HC Deb 27 July 1925 vol 187 cc191-203

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, 1924, and the statement appended thereto, that the aggregate expenditure on Navy Services has not exceeded the aggregate sums appropriated for those Services, and that, as shown in the Schedule hereto appended, the net surplus of the Exchequer Grants for Navy

SCHEDULE.
No. of votes. Navy Services, 1923–24. Votes. Deficits. Surpluses.
Excesses of actual over estimated gross Expenditure. Deficiencies of actual as compared with estimated Receipts. Surpluses of estimated over actual gross Expenditure. Surpluses of actual as compared with estimated Receipts.
£ s. d. £ s. d. £ s. d. £ s. d.
1 Wages, etc., of Officers, Seamen, and Boys, Coast, Guard, and Royal Marines. 171,169 17 10 51,759 3 1
2 Victualling and Clothing for the Navy. 47,549 3 8 686,216 9 8
3 Medical Services 59,985 14 0 4,5,172 4 10
4 Civilians employed on Fleet Services. 552 12 6 554 1 10
5 Educational Services 16,728 8 2 5,627 18 4
6 Scientific Services 47,241 11 6 9,068 18 11
7 Royal Naval Reserve, Royal Fleet Reserve, and Royal Naval Volunteer Reserve, etc. 3,036 6 4 116,445 2 2
8 Shipbuilding, Repairs, Maintenance. etc.:
Sec. 1. Personnel 109,101 14 0 51,605 19 8
Sec. 2. Matériel 55,811 11 2 522,675 15 4
Sec. 3. Contract Work 360,386 18 11 243,189 2 9
9 Naval Armaments 970,346 19 9 533,947 9 2
10 Works, Building, and Repairs at Home and Abroad. 451,231 12 2 165,852 11 2
11 Various Miscellaneous Effective Services. 17,696 18 10 59,729 13 3
12 Admiralty Office 31,211 16 5 1,374 14 9
13 Non-Effective service (Naval and Marine), Officers. 41,937 10 0 30,073 6 9
14 Non-Effective Services (Naval and Marine), Men. 65,248 19 2 65,803 14 8
15 Civil Superannuation, Compensation Allowances and Gratuities. 31,361 3 2 221 12 1
Amount written off as irrecoverable. 33,864 0 3
508,494 15 7 50,585 10 0 2,708,074 4 1 1,786,656 6 7
Total Deficits £559,080 5 7 Total Surpluses £4,494,730 10 8
Net Surplus… £3,935,650 5 1

Services over the net expenditure is £3,935,650 5s. 1d., namely:—

£ s. d.
Total Surpluses 4,494,730 10 8
Total Deficits 559,080 5 7
Net Surplus £3,935,650 5 1

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."

Motion made, and Question proposed, "That the application of such sums be sanctioned."—[Mr. Guinness."]

Lieut. - Commander KENWORTHY

This is an extremely interesting Motion the Government have placed on the Order Paper, and very appropriate at the present moment, especially in view of the Debate which I understand is taking place next Wednesday. I should very much like to know whether any representative of the Admiralty is present at this Debate to explain the reason for this over-budgeting of £ 4,000,000 on a total of £ 61,000,000, or are all the representatives of the Admiralty so exhausted by their efforts last week that they are unable to be here in spite of the quite satisfactory and victorious week-end they have spent? I should like to know the heads on which the saving has taken place. This is a very large sum. In the short time I have been in the House I have never seen a surplus quite so heavy as this. There was very much more excuse in the days immediately following the Armistice than there is now. The Treasury checks should have been imposed again on all services and not only on the Admiralty. If the Board of Education or the Colonial Office or any other Ministry came forward in the same way I should make the same protest. In this respect I agree with the First Lord of the Admiraltly who, in a speech last week, said it was time that savings could be made in the Admiralty—he admitted certain extravagance—but that the Admiralty was not the only Department to which the pruning knife could be applied. I am only sorry he is not here, so that I could tell him that I agree with his remarks.

What are the heads under which this unexpected saving has taken place? Has it anything to do with the naval wing of the Air Service? It is possible that that may be a very reasonable explanation of the whole transaction. I suppose in due course we shall ascertain. I see that the Secretary of State for Air is present and the hon. Baronet the Under-Secretary of State for Air is also present. Perhaps we shall get from the right hon. Gentleman a full and adequate explanation. This sum is equal to about l½d. on the Income Tax; it is a serious matter and should be discussed. I do not want to detain the Committee, and I do not want an apologia from the Treasury for slack control, but I do want a reason from the Admiralty for this over-budgeting to this extent.

The FINANCIAL SECRETARY to the TREASURY (Mr. Guinness)

I am surprised that an expert in our procedure like the hon. and gallant Member should have expressed so much surprise at this annual Resolution, which has been taken for very many years past. In the Appropriation Bill there is always a Clause which lays down that in the case of the Navy Votes and the Votes for the Air Ministry, surpluses in one Vote can be applied with Treasury sanction to deficiencies in Appropriations-in-Aid or over-spending on other Votes, provided that the total for each Service is not exceeded. The hon. and gallant Member spoke as though it were necessary for an explanation in detail of what Votes the surpluses or deficiencies have arisen. If he will turn to the next page on the Order Paper he will find the whole thing set out, and if he wants more information he will find it in oven greater detail in the Navy Appropriation Account for 1923–24. I have no doubt he has studied that Navy Appropriation Account, but in view of what he has said about my hon. Friend the Parliamentary Secretary to the Admiralty to-night, he perhaps has not fully appreciated the fact that it is that appropriation account we are discussing and not more recent naval history. There is another point which will relieve the mind of my hon. and gallant Friend. All these figures have been gone into carefully by the Public Accounts Committee and they have been satisfied as to the regularity of the proceedings.

Captain W. BENN

By a special rule which applies to the fighting services, a sum of money voted under one head if not expended may, with Treasury sanction, be expended on another head, but it is very desirable, if we are to keep control over these spending Departments, that the estimates laid before us should be as accurate as possible, and the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) made a perfectly reasonable request when he asked for some explanation of the figures in the table which has been given to us. It would show more respect to this Committee if the Admiralty had followed the example of the Air Ministry and had sent some Minister to represent them. [HON. MEMBERS: "They have!"] I apologise. I did not notice the very modest position which my hon. Friend the Parliamentary Secretary to the Admiralty had taken up. I notice that the estimates for victualling and clothing was £ 600,000 more than was actually spent. For shipbuilding repairs and maintenance the estimate was for £ 360,000 more than was required. Why also for naval armaments was there an estimate for £ 970,000 more than was required. These items touch the very problem, with which the country is confronted at present of trying to get the. big spending departments, of which the Admiralty is among the chief offenders, under control and to have proper estimates laid before us. We are told that now they will be able to save very considerable sums. All this is wrong from the point of view of House of Commons control. Under the heading of works and buildings there was voted £ 451,000 in excess of what was required. I would ask the hon. Gentleman to give us some explanation of these things, because it is in the strict control of these items that we may see some hope of the reductions which are the universal desire of the country to-day.

Lieut. - Commander KENWORTHY

In spite of the explanation given by the Financial Secretary to the Treasury, I shall have to take advantage of the presence of the Financial Secretary to the Admiralty to ask for further explanation. The fact that the Public Accounts Committee has passed these items is no reason why the Committee of the House of Commons should abrogate its functions in the examination of these matters. I would direct the attention of the hon. Gentleman to Vote 9, Naval Armaments, on which there is an overestimate of nearly £ 1,000,000. Where has that overestimating taken place? Take these naval armaments and stores, Then "projectiles and ammunition." I thought there was a deficit on armaments, because last year plans were laid for embarking on a totally new gun for the Navy, the 8-inch gun, of which we had not had any experience. On the contrary, we now find that we have taken more money from the taxpayer than was required under one or other of these heads. Then we come to what is probably the most useful line of research, "payments to contractors in respect of cancellation of orders as a result of the decisions of the Washington Conference." But we have already, in the Estimates, allowed £ 100,000. What is the explanation? I cannot see any scope for savings under the remaining heads. A further explanation than that of the Financial Secretary to the Treasury is required.

Major CRAWFURD

Although I have not for long been a Member of this House, I understand that the overestimating of expenditure by the Admiralty has become habitual. This is not the first occasion, or the second, or the third. If you have continual overestimating by any Government Department, there is no stimulus in that Department towards economy. The overestimating in this case is an altogether unwarrantable percentage of the Vote. The matter is very germane to the controversy which is going on in the country as to the comparative importance of naval defence and economy. Is it not a fact that a year or 18 months ago, when this habitual over-estimating had been mentioned, the Treasury was at some pains to go into the matter, and communicated a Minute to the Admiralty asking for closer estimating in future? Is either the Financial Secretary to the Treasury or the Financial Secretary to the Admiralty aware whether that policy of closer control has been abandoned, or is the Admiralty strong enough to disregard the Treasury?

The PARLIAMENTARY SECRETARY to the DMIRALTY (Mr. Davidson)

The Appropriation Account has already been dealt with in great detail by a Committee of this House appointed to deal with those details. In reference to one heading which has been mentioned, namely, victualling stores, I would point out that this is due mainly to smaller recoveries on account of provisions, clothing, soap, and tobacco sold to the Fleet, owing in part to a reduction in issuing prices, modified by the proceeds of the sale of old and unserviceable stores being larger than anticipated. As to the general aspect of this question of over-estimating, I would point out that these accounts are for 1923–24. The disparity between the original Estimate and the outcome of the Vote is almost entirely confined to Vote 8, which deals with contracts. That was due to various reasons of which the Committee are aware, such as stoppages, differences in the prices of materials, and so forth If you take the other 13 Votes, which amount to a total of £ 41,000,000, the Admiralty estimating turned out to be almost better than it has ever been. They got to a net variation of only £185,000, which is less than one-half of one per cent. of the whole Estimates, excepting Vote 8. May I give the Committee the assurance that under the guidance of the Treasury the Admiralty are doing everything in their power to try to get to better than pre-War estimating, and every effort will be made to that end.

Mr. RUNCIMAN

The explanation which has been given means that in the year 1923– 24 the Admiralty succeeded in getting so near the total amount of the Vote for the Department that they were only £ 185,000 out.

Mr. DAVIDSON

Except in Vote 8. Practically the whole variation, or failure to estimate correctly, was on Vote 8, which was due to unforeseen circumstances or, perhaps, forseeable circumstances which were not foreseen, and it is on it that the whole gravamen of the charge rests. The remainder of the Estimate has been pretty close.

Mr. RUNCIMAN

The hon. Gentleman apparently does not appreciate the point that the Admiralty must be tested by the errors of each individual Vote. It is not satisfactory to us to know that they have made an unexpected saving in one Vote, because that means they have over-estimated, or that they have made an unexpected loss on another, because that means they have underestimated. The largest of these items comes not under Vote 8 but under Vote 9 for armaments—nearly £ 1,000,000. The hon. Gentleman cannot satisfy the Committee by merely saying that the Public Accounts Committee looked into the figures. Of course, they have done so, but what they have looked into is whether the figures are correct, whether the Treasury has sanctioned this virement, was the Treasury entitled to do so, was there anything improper in allowing the excess of one Vote to be put against the deficiency in another Vote? That is all that the Public Accounts Committee does. It asks for an explanation and presents its Report. Now the Report is before the Committee, and it is for the Committee to decide whether this is accurate estimating or not. The real pertinence of this matter at the present moment is in regard to the controversy which has been, notoriously, going on between the Admiralty and the Treasury during the last few weeks. The Government have at last concluded that they will be able this year to make a saving of £ 500,000 because of the overestimating for which the hon. Gentleman the First Lord and the Sea Lords were jointly responsible. At this stage of the financial year they see they are half-a-million out on the figures on which they ask the House for money.

This is just the sort of thing that gives rise to disquietude in the public mind outside. Whatever may be said by the Prime Minister about obtaining economy in various other branches of Admiralty expenditure, which will enable them to embark on a large cruiser programme in the next few months, it leads one to believe that on all these Votes there must have been a great deal of loose estimating. They have been playing for safety throughout; and whatever may be said about the strength of the Navy or the programme necessary to maintain its strength, there is a great deal of extravagance apparent in the way in which the Admiralty make up their Estimates, and that is why we now have to enter our protest against this sort of thing, even although it may have occurred in 1923– 24. The hon. Gentleman was not himself responsible, but the Board of Admiralty was, and the system which has given rise to these enormous variations and this Motion to-night is exactly the system which ought to be brought to an end if we are to have anything like close estimating at the Admiralty such as we have at the other Government Departments. The right hon. Gentleman the Financial Secretary to the Treasury said this was a light matter and that my hon. and gallant Friend was making inquisitive inquiries about matters which have been dealt with already by the Public Accounts Committee. That will not do at all. It is the character of the Admiralty accounting that is in question, and as long as this accounting goes on, it will be impossible for the Prime Minister to obtain the economies he desires and which the

country has the right to demand. In these circumstances, although we have no other means of entering a protest except voting, I feel that it is necessary that we should divide the Committee upon it.

Question put, "That the application of such sums be sanctioned."

The Committee divided: Ayes, 167; Noes, 25.

Division No. 321.] AYES. [11.29 p.m.
Acland-Troyte, Lieut.-Colonel Glyn, Major R. G. C. Oakley, T.
Albery, Irving James Goff, Sir Park O'Connor, T. J. (Bedford, Luton)
Allen, J. Sandeman (L'pool, W. Derby) Greene, W. P. Crawford Ormsby-Gore, Hon. William
Applin, Colonel R. V. K. Guinness, Rt. Hon. Walter E. Pennefather, Sir John
Ashley, Lt.-Col. Rt. Hon. Wilfrid W. Gunston, Captain D. W. Percy, Lord Eustace (Hastings)
Astbury, Lieut.-Commander F. W. Hacking, Captain Douglas H. Perkins, Colonel E. K.
Balfour, George (Hampstead) Hall, Lieut.-Col. Sir F. (Dulwich) Peto, Basil E. (Devon, Barnstaple)
Balniel, Lord Hammersley, S. S. Peto, G. (Somerset, Frome)
Barclay-Harvey, C. M. Hanbury, C. Price, Major C. W. M.
Barnett, Major Sir Richard Hannon, Patrick Joseph Henry Radford, E. A.
Beamish, Captain T. P. H. Harland, A. Ramsden, E.
Blundell, F. N. Harrison, G. J. C. Rawson, Alfred Cooper
Boothby, R. J. G. Hawke, John Anthony Reid, Capt. A. S. C. (Warrington)
Bourns, Captain Robert Croft Headlam, Lieut.-Colonel C. M. Rhys, Hon. C. A. U.
Bowater, Sir T. Vansittart Henderson, Capt. R. R. (Oxford, Henley) Richardson, Sir P. W. (Sur'y, Ch'fs'y)
Boyd-Carpenter, Major A. Heneage, Lieut.-Colonel Arthur P. Ruggles-Brise, Major E. A.
Briscoe, Richard George Henn, sir Sydney H. Samuel, A. M. (Surrey, Farnham)
Brocklebank, C. E. R. Hennessy, Major J. R. G. Sassoon, Sir Philip Albert Gustava D
Brooke, Brigadier-General C. R. I. Henniker-Hughan, Vice-Adm. Sir A. Scott, Sir Leslie (Liverp'l, Exchange)
Broun-Lindsay, Major H. Herbert, Dennis (Hertford, Watford) Shaw, R. G. (Yorks, W.R., Sowerby)
Brown, Brig.-Gen. H. C. (Berks, Newb'y) Hilton. Cecil Shaw, Capt. W. W. (Wilts, Westb'y)
Bullock, Captain M. Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. Shepperson, E. W.
Burman, J. B. Holt, Captain H. P. Skelton, A. N.
Burney, Lieut.-Com. Charles D. Hope, Capt. A. O. J. (Warw'k, Nun.) Smith, R. W. (Aberd'n & Kinc'dine, C.)
Campbell, E. T. Hope, Sir Harry (Forfar) Smith-Carington, Neville W.
Chadwick, Sir Robert Burton Hopkins, J. W. W. Smithers, Waldron
Clayton, G. C. Hopkinson, A. (Lancaster, Mossley) Stanley, Col. Hon. G. F. (Will'sden, E.)
Cochrane, Commander Hon. A. D. Howard, Capt. Hon. D. (Cumb., N.) Stanley, Lord (Fylde)
Colfox, Major Wm. Phillips Hume, Sir G. H. Stanley, Hon. O. F. G. (Westm'eland)
Conway, Sir W. Martin Inskip, Sir Thomas Walker H. Steel, Major Samuel Strang
Cope, Major William Jacob, A. E. Storry Deans, R.
Couper, J. B. Jephcott, A. R. Strickland, Sir Gerald
Craig, Ernest (Chester, Crewe) Kidd, J. (Linlithgow) Styles, Captain H. Walter
Crooke, J. Smedley (Deritend) Lamb, J. Q. Sykes. Major-Gen. Sir Frederick H.
Crookshank, Cpt. H.(Lindsey, Gainsbro) Lucas-Tooth, Sir H. V. Thompson. Luke (Sunderland)
Cunliffe, Joseph Herbert Luce, Major-Gen. Sir Richard Harman Tinne, J. A.
Dalkeith, Earl of Lumley, L. R. Vaughan-Morgan, Col. K. P.
Davidson, J. (Hertf'd, Hemel Hempst'd) MacAndrew, Charles Glen Warner, Brigadier-General W. W.
Davies, A. V. (Lancaster, Royton) McDonnell, Colonel Hon. Angus Warrender, Sir Victor
Davies, Maj. Geo. F. (Somerset, Yeovil) McLean, Major A. Waterhouse, Captain Charles
Dawson, Sir Philip Macmillan, Captain H. Watts, Dr. T.
Drewe, C. McNeill Rt. Hon. Ronald John Williams, Com. C. (Devon, Torquay)
Elliot, Captain Walter E. MacRobert, Alexander M. Williams, Herbert G. (Reading)
Elvedon, Viscount Mannlngham-Buller, Sir Mervyn Wilson, R. R. (Stafford, Lichfield)
Erskine, Lord (Somerset, Weston-s.-M.) Margesson, Captain D. Winby, Colonel L. P.
Everard, W. Lindsay Merriman, F. B. Windsor-Clive, Lieut.-Colonel George
Fairfax, Captain J. G. Mitchell, S. (Lanark, Lanark) Winterton, Rt. Hon. Earl
Falls, Sir Charles F. Monsell, Eyres, Com. Rt. Hon. B. M. Wise, Sir Fredric
Fielden, E. B. Moore, Sir Newton J. Wolmer, Viscount
Fleming, D. P. Moore-Brabazon, Lieut.-Col. J. T C. Womersley, W. J.
Ford, P. J. Morder, Col. W. Grant Wood, B. C. (Somerset, Bridgwater)
Foxcroft, Captain C. T. Moreing, Captain A. H. Wood. E. (Chest'r, Stalyb'ge & Hyde)
Fremantle, Lieut.-Colonel Francis E. Nail, Lieut.-Colonel Sir Joseph Woodcock, Colonel H. C.
Gadie, Lieut.-Col. Anthony Nelson, Sir Frank
Ganzoni Sir John Neville, R. J. TELLERS FOR THE AYES.
Gault, Lieut.-Col. Andrew Hamilton Newman, Sir R. H. S. D. L. (Exeter) Major Sir Harry Barnston and
Gilmour, Lt.-Col. Rt. Hon. Sir John Nuttall, Ellis Mr. F. C. Thomson.
NOES.
Alexander, A. V. (Sheffield, Hillsbro') Crawfurd, H. E. England, Colonel A.
Barr, J. Dalton, Hugh Forrest, W.
Benn Captain Wedgwood (Leith) Edwards, C. (Monmouth, Bedwellty) Gillett, George M.
Hayes, John Henry Lindley, F. W. Watson, W. M. (Duntermline)
Jenkins, W. (Glamorgan, Neath) Livingston, A. H. Williams, C. P. (Denbigh, Wrexham)
John, William (Rhondda, West) Naylor, T. E.
Johnston, Thomas (Dundee) Rose, Frank H. TELLERS FOR THE NOES.
Jones, Henry Haydn (Merioneth) Runciman, Rt. Hon. Walter Sir Godfrey Collins and Sir
Kelly, W. T. Slesser, sir Henry H. Robert Hutchison.
Kenworthy, Lt.-Com. Hon. Joseph M. Sutton, J. E.

Resolution agreed to.

"Whereas it appears by the Air Appropriation Account for the year ended the 31st day of March, 1924, and the statement appended thereto, that the aggregate expenditure on Air Services has not exceeded the aggregate sums appropriated for those Services, and that, as shown in the Schedule hereto appended, the net surplus of the Exchequer Grants for Air Services over the net expenditure is £1.505.696 4s. 2d., namely:—

SCHEDULE.
No. of Vote. Air Services, 1923–24, Votes Deficits. Surpluses.
Excesses of actual over estimated gross Expenditure. Deficiencies of actual as compared with estimated Receipts. Surpluses of estimated over actual gross Expenditure. Surpluses of actual as compared with estimated Receipts.
£ s. d. £ s. d. £ s. d. £ s. d.
1 Pay, etc., of the Air Force 355,985 1 7 524,972 8 8
2 Quartering, Stores (except Technical), Supplies, and Transport. 274,003 18 9 409,002 7 11
3 Technical and Warlike Stores (including Experimental and Research Services) 16,367 19 10 376,468 13 3
4 Works, Buildings, and Lands 212,734 6 0 820,262 19 1
5 Air Ministry 9,892 11 2 1,002 5 1
6 Meteorological and Miscellaneous Effective Services. 124 6 2 47,751 8 7
7 Auxiliary and Reserve Forces 996 18 0 75,178 10 2
8 Civil Aviation 60,426 16 10 4,106 3 2
9 Half-Pay, Pensions, and other Non-Effective Services. 1,330 15 8 44,125 8 9
Balances Irrecoverable and Claims abandoned. 5,950 2 6
22,318 2 4 845,175 6 2 1,991,612 11 2 381,577 1 6
Total Deficits £867,493 8 6 Total Surpluses £2,373,189 12 8
Net Surplus… £1,505,696 4 2

Motion made, and Question proposed, "That the application of such sums be sanctioned.—[Mr. Guinness.]

Lieut.-Colonel Sir JOSEPH NALL: Many hon. Members on this side of the House will welcome the savings that are being effected in this way. While there

£ s. d.
Total Surpluses 2,373,189 12 8
Total Deficits 867,493 8 6
Net Surplus £1,505,696 4 2

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 Air Services as is necessary to make good the said total deficits on other grants for Air Services.

2. That the application of such sums be sanctioned."

may be some point in the observations made as to the loose estimating, I do not think it ought to go forth from this side of the House that we object to sayings being made when it is possible to make them. Therefore, we on this side welcome the economies, and hope that further savings will be made.

Lieut.-Commander KENWORTHY

We ought to have some explanation from the right hon. Gentleman the Secretary of State for Air. There is no saving—that is the point. There should be a saving, but all that is happening is that the money is being put from the right-hand pocket of the right hon. Gentleman to his left.

Sir J. NALL

In this particular Re-solution there is surplus of £ 1,500,000.

Lieut.-Commander KENWORTHY

It is being appropriated to another branch of the Service. Still, if there is a saving, I am very glad to hear it. Nevertheless we ought to have a few words of explanation from the right hon. Gentleman.

The SECRETARY of STATE for AIR (Sir Samuel Hoare)

Part of the money saved is from the lesser garrison at Iraq —and this ought to delight the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy). In pay and personnel, almost the whole of the saving is due to reductions. So in relation to the items that follow. In item 4 (works, buildings, and land) the surplus is £ 820,000. The major part of that is due to works for which estimates had been made, but owing to the reduction in the garrison, and the general curtailment of the policy following the return to office of the Conservative Government we were able to cut down the expenditure to a large extent. The whole amount of the surplus is due to that one fact. I can agree generally with what has been said this evening as to the objections to overestimating, and I can assure the Committee that in the subsequent year, 1924– 25, the estimating has been much closer, and, so far as I can see, the estimating this year will be closer still.

Resolutions to be reported To-morrow.