HC Deb 01 June 1933 vol 278 cc2087-105

Section twenty-four of the Finance Act, 1932 (which provides for the establishment of the Exchange Equalisation Account), shall have effect as though for Sub-section (7) thereof the following Sub-section were substituted: —

(7) The Account shall in every year until it is wound up be examined by the Comptroller and Auditor-General, and he shall report thereon to the Commons, House of Parliament.—[Mr. Morgan Jones.]

Brought up, and read the First time.

4.5 p.m.


I beg to move, "That the Clause be read a Second time.

Perhaps I might recall to the House the position in relation to this account as it now stands. The Committee will remember that last year when this Equalisation Account was set up there appeared in Sub-section (7) of Section 24, an instruction to the Comptroller and Auditor-General in respect of his responsibility for certifying the Exchange Equalisation Account, and perhaps I ought to make it quite clear what I understand is the responsibility of the Comptroller and Auditor-General under that Sub-section. Under the law as it now stands, it seems to me that all that he is called upon to do is to examine the account and, at the end of the year, to certify that, in his judgment, the account has been conducted in accordance with the terms of the law setting up the account. We had last year and we have had this year attempts to raise the question as to whether that provision in last year's Act is a sufficient guarantee in respect of the control of this fund.

In the previous discussion upon the fund, the Chancellor of the Exchequer, I regret to say, did not feel able to meet the suggestion made by hon. Members in all parts of the House, and I would like to repeat that this is not a party point at all. It is an entirely non-party point, although it is a House of Commons point pure and simple. On previous occasions when this subject has been raised with the Chancellor of the Exchequer, he has, I think, taken two points. One was that there was no object in having a full examination of the account so many months after the closing of the year's account—there was no special merit in it. That was one of his points, but it was not the first that he put. The first was that he hesitated to have the account examined by the Public Accounts Committee, lest by having such a close and minute examination of the account, an unfortunate disclosure might take place which might be inimical to the public interest. I would like to give the quotation on that particular point first of all. He was replying to some question I had put. He said, on 4th May: What is the sort of questions that they"— That is, the Public Accounts Committee— might address to him? They have been clearly suggested by the hon. Member for Caerphilly. He would want to ask, 'What has been done with this sum of money? In what form has it been held from time to time? What were your resources on such-and-such a date? What did you do when certain circumstances arose? How did you act, and what was the result of your action?' These would be reasonable questions to ask and answer if they could be safely answered to the Public Accounts Committee, or even to Members of the House, without giving the same answers to the whole world; but, as I pointed out earlier, that is really the difficulty in which we are."—[OFFICIAL (REPORT, 4th May, 1933; col. 1093, Vol. 277.] May I take that point first of all? The Chancellor of the Exchequer will know that in practice the Public Accounts Committee does not embark upon examination of the accounts of a given year until, at the earliest, the January of the following year. In practice the Committee does not actually arrive at the examination of the Treasury witness, or of the Comptroller and Auditor-General until, say, late in May, or the beginning of June. As a matter of fact, this year we have completed the examination of the Treasury witness this very week. That is to say, the examination of the Treasury witness, or the Comptroller and Auditor-General does not take place until some 15 months after the end of the financial year. On the question of privacy, the right hon. Gentleman will know that, in the very nature of things, those of us who are members of the Public Accounts Committee are presented year after year with accounts which it is desirable, in the public interest, not to make public. Quite a number of private accounts are presented to us, and, so far as my short experience of the Committee goes—and I dare say it covers the whole history of the existence of the Committee—I have never heard of the disclosure of any single figure presented within the privacy of that Committee room.

Not only that, but this also is true. Take this Account. I dare say the Chancellor of the Exchequer will attach to this Account a very special degree of privacy, but let me remind him that this would not be the first time for the Public Accounts Committee to be confronted with highly confidential documents, and that even during the late War accounts of a highly confidential character (had to be presented to the Public Accounts Committee in relation to Navy, Army, and Air expenditure. I think the right hon. Gentleman will concede to me this proposition, that in time of war expenditure of that sort must necessarily be of a highly confidential character, and yet, though those accounts were of that character, they were, in point of fact, presented to the Public Accounts Committee during those years. The then Public Accounts Committee agreed that there should be no publicity in extenso, but that for the time being certain limitations should take place. In case I should be regarded as exaggerating the position, I would like to read a passage from their second report in 1916 in relation to this question of limitation of information: Your Committee agree to the limitation of information now made public on the undertaking, as twice specifically given to them, that nothing should he withheld from the Comptroller and Auditor-General and that the full accounts will be published at the earliest moment that can be done without detriment to the public interest. But even with that limitation upon publicity the Auditor-General, as I understand it, even then did present to the Committee a full statement so far as they requested that it should be made. I think I have shown that there is a safe precedent and an adequate precedent for the proposition I am putting to the Chancellor. From the House of Commons point of view it is not enough to certify merely that the Account has been conducted according to law. The Public Accounts Committee, which is the accounts committee of this House, should be, in 1933–34, just as fully informed of the state of this Account as the Public Accounts Committee were informed in 1916 of expenditure in relation to equally confidential matters, that is, the Services expenditure at that time.

I am sure the Chancellor did not mean to make any reflection, nor, in fact, did he, upon the reliability of members of the committee. He was rather apprehensive, perhaps, of the mere effect of the presentation of accounts at all, but I have shown him that there is a precedent for the presentation of accounts of a highly confidential character in a previous year. There is also this fact, that now, year after year, we get presented to us documents conveying information of a confidential character which we all of us, as members of that Committee, have to safeguard very carefully, and do safeguard to the utmost of our ability. The second point put by the Chancellor of the Exchequer was a different one, and I wonder on which leg he proposes to stand. Having put the point about fEarlng possible publicity, he put a second point, which will be found in column 1502 of the OFFICIAL REPORT, of the 9th May, when he was answering my hon. and gallant Friend the Member for Gainsborough (Captain Crookshank): Let me point this out to the House of Commons. I think one hon. Member asked what would be the use to the speculators of knowing nine months afterwards what had been done. What use would it be to the House nine months afterwards? How would the House have control? The only information, the hon. Member now says, that is wanted is whether on a particular date a profit or loss has been incurred."—[OFFICIAL REPORT, 9th May, 1933; col. 1502, Vol. 277.] I submit respectfully that that is a poor House of Commons' point to take, be- cause the whole work of the Public Accounts Committee is an examination of accounts long Since closed. As I stated at the beginning of my speech, we have only just concluded this week an examination of witnesses bEarlng testimony to accounts which were closed 15 months ago. The House of Commons, in its wisdom long ago, set up a Public Accounts Committee, not in order to stop expenditure when it is being actually expended but in order that control shall be exercised by the House, and the knowledge that that survey is going to be made by the Public Accounts Committee acts as a bar upon the activities of the various Departments. I submit that we are not yet convInced that the case we have made is not adequate for as complete a review of this account as is made of other confidential accounts, and, indeed, of other accounts generally.

I need not argue the general case again, because I must not consume time, but I must add this last observation. I dare say that those in charge of this account will do their very best in accordance with the traditions of our public service, indeed, that is taken for granted at once; but the times in which we live are times of some difficulty financially, and in spite of the very best efforts difficulties may supervene with consequences of a very serious character to this account. When a sum of £350,000,000 is involved it is not asking too much that the Public Accounts Committee, 15 months later if you like, but at any rate at some time, should be able to cross-examine the responsible officer of this House with a view to inquiring what is the state of this account and whether it has, in point of fact, been properly used in accordance with the decisions of Parliament. I hope I have succeeded, and I trust very much from the point of view of the House of Commons alone, in showing that there is an adequate case for what we ask, Since I am not convInced that there is the need for that large measure of reticence which the Chancellor of the Exchequer seeks to preserve in relation to this account.

4.23 p.m.


Members on this side who feel very keenly about this question of Parliamentary control over the Ex- change Equalisation Account are principally concerned that a fund of such importance should not be allowed to go entirely outside the control of the House of Commons. I do not propose to say much on that subject, however, because I do not believe that we have any real issue or difference of opinion with the Chancellor of the Exchequer on that point. Only last year he expressed his willingness to make an attempt to find some means by which our request could be complied with, and again this year he has said that if some means can be found by which adequate information can be given to the Public Accounts Committee or some other body without doing any harm to the actual functions of the, account he would be quite willing to consider such a proposal, and even endeavour to seek for such means. I am therefore going to leave that point, and come to what appear to be the real difficulties of the situation. One can readily understand that those who have been charged with the extremely delicate task of operating the account may very likely have made it one of their conditions that they should be given the greatest possible liberty and suffer the least interference. That is very easy to understand, and I think in such circumstances Members of the House of Commons would be willing to give the greatest amount of liberty of action, provided the principle is maintained that the House does, in fact, retain adequate control of the moneys voted by Parliament.

The last point I wish to touch upon is probably a matter of opinion, and I rather gather that the Chancellor of the Exchequer has other views on it than my own. I have never held the view that complete secrecy can be of any real advantage in transactions of this kind. I quite realise that the operations of the account could not be carried on from day to day without absolute secrecy. The account could not be carried on if its operations were made known within a short period of their having occurred, but apart from that I have always held the view that the real objects of this account, which are, apparently, to bring about a greater degree of stability, and to inspire confidence, are better achieved by some degree of publicity than they would be by complete secrecy. To illustrate the point of view I have in mind, I would take hon. Members back to the time when we left the Gold Standard. Through the publication of the Bank of England gold statement, everyone was well aware of our gold position. We had seen the decline in gold.

Eventually we saw that extremely serious departure of gold which brought us into a period of crisis, and on top of that we were made aware of those very large debts which we had to incur in America and in France. All that was made known, and in my view it was largely because it was known, and because in some sense it was a gradual process, that no panic occurred in this country. I believe, on the other hand, that if there had been no such thing as the Bank of England gold statement, and that if we had woke up one morning and been told, without previous information, that we had no more gold left and were off the Gold Standard, nothing could have prevented a panic in this country. I admit that that is a matter of opinion, that some people will agree with me and that others have every reason to take an opposite view, and I put it forward only for what it is worth. FiNaily, in view of what the Chancellor of the Exchequer has said, I very much hope that in consultation with his advisers he has been able to devise some means which will secure adequate control over this account, and that he will be able to make some proposal which will meet our difficulties in this matter.

4.24 p.m.


I do not want to go over the ground which I trod last year and this year on this subject, but I entirely endorse what has fallen from the hon. Member for Caerphilly (Mr. M. Jones) that this is not a political matter or a political issue in any shape or form. With regard to what has been said about the Public Accounts Committee some of us, I do not say resent, perhaps, but are a little sorry, that there are people—I do not think they include the Chancellor of the Exchequer, but it may be some of his advisers—who are not quite sure that we can be trusted with information. The hon. Member has put several questions on that subject. I think that the Public Accounts Committee are perfectly trustworthy Members of the House, and that if they are told anything in confidence that confidence will not be betrayed. We have had ample evidence in the past, and we may reasonably hope that our successors will be just as public-spirited in a matter of that kind as we hope we are ourselves and as our predecessors have shown themselves to be.

Parliament showed anxiety when the fund was set up last year as to arrangements that it might be possible to make with regard to the examination of the fund. This year, Parliament has been a little more anxious because of—certainly to me—the unexpected and vast increase in the amount of the fund. Many hon. Members have thought that what might have been a good arrangement a year ago, when, compared with this year, the fund was a small one, set up as was then hoped, for a short time, was not necessarily the arrangement that is required to-day. I am certain, from the expressions of opinion that have been heard in all quarters of the Committee during these Debates, that the Chancellor must have a very good idea what it is we hope he may do. We hope that some means may be found of bringing the fund under the control of Parliament. There is no Amendment on the Paper in the name of the Chancellor, but there is yet a further stage of consideration, if he should wish to deal with the matter in the way that we suggest.

A case has been made out for some attempt to bring this matter under the better control of Parliament, and that is all that we are asking. We feel, as guardians of the public purse, and I think quite rightly, that there is an element of financial and other danger in setting up a fund, however laudable the purpose, over which Parliament has not sufficient control. On the Third Reading of the Bill I said that if the Chancellor could not give us an assurance that he would reconsider the matter between then and the passage of the Finance Bill, I might reluctantly have to vote against the Measure. He at once said that he would give the matter his personal attention, and therefore I supported him, in the hope and full confidence that the result of his deliberations might bring some satisfactory solution. I hope that that may be the case, but of course, if no means have been found, I am afraid that I shall be thrown back upon my original position that I do not think that Parliament should be satisfied with the fund under the present arrangements, and that some scheme should be formulated by which we can obtain further control.

4.34 p.m.


I support the adoption of the Clause which was so admirably moved by the hon. Member for Caerphilly (Mr. M. Jones). I have an Amendment on the Paper which I believe I am right in stating will only see the light if this Clause is read the Second time. It is based upon a Clause which was put upon the Paper by two of my hon. Friends in practically the same wording, and which was so well worded that I could not improve upon it. The hon. Member who moved the Clause which we are now discussing will agree with me that without the valuation there would not be very much of a report, and that the valuation is needed to give the hon. Gentleman what he desires. He would say that if he were given authority to cross-question the Treasury he would arrive at what we all desire, a valuation between bullion and sterling. After his last speech, the Chancellor of the Exchequer may possibly be able to meet us, in some form or another.

I have not much to add to what has been said, except that I am sure that it is the general opinion that the right hon. Gentleman, who has never shown himself averse to responding to a general request from all parts of the House, should give Us what we, as representatives of the taxpayers ought to request, some definite report and some valuation. The right hon. Gentleman says that the Fund is secret. A very excellent speech was made by the hon. Member for Putney (Mr. S. Samuel), who pointed out that we knew pretty well what is going on now with regard to bullion, and we know that the floating Debt has been increased to £900,000,000, just a little under £1,000,000,000 because of the additional £200,000,000 which was voted the other day. Many of us are capable of finding out what is going on. The right hon. Gentleman will say, "Why then press for a report?" The answer is that our efforts are merely guesswork, whereas an official statement from the Treasury and from the right hon. Gentleman would be of immense value, and would add to his popularity. It would also meet the wishes of the House.

4.38 p.m.


My views are entirely opposite those which have already been expressed. I am willing to support any reform which the Chancellor feels able to concede, but it is almost impossible for him to give any information which would be of use to anybody, and in all probability the information would do more harm than good. The hon. Member for East Edinburgh (Mr. D. Mason) is far better left guessing. I should never trouble to give him the information, because I think that that is the best state in which people should be left in regard to this Fund. The hon. Member who moved the Clause was not alive to the facts of the case which is now under consideration. He cited certain information given during the time of war, in regard to the purchase of munitions and articles of warfare, but that is entirely different from the information which is presented to the Public Accounts Committee. The hon. and gallant Member for Gainsborough (Captain Crookshank) more truly represented the position when he said that this information might be exceedingly valuable for a member of the Public Accounts Committee, and not alone for-a member of the Public Accounts Committee, but for a number of other people who attend that committee. I am not suggesting that for anyone connected with that committee to know would necessarily be giving away important information, but I can see that some Members might be placed in a very difficult position.

As an illustration of the difficulty of giving information, I might take a purely imaginary case. Suppose that this fund had been in existence for one or two years, and, at the Public Accounts Committee shortly before America went off the Gold Standard, the accounts presented dealing with the fund for the past year had shown, as I understand, the hon. Member for East Edinburgh thinks it should show, how it had been invested. If those accounts had shown large holdings in dollars, what would have been the position of the Public Accounts Committee in the future after America had gone off gold? It would be known that, nine or ten months before, the Exchange Account had had a very large holding of dollars. What would happen to that committee? Would you say to the committee: "Are you still holding those dollars to-day," or would you not? If the Accounts Committee ask nothing, all they know is that, 10 months before, the fund had those dollars. The general temptation would be to ask whether those dollars had been sold, and whether gold had been purchased with them. At once you get to the point that the Public Accounts Committee have not satisfied themselves, and would be compelled to ask questions dealing with the position of the fund, in order to have their minds set at rest. When they look at the kind of information which is being asked for, hon. Gentlemen will see that although it might be information as to the position many months ago, yet in view of the difficult position of the fund, the Public Accounts Committee might be placed also in a difficult position when they got that information.

The hon. Gentleman who moved the Clause gave an illustration of what he considered was secret information being given to that committee. I can give an illustration of information which is never divulged to the committee—information as to the Secret Service Fund. I do not think that particulars are given to the committee as to how the Secret Service Fund is spent, and members of the committee do not ask anything about it. That is an illustration that you can have a fund about which you know perfectly well that information will not be given to the Public Accounts Committee. Even if the Chancellor gave to that committee the information that is suggested, hon. Members would find ultimately that it would be impossible for the right hon. Gentleman to give any information which would be of any value to the Public Accounts Committee without the Treasury being placed in a most difficult position, and without arousing a series of questions of every kind which could not be answered. The whole question would be left in a most unsatisfactory position.


Does it not occur to the hon. Gentleman that the Comptroller and Auditor-General would only have the information up to the date of his audit and would be unable to answer about transactions afterwards.


I see that. I was pointing out that the Public Accounts Committee would then be left with information as to what happened some time ago in regard to dollars owned by the fund, and without the knowledge whether the dollars were still held by the fund. As the hon. Member knows, the usual procedure, as the Comptroller and Auditor-General cannot answer questions, is for his representatives to do so. The Treasury would be answerable. You do not ask questions of the Comptroller and Auditor-General; you ask the representative of the Department, and the person who has to be asked is the representative of the Treasury, who must know exactly what the position is, although he may refuse to answer.

4.45 p.m.


The truth of the statement made by the hon. Member for Caerphilly (Mr. Morgan Jones), in moving this Clause, that this is not a party matter, is shown by the fact that I find myself in complete agreement with the objects which he seeks to attain, but yet quite unable to support the Clause as it stands. My reasons are partly but not entirely those which have been given by the hon. Member for Fins-bury (Sir G. Gillett). I think it would be possible, when a period of some months had elapsed after the end of the year, for the Public Accounts Committee to get information as to what had happened in the previous financial period covered by this account, but whether that information would be of much practical value is another matter. I entirely agree, however, as to the undesirability of the situation in which the House of Commons finds itself at the present time, when there is this very large amount of money entirely outside its control, and that is the reason why I am in entire agreement with the objects which hon. Members who are supporting the Clause have in view. At the same time, I am faced with the fact that, as far as I can see, if you have a fund of this kind it is quite impossible to give the House of Commons that information it desires to have, because the fund could not, as I imagine, be properly administered if the information were given.

Therefore, as I see it, it merely comes to this, that the House of Commons has to put up with a position in which, be- cause of the exceptional circumstances of the times, it has entrusted to certain people a very large sum of money which is outside its control altogether. I do not think there is any alternative, and I think we have to face that position. That it is not a desirable position I entirely agree. I would go further, and say that, if this were a case in which, for a period of years, the use of such a fund was likely to continue, I think the Chancellor of the Exchequer would have to consider very seriously whether it would not be necessary in some way or other—whether by means of some special committee or in some other way—to take the House of Commons to some extent into his confidence. He, I presume, like the rest of us however, hopes that this is only a comparatively temporary measure, the necessity for which in the ordinary course of things will pass away at an early date; and I think the House of Commons must face the fact that for this temporary period it will entirely lose control of the administration of this huge sum of money.

Another reason which makes me more hopeful that this period may be a temporary one is that we are within a few days of the inauguration of the World Economic Conference, and it is perfectly clear, surely, to everyone, that if that conference does not deal with the stability of currencies first and foremost, before it even begins to consider any other questions, it is doomed to failure at the start. There is no other question in the same category of importance as that of the stabilisation of world currencies, and, indeed, all our tariff agreements and other trade arrangements will go by the board, because they will be quite inoperative, unless currencies are stabilised as between the nations. That being the case, I can only hope, and I live, perhaps over-optimistically, in that hope, that this conference, of which we have heard so much and which has been postponed so often, is going to succeed in dealing with first principles and first things first of all. If that be the case, there will be no necessity, within a very short time, for the use of this Equalisation Fund, at any rate, to anything like the same extent as it is necessary to-day, and for that reason also I think that the House of Commons must, as I have said, put up the fact that we are, and must be in the nature of things, without any control over the fund for this temporary period.

I would like to say one further thing. If there is anything that gives us confidence in continuing this admittedly unsatisfactory arrangement, it is that the Equalisation Fund has been so extraordinarily well administered in the past. I think that the House of Commons owes a debt of gratitude to the right hon. Gentleman the Chancellor of the Exchequer and his advisers for the way in which the fund has been administered— so far as we know—I add those words advisedly; and, in case I should be misunderstood, I would repeat what I have said before, that, without the information which only the Chancellor of the Exchequer and his advisers have, and which the rest of us are not in possession of, we are faced with the possibility that the so-called appreciated value of gold may not be forthcoming when it comes to a final settling up. It would be out of order to go into these matters now, and I would only say that, so far as we know it, the administration has been extraordinarily successful, and at any rate the traders of this country owe a debt of gratitude to the Government for the fact that the fluctuations in exchange have been kept within reasonable limits in recent months. For the reason that I do not believe that any statement 10 months or thereabouts after a financial year has closed can be of any real value, I could not myself support the Clause, although, as I have said, I have great sympathy with the desire of the House of Commons to know more about these matters from time to time.

4.52 p.m.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)

I am disposed to agree with my hon. Friend the Member for Kidderminster (Sir J. Wardlaw-Milne) that we may hope that the necessity for the existence of this Exchange Equalisation Account will only be of a temporary character. At the same time, I would not say, if any agreement is come to at the outset of the World Economic Conference as to means for retaining relative stability in the case of various currencies, that that is associated in my mind with the immediate disappearance of the Exchange Equalisation Account. Indeed, it might well be that an account of this kind would be one of the factors which would enable us to carry through such an arrangement if it were found possible. That, perhaps, is somewhat of a digression.

The hon. Member for Caerphilly (Mr. M. Jones), who is Chairman of the Public Accounts Committee, said very truly that this is not a party matter, but rather a House of Commons question; and I think he is entitled to make that claim, because the views which he expressed have been echoed in various other quarters of the Committee, and, as the Committee are aware, I have always been sympathetic towards that point of view. I have always realised the difficulties, to which my hon. Friend the Member for Kidderminster has referred, of the position of the House of Commons in being asked to entrust the management and administration of a vast sum of money, consisting of hundreds of millions of pounds, to a body the composition of which is not known to it, and without any knowledge at all of how the administration is being carried on. I have felt, myself, that there could be no justification for such a state of things were it not that it would appear that the disclosure of such information as the House of Commons would certainly, in other circumstances, have the right to ask for, would make it impossible to operate the fund at all for the purpose for which it has been established. That, as I have said before, and as I say again, is the only reason and the only difficulty that prevents me from accepting to the full the claims which have been made by the hon. Member for Caerphilly.

He has put this Clause down, and has argued that what he is asking—namely, that the Auditor-General should not only examine the account and report whether it has been conducted in accordance with the statute, but should, further, make a general report to the Public Accounts Committee—could be done without danger to the public interest. Of course, if the Clause were carried in the form in which it now stands, it would be obvious that the Auditor-General must take it as a direction to communicate to the Public Accounts Committee the whole state of the fund at the date on which he was reporting—what the assets were, what the conduct of the fund had been, and so on—and would have to answer questions as to the state of the fund at any particular time, and the reasons which had been given for any particular action.


When the right hon. Gentleman speaks of the date at which the Auditor-General was reporting, he will, of course, remember that in fact the Auditor-General only reports to the Public Accounts Committee some 12 or 15 months after the end of the year.


By the date at which he was reporting I did not mean the date at which he appeared before the Public Accounts Committee, but the date of the closing of the Account—the 31st March, or whatever it might be. Let me say at once that I am not suggesting any kind of reflection upon the sense of responsibility of members of the Public Accounts Committee, but I put to myself this question: What is the purpose of the Public Accounts Committee? Is it not to enable the House of Commons to exercise control over public expenditure? I will assume that in this case the Public Accounts Committee, after receiving the report of the Auditor-General, fully approve of everything that has been done. In that case there would be no reason why the information which has been given to them should go any further than themselves. But, surely, T. must take into account the possibility that they would be critical of something that had been done. They might consider that some error had been made in the administration of the Account. In that case, surely, they would desire to be able to report to the House of Commons that they did criticise, that they did not approve, that they recommended certain alterations. And when you come to that point, I do not see how they are going to make a case to the House of Commons, or how my Department is to defend itself against any such criticism, unless some of this material which has been supplied to them is also imparted to the House of Commons, whose proceedings, of course, are public. I am sure that the hon. Member will see the difficulty in which I am.


Do I understand the right hon. Gentleman's argument to be that, in the event of the Account having been, in the view of the Committee, properly conducted, all would be well, but that if there should be in the view of the Public Accounts Committee something that deserved, shall I say, censure, or objection, the (Public Accounts Committee is to allow it to go on without any observation at all?


Certainly not. It is not what the Auditor-General says that I am concerned about. I am assuming that the Auditor-General does certify in any case that the Account has been conducted in acordance with the Statute. But, obviously, the Public Accounts Committee might say that, although it had been conducted in accordance with the Statute, they did not approve of the way in which it had been conducted. It may be that I am over-cautious in this matter, but I would ask the Committee to observe that we are here dealing with matters of which we have very little experience up to the present, and yet which are matters of vital importance, as we believe, to the country; and if in this matter we make a mistake and go a little bit too far, we may utterly destroy the usefuiness of the fund, and may find that we have done away with the possibility of using it for the purpose for which we set it up. I venture to say to the Committee that it is better, at any rate in the first instance, to be a little too cautious than a little too rash in this matter, because the dangers of being over-cautious are not nearly so great as those of going too far in the opposite direction.

Having said that, I say again that I am extremely anxious to find some way of meeting the point that has been raised by the hon. Member for Caerphilly, and supported by my hon. Friends in various parts of the Committee. I have given quite a lot of time to trying to find whether one could not give to the Public Accounts Committee sufficient information to enable them to form their own judgment of the working of the account, without at the same time disclosing the actual state of the account at a known date.

I want to emphasise this point. The dangerous thing is to make known the state of the account at a given date. That would let it be known to those who have an interest in the working of the account for their own purposes and they could connect up the two things, the given date and the state of the account at that date, and by looking back at the transactions that took place at that time they could get information which would be useful to them in guessing at the future operations of the fund. There must always, in the working of a fund of this kind, be times when the resources of the fund may be fully expended. Those will be the weak times, because we are dealing here not only with speculation but with seasonal changes, which come at known periods of the year, and, therefore, we want to guard against giving the public information which enables them to say, "At such a date this was the state of the account." Perhaps it is possible to avoid that particular danger while giving the Public Accounts Committee the sort of information which they very properly desire to have and which I am anxious that they should have if it can be done without public danger. I have devised this proposal which I will communicate to the Committee and, if it is acceptable, I shall be very glad to carry it out. This is the proposal. There will be prepared a figure for each month showing the value of the holding in the account on the last day of that month of foreign devisen and gold, in which alone the account can deal. From these figures will be compiled what I may call a monthly average figure comprising the period from the setting up of the account in July last year to the end of the financial year in March, 1933. This figure, after it has been agreed with the Comptroller and Auditor-General, will be available to the Public Accounts Committee and will be given to them by the Treasury Accounting Officer when he comes before them in the ordinary course of business for examination of the Appropriation Accounts for 1932–3. That is going a good way. It is giving rather more than my advisers would like me to give, but I hope the Committee will accept it as an earnest at any rate of my strong desire to meet their wishes on the point.

My hon. Friend the Member for Gainsborough (Captain Crookshank) remarked that there was no Amendment in my name upon the Paper. While I am ready to give this undertaking to the Committee in respect of this year, I do not wish to put it in the form of a statutory provision at the present time. I must regard this as to some extent experimental. I should like to see how it works. If it works all right during the course of the present year, I shall then be quite ready to consider next year, if the Exchange Equalisation Account is still continued, whether it might not be embodied in a more permanent provision, but for the present I would ask the Committee to be content with the undertaking I have given and to let it be considered as a trial which will be permanent or otherwise according as experience guides us.


Will the right hon. Gentleman tell us what the monthly figure will consist of? Will it be a valuation of the contents of the fund at that date?


There will be first of all taken out a figure of the holding in the account of foreign devisen and gold on the last day of each month. That will give, in a full year, 12 monthly figures. The average of those figures will be taken as what I call the monthly average and that will be the figure.

5.5 p.m.


One has only heard the statement across the Table, and it is difficult to form a judgment as to the exact significance of it. I am very much obliged to the right hon. Gentleman for having attempted to meet our point. I am quite sure it is well intentioned and we accept it in that sense for the present. I am quite willing to withdraw my Motion so that we can have time to examine the statement as it appears in the OFFICIAL REPORT to-morrow, and, if it appears to us satisfactory, that is the end of the matter, but we should like to return to it on Report if it is unsatisfactory.


I think that is very reasonable.

Motion and Clause, by leave, withdrawn.