HC Deb 11 March 1861 vol 161 cc1717-27

Order for Committee (Supply) read.

Motion made and Question proposed, "That Mr. Speaker do now leave the chair."

SIR HENRY WILLOUGHBY

said, he should he glad to yield to the appeal of the noble Viscount on Thursday to allow the House to go at once into Committee of Supply, but it so happened that his Motion differed from all the other Motions on the paper. It related to the Estimates, and could not be brought on when the House was in Committee. The notice he had given was of his intention to call the attention of the House to the mode and extent of the changes made by the Lords Commissioners of Her Majesty's Treasury in the appropriation of monies voted by Parliament for Navy Services in the year 1859–60, specially that out of £503,880 voted by Parliament for ships building by contract in 1859–60, £200,000 was paid for stores and £38,521 for machinery, the latter sum of £38,521 on the personal authority of the Secretary to the Treasury; and to move a Resolution, "That the powers of the Lords Commissioners of Her Majesty's Treasury to alter the appropriation of the granting of money by this House should be defined and limited by Jaw." The question was one of great importance, and demanded the most serious consideration of the House. On the 9th of August last, in discussion upon the miscellaneous Estimates, a Resolution was unanimously passed that all unexpended balances should be repaid into the Exchequer. The opinion of the House appeared to be that when money was voted for one purpose it should not be applied to another. Now that was the question which he meant to raise by his present notice. He would show the House that with respect to both the great departments of the public service, the army and navy, they had no security whatever, in the event of £1,000, for example, being voted for one purpose, that it would not be applied to another. Last year he had raised the question in another way. There was then a sum of £519,000 taken for the transport service which was subsequently applied to the purchase of stores. It was admitted on all hands that that was a monstrous change for the Executive to make without consulting the House of Commons. But the I case he was about to raise was one of a still more extraordinary character. It appeared in the financial year of 1859–60, there was a sum voted in two Estimates of £503,880. There was an original Estimate of £252,000, and a supplementary Estimate of £251,880. Those sums were voted for the express purpose of paying for iron-cased vessels to be built by contract, the importance of such vessels having been admitted by the House. Now it appeared that only half of that sum was I expended according to the purpose of the House of Commons. What, then, became of the other £250,000? It appeared that £200,000 was expended in the purchase of stores on the authority of the Treasury. But the more remarkable case was as to what became of the other £50,000. On the; 26th of March, 1860, five days before the end of the financial year, Mr. Watts, an able gentleman in his department of chief constructor to the navy, wrote a letter to i the Board of Admiralty, recommending j them to appropriate £38,521 for the purchase of machinery. On the same day the noble Lord, the Secretary for the Admiralty, met the Secretary for the Treasury, then Mr. Laing; and in a brief conversation obtained his personal authority for the application of this sum of £38,521 to the buying machinery for other ships. Now the House would see the gravity of this matter. If such things could be done with impunity what on earth was the use of their going into the Estimates and voting them seriatim. They all knew that this system of appropriation was based upon a principle which the House had fought for 150 years. Could it be contended for a moment that the Secretary for the Admiralty and the Secretary for the Treasury, at a casual interview between them like that he mentioned, were to alter the appropriation of the money voted by that House? How stood the old Appropriation Act? Up to 1845 that Act meant what its name implied, namely, that the money voted for a particular service should be appropriated to that service and to no other. In 1845, however, a new clause was introduced in the Appropriation Act. He did not know whether the House was aware that this was one of the Acts which were not printed—it was what was called "a dummy." In that Act a new clause was introduced which gave the Lords Commissioners of the Treasury power to alter the proportions of a grant from one Vote to another in the same department, provided the aggregate did not exceed the amount voted, and also power to alter the items under the same Vote. Under the modern system, then, it appeared that the Government had only to get a greater grant than what they wanted, and then they could completely alter the whole appropriation of the money so destined by the House. For example, the repairs of Somerset House were paid for out of money that had been voted by Parliament for quite another purpose. The House was now going into Committee to declare the number of men to be levied for the navy, and to vote the pay and provisions for those men. In the very year to which he alluded the number of men was 4,000 short of the number voted by the House, and the consequence was, there was a saving under the head of pay of £160,000 to be disposed of. In every constitutional sense that money ought to have been paid into the Exchequer. The same was the case under the head of provisions. But under this modern system it was possible to vote a sum of money for men and find it employed in building a ship; in short, there was no change which could not be made under it. Now the Resolution which he wanted to move was this—that the powers of the Lords Commissioners of Her Majesty's Treasury should be defined and limited by law. He did not suppose the present Secretary to the Treasury would defend the system. He apprehended that the exercise of any such power by the Secretary to the Treasury as that to which he had called attention was wholly illegal because the power was given to the Lords of the Treasury and not to the Secretary to the Treasury—a functionary very important in that House, but utterly unknown to the statute law. It was perfectly evident, then, that unless that House was prepared to insist upon their rights in reference to the appropriation of the public monies they might save themselves the trouble hereafter of discussing the various items. He would not, however, deprive the Government altogether of a discretion when circumstances arose that would justify its exercise, but he certainly thought that that discretion ought to be limited to a certain amount. It appeared that one sum of £250,000 had been spent in the purchase of stores and machinery which had been voted for another purpose altogether. Now the House would probably be called on to vote that £250,000 a second time for the same object as before. In the financial year 1859–60 no less a sum than £494,000 was expended on the naval service without a shilling of it being authorized by that house. £219,000 was expended on stores, £102,000 on Post Office contracts, and £155,000 in a miscellaneous way, without the shadow of authority from that House. He had not stated many disagreeable things connected with this mal-appropriation of the public monies. A few words of alteration in the Appropriation Act would do all that was wanted, and leave the Lords of the Treasury power to change the grants to a limited amount— say to £5,000—but would strike at the roots of the present system. A great deal was said about the disposition of that House to take upon itself the Executive Government. He would say "No; leave the Executive Government alone, but compel them to pursue the right course;" and on the other hand, the Government was bound to respect the privileges of that House, and to take care that the appropriation of the money was not taken out of its hands. He should, therefore, move the Resolution of which he had given notice.

MR. WILLIAMS

said, he rose with pleasure to second the Motion, as he was of an opinion that unless some check were put to this kind of proceeding it would be perfectly useless for the Estimates to be brought forward, and the House might as well vote the whole sum to both services at once. The hon. Baronet was very liberal in allowing the extent of latitude which he had named; but he (Mr. Williams) thought the best course would be that whenever an amount was required for the public service the department requiring it should come to the House and ask a distinct Vote for it.

Amendment proposed, To leave out from the word 'That' to the end of the Question, in order to add the words 'in the opinion of this House, the powers of the Lords Commissioners of Her Majesty's Treasury to alter the appropriation of the grants of money by this House should be defined and limited by Law,"—instead thereof.

Question proposed, "That the words proposed to be left out stand part of the Question."

MR. PEEL

said, he was not surprised that his hon. Friend should have thought it his duty to draw attention to the state of the accounts of the naval expenditure in the year 1859–60. It appeared that there was an excess upon some of the grants for the year amounting altogether to little short of half a million of money; but, on the other hand, it must be borne in mind that there was a saving on the remaining grants of the same year, which amounted to rather more than half a million, so that the result was that there was a saving in the total expenditure on the navy. At the same time he acknowledged the Government would not be justified in exceeding any of the Votes so largely as had been mentioned, unless under circumstances which rendered that step absolutely necessary. What, however, were the circumstances in this case? The preliminary expenses of the China expedition formed part of the expenditure of 1859–60. Last year the House voted a sum of money—a Vote of Credit—amounting to £800,000, for the extraordinary expenditure of the China war during the year 1859–60; and out of that sum the Treasury advanced to the Admiralty £250,000 to meet the expenses of the expedition, upon the understanding that in the event of the ordinary Votes of the House for the navy being sufficient, not only for the ordinary, but also for the extraordinary expenditure of that year, that then the advance out of the Vote of Credit should not be made use of, but should be returned and repaid into the Exchequer. And this was done. It was found that the ordinary Vote of the House was sufficient, not only for the usual expenditure of the Naval Service, but also for the extra expenses of the China war, and that sum of a quarter of a million which had been advanced out of the Vote of Credit for the expenditure of 1859–60; was returned and repaid into the Exchequer. The hon. Gentleman had drawn attention to an excess of £200,000 upon one of the subordinate items in the Vote No. 10, Naval Estimates. It appeared that the item for the building of ships by contract was not required to the extent of £200,000 or £250,000; and that sum was transferred to an excess of expenditure for the stores, which was another subordinate head of service comprised in the general Vote No. 10. Besides that there was an excess upon the cost of steam machinery also to the amount of £200,000. He asked the House to recollect at what a rate the expenditure in our dockyards was proceeding during the year 1859, and to judge whether it was surprising that a calculation made a year beforehand should not be exact, The hon. Baronet had been engaged on a Commission of inquiry into the expenditure in the dockyards and the management of the navy, and he must know how impossible it was to foresee the rate of expenditure during the coming year. Very slight changes, the mere placing men on one system of pay instead of another, employing them by piece-work instead of by day work, might alone cause a largo difference in the expenditure; and when, in addition, they came to take into consideration the large amount of stores employed in the expedition to China, which had been paid for out of the ordinary Votes for the year, the excess on these items of charge was, he thought, sufficiently accounted for. The hon. Baronet had submitted a Resolution, by one part of which he proposed to define the powers of the Treasury. He (Mr. Peel) should have no objection to any improved definition of those powers. The Act of Parliament directed that no grant of the House for any head of service should be exceeded without the express sanction of the Treasury; and there had existed a difference of opinion between the Treasury and the great departments of War and the navy as to whether the head of service meant the Vote of the House or comprehended all those subdivisions of the Vote as they were set out in the Estimates brought before the House. The Treasury, of course, had contended for the larger interpretation of these words, but it was only quite recently, and he believed partly owing to the acquiescence in that view by his noble Friend by his side (Lord Clarence Paget), that the view taken by the Treasury had at last prevailed, and that it had been laid down that the result of the actual expenditure of the year must correspond, not only with the Votes of the House, but with the detailed Estimates submitted to them, and that if there were to be any deviation of consequence from those Estimates that deviation could only be permitted with the approval and concurrence of the Treasury. The hon. Baronet had also called attention to the circumstance that a sum of £38,000 was transferred from one item in Vote 10 to another item in Vote 10, after personal com- munication between his noble Friend and the late Secretary of the Treasury, Mr. Laing. [Sir HENRY WILLOUGHBY: Hear, hear!] He need not say that the sanction of the Treasury could only be given by an official letter, and could not be given by mere personal and oral communication. He entertained no doubt that the late Secretary to the Treasury, when he gave his verbal authority for the transfer of a portion of one item to another item, contemplated that there should be a written communication, and that it was merely owing to some accident or through some oversight that the omission took place. The Treasury very lately, when their attention was called to the absence of any written authority for that transfer, inserted a memorandum of the irregularity in the Estimates for the present year. The hon. Baronet wished, however, not only to define but also to limit the power of the Treasury; and he understood that the hon. Gentleman behind him (Mr. W. Williams) would take the whole power from the Treasury, and thus allow of no deviation being made either in the Votes or the Estimates without assembling Parliament and submitting the deviation to their approval. Now, what was the object really to be provided for? When they considered how long the Estimates were prepared before the expenditure took place, was it surprising that there should be every year some expenditure unprovided for? On the other hand there must be some expenditure in the Navy Estimates for which provision had been made, but which in the course of the year circumstances rendered unnecessary. What could be more reasonable, then, than that the saving under one head should, if necessary, be transferred to meet the excess under another? The only question was where the power to make the transfer should rest? Who was to determine whether the necessity had arisen? Should the discretion be vested in the departments themselves? Why that would be to resort to the old course which was found so unsatisfactory that the power was taken from their hands and lodged where he thought it most properly still resided—namely, in the Treasury. The Treasury viewed the departments with much the same jealousy as the House did itself. It had no interest in the expenditure except in the way of check and control; and he must say that the hon. Baronet, if he were to limit the power of the Treasury, would be taking a step in the wrong direction. What he (Mr. Peel) would seek to obtain was a system sufficiently expansive to provide for unforeseen expenditure, and at the same time capable of fixing the responsibility on that department with whom it rested to authorize the expenditure. If the House left the authority to the Treasury, and required from it responsibility for its proceedings in the exercise of that power, he was sure the object of the House would be best obtained. The Treasury would in each case require that the department should inform it beforehand when it was about to exceed the Vote granted by the House; and it would not authorize any deviation from those grants unless there were reasons for the deviation satisfactory to itself, and which would be satisfactory to the House. He had no objection to take into consideration any suggestions which might be made to him with the view of so altering the Appropriation Act as to define more distinctly the powers of the Treasury and its authority over the Admiralty; but he must, at the same time, express a hope that the House would give its assent to no proposition which would have the effect of depriving the Treasury of that discretion which it was desirable it should be in a position to exercise for the good of the public service.

SIR STAFFORD NORTHCOTE

said, he was sure that the hon. Baronet had done good service in calling the attention of the House to the powers of the Treasury, but he thought his hon. Friend would see that it would be unwise, nay, that it would be impossible to do away with the discretion of the Treasury and the Cabinet in such matters. Indeed, to deprive the Treasury of all discretion in such cases as that under the notice of the House would be to adopt a course tending to increase the Estimates to an enormous amount; inasmuch as, if the transference of any sum from the head under which it happened to have been voted to another were not permitted, it would become necessary in framing the Estimates to take a larger margin on every item for the purpose of meeting emergencies. While, however, he was prepared to maintain that a certain amount of discretion ought to be vested in the Treasury, he was not disposed to say that it came within the spirit of the rule that so large a sum as £250,000 should be appropriated in this way to a service other than that for which it was specially destined, and that not during a recess, but while Parliament was still sitting, and at a time when they were about to be asked for a Vote of Credit for the navy. At all events the circumstances should have been explained to the House. With reference to the particular sum, the explanation given seemed rather to show how very much better it would have been to have done the thing in another way. There was a Vote of Credit of £250,000 for expenditure in the navy. That Vote would have been most legitimately applied to the extra stores; and the other sum voted for ship-building, and not used, could have been given up. The House would then have known what it was about. The result had, indeed, been apparently the same, because the money had actually been repaid into the Treasury, yet such a sum might, by the terms of the Vote of Credit, have been applied to either service without involving the difficulty which had been experienced. The notice which had been taken of the matter in the House would, he felt assured, strengthen the hands of the Treasury in its dealings with such Departments as the Admiralty and the War Office, and would in all probability lead the right hon. Gentleman (Mr. Peel) to see the expediency of limiting in some respects the discretion hitherto exercised by the Department which he represented.

SIR FRANCIS BARING

said, he agreed that the hon. Baronet the Member for Evesham had done good service in bringing the subject under the notice of the House, as there could be no doubt that the verbal sanction which had been given for the transference of the money by the late Secretary to the Treasury was irregular. However, he apprehended that the object of the present proceeding was not to cast censure on the past, but to provide a remedy for the future. The Admiralty, technically speaking, had not done anything in the course of the transaction which could be construed as illegal, although the spirit of the Act might not have been fully carried out. He was further of opinion that it would be inexpedient to bind down the expenditure for the navy too strictly, inasmuch as a good deal of it took place abroad, and emergencies from time to time arose when it became desirable that the Admiralty, with the sanction of the Treasury, should be in a position to take upon itself the responsibility of efficiently performing the public service without appealing directly to the House of Commons. It might be worth consideration whether the power of the Treasury should not still be continued, but when the excess exceeded a certain amount, the expenditure so incurred should be brought under the notice of the House, not merely in the shape of an account, but in the form of a specific Vote; and thus enable them to express a distinct opinion with respect to the expenditure and the exercise of the discretion.

MR. HENLEY

said, he was sorry to hear the statement of the right hon. Gentleman the Secretary to the Treasury which seemed to open a wide door to laxity in framing the Estimates. This was not a trifling matter, for in one case it involved 50 per cent of the Estimates, and that in regard to a matter which the public had very much at heart. He might add that he concurred with the right hon. Gentleman the Member for Portsmouth in thinking it very desirable, not that the heads of the Treasury should be too strictly tied in the performance of that which might be necessary for the public service, but that its proceedings should assume such a shape that the House would be in a position to deal with them afterwards, and to come to a decision as to whether they were worthy of approval or the contrary. If matters were so regulated, a proper discretion on the part of the Treasury in sanctioning the expenditure of the public money for any particular object would, he had no doubt, be exercised.

LORD CLARENCE PAGET

said, he wished, as the transaction which formed the subject of discussion had partly taken place between himself and the Treasury, briefly to advert to it. The Appropriation Act set forth that the Admiralty should not have the power to transfer the money voted under one head of the public service to another without the sanction of the Treasury, and the question was whether the act was to be interpreted as meaning Votes or items of a Vote. His desire was to interpret the Act in such a way that those matters should always be subject to the sanction of the Treasury, and he took a course which had not hitherto been taken by the Admiralty. It had been hitherto generally hold that the Admiralty might, on its own responsibility, appropriate the surplus in any one item of a Vote to make good any deficiency which might occur in a second item of that same Vote. Now he had thought it his duty to apply to the Treasury for their sanction to the transference of a large sum of money from one item to another under the same vote, and they had deemed it right that the transaction should be recorded in a regular form; but when, on a second occasion, he required a sum of only £38,000 under the same conditions, he had understood from the Treasury that it was within the power of the Admiralty to transfer that amount from one item to another as he had just mentioned. It was extremely desirable, he might add, that such a discretion should be allowed where small sums were concerned; for if the Admiralty were invariably confined to the expenditure of money strictly for the purposes for which each item of a vote happened to be voted, it would be impossible efficiently to conduct the public service. When it was sought to transfer a considerable sum from one Vote to another, then of course it was expedient that the previous assent of the Treasury should be obtained; in the second instance even to which he had referred he had, although informed by the Treasury that the Admiralty had power to appropriate the money of itself, deemed it right to request that a note should be made of the transaction.

COLONEL SYKES

said, he was in favour of the Motion, for it constantly happened that there were some Votes that were popular and others that were unpopular. The plan of the departments was to diminish the amount of the unpopular estimates and to increase the popular ones; and then to transfer the surplus of the one to the deficiency of the other. Such a proceeding was akin to obtaining money from the House under false pretences. He did not deny that some discretion should be vested in the Treasury, but it ought to be exercised with all due caution and reserve.

MR. PEEL

said, that if the hon. Baronet the Member for Evesham would omit the words "and limited," he should offer no objection to his Resolution.

SIR HENRY WILLOUGHBY

said, he was willing to omit those words.

SIR GEORGE GREY

said, the Government had no objection to the Resolution as modified; but, as the House wished to go into Committee of Supply, perhaps the hon. Baronet would withdraw his Motion, especially since he might rest assured that the object he had in view would be carried into effect.

Amendment, by leave, withdrawn.