HC Deb 10 July 1946 vol 425 cc436-41

Lords Amendment: In page 31, line 35, leave out from "fund" to the end of the Clause, and insert: (2) The management of the said fund, tho sums to be carried from time to time to the credit thereof, and the application thereof, shall be as the Board may determine: Provided that—

  1. (a) no part of the said fund shall be applied otherwise than for purposes of the Board; and
  2. (b) the power of the Minister to give directions to the Board shall extend to the giving to them, with the approval of the Treasury, of directions as to any matter relating to the establishment or management of the said fund, the carrying of sums to the credit thereof, or the application thereof, notwithstanding that the directions may be of a specific character."

Mr. Shinwell

I beg to move, "That this House doth agree with the Lords in the said Amendment."

This is a rather more substantial matter. When we discussed the Reserve Fund during the Committee stage, there was a question whether it would hamper the operations of the Board if the prerogative as to the disposal of the Reserve Fund was left in the hands of the Government. This matter emerged in another place, and as a result of a Debate that took place there—I am certain there was a Debate on this issue in another place—it was decided to amend the Clause. There are two Amendments bearing on the same point. They are designed to alter the provisions with regard to the Reserve Fund of the Board and the application of the surplus revenues of the Board. The differences are essentially differences of emphasis. That must be clearly borne in mind. The Amendments make it clear that the initiative in these matters rests with the Board, whereas under the original Clause it rested with the Government. That is the simple issue. As regards the subsequent Amendment—in page 32, line 1—it gives the Board power to deal with their Reserve Fund subject to the right of the Minister, with the approval of the Treasury, to give them specific directions thereon, and subject also to no part of the Fund being applied otherwise than for the purposes of the Board. I never did believe that the original provision would hamper the Board in any of its activities, but as there were hon. Members who thought otherwise, the matter has, on reconsideration, been adjusted, and I should imagine that the Board, in this form, will be able to create its Reserve Fund and dispose of it without any undue interference by the Government. At any rate, that is the intention, and I think the words fit the intention.

5.30 p.m.

Colonel Lancaster (Fylde)

I should like to interpose in this discussion for a moment or two and say that we welcome this Amendment to Clause 28. It is a matter which received considerable attention upstairs when several hon. Members on this side, with longer experience than myself, pointed out to the Minister how dangerous it was to leave matters of this kind to the discretion of the Government and that frequently in the past, notably in the case of the Post Office, reserve funds have been raised and appropriated for purposes other than those for which they were intended. I am a little concerned about the actual wording of this Amendment; it introduces yet another function for the Board by virtue of the words "purposes of the Board." We have become familiar with the duties, functions, powers and policy of the Board; they now have a purpose. It is not quite clear what is that purpose but I believe that in another place it was referred to as "activities" and the Lord Chancellor said that throughout this Bill the word "activities" meant the business operations of the Board. In this case, I wonder if it would not be better to introduce the word "activities" rather than this somewhat general term "purposes," which must be very wide and which has no explanation in the Bill itself. It is a small point but it seems to me that it might bring about some improvement and I suggest that the right hon. Gentleman may be prepared to consider it.

Sir A. Gridley

As I understand the position, the Minister will still have power to give directions to the Board, but he is to some extent controlled by the Treasury. I should like to know the Minister's intention, because he will, of course, have a great deal of influence with the Board. We are not dealing with an ordinary kind of business undertaking but with a wasting asset for which considerable sums of the taxpayers' money will have been paid or pledged. Is it the intention of the Minister to see that a reserve fund is created, one of the objects of which will be to provide for the writing off of the assets as is done in a normal business undertaking? Perhaps the Minister would enlighten the House on that point?

Mr. Shinwell

With regard to the point raised by the hon. and gallant Member for Fylde (Colonel Lancaster), I imagine that it is a minor point whether we use the word "purposes" or "activities," and it is quite clear what is meant. I would not care at this stage to introduce any further changes. In reply to the hon. Member for Stockport (Sir A. Gridley), it is, of course, clear that the Board will be an ordinary commercial undertaking and must conform to the ordinary commercial practices. In the creation of a reserve fund the Board will obviously have the initiative and they will naturally deal with the reserve in accordance with the state of the undertaking, their general needs and the obligations that are imposed upon them. As Minister I should not care to direct the Board unnecessarily in a matter of that kind; I have sufficient faith in the business qualities of the gentlemen who are to serve on the Board not to indulge in unnecessary interference, and certainly not in petty interference. We must leave it to them and, as the hon. Member is aware, there is provision in the Bill to enable us to examine the position when the annual accounts are submitted to the House if we think the reserves are not being properly disposed of or used to the best advantage.

Captain Crookshank

This is a very agreeable change to us on this side of the House. It was one of the chief battle grounds throughout the Bill, although one might not think so from the rather subdued way in which the Minister has referred to it, and I want to congratulate him on having seen wisdom at last and on the fact that the arguments we put forward have been accepted. Let there be no mistake—this is a completely revolutionary change in the proposals which the right hon. Gentleman made and got through this House. Originally, while the Board were to establish a fund, this was to be managed in such way as the Minister, with the approval of the Treasury, might direct, and indeed the moneys put into the Reserve Fund could only be such, and at such times as the Minister might direct. Now it is entirely the other way round. The Minister is not the deciding factor at all, and the Board are to decide what is to be put to the credit of the Reserve Fund. This is a very different proposition. First of all, the Minister was going to direct the Board; now the Board are to be free to do as they wish, with the one proviso that the Minister can give them certain directions—but only within the purposes for which the Board exist.

As far as I can see, that does, in terms, make it impossible, short of amending legislation, for any outside raiders to put their fingers on these funds. It does not take away the temptation but makes it impossible once and for all for the Minister or the Treasury to divert any of these sums for other purposes than those of the Board. It is just as well that that should be underlined because the Minister will no doubt want in due course to have it underlined. There may be predatory bodies about some time or another and it should be clear in the Bill, as it now is, that it rests primarily with the Board to deal with their own reserves as they think fit and that no part of the money may be used except for the purposes of the Board. It is a complete change and an improvement upon anything which we were able to secure in this house. I do not think for one moment that the Minister will be sorry that he has accepted this. He said on many occasions that he did not want to interfere too much with the activities of the Board, and a moment ago he told us that in his view the Board is to be a great commercial undertaking. Be that as it may, the further temptation is removed from the Minister the better and temptation is being removed by these words. I hope, therefore, that the House will agree with the Minister's Motion and approve this Amendment.

Mr. C. Williams

As a Back Bencher who has not taken part in this battle very much so far, I should like to congratulate the Minister on one phrase which he used in his reply to my hon. Friend the Member for Stockport (Sir A. Gridley). He made a very important statement when he said that in the management of these mines the Board were to conform to commercial practices. That is a very important matter as far as the mines are concerned because up to the present they have been run in accordance with commercial practices and not State practices. That is a very important difference, as I am sure the Minister knows, and I con- gratulate him most sincerely on the fact that he used that phrase.

Mr. Shinwell

I forgot to use the word "best" commercial practices.

Mr. Williams

That removes it right into the area of pure private enterprise, and away from nationalisation of any sort, and I am grateful to the Minister for having enabled me to emphasise the value of his explanation. I am sorry the right hon. Gentleman left out the word "better", but perhaps we have emphasised it better by leaving it as it is. It is of vital importance, not only to the House but to the country as a whole, that when we are running these mines it should not be possible for some Chancellor of the Exchequer to come down and badger and bully any Minister of Mines and get into this Fund in some way. I am very glad the Minister has seen his way to introduce this Amendment into the Bill. I do not quite know how this came about but I conclude that it is consequential on some wisdom that the Minister has found in another place. Question put, and agreed to.

Lords Amendment: In page 31, line 42, after "year," insert "of the Board."

Mr. Shinwell

I beg to move "That this House cloth agree with the Lords in the said Amendment."

Mr. H. Macmillan

No doubt this is a drafting Amendment but I would be grateful if the right hon. Gentleman could answer a question for me on one point. I can see that it is necessary to have such an Amendment because, when the Board begins to operate, its financial year will be from the vesting date, whenever that takes place. The year may, therefore, start in September, or October or not even till January of next year Would it not be more convenient, if, as soon as possible, the financial year of the Board were made the same as the financial year of the nation? That could easily be done by running the first period for 18 months or whatever it might be, and afterwards making the Board's financial year conform to our own financial year. That is common practice. It would result in the financial year of the Board being the same as the April to April financial year of the nation. That would be good for Parliament, the Board and the nation.

Mr. Shinwell

I take note of the point.

Major Roberts

It would be very useful also if the vesting date could be so arranged as to fall at a convenient date, say, in September. As far as I can see, it will not come until next June

Mr. Shinwell

The hon. and gallant Member is getting very near the bone now.