§ Order for Third Reading read.
§ Motion made, and Question proposed, "That the Bill be now read the third time."
§ Mr. ARTHUR STRAUSS
I beg to move as an Amendment to leave out the words, "read the third time," and at the end of the Question to add the words, "re-committed to the former Committee."
This Bill confers on the Corporation of Bristol further powers as to several matters, including further borrowing powers. I offer no objection to the Bill as a Bill; all I ask for is that there should be a full and efficient audit. The promoters of the Bill object to my proposal. I cannot conceive why, but, strange to say, in Committee they fought with all their might against what I considered a proper audit. Considering that the ratepayers of Bristol have invested no less than six millions of money in an undertaking which entails a loss year by year, and that last year that loss was £150,000, which represents 1s. 10d. in the £ on the rates; considering that it has been shown that many irregularities took place in the past, you cannot wonder that numerous ratepayers seek the protection of Parliament from further repetitions of similar irregularities. For instance, the Corporation had authority to spend £109,000 on a railway connected with the dock undertaking. They borrowed and spent that sum not on the railway but on quite different and unauthorised purposes. Again, they borrowed and spent £46,000 without any borrowing powers from Parliament at all. Indeed, as the Chairman of the Committee put it, they came to Parliament with this Bill to legalise the irregularities; in other words, to be white-washed. There was a claim of the contractors for extra works amounting to £150,000, which was not mentioned in the accounts, even as a contingent liability.
Under this Bill the Corporation of Bristol asks not only for borrowing powers for specific work, but for powers to borrow and spend £150,000 for general purposes, so that the ratepayers are justified in asking for real and efficient audit. The audit in the past has not been 1278 satisfactory, and one cannot wonder at the conclusion which has been come to on all sides that there must be a change. The manager of the docks stated in cross-examination that they did not permit the auditor to allocate as between capital and revenue. The Audit Clause in the Bill was inserted by the Committee, as they believed, as the result of a compromise, but subsequent discussion showed that either they were misinformed or there was some misunderstanding. Therefore, if the Bill goes back to the Committee it will be no reflection upon them to be asked to change this Clause. The Clause reads:—The accounts of the Corporation relating to the dock undertaking for the financial year ending 30th April, 1912, and for each subsequent financial year, shall be audited by a chartered accountant appointed by the Corporation and approved by the Board of Trade.Why do the Corporation insist on appointing their own auditor, although the Committee pressed upon them that they should have an auditor appointed by the Government or the Board of Trade? The only answer they gave was that it would be more convenient to have an auditor residing in Bristol. We have no objection to that at all. The Board of Trade can easily appoint an auditor. Their second objection was—[Interruption]—an auditor with a certain amount of elasticity. A member of the Committee said on this: "I suppose what you mean is that you want an auditor with an elastic conscience, and that the Government does not provide such an auditor." The Clause as it stands is an absurdity. The chartered accountant auditor in this Clause has no rights nor duties whatsoever. He does not come within the meaning of the Municipal Corporations Act of 1882. This Clause is an entire innovation. It is a bad and vicious precedent. It is because of that that I am so strongly opposed to it.
You could not have a better Clause nor a clearer definition of what an auditor should be than you have in the Port of London Bill. It says, "The accounts shall be presented in such a form and containing such particulars as may for the time being be prescribed by the Board of Trade, and shall be audited by an auditor appointed by the Board of Trade: if the auditor reports to the Board of Trade that the Port Authority have declined or neglected to comply with any of his recommendations or requirements, the Board 1279 will make an Order directing the Port Authority to comply with such recommendations and requirements." I suggest that a similar provision as regards audit should be inserted in this Bristol Corporation Bill, though I recognise certainly that it would add to the responsibilities and burdens of the Board of Trade. Therefore, before pressing my Amendment to a Division, I should very much like to hear the views of the Parliamentary Secretary to the Board of Trade, which I hope will be satisfactory.
§ Mr. COURTHOPE
In seconding this Amendment a very few words from me will suffice, because I understand that the Parliamentary Secretary to the Board of Trade will make an announcement on behalf of the Government which is likely to go a long way to meet the point that my hon. Friend and myself desire. The great objection which we had to this Bill as it was drafted was that it made no proper provision for the auditing of the Dock accounts. As the Bill was originally introduced there was no such provision whatever, but as the Bill came down from the Committee upstairs it contained a Clause which the Board of Trade admitted to be insufficient because it refers to an Act of Parliament which has no possible application to the case in point. One of the desires of the ratepayers, whose interests I am attempting to voice to-night, is that not only should the Board of Trade themselves control the appointment of the auditor, but that the Bill should contain a clear definition of the functions of the auditor of the dock accounts. I understand the Parliamentary Secretary to the Board of Trade will make an announcement to the effect that the Board of Trade intend to make a report to the Lords Committee which is to consider this Bill, and to mention in that report, not only the method of appointment but a definition of the functions of the auditor. If the hon. Member is able to make that announcement on these lines I for one shall not push my opposition to the Third Reading any further, and I shall ask my hon. Friend to ask leave to withdraw his Amendment.
§ Sir EDWIN CORNWALL
Perhaps it is due to the House that I should say a few words as Chairman of the Select Committee in view of the observations of the hon. Member opposite in regard to this Clause. I should like to remind the House 1280 what the Bill was when it passed its Second Reading and came upstairs. It was an ordinary private Bill promoted by the Bristol Corporation, which had a Corporation Dock System, and this Bill, as far as an auditor is concerned, was in the same position as any Bill promoted by any corporation carrying on its municipal undertakings under the Municipal Corporations Act. The question of the auditor did not arise from any Motion in this House on Second Reading; it arose entirely by certain owners of property petitioning the Committee to consider the question of the appointment of an auditor. The Committee had to take into consideration the fact that the Bristol Corporation were bound down by the Municipal Corporations Act for the carrying on of its duties in the same way as other municipal corporations are. When the Committee considered the case with regard to the auditor, counsel on behalf of the petitioners said:—I have to say we need not trouble the Committee any more. It was rather suggested that when we persisted in asking for a Board of Trade auditor, that, is to say, an auditor appointed by the Board of Trade, it might be thought we desired to cast aspersions upon local auditors, but we do not wish to do anything of the sort, and in order to show our loyalty I am content, on behalf of my clients, to say that we are willing to accept an auditor approved by the Board of Trade.That is the only way the question of the appointment of an auditor arose before the Committee. Counsel on behalf of the petitioners was quite prepared to accept an auditor appointed by the Board of Trade. There are many Members who think that municipal corporations ought to be subjected to much more severe audit than obtains under the Municipal Corporations Act. That, I submit, is an argument for the general alteration of the law. When a private Bill of this nature has passed the Second Reading and goes to a Committee upstairs, and when the petitioners are satisfied, I think that meets the case entirely. I understand that the Board of Trade since think that if they are to approve of the auditor they should appoint him.
So far as I am concerned, I should not object to the Board of Trade appointing the auditor, but it seemed to me that the owners of property were satisfied, and had got a security which they would not have had under the Municipal Corporations Act. I do not mind if the Board of Trade prefers to appoint the auditor instead of approving him, and if the Bristol Corporation do not object, I shall raise no objection. I object to the view put forward that in the Clause put in the Bill it should be set out in the same way as in 1281 the case of the Port of London Bill. That was an entirely different thing. It was setting up a body with new powers; it was an authority to purchase the docks of London at a cost of between £23,000,000 and £24,000,000, and it was absolutely necessary that Parliament should set clearly out in the Clause the appointment of the auditors and all the machinery for regulating the audits and the accounts. But when this House is dealing with a private Bill, promoted by a corporation, which is responsible under the Municipal Corporations Act, I think the Clause we put in, which was asked for by the petitioners, is not entitled to the reflection which the hon. Member for Paddington has put upon it. I hope the House will support the view of the Committee on this point.
Sir HOWELL DAVIES
I do not consider that the House is the proper place to make these very general observations. The Corporation of Bristol are perfectly satisfied with the auditor we have had in the past. The genesis of this opposition arises from the fact that there was a reduction in the number of the Committee at Bristol and one member who was left off the Committee to show his disapprobation of being left off moved a resolution that we should apply for a Local Government auditor. That resolution was not accepted by the corporation and only three out of 92 members of the corporation voted with that gentleman. That gentleman has followed his opposition to the Committee upstairs, and, as the Chairman of that Committee has stated to the House, an agreement was come to. We had no desire to change the auditor we have had for many years past, but to meet the opposers we were prepared to accept an auditor we might name who should be approved by the Board of Trade. Upon that proposal, whilst I was in the box giving evidence, the case was stopped, and the opposition said they were prepared to withdraw. It was a great surprise to me that, having made a bargain upstairs, they should attempt to induce hon. Members of this House to go behind it and block the Bill on the Third Beading. I am quite certain, after the statement of the Chairman of the Committee, the House will feel it ought to give the Bristol Corporation the Third Reading of this Bill. It is quite true the City of Bristol are contributing a considerable sum towards the support of the dock undertaking, but they who bear the burden are perfectly well satisfied, and 1282 do not want the sympathy of any hon. Gentleman of this House. We feel we have done quite the right thing in increasing our dock undertaking, and I am glad to inform the House that this year we shall ask for £14,000 less than we required last year, and there is every reason to believe that in a very short time the Bristol Dock undertaking will be an entirely successful undertaking. I hope the House will give the Bristol Corporation a Third Reading of this Bill.
§ The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. H. J. Tennant)
I only rise in response to the appeal made by the hon. Member for Rye (Mr. Courthope) that I should state what the Board of Trade are prepared to do in this matter. This is a large Bill, but the only point made by either of the hon. Gentlemen is in connection with the auditor. The Clause inserted in the Bill by the Committee was inserted without reference to the Board of Trade, and we had no cognisance of it. It asks the Board of Trade to approve the auditor appointed by the corporation. That is a position which we do not very much wish to occupy. We should prefer to appoint the auditor ourselves. I have had the advantage of having a conference with the opponents and with the promoters of the Bill, and we have come to the decision that while they should nominate, the Board of Trade should actually appoint the auditor. It is supposed, I do not know by what machinery, we should have a greater opportunity of rejecting candidates put forward. We think by this means we shall secure what the hon. Member for Paddington (Mr. Arthur Strauss), I think, desires, that the auditor will not be elastic, but will be independent. Our agreement upon this point is subject to the corporation inserting in the other House certain terms and conditions as to the functions of the auditor. The hon. Member for Rye appealed to me to say we would report to the Committee in the other House that they should insert definite conditions as to the functions of the auditor. I do not think it is possible for us to do that with great definiteness, but the Board of Trade have every hope that we shall be able to agree to a Clause. In the event of that Clause not being agreed to by the opponents and promoters we shall certainly present a report to the Committee in the other House asking them to lay down definite functions for the auditor which they consider are necessary and ad- 1283 visable. We believe by that means we shall secure an independent auditor, which is the main point, I understand, of hon. Gentlemen opposite. Publicity will be provided for, and all things, such as the fixing of the fees of the auditor and defining the conditions by which he shall be dismissed, if necessary, will be definitely laid down. That really will meet the point of the argument which has been laid before the House by the two hon. Members who wish to re-commit the Bill in respect of this Audit Clause. Under these circumstances I venture to hope that hon. Gentlemen opposite will not think it necessary to carry this matter to a Division and will be content to withdraw the motion.
§ Mr. ARTHUR STRAUSS
The explanation has been most satisfactory, and under the circumstances I ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.