§ Considered in Committee under Standing Order No. 84 (Money Committees). [Queen's Recommendation signified.]
§ [Mr. HOPKIN MORRIS in the Chair]
§
Motion made, and Question proposed,
That, for the purposes of any Act of the present Session to make provision for authorising the Minister of Transport to undertake the insurance of ships, aircraft and certain other goods against war risks and, in certain circumstances, other risks, it is expedient to authorise—
§ 11.48 p.m.
§ Mr. Wedgwood Benn (Bristol, South-East)There is one point which I would like the Parliamentary Secretary to answer. In paragraph (b) of this Resolution we read,
for the payment out of moneys provided by Parliament of the expenses incurred for the purpose of the said Act by the Minister of Transport, except in so far as they are required to be defrayed out of the fund so established.I have searched hard to find out where it is laid down, in the Bill or in this Resolution, how the money is to be allocated between moneys to be carried on the Ministry Vote and moneys to be defrayed out of the fund so established. I can find no reference to a rule, regulation or principle governing the allocation of these expenses. It seems to me that this fund ought to be regarded as a commercial concern and that Parliament ought not to be required to pay out money for the financial cost of administration; that the fund itself ought to carry this. We are being asked to pass this Resolution and accept financial liability on ourselves without knowing on what principle that liability will fall upon us.1470 I wish also to ask whether the Minister can tell us what check the House of Commons will have on the circumstances which might arise when the sum standing in the fund is not sufficient to meet the demands made upon it. I can well understand that with an insurance fund as risky as this it is not always possible to be sure that there will be enough in the fund to meet the demand. But it is unsatisfactory that we should be asked to make provision and then be told that if there is not enough in the fund then it will be met in some other way. Obviously, the Minister will have a great deal of experience that he can delve into—
The Deputy-ChairmanIt seems to me that the hon. Member is raising matters that can be raised on the Bill. The Money Resolution is wide enough for all the machinery to be dealt with when the Bill is discussed. These matters can then be raised.
§ Mr. BennI should like to be advised on this point. Paragraph (a) of the Resolution asks this Committee at this stage to vote money in one of two ways—either by Parliamentary grant or, in certain circumstances, in another way. I should have thought that when we were considering the financial aspect of this matter we could rightly have an answer to the question: on what principle is the money to come sometimes this way and sometimes in another way? I confine myself to this narrow point. I am grateful to the Chair for pointing out how difficult it is to remain in order and still speak on this subject.
This provision has been working in previous legislation for something like 30 years now, and the Minister no doubt can tell us from his own experience of the way the fund works on what principle the money has been allocated as between the two sources of supply since the 1939 Act.
I should like the Minister to answer the two questions. The first is what governs the payment of expenses for the administration of the fund. It says that there are some regulations. I should like to know where they are. The second question is what principle governs the allocation of demands on the fund as between the Parliamentary Vote and the money from the Consolidated Fund.
The Parliamentary Secretary to the Ministry of Transport (Mr. Gurney Braithwaite)We have rightly been reminded that this is not the occasion for discussing some of the wider issues of this matter. On Second Reading we touched upon the main financial structure, and we are to have the pleasure of the company of the hon. Gentleman for Bristol, South-East (Mr. Benn) on the Standing Committee which will examine the Bill in detail. Therefore, if I briefly inform the Committee of the purpose of the Money Resolution in its narrowest sense I think that I shall be discharging the duty laid upon me at this stage.
The necessity for this Resolution arises from Clause 5 (2) and Clause 9 of the Bill. Clause 5 (2) provides that if and so far as the fund to be established out out insurance premiums may prove insufficient to meet liabilities the deficiency shall be paid out of moneys provided by Parliament or out of the Consolidated Fund. Clause 9 authorises the payment out of moneys provided by Parliament of expenses incurred for the purposes of the Bill.
It is, of course, impossible to give any forecast estimate of the income of the fund to be established under the Bill or of the liabilities to be met, and it is essential that we should be in a position to provide funds against the contingency that a deficiency might arise from time to time in the fund, especially in the early stages of any war. Any such deficiency, if it arose, would, of course, be borne in mind when fixing future premiums. The intention is that the premium income will be such as to cover all liabilities.
As regards expenses incurred for the purposes of the Bill, it is again impossible to frame accurate forecast estimates, as the magnitude of the business to be handled is dependent upon the nature and extent of any hostilities in which this country might unhappily become involved.
Paragraph 5 of the Financial and Explanatory Memorandum, which is appended to the Bill, gives such indication as is possible of the magnitude of the expenses to be faced. It states that the expenses in peace-time are not expected to exceed £7,000 to £8,000 per annum. This figure represents the present cost of the staff now employed upon two tasks. 1472 One, in liquidating outstanding obligations under insurances and re-insurances granted under the Act of 1939, and, second, in negotiating new re-insurance agreements which will be brought into operation in the event of a further war.
No additional staff will be required under the Bill unless and until hostilities break out. If no new war intervenes in which this country is involved, this rate of expenditure will reduce as the work is completed. The estimate of £80,000 to £100,000 per annum, mentioned in the Financial and Explanatory Memorandum as the war-time rate of expenditure, is based upon the assumption that in the event of a further outbreak of war, it will be necessary to set up a Government insurance office on the scale found necessary in the late war. The estimate is necessarily tentative and the actual expenditure would be dependent upon the volume and nature of the business undertaken and the general level of wages and rents current at the time.
We shall be able to resume discussion on this during the Committee stage, and thus I hope it may be possible to agree to this Resolution now.
§ Mr. BennIt is not clear whether the amount of £7,000 to £8,000, which is carried at the moment, and which is expected to continue until such time as insurances have been developed, is carried on a Departmental Vote or whether it becomes an additional burden upon this Committee. May I ask whether this has a special Vote or whether it is carried on the residual fund under the Act of 1939? The Parliamentary Secretary gave an interesting reply, but I do not think it covered this point at all. Who is paying, and in what way, the £7,000 to £8,000 his own Department is incurring at present? An answer would be very helpful.
§ Mr. Eric Fletcher (Islington, East)While the Parliamentary Secretary is obtaining the information to enable him to answer my hon. Friend, and which must take a few minutes to obtain, digest, understand, and ultimately give to the Committee, could I put another question to him? No doubt he knows the answer from his own knowledge. During the remarks he made just now, he referred two or three times to risks which might arise in the event of a future war.
1473 I am not clear, from the terms of this Resolution or from the Bill or what the Minister said, whether the phrase he used would be limited to a war such as the recent war, or whether it would also include hostilities in which we might be engaged on behalf of the United Nations.
The Deputy-ChairmanThe point the hon. Gentleman is now raising appears to be more properly raised on the Bill itself.
§ Mr. FletcherWith great respect, Mr. Hopkin Morris, I was trying to get some elucidation from the Minister of the remarks he made to the Committee, because they were far from clear.
Mr. BraithwaiteDiscussion on the Second Reading debate did range over this aspect and you, Mr. Hopkin Morris, have already ruled that this is not a matter for the Money Resolution. In reply to the question asked by the hon. Member for Bristol, South-East (Mr. Benn), I thought I had better check my answer. I find that I was correct. The amount is borne on a Departmental vote
§ Resolution to be reported Tomorrow.