§ Order for Second Reading read.
§ 12.38 p.m.
§ The Financial Secretary to the Treasury (Mr. Glenvil Hall)
I beg to move, "That the Bill be now read a Second time."
It was over a year ago—in November, 1946—that I presented a similar Measure to the House. That Act had two main provisions. First, it empowered the National Debt Commissioners to make advances to the Public Works Loans Board for local loans up to a maximum of £250 million. The advances so far made amount to £220 million. The House will see that there is only about £30 million left. This being so, the powers conferred on the National Debt Commissioners by the present Act will be exhausted so far as we can judge early in January.
The second thing done by the last Act was that it empowered the Board to incur commitments to lend up to a maximum of £500 million. That was an overall sum. It had to include the £250 million which they were empowered to advance. So far, the commitments to lend, plus the advances actually made by the National Debt Commissioners through the Board, amount to £445 million. The actual balance left is approximately £55 million. Therefore, it is necessary that the Board should receive further lending powers without delay. The present Act has been in force for just over 13 months. When we asked for the powers which were conferred when it was introduced we intimated that the amounts then agreed to might last for over a year. In fact, they have lasted for 13 months and, with the balance still in hand, they may last for another month.
The new Bill is very short. It is simple and contains only four Clauses. The first Clause authorises the £250 million, to which I have referred, as a maximum sum which may be advanced by the National Debt Commissioners to the Public Works Loan Board for local loans until the next Measure is passed. Clause 2 authorises the Public Works Loan Board to incur commitments to lend up to £400 million in all. Until the act is superseded they can 722 actually advance the £250 million to which I have referred and promise to advance a further £150 million, making a total of £400 million. Clause 3 authorises the writing off from the assets of the Local Loans Fund of the outstanding principal of certain loans made in the past under the Agricultural Credits Act, 1923. The details of this are given in the Schedule and also in the Financial Memorandum. Although these loans are written off from the Fund, it does not necessarily mean that they will be a total loss. Though the Fund will no longer have any interest in attempting to recover them, the Exchequer will take over that work and do what it can to do so. Clause 4 remits certain arrears of interest which are now completely irrecoverable. The reason why the interest must be mentioned separately from the principal is that arrears of interest have never been entered or looked upon as part of the assets of the Local Loans Fund.
I may be asked how this Bill, with powers to make loans and to enter into commitments up to £400 million, squares with the announcement of the Government that they intend to cut expenditure on capital investment. No doubt it has been noticed that we are asking for powers to make advances up to £250 million, the same amount as was asked for last year when the present Act was passed. There is to be a Debate on the White Paper which has been issued setting out the policy of the Government in relation to capital investment. I am sure that the House has no desire to anticipate that Debate or to discuss that side of the matter now.
Perhaps I should remind the House that the last Act asked for £500 million as an overall sum. The total we ask for here, which will include both advance[...] and commitments, is only £400 million. When this Bill has been passed—as was the case with its predecessor—all commitments entered into by the Public Works Loan Board under the powers conferred upon them under the previous Act, will be carried forward. They will form part of the commitments under the present Bill. The majority of the commitments already entered into are for housing and ancillary projects. As those who have read the White Paper will remember, such projects are scheduled to be completed.
The commitments and advances tinder the present Act amount to £445 million.
723 Of these, actual advances have amounted to £220 million. Therefore, the commitments which will be carried forward under this Bill amount to £225 million. Those amounts, as and when they can be advanced, will be taken from the £400 million which we are asking the House to sanction under the present Measure. Although we appear to be asking for powers to permit advances up to £400 million we are only granting power to the Public Works Loan Board to advance and commit themselves to a further £200 million, if we take into account the present commitments which will be carried forward. That is a great decrease compared with last year, when we asked for power to enter into commitments up to £;500 million. The carry-forward last year was only £130 million, so that the new advances and commitments then gave the Public Works Loan Commissioners power to go to a total amount of £370 million, as compared with the £200 million I have just mentioned.
It is hoped that the amounts under this Bill will enable the Commissioners to go forward for an appreciable time, but it is impossible for us to say how long it will be before we have to come back to the House for a renewed authorisation. We hope that this Bill will run, if possible, for as long as its predecessor, but I would not like to commit the Government to a definite forecast. Hon. Members will see that we are not asking for nearly as much as we asked for last year and that the reason why we want the money is that the Loan Commissioners are fast running short of funds. For these reasons, I hope that the House will agree to the Second Reading of this Bill.
§ 12.50 p.m.
§ Lieut.-Colonel Elliot (Scottish Universities)
We on this side of the House are not satisfied with the statement made by the right hon. Gentleman. It is true that we have the important Paper on Capital Investment in 1948, and it is true that it is to be debated, but I should have thought that the Financial Secretary to the Treasury would have taken every opportunity of enlightening the House on at least some of the issues contained in that White Paper. It will not be possible, without repeated Debates in this House, for hon. Members and the country to grasp 724 the implications of that formidable document, and the repercussions it may have on the life of this country.
As I understand, the Financial Secretary said that he was asking for a sum considerably less than the Government asked for last year, that the last Act asked for £500 million, whereas this Measure will empower the expenditure of £400 million, of which commitments amount to some £200 million, allowing only some £200 million of fresh money. I appreciate the difficulties of the Financial Secretary under conditions such as this. I myself, when Financial Secretary, had to introduce the Public Works Loans Bill following the financial crisis of 1931. On that occasion a good many questions were asked about the shrinkage which was to take place, and to what extent the Government measures were adequate to deal with it.
The right hon. Gentleman mentioned that a considerable proportion of the commitments made were in respect of housing, and that the housing programme would continue until the run-off began to show. The period of the commencement of this run-off, and the effect it will have upon our circumstances, is of vital importance not merely to individuals in this country but to the local authorities and to the great building trade—the trade with a million people—which is looking anxiously to see how this run-off will develop and what preparations they will have to make to transfer a considerable quantity of their labour to other fields of activity. If the runoff which is predicted takes place in the second part of next year, a considerable diminution in what one might call the carcass construction of houses is almost bound to take place if efforts are to be concentrated on finishing the houses. As I understand it, a considerable restriction is being made upon the proposals to commence construction, so that again an imbalance will take place during that period. Every effort was first directed to finishing the hulls of houses and those whose work lay in the later stages were relatively in difficulties. Now, as the hump passes, the carcass builders will be out of work—though not necessarily out of employment, if they are transferred to other employment—and great pressure will fall upon those trades engaged in finishing the hulls already constructed.
It is quite true that these are general considerations which will be reviewed in 725 the Debate, but they will require more than one Debate before they are fully appreciated. This Bill involving £400 million has an appendix showing the unfortunate circumstances which overtook a farmer of Nettlehill Farm, Uphall, Westlothian, Mr. Thomas Cook of Saltaugh Grange Farm in the County of York, Mr. Ernest William Nickerson and Mr. Charles Alfred Peck of the Glebe and Rectory Farms, Thoresway, in the County of Lincoln, and of Mr. Thomas Ford Robinson of Nuthill, Wranglands, and Weghill Farms, Burstwick and Preston, Hull, in the East Riding of the County of York——
§ Lieut.-Colonel Elliot
Yes, but that is a case of arrears of interest—which, as the Financial Secretary properly said, does not fall into exactly the same category—on sums borrowed by Mr. Alexander Fowlie and Mrs. Mary Ann Fowlie, tenants of the farm of Mid Culsh, New Deer, Aberdeenshire. I think the Financial Secretary will agree that this is a striking example of the way in which our financial affairs sometimes, like the trunk of the elephant, are used to uproot an oak tree and sometimes to pick up a pin, because these are small transactions in comparison with the gigantic sums, and still more gigantic issues, affected by the White Paper.
It is impossible for us to carry the matter further just now when the whole financial policy of the Government is obviously undergoing a great recasting. The terms of this Bill foreshadow that to some extent, and the White Paper describes it in somewhat greater detail. However, a great recasting of financial policy should not be confined merely to one or two occasions in the House of Commons. Every possible opportunity should be taken of explaining the crisis in which the country finds itself, and the measures which the Government intend to take to deal with that crisis. Otherwise, sudden measures of great stringency fall upon an unprepared public and give rise to disappointment, if not panic. The Financial Secretary has lost an opportunity this afternoon, but I hope it may even yet be possible for him to add a little to the rather circumscribed statement he vouchsafed to the House at the beginning of this Debate.
§ 12.58 p.m.
§ Mr. Charles Williams (Torquay)
I rise to support my right hon. and gallant Friend the Member for the Scottish Universities (Lieut.-Colonel Elliot) in his comments on this Bill. As he said, it is indeed a curious fact in this Bill, that small items in the Financial Memorandum covering only some £16,000 or £17,000 of debts, are dealt with in great detail, and yet the Financial Secretary was unable to offer any information as to how the big figures included in the main part of the Bill are broken up. I shall not deal with the small debts at the beginning of the Bill except to point out that, somehow or other, two Scotsmen got away with it, two Yorkshiremen and one farmer from Lincolnshire, and that apparently none of the honest people South and West of the Thames have done otherwise than pay up all their debts. I am not astonished that my right hon. and gallant Friend omitted Aberdeen, because I always though they were never in debt up there.
The right hon. Gentleman said that he was not asking for quite so much this year as last year because of the financial cuts under the White Paper. He then used a phrase which has now become common form on the Treasury Bench, that we are some time, somewhere to have a Debate on this matter in the immediate future, and that, therefore, he could not say anything today. In other words, he has abdicated from his position as Financial Secretary to the Treasury in asking this House to grant loans. After all, we are the House of Commons; he is asking us for this money, and is not really telling us much except to say that some time in the future we may have some information if we are clever enough to get it out of Ministers.
I do not want to be unkind to the right hon. Gentleman, but he has had some days in which to prepare for the Second Reading of this Bill. He has terrific sources of information behind him and surely he could have been told how much is represented by the cuts. In all probability that must be something in proportion to the total bill. I should like to know how much of this reduction—I will leave out the cuts because they may come on later—is due to the fact that during the last period which the Bill covers, no more money will be needed for temporary 727 housing. I think I am right in suggesting that on that account there should be a very considerable saving in the amount of these local loans.
Again, we are asking where we are on this matter. This is a very large amount of money for the purposes of loans. Is any of this money which is being granted in this way going to the nationalised coal industry? I do not know; some of it may go there and some of it may not, but we have never been told. The right hon. Gentleman never told us of the details for which he wants this money. Again, as far as this money being used in any way is concerned, it might easily go—though I do not say I am technically correct, for I do not pretend to be—for use in the expenditure of £1,000 million for the nationalised railways. On the other hand, we may be asked for another loan for that on another occasion.
The usual practice of the Treasury, when they are bringing forward a Bill of this kind for such a considerable amount of money and when relating it to other loans not necessarily of the same type but not too dissimilar, is that they gave a greater explanation than we have had this morning in this matter. It may very well be that the right hon. Gentleman was not supplied with the answers to the points put by my right hon. and gallant Friend and myself, but there are other occasions on which this Bill will come before the House and I ask the Financial Secretary, with very great respect, to provide this information, remembering that the people of this country are continually being appealed to—now by the Chancellor of the Exchequer, and formerly by the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton)—to loan money to the Government. It is very rarely that in this House we get a chance of probing how that money is used. This is an occasion where, I imagine, the money loaned to the Government is bound to come into the picture to some extent.
I ask the right hon. Gentleman, in future, in dealing with such matters as these, not to allow himself to be pushed into the background, but rather to tell those connected with the Treasury that the proud record of his office in the past compels him to tell the House and the 728 country as a whole what is being done, what the money is wanted for and why it is wanted. In my last few words I would only say that I am glad at any rate that the position is not quite so bad as it was 12 months ago.
§ 1.5 p.m.
§ Mr. Glenvil Hall
I can speak again only by leave of the House. If I might briefly reply to the points that have been made, the first point I would make is that this is only an enabling Bill, and therefore, it is quite obviously impossible for me to say how this money is to be split up, which was, I think, the phrase used by the hon. Member for Torquay (Mr. C. Williams). It is an enabling Bill for the future, to empower the Public Works Loan Board to make advances by way of local loans. These local loans will go almost entirely to local authorities, who must, as the House will remember, come to the Treasury under the Act of 1945. They cannot make an issue or seek an advance on the Stock Exchange or in any other way, as they were able to do in the past.
This money is required to meet any commitments or advances which the Public Works Loans Board may desire to make from local loans funds. The Treasury and the Board act in conjunction with the Departments concerned. Normally, it would be the Ministry of Health, and it certainly is the Ministry of Health where housing and ancillary projects in England are in question. It is, therefore, quite impossible for me to give the hon. Member for Torquay any indication of how the figures will be broken up, as the money has not yet been advanced. The right hon. and gallant Gentleman the Member for the Scottish Universities (Lieut.-Colonel Elliot) called attention to the lists at the beginning of the Bill, and I understood him to draw some sort of analogy from the fact that there was a difference betwen the sums there and the possible changes that the White Paper will make when the cuts envisaged in capital expenditure are implemented.
§ Lieut.-Colonel Elliot
I must not give a wrong impression to the right hon. Gentleman. I merely indicated that they were admittedly small sums, and that in comparison with the general sums mentioned both in the body of the Bill and in the White Paper, we could perhaps have dispensed with the Clause by Clause 729 analysis of the Bill which the Financial Secretary gave in favour of a much more general statement.
§ Mr. Glenvil Hall
As I indicated, it was not for me to make a general statement on the Government's policy on capital investment, or on any changes which the Government contemplate in that direction. It would, in my view, have been clearly inappropriate and most certainly out of Order when, within a week or so, we are to have a full-dress Debate on the White Paper as such. A further reason why it would be inappropriate and wrong on my part to deal with capital expenditure is that today we are dealing with the very narrow issue of whether the House will or will not grant the Government the power to lend through the Public Works Loan Board certain sums, to local authorities in the main, for certain purposes.
There are signs that the local authorities in the future will not want so much money. Their future capital expenditure will presumably be reduced by the Government's policy on capital investment, hut, it would have been wrong of me to deal with this in its wider aspects, when I am only asking the House to pass this short, simple Measure with one single aim.
§ Lieut.-Colonel Elliot
I do not wish to keep on interrupting the right hon. Gentleman but to say a loan of £400 million is a narrow issue is in these days a little of an under-statement.
§ Mr. Glenvil Hall
The issue is a narrow one, but the amount involved is large. Let me repeat, this is only an enabling Measure. We are not asking the House to lend this money to unspecified local authorities. We are asking the House to give us, through the National Debt Commissioners and the Public Works Loan Board, power to make advances and enter into commitments for sums which, in the aggregate, will not amount to more than £400 million between the time this Bill is passed and another one projected and agreed. I did not follow what the right hon. Gentleman had to say about the losses, which are listed in the Financial Memorandum in some detail. I would point out to him, however, that these losses are agricultural losses. They have been incurred under the Act of 1923, and, if he will look at the details, he will see 730 they were almost entirely incurred under the Conservative Government in pre-war years.
§ Lieut.-Colonel Elliot
I do not wish to keep on interrupting but if the right hon. Gentleman trails his coat he must expect to get it trodden on. In fact, the loss incurred in the first of these items is a specific loss which came to fruition in 1931, after two years of Socialist Government.
§ Mr. Glenvil Hall
It may have come to fruition in 1931, but that particular Government was a minority government and was only in office two years. The whole loss was not incurred in that particular year, and the right hon. and gallant Gentleman will find, in the main, that these losses were incurred in the inter-war years, when we had a Conservative Government in office. I think what I have said covers the main points put by the right hon. and hon. Gentlemen opposite. The House can have no serious criticism to make of the Bill as it stands or the amounts contained therein. I hope, therefore, that we may now get the Second Reading.
§ Question put, and agreed to.
§ Bill accordingly read a Second time.
§ Bill committed to a Committee of the whole House for Monday next.—[Mr. Simmons.]