HC Deb 21 November 1952 vol 507 cc2235-69

11.34 a.m.

Mr. Ian Mikardo (Reading, South)

I beg to move, in page 1, line 21, at the end, to insert: (2) In subsection (1) of section three of the Miscellaneous Financial Provisions Act, 1946 (as amended by section one of the Miscellaneous Financial Provisions Act, 1950), for the words "one hundred and twenty-five million pounds" there shall be substituted the words "fifty million pounds. The Committee will observe that the effect of this Amendment would be to reduce the total capital sum available to the Civil Contingencies Fund from £126½ million to £51 million. In the Second Reading debate this Fund was referred to as the Government's petty cash account and it has been so described in previous debates on this subject. I fancy that the author of the phrase was the right hon. Member for Blackburn, West (Mr. Assheton).

When we talk about £126½ million as a petty cash account we are somewhat straining the philological definition of the word "petty" because that sum of money is by no means petty. It amounts to £7, £8 or £9 for every family in this country, and that is a sum of money which many families have not got in the petty cash account or in any other account. It seems, therefore, that we should not allow a fund of this nature to be continued indefinitely without considering what measure of Parliamentary control we have over it and whether the sum that is put down is about right or is greater than the amount which we really want the Executive to have at its disposal, with the very small measure of Parliamentary control which we have over this Fund.

When we last debated this matter, in 1950, a number of right hon. and hon. Gentlemen opposite made reference to the point that the amount of Parliamentary control over this Fund is so small that we ought to be careful how much money we put into it. The right hon. Member for Blackburn, West said: Parliament has very largely lost control over the borrowing powers of the Executive, and it is essential that it should retain its control very closely over the spending powers of the Executive. It should be observed that the right hon. Gentleman referred to the Executive without any reference to whether it was a Conservative or a Labour Executive. I think the right hon. Gentleman was being perfectly sincere in putting forward the view that whatever party was in power it was still the business of Members of the House of Commons, whether they supported or opposed the Executive of the moment, to see that careful control was retained over its spending powers. On that occasion, in 1950, the Labour Government were reducing the upper limit of the capital available to the Civil Contingencies Fund. They were halving it from £250 million to £125 million, but at that time there were many right hon. and hon Gentlemen opposite who thought that that figure was far too high and that it ought to be reduced far below £125 million.

Quite a number of right hon. and hon. Gentlemen followed each other in putting this point. I will quote again from the remarks of the right hon. Member for Blackburn, West. He said: I therefore ask the hon. Gentleman to put most seriously to the Chancellor of the Exchequer that he should reduce this temporary increase of the Fund to a more reasonable figure. I do not think that anything which the hon. Gentleman said convinced me that there was any need for a fund anything like as large as £125 million."—[OFFICIAL REPORT, 28th June, 1950; Vol. 476, c. 2307–2310.] I do not know what are the views of the right hon. Member for Blackburn, West two years after he made that statement. I do not know whether he still remains unconvinced, as he put it, that there is any need for a fund anything like as large as £125 million. But I think I am not unreasonable in inferring that if we had the benefit of his engaging presence this morning we would find him supporting the Amendment which I have moved.

On the previous occasion to which I have referred 246 Conservative Members, including the Financial Secretary, voted for a reduction to £50 million. It will be interesting to hear the Financial Secretary explain to us by what process of mental gymnastics he has, two years later, come to the view that the sum of £50 million, which was adequate two years ago, judged by his vote, is no longer adequate. The hon. Member for Flint, West (Mr. Birch), who moved an Amendment to reduce the amount of £50 million, is now a Member of Her Majesty's Government, and one of the things which he said in the course of his speech in moving the Amendment was this: That brings me to my last point: the main mischief which we suffer from having a very big Civil Contingencies Fund. I believe that leads to sloppy and even dishonest estimating, Those are strong words. He said: … it leads to a lack of full Parliamentary control over Government expenditure, and it leads to the possibility of the public being misled at times of critical importance in political history. At this moment, when we are debating the amount of money which the Civil Contingencies Fund should have, where are all the right hon. and hon. Gentlemen opposite who were so eloquent and so vocal in 1950 in expressing the belief that £50 million was enough? It was during that debate that one right hon. Member opposite turned to these benches and said: I know hon. Members opposite are not interested in financial matters, and do not seek to show much interest."—[OFFICIAL REPORT, 10th July, 1950; Vol. 477, c. 1066–1078.] If we gaze at the benches opposite this morning and see not merely their sparse population but the total absence, the 100 per cent. absenteeism—if I may use a coal mining term—of all the right hon. and hon. Gentlemen who in the past have expatiated on the wickedness of having a large Civil Contingencies Fund, we can see how justified we should be in saying that hon. Members opposite show very little interest in financial matters when they are in Government and how totally loath they are to practise in Government what they preached in Opposition.

One Member of Her Majesty's present Government, the Minister of Works, the right hon. Member for Chippenham (Mr. Eccles), went much further than his colleagues on that occasion. He was not satisfied with a reduction from £250 million to £125 million. He was not satisfied with a reduction from £125 million to £50 million. He said that £5 million would be enough. I wonder whether we can persuade the Financial Secretary this morning to give us an explanation. We are always glad to have him with us on these occasions and to have his clear and urbane, if somewhat incomplete, explanations of the Measures which he is putting forward.

We all feel great sympathy with the hon. Gentleman in being alone on these occasions. Perhaps we cannot be too censorious of the absence of the Chanceller of the Exchequer, who, we know, is very busy fending off attacks from his own back benches and the City, but we often wonder whether the Financial Secretary ever complains to his boss that the job is always delegated from the management to the foreman and from the foreman to the charge hand and that the foreman is never present.

I should like to ask the Financial Secretary what are his present views upon the contention of the Minister of Works that £5 million would be enough for the Civil Contingencies Fund. Has he discussed the matter with the Minister of Works lately? Has he met him over a cup of tea and had a heart-to-heart talk about it? Has he managed to persuade the Minister of Works that £5 million is not enough and that we must have £125 million? Certainly, he seems to have managed to persuade the Minister of Works not to come here this morning in case somebody should quote his murky past at him.

11.45 a.m.

In that debate in 1950, the right hon. and hon. Members opposite to whom I have referred described what they thought were the improper purposes of the sum of £125 million in the Civil Contingencies Fund. These right hon. and hon. Members were the right hon. Member for Blackburn, West, the right hon. Member for Chippenham, the hon. Member for Flint, West and, above all, the hon. and gallant Member for New Forest (Colonel Crosthwaite-Eyre), who for such a long time was the ever watchful guardian of the public purse but who now seems to have deserted his watch, a crime for which, in another sphere, one can be court-martialled.

These right hon. and hon. Gentlemen said in 1950 that the Labour Government wanted £125 million only for two rather shady purposes. First, they said, this large sum was required to disguise a sort of wangle, a sort of subterfuge, to hide the growing cost of the National Health Service. Secondly, they said that it was only the wicked Labour Government, with its wicked doctrinaire practice of bulk buying and State trading, which could possibly need a Civil Contingencies Fund of this size.

They said that when a Conservative Government were returned, and the people were set free, and business was given its head, and private initiative was brought into play, and there was no further need for this obscurantist policy of State trading—then, of course, there could not be the least justification for a Civil Contingencies Fund as great as £125 million.

On this, I have two questions to the Financial Secretary. First, is the present Minister of Health engaged in a subterfuge to disguise the cost of the National Health Service? If not, what is the justification for a Civil Contingencies Fund of this size? Secondly, surely we are not to infer—and perhaps the Financial Secretary will tell us this—from the maintenance of the Civil Contingencies Fund at the figure at which it was fixed by the State trading Labour Government, that Her Majesty's present advisers are to conduct as much State trading as their predecessors and, therefore, will need as much money to finance State trading as their predecessors.

These are questions to which we have a legitimate title to an answer. But the great thing which was said by right hon. and hon. Gentlemen opposite in 1950, and the great burden of their case, was this: "Maybe immediately after the war, with all the turmoil and terminal accounts and settling of accounts and changes in the method of national accounting, there is some justification for a very large petty cash account, but in 1950, five years after the war, when everything has settled down, the immediate post-war justification for this sum no longer exists, and the very fact that we are now five years after the war means that we ought to cut this sum from £125 million to £50 million." That was their case.

We are now seven years after the end of the war, and perhaps the Financial Secretary will be good enough to tell us this morning how it comes about that, whereas five years after the war we have settled down from all the post-war accounting turbulence, nevertheless, seven years after the war we have not settled down from all the post-war accounting turbulence. I am sorry to have to put all these questions to him and to place on him the responsibility of answering them unaided. I hope he is getting, because he is certainly earning, part of the salary of the Minister of State for Economic Affairs. But these are questions which we want answered. We want to know why it is that if £125 million is too high a figure in 1950, five years after the war, it is not too high a figure in 1952, seven years after the war.

That is our object in moving this Amendment; to discover how the Financial Secretary can straighten out the collective conscience of his right hon. and hon. Friends; to discover how he will manage to justify this complete volte-face, this complete abandonment of the principles for which, during the Election campaign, they stood so firmly and so volubly. In the last day or so we have had, as my hon. Friend the Member for Oldham, West (Mr. Hale) pointed out in an earlier debate, ample evidence that the people who, at Election time, talk most glibly about the wickedness of delegated legislation, and of removing legislation from Parliamentary control, are themselves at present doing more to remove legislation from Parliamentary control than any previous Government have done.

Here, with regard to the Civil Contingencies Fund, we have an equally glaring, if less important example of the same abandonment of a firmly expressed and glowingly described principle, the principle that Parliament must always retain the best possible control over the expenditure of the Executive. I hope that we shall obtain some answers to these questions from the Financial Secretary, and that they will be in a form which will at least cover up the glaring weakness of the Government's case.

Mr. A. Edward Davies (Stoke-on-Trent, North)

My hon. Friend the Member for Reading, South (Mr. Mikardo) does well to pose these questions this morning, because it will be within the recollection of many of us that when the Labour Party formed the Government of the day there was a very careful scrutiny, and rightly so, from the Opposition benches—in which the present Financial Secretary figured—of the intentions of the Government at that time in requiring such a vast sum of money.

All kinds of questions were raised. It was said that it was a nefarious device to cover up a policy which would not stand up to examination in daylight, and for which the Labour Party was responsible. I do not think it is any breach of confidence to say that during my sittings on the Public Accounts Committee it was the constant preoccupation of Members of the Conservative Party to try to track down some of the expenditure in the National Health Service, and to extract an explanation as to why the Civil Contingencies Fund should have to be used for a certain expenditure which, they argued, ought to have been provided for in the Estimates. They were at pains to remind us that a much smaller sum would meet the case. If that were true in those days, for what reason is there need for a change today?

Some time ago the Prime Minister reminded us, in connection with the development of the atomic, and, I believe, the hydrogen bomb, that this House had made available for that work £100 million and he said a device had been used which was open to question. At least, it took away from this House the close scrutiny and supervision which we normally expect when large sums of money are involved. Is this for some secret purpose of research which ought not to be discussed in this House on grounds of public security? If that is the case we shall have our own views about it, but we must be told. Or is it that the Estimates of Government Departments have been so badly laid that they are running short of money, and that they have to come to the Civil Contingencies Fund for help?

Hon. Members opposite have boasted that they are masters in housekeeping; that they were going to go through the whole of our finances with a fine comb to reduce our expenditure. Surely it cannot be the explanation that they are so out in their Estimates that they must have this wide reserve of £125 million. But whatever is the cause, I think we are all agreed it is not a good thing that vast sums of money are to be made available for uses with no proper opportunity provided, as in the case of the Estimates, for debate and discussion about the specific purpose for which the money is used. We do not know until afterwards what has happened to it, and it is then often too late to do anything about it.

I think, therefore, that we are entitled to be told why this sum of £125 million is necessary as a sort of "kitty" out of which any Department of State—having, I take it, made out its case—can come and make a requisition, and use that money without scrutiny by this House.

Mr. Leslie Hale (Oldham, West)

It is painful to have to pursue this sort of matter constantly throughout the day. Here we have another classic example of a Bill brought forward seven years after the war to use a Fund designed for a wholly different purpose.

We are indebted to my right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall) whose researches were revealed in the Second Reading debate, for the fact that this Fund is about 90 years old and that it remained at £120,000 for the first 60 or so years of its existence. After being increased it came down to a steady £300,000 for a long time. I am sorry not to see the present Minister of Works in his place this morning. I thought he would try to substantiate the theme he so ably and fully expressed last time when he referred to it as a Fund which was to provide the money to put up a statue to somebody for whom no provision had been made; or to repair the Chancellor's robes; or it was a little "kitty" from which minor emergencies could be dealt with.

We heard of a hurricane in the West Indies and of £100,000 being provided for that. No one could object to that. And there is, of course, the £1½ million now provided by statute for precisely that sort of thing. We had a reference to the more recent tragedy at Lynmouth. No one objects to the existence of a genuine Civil Contingencies Fund to deal with precisely that sort of emergency; to make it possible for the Government, when there is devastation in the Orkneys, or when there is a flood disaster at Lyn-mouth or a hurricane in the West Indies, or matters of that kind, to have the right at once to take the necessary action, and to administer relief at once.

After the last war the Labour Government used this Fund, I think now, looking back, perhaps rather unwisely. It would have been better had we put the matter on a proper footing to start with, and created the special fund required, rather than used this curious Fund. But the method is well understood. It certainly is true if we look through the past debates on this matter that the fullest information about it was given by the Labour Government to the Opposition. They had the fullest information about how this Fund was administered, how the money was dealt with and how it was applied. Issues were made from the Consolidated Fund to the Civil Contingencies Fund, and various Departments made their requests to the Civil Contingencies Fund to deal with special contingencies which arose.

When my right hon. Friend the Member for Battersea, North (Mr. Jay) dealt with this matter two years ago, he was able to make a very special position. The war in Korea had just commenced, and no provision had been made in the Budget for dealing with the very special expenses in connection with that. The European Payments Union was in its infancy, and efforts were being made in connection with the balancing of European payments.

12 noon.

But even at that time, with one voice, the then Opposition condemned the figure of £125 million and moved to amend it to £50 million. No one was more vociferous on this matter than the hon. and gallant Gentleman the Member for New Forest (Colonel Crosthwaite-Eyre), who always spoke from a sense of financial purity and rectitude and who always appealed for Parliamentary control of expenditure. Where stands he now? Does he propose to remain seated throughout this debate, or are we to have the advantage of his advice?

Does he intend to say, "I was wrong in 1950." Will he say that the Government are wrong now, or does he propose to skulk there in silence and to take no part in the debate at all? It would be regrettable if one whose lavish advice was handed out with great generosity, one who, day after day and night after night, gave us his views on the control of financial expenditure, did not speak now.

My hon. Friend the Member for Reading, South (Mr. Mikardo) said that it was perhaps with regard to bulk buying that we had the benefit of most advice. We were often told what the hon. and gallant Gentleman thought about bulk buying. On that he belonged to what I would call the Smithers school of politics.

Mr. Mikardo

Smithers' kindergarten.

Mr. Hale

He was against it and he did not hesitate to say so. Do the Government think that they may lose money on bulk buying contracts? Do they say, "We want money available to the tune of £125 million to cover any possible losses of the Ministry of Materials and the Ministry of Food?" I think that we should be justified in moving "That the debate be now adjourned" because neither the Minister of Food nor a representative of the Minister of Materials is here. Nor have we present the Chancellor of the Exchequer and I am told that none of the overlords is in the Gallery. We have had no information about the expected losses.

Mr. James Hudson (Ealing, North)

Perhaps my hon. Friend would like to know that the Minister of Food is in the building and could be secured if proper efforts were made.

Mr. Hale

I am much obliged for that information.

In the circumstances, the Financial Secretary, sitting there lonely and deserted by all his leaders, might think fit to send to the Minister of Food so that we can have some information. What is he likely to lose money on? There is precious little food about. We cannot lose much on a 1 oz. cheese ration. What is in his mind? Where does he think that he will need £50 million or so for losses this year? Is it because he is continuing a system of bulk buying of meat in the Argentine?

Mr. Mikardo

He cannot get it.

Mr. Hale

I should have thought that the Committee was entitled to information. To the best of my recollection information has been given that withdrawals have never at any time exceeded more than £69 million. Throughout the history of this Fund, since it was fixed at £125 million, a lot of the money has never been used. The "wicked Socialists" were often accused by the Financial Secretary of wasting public money.

But now the Chancellor of the Exchequer, with a new policy of restriction of credit and reduced expenditure, with a determination to wipe out the bureaucrats and to eliminate waste, says, "Give me £125 million; we really do not want to alter the figure; that is the figure you put two years ago and, although we voted against it, we have changed our minds now and we want £125 million."

So far, no one has said what it is for. No one has had the courtesy to tell us why the money is required. This certainly concerts very ill with the legendary figure of the Chancellor of the Exchequer which we read about in the Press day after day. The policy of the Conservative Party has been to adopt the thesis of Professor Coué that every day in every way everything is getting better and better. If the party opposite say a thing often enough then they think that it gets better. The Chancellor has been saying that in every way the financial situation gets better while the Budget deficit is increasing, while unemployment is increasing and the major industries are facing disaster.

We have been treated to a very pretty picture of the Chancellor shovelling coal in the bunkers of the ship of State and doing peculiar things to keep the ship afloat. No one knows what is going on, and no one knows what is the function of the Minister of State for Economic Affairs in his somewhat unusual unaccustomed position. No one knows what is his position in the whole. Hon. Members have been asking "Que fait-il dans cette galère?" and many of his colleagues have been making the same speculation. I think there is almost unanimity in the House that the Minister of State for Economic Affairs goes gladly about his duties and that no one knows what they are.

Then we have the Financial Secretary noisily and boisterously spitting on his hands and saying that he is about to start work at any moment. Meantime, the sooty and grimed face of the Chancellor, perspiring heavily, pops up now and then to announce that he is still keeping the ship afloat. We are glad. The curious point is that, until he took over, the ship was sailing very comfortably and had passed through the stormy waters. His distinguished predecessor, the late Sir Stafford Cripps, had said that the balance of payments position had been met at least temporarily, that our credit was substantially restored and that there were no storms ahead.

Sometimes one thinks that the Chancellor gets some pleasure from the storms as the ship sways under the gyrations of the Prime Minister on the bridge and bounces, as it were, from rock to rock. It sometimes occurs to me that perhaps the speculation has passed through the mind of the Chancellor that, if the worst comes to the worst, the captain will go down with his ship. It is only then that a bright smile flits across the somewhat dour countenance of the Chancellor and he realises that there are advantages in even the most dismal situation.

I do not know whether the Financial Secretary proposes to honour us with his observations in reply to this Amendment. I observe a motion of his head which appears to indicate that he does. If he does, I will ask him to deal with one or two matters. We really are entitled to be told about the operations of the Minister of Materials. We are entitled to be told what operations are being continued by his Ministry and what are the forseeable or the contemplated contingencies which may arise in the next 12 months which may give rise to the possibility of substantial payments from this Fund.

We are entitled to some information from the Ministry of Food. It is treating the Committee with contempt for two Ministries to be asking for a possible sum of £125 million and for neither of the Ministers to come her to tell us why they want it. For neither Minister to be represented in any way, directly or indirectly, is wrong. The House of Commons has been treated with contempt during the last week. Some of the fundamental and cherished liberties are going.

The Financial Secretary used to fulminate about delegated legislation. I observe that 1,979 Statutory Rules and Orders have been issued by this Government this year. Now we have the position that in the course of a Friday morning, in the absence of every senior Minister, with the presence on the Front Bench of only the Financial Secretary and one Whip, we are being asked to spend sums, in the one case, of £1,050 million, and, in this case, of £125 million without any explanation at all.

Those who cherish our political traditions and our Parliamentary liberties—and I used to think that the Financial Secretary was one of them—must deplore the situation into which we are being gradually drawn. It is a situation in which the Government assume the right to make demands on the House without explanation at all. If the Financial Secretary is to reply—and I gather that the hon. and gallant Member for New Forest (Colonel Crosthwaite-Eyre) does not propose to give us the benefit of his advice on this occasion, I hope he will deal with some of the observations that were made last time by the hon. and gallant Gentleman, who said: I think we have just heard a speech which must rank high in the annals of Parliamentary debate in that a Fund which was originally designed for the most minor occasions, something like erecting a statue for which there was no specific Vote, is now being used, in the words of the Financial Secretary to the Treasury, to finance the war in Korea, on the one hand, and the whole of the European Payments Union, on the other. The sum for which the Government are now asking is not anywhere within measurable reach of what this Fund was designed for, and it has now nearly become a weapon in the hands of the Government for use for those matters which they either do not dare or do not wish to bring before Parliament."—[OFFICIAL REPORT, 10th July, 1950; Vol. 477, c. 1074.] On that occasion, the Financial Secretary did make a full reply and explanation, and information was given to the House. Where does the hon. and gallant Gentleman stand now on this matter? He was associated with an Amendment to reduce the Fund to £50 million—precisely the same kind of Amendment as is being discussed now. That was two years ago. What has happened since, except the coming of a Tory Government? What has happened since to make him repent of his financial rectitude of the past and indulge in the financial dissipation that is going on at present?

But it was the Minister of Works from whom we had the most severe condemnation. Has he been consulted? Has he had an opportunity of expressing his views on this matter? Has he made any representations? I gather from the Financial Secretary that he has not, and, if not, he has certainly failed in his duty, in view of what he said last time.

I hope that the Financial Secretary, on this occasion, will at least have the courtesy to give us more information about this Fund and what is intended should be done with it, and, if not, I hope that my right hon. Friends may think that this is a matter that needs further discussion and enquiry until we do get it.

Mr. Norman Smith (Nottingham, South)

I propose to make only a brief contribution. While I entirely concur in what has been said by my hon. Friends the Members for Reading, South (Mr. Mikardo), Stoke-on-Trent, North (Mr. Edward Davies) and Oldham, West (Mr. Hale), I wish to approach a rather different facet of this matter.

Anybody coming to this House from another planet or the moon would think that the whole thing rather preposterous. I suppose that what is really happening is that the Government, not for the first time in the last week or two, have got themselves tied up in the toils of their new financial policy. It happened a week or two ago, and it has happened again today.

The Government make a fetish of dear money and all that kind of thing. It is part of the superstition in which they are shrouded, and the sensible thing, instead of having this Fund, would be to take up Treasury Bills at half of one per cent., as they were available years ago, and, no doubt, will be available again.

When the Government get themselves enmeshed in the toils of superstition and treat money as a commodity, which has its price, and then take steps to force up that price, this sort of thing will go on, and they will continue to place themselves in that humiliating position until some future Government takes the sensible way of issuing Treasury Bills at half of one per cent., which will be the sensible way of meeting this expenditure without the necessity of doing those things which it is obliged to do now.

12.15 p.m.

Mr. James Hudson (Ealing, North)

I think we should have been better off if we could have had some statement from the Financial Secretary before we indulge in these excursions and flights of fancy in the realms of finance which we are compelled to make for lack of information about the precise purposes which this Fund is intended to meet.

Many suggestions have been made as to how the money may be spent. My hon. Friend the Member for Oldham, West (Mr. Hale) suggested that we should have no objection if the money was to be spent in order to meet contingent disasters of one sort or another either at home or abroad, and that, when we have the problem facing us of the need for immediate assistance where a great tempest tad struck part of our country, or when we were faced by some volcanic eruption in a foreign land, where great suffering had been caused, we should readily agree that the Fund should be in existence in order to meet contingencies of that sort.

I am not altogether sure that we would be agreed, because, on the whole, history seems to prove that the general sympathies of our people are adequate to meet these situations as they come along. The Lord Mayor's Fund and similar funds generally prove to be more effective and more rapid in their operations than any contingency fund of this sort could be expected to operate. If I am wrong about that, I must moderate my views with regard to what I am saying on my hon. Friend's proposal.

My hon. Friend the Member for Nottingham, South (Mr. Norman Smith) suggested a way in which this Fund might have to operate—that it might be in some situation which the Treasury has to meet, in the fluctuating world of finance, that cannot be provided for beforehand, and that the money must be there to be drawn upon in times of special difficulties. It is all guesswork, and I hope my hon. Friend will not be offended if I suggest that his view about the matter is no more certain to be the correct view of what is going to be done with the money than the view of my hon. Friend the Member for Oldham, West in a quite different direction.

Mr. Norman Smith

On the contrary, I can assure my hon. Friend that I have not the slightest doubt or uncertainty whatever of the correctness of my view.

Mr. Hudson

I am suitably rebuked. I am of the opinion that my hon. Friend is as cocksure as anybody in the House; it only happens that I am not as cocksure as he is. Therefore, I feel that I should like to have more information about the matter. There is a whole series of other propositions that might be somewhere in the background, and I hope the Financial Secretary will not feel offended if I raise them as possible ways in which this Fund can be used.

My hon. Friend talked to me last night about being the keeper of the wine cellar. I have heard recently about the tremendous expenditure in some of our Government Departments in that sort of way. There is a great deal of talk at the moment about the bills incurred by our delegations to the United Nations for precisely the same kind of thing as the hon. Gentleman was talking about last night, and I surely may be allowed—as I am to be regarded as holding the key in these matters—to wonder whether part of this money is used in that way. Has it seeped through from the general hospitality fund into liquid refreshment, and, particularly, in the Foreign Office? The Foreign Office, notoriously, has for many years been involved in this sort of thing—expenses on liquid refreshments to be met by this Fund.

Perhaps it is another question of the same sort. We were rather shocked some time ago to be informed—I do not know whether it was for lack of a proper Contingencies Fund at the time—that the Prime Minister's fares for travelling on the nation's business were to be met by the private shipping firms which he found it necessary to use. Does the necessity to let the Cunard pay for his travelling on the nation's business arise because this Fund has not been big enough? Is that the sort of thing this Fund is having to meet? I do not know. I may be entirely wide of the mark.

Much has been said my hon. Gentlemen opposite about the extreme necessity for care with the nation's finance. If the nation's finance is to be spent upon the Prime Minister's travelling upon vitally important issues, and if the proposal that he should go to America to meet Mr. Eisenhower is accepted, it will be money very well spent, but I hope the expenditure will be met by the nation's Exchequer and not by this Fund.

The Chairman

We cannot continue to talk about all the possibilities of the Measure in that manner, or we shall be here for a very long time.

Mr. Hudson

The trouble is that I do not know. I am like the lady in the novel who was asking for information. My mind roves over all sorts of dreadful possibilities. The sum of £126 million is big enough to suggest all sorts of difficulties. The party opposite promised to be careful in the management of the nation's finances and in the matter of expenses, but hon. Gentleman opposite do not know any more about this than I do, in spite of all their promises. Hon. Members opposite show no signs of getting to their feet to probe this matter, although, from their point of view, there may be waste. At election times they are full of stories about the way money is wasted by Government Departments. This sum of £126 million should suggest some ground for inquiry.

If I am proving rather a poor stick in investigating where the money is going, I shall be extremely glad to give way to hon. Members opposite who may be better informed. I must not indulge all my fancies—I have a good many—for lack of knowledge in this fanciful situation of being told that £126 million must be put into a Civil Contingencies Fund although nobody knows how it is to be spent, but in such a situation there is justification for a roving inquiry by a number of us into what is going on.

The Financial Secretary is very kindly in the way he is receiving what I have to say. I hope he has something to tell me and will let me know whether I am anywhere near the target. If I am all wrong, I hope he will tell me more precisely than we have yet heard in what way I am wrong, especially after his personal responsibility for the attacks which were made upon the Labour Party when the Fund was discussed in previous years. The things that he managed to say then—I am sorry that I have not looked up his speeches; perhaps I ought to have done so—

The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter)

The hon. Gentleman was quite right not to do so, because I did not make any.

Mr. Hudson

I have in my mind so many speeches which the hon. Gentleman made on public expenditure, the wasting of public money and the need for Parliamentary consideration at every turn, that I hope he will forgive me for thinking that he must have made one on this matter as well. Perhaps he was better informed about the situation than I am now. Two or three other hon. Members opposite who made speeches have been referred to but they have sat in the House making no response to the charge made against them, although, apparently, they are full of information upon a matter or which I am not fully informed.

I am sorry, Sir Charles, if I seem to be wandering far afield, but there is ground for asking questions. I hope you will feel that I have not wasted your time nor the time of the House in insisting that some information of a much more precise character should be afforded us before we can vote in favour of the Measure.

Mr. Douglas Jay (Battersea, North)

As my hon. Friend the Member for Reading, South (Mr. Mikardo) said, we are pressing the Amendment, not because we wish the figure to be reduced from £126 million to £50 million, but because we want the Financial Secretary to give an explanation of the incredible discrepancy between the way in which his hon. and right hon. Friends spoke two years ago and, in particular, the vote then—he cast his vote, although he did not speak on the Measure—and what is taking place now.

We do not press these matters in order to carry on a persecution of the Financial Secretary personally, although it may have looked like it in the last few days. We are compelled to do it in this way because he has been deserted by all his right hon. Friends. We have much sympathy with him. There he sits: … on the burning deck Whence all but he has fled, With a millstone hanging round his neck, And heaven knows what in his head.

Mr. Mikardo

And maybe, standing on a trap-door.

Mr. Jay

Besides his having been deserted by his fellow Ministers, there is a remarkably high degree of absenteeism on the benches opposite. Although we have had many speeches from this side of the House today, we have had not a single speech from the supporters of the Government and the party which professed such great concern about public expenditure. We have seen the hon. and gallant Member for New Forest (Colonel Crosthwaite-Eyre) here—I think I see him now lurking nearby—but he has not attempted to raise his voice on this matter. I have also seen the hon. Member for Louth (Mr. Osborne) who used to speak a good deal about public expenditure, but he has not come to the rescue of his hon. Friend.

In fixing the figure of £126,500,000, the Financial Secretary has paid me the sincerest form of flattery—imitation—for that was precisely the figure which I recommended to the House two years ago. But it does not necessarily follow that because it was right then it is right now. Since we have moved further from the war, it may be that there ought to be a lower figure, but it is exceedingly hard to see how £50 million could have been right two years ago and £126 million is the right figure now.

It was the right hon. Gentleman the Member for Blackburn, West (Mr. Assheton) who was most eloquent on this matter. Some of his remarks have already been quoted. But he was perhaps even more categorical than might have been thought from the previous quotation. He said quite clearly in the debate on 28th June, 1950: I should like to make it clear now that we on this side of the House think that it is too small a reduction."—[OFFICIAL REPORT. 28th June, 1950; Vol. 476, c. 2309.] That was the reduction from £250 million to £125 million that year.

12.30 p.m.

Then on the Committee stage he stated even more clearly and categorically the official view of the Conservative Party at that time. He said: I suggest that unless we put our foot down and set a limit to this Fund, a very reasonable limit which should soon be reduced—the £50 million could soon be reduced to a much lower figure"— he was saying in 1950 that even the £50 million could soon be reduced— we shall weaken Parliamentary control over finance. Ever since the House of Commons was formed it has been the duty of Members of Parliament to keep a control over finance and we cannot keep a proper control over finance if we have a petty cash till containing £125 million which the Government have at their disposal."—[OFFICIAL REPORT, 10th July, 1950; Vol. 477, c. 1079.] That really was a very clear and definite statement, and we feel that we have the right to know the explanation of this extraordinary change of mind. I pass over the remarks of the Parliamentary Secretary to the Ministry of Defence about sloppy and incompetent control of finance and so on and those of the Minister of Works, because they have been quoted and perhaps they did not carry so much weight, anyway, as the speech of the right hon. Gentleman the Member for Blackburn, West.

There is another question which I should like to ask the Financial Secretary, with apologies again for this seeming persecution. I defended this figure of £125 million in 1950, which I may say seems on experience to have turned out to have been not a bad calculation, because I think that the Financial Secretary said this year that £108 million was actually the highest figure which the Fund reached. When I defended that figure I said that one use for which this Fund might be necessary was increased defence expenditure arising out of the Korean war, which had actually begun a week or two before. I had naturally in mind expenditure by the Ministry of Supply.

But on that occasion the right hon. Gentleman the Member for Blackburn, West sprang up with great indignation and told me during the Committee stage that … the suggestion that we can finance a war in Korea out of that Fund shows a complete lack of knowledge of our whole financial system."—[OFFICIAL REPORT, 10th July 1950; Vol. 477, c. 1077.] That was very strong language—to accuse somebody of complete ignorance of our whole financial system, particularly when in fact the right hon. Gentleman was completely wrong. I did not answer back at that time, because I think it is no breach of official secrets to say that answering back does not always expedite Government business.

Only last week the Chancellor of the Exchequer informed us that there would be a considerable supplementary expenditure, requiring Supplementary Estimates from the Ministry of Supply, in the current financial year on account of the defence programme. He went on to say on 11th November: In due course we shall be presenting a Supplementary Estimate. If the funds of the Department are exhausted before the Supplementary Estimate can be presented"— that was for the Ministry of Supply— the excess expenditure will be financed from the Civil Contingencies Fund."—[OFFICIAL REPORT, 11th November, 1952; Vol. 507, c. 775.] I hope, therefore, that the Financial Secretary will give us his view as to whether my contention, and that of the present Chancellor, that this Fund can be used for defence expenditure under the Ministry of Supply is correct, or whether he supports the view of his right hon. Friend the Member for Blackburn, West that that cannot be done and that I was guilty of gross ignorance in suggesting that two years ago. It seems to me that at a time of high defence expenditure it is rather important for the House, in voting these large sums, to be clear that they can be used in that way.

My own view is that I was perfectly correct and that the Fund can be so used. I hope therefore that we shall have some clear explanation from the Financial Secretary, in the absence of any activity from the back benches opposite, as to what is the considered view of the Government and the Conservative Party on the proper purposes and use of this Fund.

Mr. Boyd-Carpenter

The practical point raised upon this Amendment is what is the correct maximum limit for the Fund. The right hon. Gentleman the Member for Battersea, North (Mr. Jay), I think, disclosed that the reason for this Amendment was to enable him to make certain observations with respect to a debate two years ago. But, of course, the practical point that in the event the Committee has to decide upon officially is not the intriguing question of who was right or wrong two years ago—about which I shall have something to say in a moment—but what is the right figure now.

No hon. Member, on whatever side of the Committee, will wish to come to a decision on this matter save on his best judgment as between the two conflicting considerations which have been very fairly stated—the consideration which I think was advanced by the hon. Member for Stoke-on-Trent, North (Mr. Edward Davies) that the Fund should be no larger than the needs of the situation can be shown to demand, and, equally, the view that the Fund should be large enough to cover the practical calls upon it for the necessary temporary financing of Government activities.

Indeed, the matter was put in language much better than I can use in the debate two years ago. These were the words: At the same time, it would in our view be foolish and imprudent to set the maximum so low that, in the light of the last few years' experience, a jam might be caused in our financial machinery. For those reasons we have decided that, in view of that experience, £125 million represents a reasonable compromise."—[OFFICIAL REPORT, 10th July, 1950; Vol. 477, c. 1070.] Those were words spoken by the right hon. Gentleman the Member for Battersea, North two years ago and, therefore, the fact that he now comes forward in support of this Amendment shows that what he calls mental gymnastics are not confined to one side of the Committee.

Mr. Jay

Will the hon. Gentleman note that I am still in favour of that figure and that I am apparently the only Member of the Committee who has not changed his views since two years ago?

Mr. Boyd-Carpenter

I take that with pleasure from the right hon. Gentleman. If he is still in favour of that figure that statement appears to be inconsistent with this Amendment, which is headed by his name. But I take it that he means what he says now and that what he has put on the Order Paper is a flight of fancy. I am very much obliged to him for preventing any confusion on that point.

The real figure here, of course, is not £125 million but £126,500,000 because in both cases we are imposing £125 million on the basic £1,500,000 under the old Statute. When I refer to £125 million it is for convenience instead of the rather odd and cumbrous figure which historical events have dictated. I take some exception to what the hon. Member for Oldham, West (Mr. Hale) said. I gave a considerable explanation of the purpose for which the Fund is required. If I had not done so I should have been failing in my duty, because when a Minister comes to the Box to ask for financial arrangements of this sort it is very proper that he should give a full explanation.

Mr. Hale

The hon. Gentleman gave no explanation at all on the last Bill. Quite frankly, I have failed to find any adequate explanation.

Mr. Boyd-Carpenter

I do not know that I should be in order to refer to the last Bill, but I take great exception to what the hon. Member said. On the last Bill, which was extremely fully discussed, I made a speech of inordinate length.

The Deputy-Chairman (Mr. Hopkin Morris)

I hope the Financial Secretary is not going any further with that.

Mr. Boyd-Carpenter

I can only say that the hon. Member tempted me, and that, for once, I fell. I apologise, and I will not do it again.

On the Second Reading of this Bill I explained in some detail the three categories in which the use of the Fund had fallen and is expected to fall. The three were: first, the sudden accidental happening—the disaster, the catastrophe which calls for immediate Governmental action: secondly, the trading operations, the temporary financing of the trading operations of the trading Departments of which the Ministry of Food and the Ministry of Materials are the major ones, although there are others thirdly, the category to which the right hon. Member for Battersea, North referred in the closing part of his speech—the provision of temporary financing in respect of Votes during the period before which it is possible to get the precise figure which is required for the presentation of the Supplementary Estimates.

Those are the three categories in which this expenditure has fallen under previous Administrations and, no doubt, will fall under this. Indeed, as the right hon. Gentleman has very properly said, my right hon. Friend the Chancellor of the Exchequer gave notice of the possibility of such particular expenditure arising in connection with the Ministry of Supply. The fact that we intend, if necessary, to use the Fund in that way, I think, answers the question whether that is, in our view, correct procedure.

One of the reasons for that is connected with the decision announced last summer—a decision which I think was applauded on both sides of the House—to advance the textile orders in connection with the defence programme by bringing forward orders which, in the normal working of the programme from the defence angle, would not have been given until subsequent orders had been completed, in order to provide extra work in the textile areas. That is one of the elements, and that is a specific example of the way in which the system operates.

The hon. Member for Reading, South (Mr. Mikardo) referred to the second category in my categorisation—the State trading category—and I thought he rather took us to task for including this, having regard to the views which have been expressed on the general topic by some of my right hon. and hon. Friends. I would remind him that we are proposing in this Measure to extend this limit only for one year as opposed to the two year and four year extensions in the previous Bills, and that, therefore, there is no need for him to prejudge the general situation beyond that comparatively limited period. Obviously, no Government would ask for a higher figure than it thought necessary in all the circumstances. We think that this is so in the present state of affairs.

The hon. Member for Oldham, West proceeded, in this context, to attack my right hon. and gallant Friend the Minister of Food and the Minister representing the Ministry of Materials in this Committee for not being here in view of what he described as the losses on their trading. I ought perhaps to explain that this financing is not necessarily, or indeed generally, connected with losses. The hon. Member will appreciate that in the course of ordinary trading operations, whether of a trading Department of State or a commercial company, there are times when temporary finance is needed arising from the simple fact that expenditure and receipts do not always balance, that sometimes for commercial reasons it is necessary to buy when the market is appropriate before one has realised from the sales of commodities already in one's possession. This is solely a temporary accommodation.

On the question of Parliamentary control, I think the hon. Member was under some misapprehension. In the first place, as I have said, this is temporary financing. In general, these advances are repaid from Votes. Those Votes come before the House in the normal way as do other Votes. Complete control is preserved. On top of that, by way of assisting the House, the accounts of the Civil Contingencies Fund are themselves presented to Parliament, and, therefore, there is a proper preservation of Parliamentary control.

I have replied to that point at some length because it is a subject in which I have been and am interested, as I know the hon. Member is, and I thought it was necessary to make quite clear the system by which Parliament retains this control over the operations of this Fund. Apart from small items which sometimes come on the Consolidated Fund, they have to be voted as repayments to the Civil Contingencies Fund and asked for by Ministers responsible for the Department in the normal way, with which hon. Members are so well acquainted that it would be wrong for me to go into any detail in describing it.

12.45 p.m.

Mr. Jay

Does the hon. Gentleman repudiate all that his right hon. and hon. Friends said two years ago about the use of this Fund for National Health expenditure?

Mr. Boyd-Carpenter

I am not talking about National Health expenditure, nor do I conduct my exposition of my point of view by repudiation of the points of view of other people. I hope I have succeeded in making clear what, in my view, the facts are, and that is all that can be expected of me.

Mr. Edward Davies

Would the right hon. Gentleman not agree that although there is some control in the terms of the Votes of the Departments indicating that repayment is to be made to the Civil Contingencies Fund, actually the discussions at the end of the year are very different from scrutiny either before or at the time of the transaction?

Mr. Boyd-Carpenter

There is some truth in that, but that applies to other forms of expenditure over which this House exercises supervision. It is not a unique aspect of the Civil Contingencies Fund.

The major point is the correctness of the amount. On the Second Reading I gave the peak figures of the last two financial years. In case some hon. Members were not present on the Second Reading, perhaps I may be permitted to repeat them. The peak figure in the financial year 1950–51 was £108 million, and the peak figure for 1951–52 was £92 million. I can bring the matter up to date by saying that the latest peak figure for the current year—it relates back to July—is £65 million. Of course, there are a good many months to go.

It is, therefore, quite clear—and I think the right hon. Gentleman agrees with me—that we should be risking causing serious dislocation to the machinery of Government and the effective conduct of affairs were we to agree to the figure which is suggested.

Of course, the fact that the right hon. Gentleman has urged the figure is not an argument against that figure being right; I am sure he would agree with that proposition. I therefore hope that the Committee will take the view that for the period for which we are asking—one year—it would be unsafe to reduce the figure below the £126 million odd which it is suggested should be made available.

That seems to us to be reasonable in the circumstances, but I give the assurance that before coming to the Committee next year, as we shall have to if the Fund is to be above a level of £1,500,000, we will carefully scrutinise the situation then to see whether it is reasonable or not to suggest some reduction. I fully share, and so do the Government, the view that has been expressed in the Committee that though this Fund should be large enough, it would be very wrong indeed to make it too large.

Mr. Glenvil Hall (Colne Valley)

Of course, it remains to be seen whether the hon. Gentlemen and his friends will be in a position to come to the House next year. We have our views on that, but this is not the time to express them.

I have listened very carefully to what the Financial Secretary has said, and I thought his speech a lamentable one. He did not cover any of the fundamental points that have been made from this side of the Committee this morning. I shall, therefore, have to criticise him a little—not too drastically, I hope, because he has been under the harrow rather a lot lately—for the fact that he has not really come clean with the Committee on this matter.

We do not want, as my right hon. Friend the Member for Battersea, North (Mr. Jay) said, to harry the Financial Secretary. My right hon. Friend and I have both occupied the post that the hon. Gentleman now occupies and we realise the difficulties under which he labours. We have repeatedly expressed our view that some help should be given to him, particularly as now at the Treasury there is an additional Minister who could help him considerably if that were allowed. We are not attacking the Minister of State for Economic Affairs personally when we often have to remark on the fact that he is not present in the Chamber although we know very well that he is present in the House. It would have been well had he been here this morning to have shared in the debate and to have given us the advantage of his very great knowledge of financial as well as of economic matters.

The hon. Gentleman failed, as he did last night, to explain away his past actions and speeches. Last night, he was naive enough—it was rather unusual for him to say what he said last night—to explain that the reason why a certain statement was inserted in the election manifesto of his party was because they were not then in full possession of the facts.

Mr. Boyd-Carpenter

Will the right hon. Gentleman complete the quotation?

Mr. Glenvil Hall

I am paraphrasing, and I do not want to—

Mr. Boyd-Carpenter

The right hon. Gentleman is not paraphasing but parodying.

Mr. Glenvil Hall

I have not his exact words with me. If I am wrong, the hon. Gentleman will correct me, but I think that Members of the Committee who were present will agree that the Financial Secretary did indicate last night that the reason why the Government had changed their minds was because at the time of the Election they did not know the full facts. I think that that is a very fair paraphrase of what the hon. Gentleman said to us last night.

Mr. Boyd-Carpenter


Mr. Glenvil Hall

I would add that the same explanation is true of the fact that two years ago the hon. Gentleman with his hon. Friends voted against the Amendment which we are now moving. We are moving the Amendment not because it is our view, as my right hon. Friend explained very clearly, that £50 million is the correct figure; we have moved it in order to give hon. and right hon. Gentlemen on the other side of the Committee a chance to ease their conscience.

After all, the Members opposite must for the last two years have been labouring under a very great sense of guilt in that two years ago they said and did one thing and now say and do exactly the opposite. I can find nothing wrong in our giving them the opportunity at long last, when this Bill comes forward, to say quite definitely that the views they held then they still adhere to.

What is a reasonable sum for this Fund to have at its disposal? The hon. Gentleman put that query and proceeded to answer it, and I gather from what he said just now that he believes £126,500,000 is a reasonable sum. What he did not explain was, if he believes it is a reasonable sum and if last year the Fund used at its peak period some £90 million and the year before £108 million, what would have happened if the Amendment moved by the then Opposition had been carried. The Fund would have been in a very poor way if all it had had at its disposal was the £50 million to draw upon from the Consolidated Fund as they suggested.

One point which has not been touched upon by the hon. Gentleman, and on which I had rather hoped that he might give us some information, is the extent to which the Fund is being used for E.P.U. As he knows very well, a year or two ago very large sums from this Fund were advanced when the European Payments Union was set up. I should imagine that advances from it are still necessary. If so, and as I assume that they will continue to be necessary for some years, it would have been of use to the Committee in coming to a conclusion on this matter had we been told just how much of that £90 million had been used in this direction.

Mr. Boyd-Carpenter

My recollection is that the E.P.U. element is very small, but if the right hon. Gentleman so desires—he had not previously indicated that he did—I can, no doubt, obtain the information for him either in the course of the debate or subsequently.

Mr. Glenvil Hall

I imagine that it is much less than formerly now that E.P.U. is getting into its stride.

There is one further matter that I should like to ventilate. I touched briefly upon it when we were dealing with this matter on Second Reading. As I understand the framing of the Bill, it is possible for it to lapse, I will not say without Parliament knowing anything about it, but certainly without Parliament being consulted. By the mere effluxion of time, at the end of 1953 the Act, as this Bill will then be, will cease to operate unless renewed. The capital of the original Civil Contingencies Fund, as originally laid down in the 1921 Finance Act, will not of course be affected at all by the lapse of the Act. Therefore, unless the Government themselves do something before the end of next year, the Civil Contingencies Fund will revert to a capital sum of something like £1,500,000.

We do not object to that. I think that from what my hon. Friend the Member for Reading, South (Mr. Mikardo) said, it is quite obvious that we agree that we do not want this Fund to be larger than it need necessarily be for the commitments which the Government have to meet under it. We must remember, however, that it can now be used, and has been used, not only for E.P.U., which, I realise, is a diminishing—

Mr. Boyd-Carpenter

If it is convenient, I can give the right hon. Gentleman the information at this stage. In the earlier part of the last financial year, there was a small E.P.U. element. At the moment, no use is being made of it. Of course, I cannot speak of the future.

Mr. Glenvil Hall

But I think that in the year before it ran to some £71 million, which is a substantial sum when the total available is only £126,500,000.

1.0 p.m.

What I was in the process of saying was that if the Government do nothing and this Act comes to an end on 31st December, 1953, the only sum available to the Civil Contingencies Fund will be £1½ million. Are we to assume from that that the Government have it in mind to cease bulk buying and even close down the Ministry of Food by that date? For obviously this Fund has been extremely useful in providing temporary cash balances to meet deficiencies and other calls on the Ministry of Supply, the Ministry of Materials and the Ministry of Food.

It would have been an advantage if the Financial Secretary had indicated to us just what the Government have in mind in this direction. If, as we hope, bulk buying and the Ministry of Food are to continue, and if quite substantial sums will be wanted temporarily in many directions, then some other arrangement will have to be made, if this Fund is considered not to be the proper one from which to get those moneys. I hope the hon. Gentleman will give us some information on that subject. As, seems likely, the Government are going to let this Fund run out and reduce it to the £11½ million at which it stood for so lone between the wars, then it is absolutely essential that the Government should do something else to assist the Ministry of Food and other Ministries who must have a certain working day-to-day capital if they are to carry on efficiently.

I have here quite a number of extracts from speeches of the hon. Friends of the Financial Secretary. Some of the things which they said in the debate two years ago have already been referred to by my right hon. Friend the Member for Battersea, North and others of my hon. Friends so that I will not weary the House with them. Suffice it for me to reiterate that we think we would have been lacking in our duty if we had not put down this Amendment, if only to give—

Notice taken that 40 Members were not present;

House counted, and 40 Members being present—

1.3 p.m.

Mr. Glenvil Hall

I had, in fact, practically completed what I proposed to say. I had almost reached my final sentence, and I do not anyway wish to prolong the debate. I was saying that in our view it has been a useful thing putting down this Amendment for the reason given by my right hon. Friend the Member for Battersea, North. We do not for a moment agree that £50 million is the correct figure at this juncture. We think that the amount laid down in 1950 was reasonable then and is still reasonable. It is our view that this Fund should be used both for the purposes for which it was originally instituted, and that we should not be afraid to use it too for other purposes if we find it should be so used.

The present Minister of Works, in the debate we had last time, said that the difference between this Fund and the normal Estimates submitted was that in one case the wife asked her husband if she could buy a hat and in the other announced that she had bought it. That, of course, is true. With a Fund of this kind we only know that the money has been spent after it has been spent, and to that extent the House has lost control. I for one find no fault with that. It is essential that we should have a Fund of this kind for expenditure which has not been forseen. This Fund then fulfils an excellent purpose, and in no way really contravenes the principles laid down under which this House keeps a very tight control over Government expenditure.

Mr. Hale

The Financial Secretary to the Treasury lashed himself into synthetic indignation in reply to me, and said that he had explained this Fund most elaborately to the House on Second Reading. I was very much afraid that I had done the hon. Gentleman a possible injustice, so I turned up what he said. His explanation of the working of this Fund can be found in two sentences and what he says is this: It is used only for temporary financing, whatever may be the purpose of the advance. The advances are normally repaid, almost entirely from Votes, for the main part during the same financial year, although a certain percentage of the Fund may relate to expenditure borne on the Consolidated Fund.—[OFFICIAL REPORT, 19th November, 1952; Vol. 507; c. 1955.] That is his explanation of the mechanics of the Fund, but what that means I do not know. It is a cycle of qualifications reservations and financial inhibitions. I do not believe it possibly could convey to anyone how the Fund is, in fact, administered.

If the Committee will forgive me should like to quote a rather facetious example which I take from the speech delivered by the present Minister of Works when he spoke on this subject in 1950. He said that the Civil Contingencies Fund provided about £41 for the Lord Chancellor's robes one year and £36 13s. for patching them the next. Who decided that the Lord Chancellor's robes are in such a state that they need repair, and that the cost of the repairs should be borne by the community at large and not by the Lord Chancellor? It seems to me that this reveals a rather startling state of affairs, for apparently the people who run the Civil Contingencies Fund and who have to find the finances for hats, clothes and repairs have to accept a decision made by someone else, so that the Department which is supposed to have control has, in fact, very little control indeed. All they have to do is to pay.

I want the Financial Secretary to the Treasury to deal with one or two points. I want to know what is the cost of the Fund. I want to know how it is run and what happens when losses are incurred. The Financial Secretary, in his Second Reading speech, gave us three suggestions of how money was drawn from the Fund and in what circumstances. He said that, normally, a great trading Department—I must say I was very moved by this kindly expression about the Ministry of Food, so different from the references we have had in the past—has to draw out money in advance of receipts and is not drawing in money at the same time.

That, of course, applies to almost every other trading department. Under those circumstances, the Minister of Food needs credits from the Fund to meet the expenditure which is ultimately paid. But what happens if they do not ask? Is it a fact that later there is a Supplementary Estimate presented to the House and the Fund bears the money until the Supplementary Estimate comes along? That is what is the accepted—

Mr. Boyd-Carpenter

Perhaps I might explain. The amount advanced from the Fund has to be repaid, which is done on a Vote, either a supplementary or a main Estimate.

Mr. Hale

It is difficult to understand, but I am sure the Committee would wish to understand it.

I come back again to the very important speech which the present Parliamentary Secretary to the Ministry of Defence made in 1950, and to examples which he gave. He said: In 1948–49, a sum of £36 15s. was raised for the Lord Chancellor's robes. That is a very small sum. The House may rest assured that it was not a utility robe. It had cost £414 the year before. In addition to that, £1,300 was raised for additional Stamp Duty on lost documents and a sum of £43 for licences under the Inebriates Acts, 1879–99."—[OFFICIAL REPORT, 10th July, 1950; Vol. 477, c. 1062.] Why do payments like that come from the Civil Contingencies Fund at all? Why is there no machinery to pay such sums from the appropriate fund? Where is the Government Department that cannot meet a bill for £1,000?

Why is machinery of this kind invoked and why are these sums brought into the Fund if the only purpose is to take them out again in six months' time? Why have we to pay £43 for licences under the Inebriates Acts, 1879–99? How do these things come about? They do not tally with the explanation given by the Financial Secretary that this is a purely self-balancing Fund and that we pay the money in in advance and draw it out again in arrear, and everything in the end is all right.

I am in some doubt about what the Fund is for at all, except for the original and main purpose of dealing with a disaster, making a generous contribution to the relief of distress, or taking emergency action. There is the other spending to which the Minister of Labour called attention, the cost of the Victory celebrations for which £118,000 was paid out of the Fund. As he said, the war had been won anyhow, and the victory did not even come unexpectedly. It is rather surprising that that should have been regarded as a civil contingency, since it was neither civil nor a contingency. None of this tallies with the explanation which has been given.

It may be that the Financial Secretary has to administer the Fund, or that the Minister of State for Economic Affairs is busy in his office administering the Fund, with more than the usual care and prudence, but we still have no explanation of the real position in connection with the trading Departments. I ask the Financial Secretary to tell us what sort of trade the Government are now guaranteeing with this Fund. What are the Ministry of Food buying? It cannot be food, because there is so little food coming into the country that there can be no question of substantial money being lost.

What are the operations which it is now necessary to finance? What are the sums like? One of my hon. Friends referred to the European Payments Union. I am glad that he was able to get from the Financial Secretary the answer which I was not able to get when I put a similar question earlier in the debate. I congratulate him on his endurance and patience, and on his final success.

I come to the argument about the size of the Fund, which was mentioned by the Financial Secretary. He said that it stands at the figure at which it has stood under the present and past Administrations, and it was therefore quite impartial as a political fund. That is a sort of financial nonsense in excelsis: "We fixed it years ago and therefore it is right. It has lasted for one year under the previous Administration and it has lasted another year under this Administration. Therefore, it is perfectly all right. We fix our rate of Income Tax, Stamp Duty or Death Duties, and everything is all right. We can now go on spending money like mad without any regrets or efforts at retrenchment, and just go on on the basis on which somebody else went on years ago."

I do not agree with my right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall). I do not think that we have had adequate explanation or justification. I say again that this is one of three Bills today under which large sums of money are to be spent and in respect of which the House has never had adequate information. We ought to go on insisting on the information until we get it.

1.15 p.m.

Mr. Mikardo

Though it has been said that the Financial Secretary has answered all the questions which have been put from this side of the Committee, he looks much less handsome in a white sheet than he does in a suit of armour. He has made it clear that he does not look upon his own vote of two or three years ago in this matter as being the best thing he has ever done. As a reward, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

Bill reported, without Amendment; to be read the Third time upon Monday next.