HC Deb 16 June 1938 vol 337 cc539-54

10.2 p.m.

Mr. Morgan Jones

I beg to move, in page 3, line 38, after "Exchequer," to insert "as soon as may be and in any case."

I expect that representatives of the Government will at once have sensed why it is that this Amendment is being moved. We are reverting to a point that was raised in the Second Reading Debate and originated by my right hon. Friend the Member for Hillsborough (Mr. Alexander). Frankly, the reply of the Minister for the Co-ordination of Defence did not seem to be quite satisfactory, and if the right hon. Gentleman will forgive me for saying so, I should be very glad if he would indicate upon what grounds he made the observations which I will quote in a minute. This point is not a party point, as my right hon. Friend the Member for Hillsborough said, but it is a point of some considerable substance to the House of Commons as such. It goes down to what I regard as the rights of the House in regard to control over expenditure, and it is from that point of view that I am raising the matter, and not in any spirit of hostility to the general proposals of the Bill. The right hon. Gentleman the Minister for the Coordination of Defence used the following words: The Bill requires that any money advanced should be paid back to the Consolidated Fund in the year following the close of the financial year in which the original transaction took place. He went on to say: That is a usual provision in connection with other advances out of the Consolidated Fund. It entails the ascertainment of the sum and the granting of it by the House of Commons in the previous July. That is the customary practice. It means a postponement of only three months after the close of the financial year in which the original transaction took place. There is nothing unsual in that, and it will in the appropriate period enable the House to obtain the fullest information."—[OFFICIAL REPORT, 2nd June, 1938; col. 2358, Vol. 336.] I should be very glad if the right hon. Gentleman would tell us upon what precedent he bases that claim, for frankly I am not yet aware of the precedent upon which he relies. What we are doing in this Sub-section is this. To use the precise words of the Sub-section, we are authorising the Treasury out of the Consolidated Fund of the United Kingdom or the growing produce thereof to make temporary advances to the fund. There is no limitation whatever—and this is the essential point—on the amount which may be advanced out of the Consolidated Fund. I suggest that to give, so to speak, an open cheque in that way is without precedent. As I say I am not raising the matter in any hostile spirit but I would ask the right hon. Gentleman to say what precedent if any exists for this course. The nearest thing to a precedent which I can recall is that of Section 18 of the Unemployment Act of 1934. In that case we were enabling certain benefits to be paid but the rate of payment was laid down by Parliament and therefore what was done subsequently was automatic. In this case no sum is stated and therefore it will be competent for the Treasury—though I do not say they would do it—to draw upon the Consolidated Fund for an unlimited amount of money. They are fully authorised to do so under the terms of the Sub-section.

Of course what will happen will be that the Treasury will from time to time come to the House of Commons with Supplementary Estimates but I am speaking of what is possible under this Sub-section as it is now drawn and striving, as best I can, to safeguard the rights of the House of Commons. If the words of my Amendment are not adequate or are open to criticism in any way, I am willing to accept any other words that may be suggested as long as they guarantee the right of the House of Commons and its control over the amounts to be taken from time to time out of the Consolidated Fund. I do not think it right that this House should give the Treasury carte blanche in this matter. Moreover, technically, the Treasury would not be called upon to give any account until the September of the year following the end of the financial year concerned. If, shall we say, money began to be abstracted for this purpose in April then unless there were Supplementary Estimates for the exact amounts, the time which would elapse before the Treasury were called upon to give any information to the House of Commons might be as much as 15 months. What objection can there be to my proposal that there should be an obligation on the Treasury as speedily as possible to inform the House of Commons how much money has been taken for a particular purpose? I do not seek to set any exact time limit but there ought to be some condition of this kind I think I have made by point clear. It is an important House of Commons point. If the right hon. Gentleman thinks that the wording of my Amendment is open to criticism and that a better form of words could be devised, I shall be glad to consider any alternative he may suggest. But I would like him to enlighten us, first, on what grounds there are for taking these broad powers, and secondly on what precedent he relies when he describes this as a usual form of procedure.

Sir A. Salter

May I, Sir Robert, ask for your guidance. I wish to raise a point which is rather similar to that raised by the hon. Member for Caerphilly (Mr. Morgan Jones) but is not exactly the same and is I think scarcely covered by his Amendment. I wish to ask that certain information should be given to us, before we pass a Clause which, among other things, is really a Bill of Indemnity—

The Temporary Chairman (Sir Robert Young)

If that is the hon. Member's purpose, he can ask that on the Question "That the Clause stand part of the Bill."

10.11 p.m.

The Minister for the Co-ordination of Defence (Sir Thomas lnskip)

I think the Committee appreciate the hon. Member's desire that the House of Commons should have information as soon as possible about any advances that have been made temporarily from the Consolidated Fund. I have no doubt that everybody in the Committee shares his opinion as I certainly share it that it would be undesirable that the House of Commons should only be acquainted with the facts at a late stage and to postpone the information for two or three years would be most undesirable. It could not, however, be postponed longer than the period mentioned in the instance which he has given, of an advance being made out of the Consolidated Fund in April which would mean that the House of Commons might not have the information until 17 months later. In practice, however, it is certain that that would not happen. The hon. Member has great experience in the Public Accounts Committee, and he knows the practice which is followed in these matters. In practice a Supplementary Estimate would be presented without waiting for the lapse of the full time allowed by the Statute.

The hon. Gentleman may reply that the practice is not good enough for him, and that he would like to see it in the Statute. I am not quibbling about the form of words which he has used in his Amendment, but if I may, for once, assume the role of lawyer I would be inclined to say that these words would not be effective if there was any inclination on the part of the Government to depart from the practice which is familiar to us. The mere insertion of the words "as soon as may be" would not compel the Government to do anything. It would merely be a pointer or indication to the Government that the usual practice was the proper practice. I cannot say that I should take any very strong objection to the insertion of these words if the Committee really thought they were likely to be useful in effecting the object which we all have at heart, but I would not like to see them put into the Bill for the reason that I have mentioned, that they are not really effective for their purpose, and I think the Parliamentary draftsman's advice always is that you should not put in words which are not precise or adequate to effect the object which is intended.

I do not meet the hon. Member's criticism in any partisan spirit. As he said, this is not a party question, but a question which concerns the convenience of the House as the watchdog of finance. He asked me what is the precedent for these words. I was told on the last occasion, and I have been told again, that it is a very common provision, and he himself gave one precedent in the Unemployment Insurance Act, though he gave reasons for thinking that the mischief of delay was not so great in that case as it might be in this case. The answer which I will give to the Committee is that they may be satisfied that the usual practice will be followed, and that even if an advance was made out of the Consolidated Fund in April, it is certain that the necessary Supplementary Estimate would be taken in the ensuing months, so as to ensure the matter being brought before the House of Commons at the earliest possible moment. I cannot conceive of any Government taking upon itself the responsibility of postponing it for 12 or 15 months and then having the criticism of the House directed against its delayed activity. I would respectfully ask the hon. Member whether, in these circumstances, he will not press the Amendment, which I think he will see would not really add anything to the effectiveness of the Clause.

10.18 p.m.

Mr. Morgan Jones

I confess that in moving these words I was conscious of their vagueness, but one was anxious not to draft a form of words which would unduly hamper the Government in the work which they wish to do. However, even as they are, they do make a difference, for this reason, that these accounts would have to be examined by the Public Accounts Committee of the House of Commons some year or 18 months later, and if these words were inserted, the then Public Accounts Committee would know, by cross-examination of the appropriate witness, whether in fact the Government had notified the House of Commons as early as it could have done or whether it had unnecessarily delayed doing so. I will make this offer to the right hon. Gentleman: He thought these words were insufficiently strong to meet my purpose. Very well, if it will meet his pleasure and

the pleasure of the Committee, I will undertake to withdraw them to-night, so that we can discuss them again between now and the Report stage, and insert stronger words to meet my point at that stage. If he will accept that suggestion, I will gladly fall in with it.

Sir T. Inskip

I must not allow the hon. Gentleman to be put into a position which he does not intend to take. There will be no Report stage unless some Amendment is carried at this stage.

Mr. Jones

In that case I had better hang on to the little I have, and, weak as these words are, and as I know they are, I would rather attach them to the Clause than have no such words at all.

Question put, "That those words be there inserted."

The Committee divided: Ayes, 110; Noes, 170.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

10.28 p.m.

Sir A. Salter

Before we pass from this Clause I should like to ask the Government whether they will either give us to-night, or promise us before the Bill becomes law, certain information which they have so far withheld. Sub-section (3) of the Clause is, among other things, a Bill of Indemnity. The Government have incurred expenditure without authorisation from Parliament and have now come to get indemnity for that act. Of course, I agree that their action was not only excusable but even imperative, but it is of a kind very rare in our Parliamentary history. I have not been able to find any other instance in a time of peace, except the case of the purchase by Disraeli of the Suez Canal shares. It is a very rare event, and I suggest, when the Government do incur expenditure in this way without authority, for however necessary a purpose, that when they ask for indemnity they should give the fullest possible information to Parliament, unless there is an imperative, overriding public reason for not doing so. I suggest that there can be no such reason in this instance. I tried to get this information during the Budget Debate, and again on the Second Reading of this Bill, but I did not succeed. But we did draw two pieces of information from the right hon. Gentleman, which, I suggest, means that the withholding of the information for which I am now asking is no longer defensable.

In the first place, the right hon. Gentleman told us that he would next month be introducing a Supplementary Estimate, from which we shall presumably know how much the Government spent before authorisation. Secondly, he told us that the purchase of the stocks in question of the three commodities was completed and that no further purchases of those commodities were at present contemplated. If no further purchases of those commodities are being made between now and the next month, there can be no real reason for withholding information now as to how much money has been spent for which a Bill of Indemnity is now sought, and that he could give us that information as well now as next month. The moment when it is obviously proper that that information should be given is when the indemnity is asked.

10.31 p.m.

Mr. McEntee

I was going to ask a similar question in relation to information which the public ought to have. The Bill states in Clause 3 the reason for the payments. Sub-section (2) provides for the payment of such expenses incurred by the Board in respect of remuneration and allowances payable to any of the officers or servants of the Board. Would the right hon. Gentleman tell us what is meant by "officers or servants of the Board"? I have in mind conditions which prevailed in a certain trade during the last War. At that time a percentage basis was paid to a certain firm in the City for buying stocks, and the firm were able to make such a huge fortune in a few weeks that it became almost a public scandal. The persons concerned at that time, if this Sub-section had been in operation, would have been, in my view, a servant of the Board, because he would have been acting under the direction of the Board and would have been employed for the definite purpose of purchasing the commodity. Are we to have a similar experience now? That is what I want to know. We have been told that the wheat has already been purchased and that it is now in store, but we have no information whatever as to the conditions under which it was purchased or as to the payments that were made to the persons who were negotiating—

Mr. Stanley

I do not want to interrupt the hon. Gentleman, but I think I ought to remind him that in my Second Reading speech I made the definite statement, which the House welcomed, that the firms concerned in the operation of these purchases had done it without charging any commission at all.

Mr. McEntee

I agree with the right hon. Gentleman that those people might not have charged any commission at that time. Somebody has pointed out what happened in regard to timber; it may also be the case in regard to food, and there may be very serious profiteering by firms concerned, with the connivance and under the direction of the Government themselves. Cannot the Government tell us what is going to happen? It is no use telling us that up to now certain purchases have been made and that no commission has been paid. In the event of further purchases being made the people who have made the purchases now are not always going on acting for the Government in the purchase of huge quantities of wheat and other materials unless a commission or some form of payment is agreed upon. There must be something in the mind of the Government in that regard. Can they not take the House into their confidence and tell us what it is—whether these transactions are to be on a commission basis, or whether they are to be open to competition, or whether qualified people are to be asked to give estimates in regard to the purchase of wheat and other commodities?

Further, I agree with the last speaker that it is not only unusual but very dangerous that Parliament should permit expenses to be incurred—perhaps very heavy expenses—the amount of which we do not know. These expenses have already been incurred, and we are asked for an indemnity in respect of an expenditure the amount of which we do not know. Before we are asked to pass such a provision, we ought to know the amount of the expenditure that has been incurred without asking the consent of Parliament. I hope that, before we vote on this Clause, we shall get some further information on that subject.

10.37 p.m.

Mr. Oswald Lewis

I should like to support in general terms the plea of the hon. Member for Oxford University (Sir A. Salter). It seems to me that, however strong may be the arguments for saying that the Government should have made these purchases without the previous authorisation of Parliament, there is very little to be said for the argument that, now that authorisation for these purchases is being sought, we should not be told the amount that is involved. The hon. Member for Oxford University said he understood that in about a month's time, in a Supplementary Estimate, the figures would be available. I am not at all sure that that is going to be the case. I should like to ask the Minister for the Co-ordination of Defence, who, I see, is going to reply, this specific question: Will the figures in the Supplementary Estimate be arranged in such a way as to show what expenditure was incurred before the passing of this Bill, and what expenditure has been incurred since the passing of the Bill up to the time of the Supplementary Estimate? If those figures are confused, the information that the hon. Member wants will never be available.

There is another question to which I would like to draw attention, namely the question of secrecy. We all appreciate that the Government are operating in difficult circumstances, and that they are bound to make such purchases as they desire to make with the maximum of secrecy. But we do not want secrecy for secrecy's sake. Take the question of the storage of the commodities which have already been purchased. The President of the Board of Trade told us on the Second Reading, and he has reminded us to-night, that the firms who acted for the Government did so without charge. I listened very carefully to his speech on that occasion. Very likely it was my fault, but I formed the impression that these firms had provided for the storing of the commodities. Yesterday, however, when I put a question on that subject, I was told by the Parliamentary Secretary to the Board of Trade that these firms have not provided any storage, but that storage has been provided elsewhere. That seems to me to be important, because we were also led to understand that these firms had undertaken that the existence of these stores of commodities, of which they know, would not influence them in their buying, but that they would continue to hold as large stocks as they did before.

I cannot conceive why the House should not be told something, at any rate, of the arrangements that have been made for the storage of these commodities—for instance, whether special buildings are to be erected, or whether the Government intend to hire buildings for the purpose. Surely we might be given some information on that head. I do not suggest that the Minister should tell us exactly where the commodities are; if he cannot give us information of that kind, I am sure no hon. Member would press for it; but I think we are entitled to some general information, if the eminent firms who have purchased these commodities have not provided any part of their own storage for the accommodation of the commodities, as to how the accommodation has been provided.

10.40 p.m.

Sir T. Inskip

There is no difficulty about that. There is no objection at all to informing the Committee now of the volume of the commitments already incurred in respect of the purchase of wheat, oil and sugar. These commitments at the present time amount to a sum of about £7,500,000, but, as I told the House on the Second Reading, on 2nd June, hon. Members must not suppose that that sum will enable the Committee to judge the total volume of stocks of which, in one way or another, provision has been made in consequence of the arrangements of the Government. With regard to the point that the Committee should not be asked to pass a Clause which amounts to something in the nature of an indemnity for something done in the past. I can say that the indemnity which the Committee is asked to pass is for the sum I have mentioned. With regard to the point of the hon. Gentleman opposite as to the item for expenses in respect of remuneration and allowances, that has nothing to do with commissions. It is merely a provision that the salaries and allowances of officers in the Board of Trade, under my right hon. Friend the President of the Board of Trade, in so far as the services of those officers may be identifiable in connection with food storage, shall be payable out of the fund. The question of extravagant commissions, which the hon. Member mentioned, does not arise at all, therefore, on this Clause.

Mr. McEntee

Under Sub-section (3), there is provision for any expenses incurred by the Board of Trade in pursuance of an arrangement made before the passing of this Act. Surely some arrangement has been made for the payment of expenses in connection with the purchase of that £7,500,000 worth of goods already purchased, and the arrangements, to which the Minister has just referred, for very much larger quantities, for which arrangements have been presumably made without the actual payments having been made. I want some indication of the expenses.

Sir T. Inskip

The hon. Gentleman, I thought, dealt with the provisions of Subsection (2) of this Clause when he made his original inquiry. Now I understand that he is referring to Sub-section (3).

Mr. McEntee

I mentioned both in my original inquiry.

Sir T. Inskip

I thought the hon. Member was referring to Sub-section (2), which he read out, and I have already, I hope, disposed of any anxiety he had in respect of that Sub-section. Now he asks a question with regard to Sub-section (3), which provides that: Any expenses incurred by the Board of Trade in pursuance of arrangements made before the passing of this Act for the purpose of creating or assisting the creation of a reserve of any such commodity as is described in the Schedule to this Act shall be defrayed out of the fund as if this Act had then been in operation… My right hon. Friend the President of the Board of Trade has informed the Committee, as he informed the House, that no commission at all has been paid in pursuance of the purchase of wheat before the passing of the Bill—that is, up to the present time. Therefore, the answer to that question is that nothing has been paid, so there is nothing to be defrayed out of this fund in respect of purchases of wheat.

Mr. McEntee

That is on the £7,500,000, but the right hon. Gentleman made reference to very much larger quantities that have been arranged for. Has any arrangement been made as to the method of payment?

Sir T. Inskip

No arrangement has been made for the purchase of anything more beyond what has been already purchased up to the present moment.

Mr. McEntee

The right hon. Gentleman said that the Committee must not understand that, because we have purchased only £7,500,000 worth, that is all that we have done; we have made arrangements for a very much larger sum than the £7,500,000 represents. I want to know whether, in making those arrangements, any arrangement will be made in the matter of payment for the great quantities of goods which must be envisaged by the Government over and above the actual expenditure of £7,500,000?

Mr. Bellinger

Would the right hon. Gentleman elucidate the question of the £7,500,000 a little further? I understood him to say that this £7,500,000 sterling bears no relation to the quantities or the volume of commodities bought. What does it represent? Is this £7,500,000 in respect of options to purchase certain commodities, or what is it really for?

Sir T. Inskip

The hon. Gentleman has, I think, misheard the words I used. I did not say that the £7,500,000 had no relation to quantities purchased, but that it was not a guide to the volume of stocks for which arrangements had been made. If I remind the hon. Gentleman of what I stated in COlumn 2356 of the OFFICIAL REPORT with regard to sugar, he will realise what I am referring to. I informed the House on that occasion that Messrs. Tate and Lyle undertook, without any charge to the Government but solely at their own charge, to hold an increased volume of stocks so as to prevent the stocks of sugar falling to the low point at which normally they would fall. That arrangement does not require the expenditure of any sum of money at all, and it is to that sort of arrangement that I refer as.being in addition to the purchases, the cost of which has been up to now £7,500,000.

Sir A. Salter

I understand that the £7,500,000 comprises absolutely all that the Government have so far spent upon these three commodities, and also that the Government do not propose at present to purchase any more of these commodities. Therefore, that sum is a guide to us as to the volume, except only so far as the trade may have been willing, without any financial assistance of any kind, without compensation by the Government and purely as a voluntary arrangement, to make the kind of provision that Messrs. Tate and Lyle have clone. If so, I suggest that while we cannot infer precisely the volume, we have a fairly close approximation of what has been done, and what is being immediately contemplated with regard to these three very important commodities.

Clauses 4 and 5 ordered to stand part of the Bill.