DEVELOPMENT GRAVTS. (Hansard, 1 March 1938)

§ Lieut.-Colonel Colville
I see there is an Amendment to reduce this Vote, but I imagine that it is only for the purpose of asking for information. The Vote provides the amount required to meet payments to which the Treasury is already committed under Section 2 of Part I of the Development (Loan Guarantees and Grants) Act, 1929. The purpose of the part of the Act in question was to promote employment by accelerating development schemes of an economic nature to be carried out by certain classes of public utility companies, such as gas, electricity, water and railway companies. Grants were made by the Treasury after consultation with an advisory committee and with the concurrence of the appropriate Government Departments. The power to give assistance expired in August, 1932, so there is no question of new commitments, but there are certain commitments under the Act which we meet from year to year. £780,000 was voted for the current financial year, but certain maturities have taken place which necessitate a Supplementary Estimate this year.
There is a grant towards a particular group of three schemes. I shall not mention the undertakings concerned unless I am pressed very strongly. It is not usual to give publicity to them in the House. The grant was authorised in 1931 on the understanding that any variation between one claim and another of the allocation of the total expenditure ranking for grant would be subject to the approval of the Treasury. At a fairly early stage additional expenditure was incurred in respect of one of the schemes. When the claim for grant on that excess expenditure was lodged, the company in question was informed that the actual payment of grant on any excess expenditure over the original allocation for that scheme must be deferred until the completion of all three schemes enabled the final picture to be given. When the original Estimate for 1937 was framed there was no indication that the stage to which I have referred had been reached, but when the financial year had been entered upon we were informed that all the three works had been completed, and that it was desired to reach a settlement as to re-allocation. The Treasury were satisfied, after consultation with the appropriate Department, that the re-allocation could be agreed. They, therefore, made a settlement.
1052 There was a second company, to which a grant had been authorised. In 1931, this company had voluntarily offered to forgo presentation of its claim at the time, while reserving the right to resort to it later on. The company has come and asked for payment of its claim, which had been agreed to under the Act, and we are satisfied that they are entitled to receive payment.
For these two reasons, we have found it necessary, for the first time in the administration of this Act, to present a Supplementary Estimate. It is an Act in the administration of which we ought to be able to estimate expenditure accurately and to avoid Supplementary Estimates, but these two maturities could not, I am certain, have been foreseen. We had obligations to meet, and we have decided to meet them. This has necessitated coming to Parliament for a Supplementary Estimate.

§ Mr. Pethick-Lawrence
I am glad the right hon. Gentleman gave this explanation, because this had appeared a very unreasonable proceeding. I take it that there is no considerable likelihood of such a thing occurring again.

§ Lieut.-Colonel Colville
I can assure the right hon. Gentleman, as regards the case, in respect of which there was an undertaking, under which the company could come back and ask for a grant later on, that I have made careful search, and I find that there are no other cases of this kind.

§ Mr. Kirkwood
Who were the firms which got the Grant-in-Aid? Do the Government simply hand this money over to these firms and have no control over them, or do they retain control over this money, which they have given to bolster up these firms? I would also like to ask whether the Government, when they make those grants, insert any clause to ensure that the Fair Wages Clause will be observed.

The Chairman
The hon. Member is either too late or too early with his questions. He can raise this subject on the main Estimate, but not on the Supplementary Estimate.

§ Mr. Kirkwood
It is no use submitting an Estimate to us unless we can get 1053 information. The only way we can force the Government to give us information is by dividing the Commitee if we do not get it. I am sure that I am putting a fair question. I can never forget that the present Prime Minister, when he was Chancellor of the Exchequer, in making a grant to the Cunard Company to enable them to furnish the 534, which is now the "Queen Mary," although I pressed him, neglected to see that the Fair Wages Clause was observed in that contract. I want to know from the Financial Secretary whether they have taken any precautions in this matter, and I would like to know the names of the firms?

The Chairman
The names of the firms are another matter, and the right hon. and gallant Member can give that information, but the hon. Member can raise the other questions only on the main Estimate and not on the Supplementary Estimate.

§ Mr. Pethick-Lawrence
If the terms were such as my hon. Friend suggests, would he not be in order in asking whether, before this money was finally paid over, the Treasury should give an assurance that the terms had been carried out?

The Chairman
That assurance, I understood, had been given, but the terms would not be in order.

§ Mr. Pethick-Lawrence
If those were part of the original terms is my right hon. Friend not justified in asking whether the Treasury is satisfied that the contract was carried out?

The Chairman
The right hon. Gentleman is putting to me a question which has not arisen at all. It is a totally different question from that which the hon. Gentleman the Member for Dumbarton (Mr. Kirkwood) asked.

§ Lieut.-Colonel Colville
The commitments are under an Act of Parliament which was passed when hon. Members opposite were in office, and any terms that were attached were framed by them.

§ Mr. Buchanan
Will the right hon. and gallant Gentleman give the name of the Act?

§ Lieut.-Colonel Colville
I certainly gave it, but I will give it again. It was 1054 Section 2 of Part I of the Development (Loan Guarantees and Grants) Act, 1929. Any terms laid down in that Act have been observed before the money was handed over, but I do not think that it would be in order to discuss that upon this Supplementary Estimate. The Treasury have assured themselves that these terms were observed. I said that I preferred not to name the firms following the practice consistently followed by successive Governments on both sides of the House since the Act was passed. I indicated that one undertaking is a very large transport undertaking, and that the other is one dealing with public services.