§ MR. BOWLES (Lambeth, Norwood)
To ask Mr. Chancellor of the Exchequer whether he is aware that, although Section 5 of the Appropriation Act, 1905, only empowered the Treasury to authorise the Board of Admiralty to defray expenditure not provided for out of surpluses effected by the saving of expenditure and not otherwise, and only empowered them to deal with appropriations in aid to the extent of sums not exceeding in all £1,688,687, the Treasury have, nevertheless, contrary to the Act, taken upon themselves to authorise the application to expenditure of £120,938 19s. 7d., which is not a saving of expenditure but an excess of receipts beyond the total sums appropriated in aid of naval expenditure by the Appropriation Act, 1905; whether a precisely similar course under precisely similar circumstances was taken by the Treasury in regard to a sum of £172,392 13s. 4d. on the Army Votes; why the Treasury thus took upon itself to exercise powers beyond those conferred upon it by law, and reported by the officer appointed to examine the public accounts on behalf of this House to be without statutory sanction; whether he will direct these two sums, amounting together to £293,331 12s. 11d., to be surrendered to the Exchequer; and whether he will undertake that in future the Treasury shall set an example to the other departments of strict obedience to the law.
§ (Answered by Mr. Asquith.) I agree generally with the hon. Member in his interpretation of Section 5 of the Appropriation Act, 1905, and gave orders, as soon as the matter was brought to my personal notice, that an Amendment should be drafted so as to make it quite clear in future that the Treasury's temporary powers shall extend to making up any deficiency upon the receipts appropriated in aid of any Navy (or Army) Vote out of the surplus receipts on account 1458 of Appropriations in Aid on other Navy (or Army) Votes respectively. My decision has been communicated by the Treasury to the Public Accounts Committee, who are considering the Navy and Army Appropriation Accounts on which the Comptroller and Auditor General raised the question; and their approval will be sought forthwith to the draft Amendment of the Treasury, which has already been agreed to both by the Comptroller and Auditor General and by the authorities of the House. So far I have dealt with the steps to be taken for regularising the position for the future. As regards the current year, I may add that in the Treasury Minutes of the 22nd instant which were laid in dummy on the Table of the House on Friday, the temporary application of anticipated surpluses to meet anticipated deficits on Navy and Army Votes for 1906–7 has accordingly been dealt with exclusively on the basis of using surpluses effected by the saving of expenditure, without applying any extra receipts. I now proceed to deal with the second part of the Question, in which the hon. Member asks, with reference to the year 1905–6, that sums of £120,938 19s. 7d. in respect of the Navy and of £172,392 13s. 4d. in respect of the Army may be surrendered to the Exchequer. These sums represent the gross excess of actual over estimated receipts on certain Navy and Army Votes, respectively; and I will now indicate how, if they had been surrendered eo nomine to the Exchequer, the Exchequer and the Old Sinking Fund could not have received one penny more than the net surplus of £237,758 19s. 2d. on the Navy, or of £1,334,136 17s. 10d. on the Army, as shown on the face of the Appropriation Accounts for the respective services. As the hon. Member will see, this result flows from the fact that there was an unexhausted balance of authorised grants from the Exchequer out of which the deficiencies of receipts appropriated in aid of certain Navy and Army Votes could have been made good without making any use of the surpluses of receipts which have arisen on certain other Votes. All that would have happened would have been two payments of extra receipts into the Exchequer, and a precisely equal increase of the two payments out of the 1459 Exchequer under the head of Exchequer Grants. With this general explanation, I proceed to give the figures which will make the position clear in respect first of the Navy and then of the Army. As is shown in column 4 of page 5 of the Navy Account for 1905–6, the actual gross expenditure on Navy services as a whole amounted to £34,861,442 17s. 7d. As shown in column 5, the actual receipts amounted to a total of £1,709,601 16s. 9d., but this actual total included (column 2 on page 6) an excess of actual over estimated receipts on certain Votes amounting to £120,938 19s. 7d., so that on the strictest ruling the Executive was only able to use (out of a maximum of £l,688,687, shown in column 2 on page 4) Appropriations in Aid to meet gross expenditure up to a sum of £1,588,662 17s. 2d., leaving a balance of expenditure amounting to £33,272,780 0s. 5d., chargeable against Exchequer grants. But the Exchequer grants authorised by Parliament (column 3 on page 4) were £33,389,600, therefore the saving on Exchequer grants was £116,819 19s. 7d. Add to this the excess of actual receipts on certain Votes amounting as above to £120,938, 19s 7d., and the result is that the Exchequer could receive a total surrender of £237,758 19s. 2d., which is also the figure shown as the net surplus on page 5 of the Navy Account. As is shown in column 4 of page 5 of the Army Appropriation Account for 1905–6, the actual gross expenditure on Army Services as a whole amounted to £32,043,809 11s. 6d. As is shown in column 5, the actual receipts amounted to £3,564,946 9s. 4d., but this actual total included (column 2 of page 8) an excess of actual over estimated receipts on certain Votes amounting to £172,392 13s. 4d., so that, on the strictest ruling, the Executive was only able to use (out of a maximum of £3,557,725, shown in column 2 on page 4) Appropriations in Aid to meet gross expenditure up to a sum of £3,392,553 16s., leaving a balance of expenditure amounting to £28,651,255 15s. 6d. chargeable against Exchequer Grants. But the Exchequer Grants authorised by Parliament (column 3 of page 4) were £29,813,000, therefore the saving on Exchequer Grants was £1,161,744 4s. 6d. Add to this the excess of actual receipts on certain Votes, 1460 amounting as above to £172,392 13s. 4d., and the result is that the Exchequer could receive a total surrender of £1,334,136 17s. 10d., which is also the figure shown as net surplus on page 5 of the Army Account. This explanation will, I trust, satisfy the hon. Member that, apart from form, the action actually taken by the Treasury, in accordance with an unchallenged practice of many years' standing, amounts in substance to precisely the same thing, so far as the Exchequer is concerned, as payment of the excess Navy and Army receipts into the Exchequer, and the consequent issue of a correspondingly larger sum of the Exchequer under the head of authorised Exchequer Grants.