§ Considered in Committee.
[Mr. JAMES HOPE in the Chair.]
Whereas it appears by the Navy Appropriation Account for the year ended the 31st day of March, 1922, and the statement appended thereto, that the aggregate expenditure on Navy Services has not exceeded the aggregate sums appropriated for those Services but that, as shown in the Schedule hereto appended, the total difference between the Exchequer Grants for Navy Services and the net expenditure are as follows, namely:
|Net Surplus||£7,457,858 12 10|
§ And whereas the Lords Commissioners of His Majesty's Treasury have temporarily authorised the application of so much of the said total surpluses on certain Grants for Navy Services as is necessary to make good the said total deficits on other Grants for Navy Services.
§ 1.0 A.M.
§ sanction of this House to the provisional permission given during the financial year 1921–1922 from the Treasury to the Admiralty to utilize surpluses on one Vote for tempo- 407 rary deficits on the other Votes. Without that permissive authority, of course, it would be necessary to come to this House continually for small Supplementary Estimates on small individual Votes. But in order to maintain the authority of this House and to make it clear as to the permission of the Treasury, it is laid down, I think by the Monk Resolution in 1879, that after permission has been given and the Treasury Minutes embodying it have been laid on the Table of this House, and the subsequent passing of the whole of these Votes by the Public Accounts Committee, that a formal Resolution should be tabled in order that the House may formally ratify the action of the Treasury.
The First Lord is going rather far when he says this is a purely formal proceeding. By the rules that govern the accounts of this country the fighting services have the power, although money is voted for one purpose, to apply it to some other purpose in excess of what the House has already granted. That is to say we voted so much money for "The wages of officers, seamen and boys," and the Admiralty have spent more money than this House authorised, but inasmuch as they have spent less on "Victualling and Clothing" they have not had to come to Parliament for authority. If this House is to retain an effective control they cannot regard the transfer of a sum from one account to another as a formal matter. In respect to one of these items, namely the deficit on the wages of the men, I want to ask the First Lord a question. I understand that he has an excess of men in his employment, in excess of requirements, and in anticipation of a decision which it is hoped will be arrived at by the Imperial Defence Committee.
It may be that these men were not being kept in excess of rquirements in the year before last. If the First Lord says they were not kept in the year before last, I shall not pursue the point. I will ask the First Lord of the Admiralty whether that condition existed last year, and whether he kept these officers and men, and thereby 408 created this deficit in view of this anticipated decision?
§ Mr. PRINGLE
I think the Committee is entitled to some explanation regarding the deficiency. I understand that under Vote 1 the net expenditure exceeded the Exchequer grant by £161,859 3s. 7d. With regard to the Admiralty Office, there was a deficiency of £27,841 6s. 4d., and on a similar matter, civilians employed on Fleet services, there is a deficit of £91,243 7s. 4d. On the Admiralty Office and the civilians employed on the Fleet, we are dealing with matters on which the Geddes Committee reported there ought to have been economies, and in these circumstances we are entitled to some explanation as to why the actual expenditure exceeded the grants made by this House. It is very important that we should know. We are delighted to know that on so many Votes there were surpluses and surpluses which cover a great deal more than the deficit to which I have referred, but I think the right hon. Gentleman ought to explain at least the variations under these particular Votes.
§ Mr. HARDIE
I would like for the purposes of information to ask the First Lord a question. I would like him to explain what is the system under which, when money is voted by the House of Commons to his Department and there is a surplus under one head, it is used for another purpose. In ordinary business, when there is a surplus, it comes back to its source for re-allocation; but here it seems that when once money is voted to a Department they can spend a surplus as if it had been voted for other purposes. I do not know what the difference may be between conducting a private business and a Government Department and that is why I am asking the question, but it seems to me that there is no logic in saying that the Government have absolute control over finance unless when a certain sum is specified to be spent on a certain thing and is, not so spent, the money comes back to its source because it has not been applied under the grant given by the House. Therefore I would like to be clear as to what is the law that gives power to any Government Department so to spend a surplus.
409 The next point is as to educational services and scientific services. What is the distinction between the two? Is it that the educational side is applied to training for the Navy and the scientific side is payment for these educated men?
That is a question that ought to be raised on the original vote. The hon. Member is entitled to ask why there should be a surplus, but he is not entitled to discuss the whole of the naval votes.
§ Mr. HARDIE
The next point is the amount written off as irrecoverable. How is it that a Department that gets sums of money voted to it comes to be in a position to have something written off as irrecoverable? I understand that: the Department does not do business, and, therefore, I want to know how it comes to be that an amount is written off as irrecoverable.
§ Mr. AMERY
The hon. Member for Penistone (Mr. Pringle) asked for an explanation of one or two of the deficiences with regard to Vote 1, deficiency mainly due to expenditure having been more than was anticipated on account of special pay that had been given during the year, and to an underestimate of the average rates of pay and allowances. Vote A gives the maximum figure of the Estimate; Vote 1 is based on the anticipated average. But, of course, if men are not reduced as rapidly as was expected, and others are taken on more rapidly than was anticipated, the average calculation will not be quite correct. The other is Vote 11, dealing with the hire of vessels taken up during the War. During 1921–22 we were still dealing with a good many outstanding claims from the War, and in respect of some of them we were able to liquidate more than we hoped to liquidate during the year. In others we were not able to get through as many accounts as was expected, and the liquidation of them stood over till the following year.
As regards the question put by the hon. Member for Springburn (Mr. Hardie) with regard to amounts written off as irrecoverable, I am afraid that the Admiralty is, in this sense, very much of a trading Department, that it had, during the War, very large accounts and also contracts. It has had a great many claims against it, and also counter claims.
I want to ask the right hon. Gentleman with regard to Vote 8. This is the year which preceded the Washington Conference. In that year Members on this side repeatedly urged that four ships in the programme for that year should not be contracted for, because we said that when the Washington Conference met we might find that those ships would not be needed. The Government of that day, many Members of which are in the present Government, rejected that. Mr. Churchill's view was that we must have these orders placed in order, as he said, to have something to bargain with. When the Conference met it was decided that these four ships should be scrapped. The taxpayer would expect as a result of the agreement made at Washington that he would have back in the surplus the full amount of money voted in that year for expenditure on these ships. I understand we have not got the full amount back because the Government was foolish enough to give contracts for these four ships, although we were in sight of an agreement which made the building of the ships impossible. That being so, I want to ask how much expenditure is involved by the decision of the Government to place the orders for these four ships, and how much would have been saved had our advice been taken?
§ Mr. AMERY
It is clearly impossible for me to give a precise figure, but I would certainly say that, if these ships had not been contracted for and definitely known to be building, it would have been far more difficult to arrive at an agreement at Washington. But, as the hon. and gallant Member will see, there are large surpluses mainly due to the stoppage of work on these ships, and the only reason why the saving falls short of the total of the previous estimates is the fact that certain sums have been paid in compensation.
§ Mr. SULLIVAN
I have followed the right hon. Gentleman very closely, and the only thing I can gather from his reply is that he has spent more than he was at liberty to spend and he tries to explain it. He uses a lot of words, but the hard fact is that you have spent more than was passed. I do not think that his answer is at all clear.
§ Question put, "That the application of such sums be sanctioned."
§ The Committee proceeded to a Division.
§ The Chairman stated that he thought the Ayes had it: and, on his decision being challenged, it appeared to him that the Division was unnecessarily claimed, and accordingly he called upon the Members who supported and who challenged his decision successively to rise in their places, and he declared that the Ayes had it.
§ Resolution to be reported To-morrow.