NEW CLAUSE.— (Amendment of Section 1 of 9 and 10 Geo. V., c. 6.) (Hansard, 14 July 1920)

§ Mr. BALDWIN
I beg to move, "That the Clause be read a Second time."
I gave briefly the answer as to the reason for the insertion of this Clause in the Finance Bill, when I moved the Resolution. There was £66,000,000 in this fund, of which £36,000,000 is still in employment, or about to be employed, in the Civil Contingencies Fund. The reason I have to ask for the in- 2553 sertion of this Clause is that under the Act the money must all be repaid to the Exchequer by 30th September. When the Act was passed, it was hoped that by this time all food control would have ceased. Owing to circumstances with which the Committee is familiar, all food control has not yet ceased. It will still be necessary for some time to come to finance sugar purchases. It is necessary we should lay out our money for some time, because the sugar has to be paid for, and it is some time before it is distributed and the cash comes back again. There also will be in the near future payments to be made on behalf of meat imported into this country. There are also allocations, explained by the Board of Trade, for the purchase of zinc concentrates, which will run on through the ensuing year.
Were we not to take the power I ask for in this Clause, we should have to do one of two things—to take up the time of the House by introducing a new Civil Contingencies Fund Bill, or have it included among the Expiring Laws Bill. I feel that that would hardly be treating the House fairly, because there is always the possibility of the Expiring Laws Bill going through hurriedly at the end of the Session, and it might escape observation. I think it is a matter that ought to be brought before the House, and I take this as the quickest and simplest way. I may remind the Committee that in all cases where payments are made on these trading accounts from the Civil Contingencies Fund, the service and amount is to be laid before the House, and in each case during the last year that rule has been carried out. This Clause gives no power to draw out any more money at all. It merely postpones the repayment of the money that is already there, so that it can be used for the financing of these purchases. I have looked at this matter myself, and I quite expect that at least half the sum will be paid into the Exchequer in the course of this financial year. But it is essential, in view of the continuation of food control, that this power should be prolonged for the period I have named. I hope, with that explanation, the Committee will give me this Clause.

Mr. HILTON YOUNG
I do not think this extension of the new use of the Civil 2554 Contingencies Fund ought to be allowed to pass without a word of comment and even protest. The Civil Contingencies Fund was never meant to be used for such a purpose as this. It commenced as a small fund for dealing with special emergencies in the ordinary financial year. It was never meant to be used as a trading fund. The extension of the fund for use for that purpose was, I think, in the view of all Members who considered what the real use of the fund was, an error, and any extension of the fund and the continuation of its use for those purposes were a continuation of the original mistake which it is too late to rectify now. I do not say that it is anything but inevitable at this time of day that this extension should be taken, but a word ought to be said that in the general interest of the financial structure of the country the earliest possible opportunity should be taken of bringing to an end this use which is being made of the Civil Contingencies Fund. Even at the present time I believe it would be very desirable that the use of the fund should be immediately concluded, and a special fund for these purposes should be established. That may possibly not be worth while, but at any rate it should he very clearly recognised that these uses which are made of the Civil Contingencies Fund are definitely weakening. The more often they are repeated the more often do they weaken the whole scheme of appropriation established by this House. With a view to the reestablishment and re-invigoration of the scheme of appropriation which has been so much weakened by the emergency finance of the War, it is most desirable that this use of the fund should be brought to an end at the earliest possible moment.

Major BARNES
The Committee will approve the frankness of the hon. Gentleman in explaining this Clause, and we are grateful to him. We have had an opportunity of considering what is really rather an important matter, the expenditure that is going to be involved in the continuation of these controls and the Sugar Commission. The concession is weakened by the somewhat late hour at which this matter comes before the Committee. I should like to know what is the cost of this to the Treasury? I take it that the Treasury is going to stand out 2555 for £30,000,000 for another year. I hope it will not be more than £15,000,000 a year, but to stand out for £30,000,000 in an ordinary business firm would mean you were standing out for a considerable sum. Is there no way by which the Treasury gets anything that recoups them? Is interest charged? Are prices to be put on sugar or anything done which recoups the Treasury for the delay in getting this money back? It seems that somebody has got to pay £2,000,000. Where is it to be found? Does it mean that prices are to be raised to those trading in sugar or any other kind of food, or will the sum be lost to the Exchequer this year?

§ Mr. BALDWIN
I entirely agree with the remarks of my hon. Friend the Member for Norwich (Mr. Hilton Young). Of course he recognises that this is a wholly exceptional state of things. The practical difficulty in dealing with the subject, as I think I explained on the financial resolution, is that payments have to be made for food as food comes to this country, and it is essential in those circumstances to keep, as it were, a banking account on which we can draw to serve us for that period. I hope and believe that this will be the last occasion on which we shall have to ask for any such powers from the House.
With regard to the point that my hon. Friend raised, it is impossible to give any real estimate of how much money may be out at any given time, because, to use again the phrase I have employed, this account is, as it were, a banking account, and how much it is "out" at one time or how much it is "in" depends on the rate at which repayments be made in realising the various items on the trading account, and whether payment has to be made promptly, or whether credit is given and so forth. With regard to the utilisation of the money, the trading accounts themselves, of course, aim at covering expenses, and making both ends meet over the term of their existence. The practical opinion, of course, is that so long as a sum of money is outstanding we obviously have not got the benefit of that in the Exchequer, and my right hon. Friend reminds me that we are not charging interest on Government money in arranging for these purchases.

§ Captain W. BENN
I do not desire to detain the Committee, but this is a great justification of the work that some of us are trying to do in examining minutely the Government proposals as they are put forward. Here we find, owing largely to the great frankness of the Secretary of the Treasury, that we are asked in this apparently innocent-looking Clause to supply the working capital of two of these Ministries whose existence and work hag been so very much criticised. I just draw attention to it because it shows that it is a public duty which is being performed by those hon. Gentleman who take the trouble to be present and to examine the new Clauses which are brought forward, and we have been assisted by the candour of the right hon. Gentleman. This is a matter of great importance, for here we are passing a Clause which is going to provide two—what some of us think—objectionable Ministries with the capital necessary for their working.