ARMY AND AIR EXPENDITURE, 1952–53 (Hansard, 12 July 1954)

HC Deb 12 July 1954 vol 530 cc166-225 166

§ Considered in Committee.

§ [Sir CHARLES MACANDREW in the Chair]

§ I. Whereas it appears by the Army Appropriation Account for the year ended 31st day of March 1953, that the aggregate Expenditure on Army Services has not exceeded the aggregate sums appropriated for those Services and that, as shown in the Schedule hereto appended, the net surplus of the Exchequer Grants for Army Services over the net Expenditure is £6,237,443 6s. 3d. viz.:—

	£	s.	d
Total Surpluses	8,282,978	14	2
Total Deficits	2,045,535	7	11
Net Surplus	£6,237,443	6	3

And Whereas the Lords Commissioners of Her Majesty's Treasury have temporarily authorised:

(1) the application of the realised surpluses on Vote 2, Subhead F and Vote 8 for Army Services to meet the net deficit of £625,167 11s. 3d. on Vote 11 that would otherwise have been met from issues out of the Consolidated Fund under the Armed Forces (Housing Loans) Act, 1949;
(2) the application of so much of the remainder of the said total surpluses on certain Grants for Army Services as is necessary to make good the remainder of the said total deficits on other Grants for Army Services.

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Schedule
No. of Vote	Army Services, 1952–53 Votes	DEFICITS	SURPLUSES
Excesses of actual over estimated gross Expenditure	Deficiencies of actual as compared with estimated Receipts	Surpluses of estimated over actual gross Expenditure	Surpluses of actual as compared with estimated Receipts
		£	s.	d.	£	s.	d.	£	s.	d.	£	s.	d.
1.	Pay, &c., of the Army	—			—			1,847,165	1	2	613,437	4	5
2.	Reserve Forces, Territorial Army, Home Guard and Cadet Forces	—						342,920	18	2	6,718	2	6
3.	War Office	—			—			110,582	6	8	6,349	19	8
4.	Civilians	—			—			206,054	3	4	66,507	10	9
5.	Movements	—			—			475,746	19	8	102,849	3	9
6.	Supplies, &c	—			—			1,210,215	16	4	485,656	4	9
7.	Stores	—			448,826	4	2	1,035,035	0	10	—
8.	Works, Buildings and Lands	—						468,398	4	3	74,780	11	5
9.	Miscellaneous Effective Services	—				4	4	1249,546	10	11	—_
10.	Non-effective Services	—			32,875	4	2	311,148	4	9	—
11.	Additional Married Quarters	—			1,295,034	2	1	669,866	10	10	—
—	Balances Irrecoverable and Claims Abandoned	105,834	3	2	—			—			—
		105,834	3	2	1,939,701	4	9	6,926,679	16	11	1,356,298	17	3
		Total Deficits	Total Surpluses
		£2,045,535 7s. 11d.	£8,282,978 14s. 2d.
		Net Surplus £6,237,443 6s. 3d.

§ Motion made, and Question proposed, "That the application of such sums be sanctioned."—[Mr. Boyd-Carpenter.]

§ 10.12 p.m.

§ Mr. Geoffrey Bing (Hornchurch)
I think that a grave error of judgment has been committed by the Patronage Secretary. That probably accounts for his absence. His name is down as the mover of this Motion. I do not know how the Motion came to be moved in his absence, but no doubt one of his colleagues was persuaded to act in his place.
The grave error of judgment was committed in this way. I do not wish to make any criticism of any previous debates that have taken place on this subject, which have been on a somewhat wide nature. It seems to me, looking at the precedents, that it might possibly be argued, probably the Chief Whip might take the same view—I do not know what view you will take, Sir Charles—whether we can discuss this only by way of excess Vote or by virement. It seems to me that it is a matter which should

168

§ under any circumstances be considered by way of virement.

§ I say that because, to put it in a mild way, there were revealed in the Report of the Comptroller and Auditor General three grave scandals, each one of which rivals that of Crichel Down.

§ Colonel Alan Gomme-Duncan (Perth and East Perthshire)
I am sorry to interrupt the hon. and learned Gentleman, but he used an expression which I am afraid I do not understand. It was "by way of" something or other.

§ Mr. Bing
It was "by way of virement." I believe I have used a good English pronunciation for the French word. It is the process by which the Treasury may exchange sums noted for one purpose for sums voted for another. Normally the House takes the view that that is a reasonable procedure and that the thing should go through on the nod, but it ought not to go through on the nod when the matter involves grave standards and a great expenditure of public money, 169 sufficient to pay a reasonable increase to the old-age pensioner, which has been squandered by complete failure on the part of the Ministers concerned.
It is a most extraordinary thing, but I do not see on the Government Front Bench a Minister representing the War Office. There is a junior Minister, the Under-Secretary of State for Air, but there is no senior Minister. After all, Ministers are responsible for these matters. Meetings are continually being held upstairs to consider Crichel Down, but the money involved in that case is only about one-twentieth of the sums squandered in this case. I welcome the Under-Secretary of State for War who has now taken his place on the Government Front Bench.
To turn to the three matters which, I think, necessitate the House considering this question by way of an Excess Vote, it is quite unfair, Sir Charles, but I should make this speech and that you should be in the position of saying that the Minister really cannot reply to it and cannot deal with the matters in the report of the Comptroller and Auditor General because it has been decided to deal with the matter in this way. Therefore, I want to make an appeal in absentia, as my hon. and learned Friend the Member for Gloucester (Mr. Turner-Samuels) would undoubtedly have done, to the Chief Whip that he might at least reconsider that this Motion should be withdrawn and that there should be introduced in the honest and straight way a Motion for an Excess Vote. In that case, the Minister need not try to cover these things up but could come here and give an honest explanation of why there has been this gross waste of public money.
I take three examples from the Report of the Comptroller and Auditor General. I will not deal with them in detail; I merely want to make the case why this matter should be dealt with by way of an Excess Vote. In the first place, what we and the Minister are engaged in doing, among other things, is financing the armies of foreign governments. That may be all right in its way, but this House is at least entitled to have some account of how the money has been spent. Not since right hon. Gentlemen opposite came into power have they had the accounts audited. I want to call 170 attention to paragraph 22 of the Comptroller and Auditor General's Report on the Appropriation Account for Army Services. The Comptroller and Auditor General is officially employed by this House to carry out just this examination. The Report says: Certified accounts of cash expenditure by the Government of Jordan for the years 1951–52 and 1952–53 have not yet been furnished to the War Office. Why not? No answer can be given. We cannot discuss the matter even on this Vote. It would be out of order for the Minister to try to offer any explanation.
These are large sums of money. If one looks over the page to paragraph 16 one sees that this expenditure, if one takes into account the Foreign Office Grants and Services, amounts in one year to £7,500,000. Over two years, that is £15 million, quite enough to give the old-age pensioners about half of what they deserve. Yet this Government does not even bother to ask the Jordan Government to give an explanation, and the Minister himself puts it down in such a form that he cannot even reply, so that the House cannot even discuss what has happened to £15 million of the taxpayers' money. Surely, that is an argument for withdrawing this procedure and for treating this matter by way of an Excess Vote?
May I now come to the second, and. in my view, equally serious scandal? The only reason why not so much has been heard about this is that it took place in Wales, and it was therefore very difficult to know the names. What happened was this. In his wisdom, the Secretary of State for Wan—if I may have both your attention, Sir Charles, and that of the Under-Secretary for War, because I am afraid that I might say something which was out of order, or that some observations might escape the Under-Secretary, so that he would not be able to make an effective reply to the debate—

§ The Under-Secretary of State for War (Mr. J. R. Hutchison)
I know exactly what the hon. Gentleman has in mind.

§ Mr. Bing
In that case, I am surprised that he allowed the Motion to be put down in this way, instead of dealing with the matter by Excess Vote, in view of the deplorable scandal which took place in 171 Penrhos. What happened there, according to the Report of the Comptroller and Auditor General, was that the Secretary of State for War in his wisdom decided that there should be a camp there, that there were 118,000 acres available, and so £108,000 of public money was spent on that camp.
What happened? There was a slight error; somebody had forgotten those noughts. Lord Randolph Churchill disappeared from the Treasury because he forgot the dots—the decimal points—but, of course, the Secretary of State for War not only does that. When he makes an error, he makes it not in decimal points, but in hundreds of thousands of pounds. The right hon. Gentleman thought that there was a large acreage available. If I might refer to what the Comptroller and Auditor General said, in order to show that this matter ought to be discussed in such a form that there should be some reply to it—

§ Mr. Leslie Hale (Oldham, West)
If my hon. and learned Friend will allow me to correct him on an historical point, may I say that Lord Randolph did not forget the dots; he did not understand the dots. What he forgot was Goschen.

§ Mr. Bing
Be that as it may, his lack of memory seems very small compared with the lack of comprehension on the part of the Secretary of State for War. What the Comptroller and Auditor General says in paragraph 28 of his Report is this: In a letter to the War Department Land Agent later in November, 1951, the Provincial Land Commissioner of the Ministry referred to discussions which had taken place between representatives of the two departments in November, 1950. He stated that Army requirements for a camp in North Wales had then been put at 120 acres, and no indication had been given that training rights would be required over additional land; but for that omission the proposal to establish a camp at Penrhos would in November, 1950, have been opposed by the Ministry on the ground of interference with food production. This took place a long time ago, but, now that this has been revealed, there surely must be some investigation? Why is there this process of covering the whole thing up? Why are we not to have a proper way of dealing with this matter by means of Excess Vote, so that we can discuss in detail each of these cases? The responsibility may rest on my right hon. 172 Friends on this side of the Committee. Perhaps some civil servants should be better equipped to deal with this matter? Perhaps it is our responsibility that such an error occurred in the first place? Perhaps it is the responsibility of right hon. Gentlemen opposite? Whoever is responsible, it is the duty of the Committee to probe this matter and to establish that responsibility wherever it lies, on this side or the other. What is being done at the moment is to have a form of discussion chosen to cover up these things.
If one looks back to the Resolution of 1879, one sees quite clearly what was in mind; it was some small adjustment. If one looks at the debate in 1947, exactly the same thing appears. It was never intended that this should be a large matter, on which there is an important issue of principle.
Let me take the third of these cases, which is even more interesting, because it deals with a matter which I am certain hon. Gentlemen on the Government benches do not want discussed that is, the value of private enterprise. They will see that it is a somewhat serious matter. I know that they are interested in what is happening in the Canal Zone. They are always having meetings upstairs to decide what their attitude is to be. What they forget entirely and do not bother to discuss is how the troops in the Canal Zone are treated.
The Report of the Comptroller and Auditor General shows that, with the connivance of Ministers, the troops are being charged twice as much as they ought to be charged for their food and vegetables. As a result of Egyptian action, what happened is set out in paragraph 31 of the Report. I should have thought that the Under-Secretary would have welcomed an opportunity of explaining this matter, but for some reason he, or the local Army authorities, saw fit to advise the Government in a certain way.
In the negative, polite and restrained language of the Comptroller and Auditor General we can see what lies behind this. In those controlled and polite expressions, he says: …but local Army authorities accepted advice that political difficulties ruled out direct purchase by the normal method of competitive tender. 173 What a pity that the Secretary of State for War has not an opportunity, because the Chief Whip has ruled him out of the opportunity, of explaining why political difficulties ruled out the acceptance of contracts by direct tender. What was the result? The Comptroller and Auditor General says: A contract for a period of six months from February, 1952, was therefore entered into with the only British firm in the Middle-East considered to have the requisite buying organisation and other facilities necessary to ensure continuity and regularity of supplies. This is a very serious matter. On whose authority was this decision come to? I agree that we cannot debate it now, but that is the fault of the Government in choosing this method of putting the thing forward. They have said, "Here is the Comptroller and Auditor General's Report, with all these serious charges and the implications that lie behind them."
Why did the Army decide in this way and come to this decision? It may have been an entirely innocent transaction, but we ought to have some form of procedure to enable the Under-Secretary of State to get up and defend the Egyptian Army authorities. Why does he put himself in a position to shelter behind the procedure of the House, and to say, "I am very sorry, Sir Charles, but you would rule me out of order if I attempted to justify the peculiar action which was taken."
What will the ordinary soldier think of this transaction? What happened first of all was that the firm made a net profit of £33,281, according to the Comptroller and Auditor General. How was that profit arrived at? The firm was getting one-ninth of the money paid out to the British soldiers. Does the Under-Secretary think that that is one of the ways to get more people into the Forces? What a pity we cannot discuss it.
Another method of recruiting would be to cut out the excessive profit of these contractors and to investigate how they came to be appointed. Of course, the Patronage Secretary has chosen a method of debating this matter which precludes the House's examining it. That is why I suggest that we should not proceed further by this method. We should be fair to the Secretary of State for War and give him a chance to reply. You, Sir Charles, would' find yourself in a very awkward position if, after my 174 speech, you felt compelled to rule that he could not deal with these matters, and you may well find yourself in that position. It is surely for the Government to come forward and say, "We will now withdraw this Motion and proceed by means of the Excess Vote procedure." That would be the honest course, and we should be told why they do not propose to proceed in that way.
10.30 p.m.
With regard to this contract, in paragraph 32 of the Report the Comptroller and Auditor General, who is a person who weighs his words, says: No precise conclusion could be drawn owing to the absence of details of all the items making up the prices, but it appeared that prices for Canal Zone supplies were appreciably the higher and sometimes…double. It may be that these happenings can be entirely justified; we may be doing the contractor an injustice—but why does not the Patronage Secretary see that the House is given the opportunity to discuss the matter? Why was it decided to appoint somebody who not only charged 10 per cent. profit, but double the normal price, according to the Report of the Comptroller and Auditor General?

§ Mr. E. Fernyhough (Jarrow)
My hon. and learned Friend should not underestimate the position. The Comptroller and Auditor General says "over double."

§ Mr. Bing
Yes. "sometimes over double." I am sorry; perhaps I was doing "underjustice" to the ingenuity of the Patronage Secretary, who decided that this matter should not be debated by the House.
If one looks at the final remarkable words of the Comptroller and Auditor General one finds that he says: My officers have therefore inquired whether the methods of purchase adopted by the contractor had been investigated and whether his suppliers also contracted for the Cyprus Garrison. A reply to these inquiries is awaited. For how long must we wait? This is another matter which we could have discussed on the Excess Vote procedure, but which we shall never be able to do now.

§ Mr. George Wigg (Dudley)
Surely my hon. and learned Friend has in mind paragraph 33 of the Report, which says that three contracts were made, with no apparent incentive to economical buying

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§ Mr. Bing
Exactly. This is only another example of the same sort of thing. I did not want to weary the Committee; I thought I had made the point that an attempt was being made to cover up a most undesirable practice.

§ Mr. Wigg
In order to establish his case, my hon. and learned Friend must take the matter a little further. The Comptroller and Auditor General states that the contractor subsequently agreed to a reduction of 7½ per cent. of cost plus profit, and that: The total value of the four completed contracts is likely to exceed £1,500,000. Would he endeavour to find out how much of this, by indirect method, found its way back into the coffers of the Tory Party?

§ Mr. Bing
These are all matters which might have been investigated if the honest course had been taken of putting down this matter by way of Excess Vote. That was the proper course to adopt. This is a very serious matter. It is a complete squandering of public money. As my hon. Friend has said, the Report states that: Three subsequent six-monthly contracts let to and completed by the same firm have also been let without competition, virtually on a 'cost plus ' basis…' After it was discovered that this firm was charging over double, the Government not only gave it the same contract again, without competition, but also allowed it to charge 7½ per cent. profit.

§ Mr. Emrys Hughes (South Ayrshire)
Can my hon. and learned Friend tell me the name of the firm?

§ Mr. Bing
That is one of the things that ought to be disclosed to the House, and if there were an Excess Vote there could be a frank and fair statement. To be fair to the firm, it may have been only incompetent.

§ Mr. Wigg
The Government?

§ Mr. Bing
No, the firm. Perhaps it thought this was the cheapest it could buy these things. It may have been a genuine and honest mistake. It may have thought that the average cost was 4d. when it was in fact only 2d.—or, probably, in the Canal Zone, Is. In fairness to the firm concerned, the Government ought to have a chance to reply, but I am sure, Sir Charles, you would rule the hon. Gentleman out of order if he tried to. It is 176 not the hon. Gentleman's fault that he cannot reply, and I am sorry the Secretary of State is not here. [HON. MEMBERS: "Where is he?"]
The fact remains that the three subsequent six-monthly contracts were let to the same firm without competition on what was virtually a cost plus basis with no apparent incentive to economy. That is in the Report of the Comptroller and Auditor General. It is not an election pamphlet of the Labour Party to which I am referring, but to this Report issued by an official employed by this House to watch over the expenditure that we vote. The Government bring the matter forward in such a way we cannot discuss the Report made to us by our own official. They do not state what the remuneration is.

§ Mr. Niall Macpherson (Dumfries)
Would not the hon. and learned Gentleman agree that the normal time to discuss this matter would be when the Public Accounts Committee, to which the Appropriation Accounts are remitted for examination, reports after examination in detail? Would not that be the normal time, rather than now?

§ Mr. Stephen Swingler (Newcastle-under-Lyme)
Would not my hon. and learned Friend agree that it is the responsibility of Parliament to discuss it?

§ Mr. Bing
Yes, that is a responsibility of Parliament. The Report of the Public Accounts Committee, which I have studied, seems rather inadequate in dealing with these matters. Now the Government have not provided time in which to discuss the Report. I was suggesting that just such a Report should be discussed and that the Government should find time for discussing it. What I am trying to do is to show to the House the reasons why the matter should be discussed.
I may be making a very unfair speech. I am relying only on what an official of the House says. He may be entirely wrong. The Government may say, "We are sorry we employed this particular Comptroller and Auditor General. He has misunderstood us altogether. His conclusions are entirely wrong." That would be a permissible case to be made, but the Government cannot make it by dealing with the matter in this way. That is why I think the Government 177 should look at the Report again and, on the basis of what is said in it, should withdraw this Motion and substitute for this another procedure. I am sorry there is not a senior Whip here to appeal to, since the Motion is in the name of the Chief Whip. It would be a better procedure that allowed us to discuss the matter properly. Perhaps when we have dealt with Crichel Down we could come back to this, for, after all, Army matters are of equal importance.

§ Mr. Emrys Hughes
Is not my hon. and learned Friend aware that if this came up on the Army Estimates we should not be able to discuss it because the Government use the Guillotine after Vote A?

§ Mr. Bing
It is certainly worth considering whether of some £1,000 million voted we could not use some of the money that is being wasted to double the old-age pensions. There ought to be some explanation given the House about this expenditure. Let us consider that the serious allegation of the Comptroller and Auditor General in paragraph 35: From information recently made available to me, it appears that certain unsatisfactory matters have been disclosed by cost examination of the contractor's records in Cyprus. These are being investigated. I understand that future supplies from Cyprus will be obtained directly by the local Army authorities by competitive tender. The remainder of the supplies will, for the time being, be obtained by the original contractor but, to the extent possible, from a less costly source than has been used hitherto. What is the costly source used hitherto? Possibly this was how the Guatemalan revolution was financed; they certainly made enough profits to foment a revolution in most places.

§ Mr. Hughes
Could my hon. Friend say whether this is the firm which exports potatoes to Ayrshire?

§ Mr. Bing
That I do not know; but if they are sold at anything like the price at which they are sold in the N.A.A.F.I., I should have thought the Ayrshire people had little to worry about; but perhaps they have one price in the N.A.A.F.I. and another in Ayrshire.
The Chief Whip, whose absence we all regret—no doubt it is due to illness or indisposition—has made a great mistake in treating the House in this cavalier and grossly discourteous manner. The Leader of the House and the Chief Whip should be here to explain these serious matters. 178 They are not the only matters. I will not weary the Committee by going through all of them; no doubt other hon. Members will draw attention to other matters in the accounts into which it is equally necessary for the Committee to inquire.
We should not have to consider them in this way, which rules out discussion altogether, in my opinion. It is for you to rule on that, Sir Charles, but it seems to me to be a most unsatisfactory method. The Government are saying to the House, "We have made an awful mess of the Army accounts, but we will not allow you to discuss them. It is true that the House appointed a Comptroller and Auditor General to make a report, but we will not allow his report to be discussed."
That is the effect of the procedure being adopted. I hope the Government will seriously consider whether they should proceed in this way. If they choose to proceed in this way, I hope that my hon. Friends will take another opportunity—for this is not an opportunity to pursue the matter fully—to have a full investigation into what has taken place and what is revealed by the Report of the Comptroller and Auditor General.

§ Mr. Stephen Swingler (Newcastle-under-Lyme)
I should like to ask your leave, Sir Charles, to move to report Progress, in view of the speech of my hon. and learned Friend the Member for Hornchurch (Mr. Bing), and in view of the fact neither the Chief Whip, who proposed the Motion, nor the Minister in charge of the War Office—nor, indeed, the Minister in charge of the Air Ministry—are here. I agree that the Minister in charge of the Air Ministry is prevented from being here because of the Prime Minister's choice of a Minister to fill that office, but the Minister in charge of the War Office could be here and the Chief Whip could be here.
In view of the fact that they have deliberately absented themselves, I beg to move, "That the Chairman do report Progress and ask leave to sit again."

§ The Chairman
I am not willing to accept that Motion.

§ 10.45 p.m.

§ Mr. George Wigg (Dudley)
We have heard an extraordinary doctrine from the hon. Member for Dumfries (Mr. N. Macpherson), who took exception to the fact that my hon. and 179 learned Friend the Member for Hornchurch (Mr. Bing) has raised these points. He suggested that more appropriate action would be to deal with them when the accounts come before the House. The hon. Member does not take part in the Service debates, particularly the Army debates. Had he taken part in them, he would have learned during the last 10 years that if there is one subject about which the House must concern itself it is the financial control of the Army.
I remind the hon. Gentleman—he sits for a Scottish constituency, and he ought to know this if he has any qualification to sit in the House—that it was the conflict between King and Parliament which led to establishment by the House of Commons of control not only of the numbers in the Army but also of the methods of finance. I do not agree with those methods of financial control. I believe that they are archaic and out-of-date and ought to be reviewed, but from an hon. Member opposite—

§ The Chairman
I am afraid that the hon. Member for Dudley (Mr. Wigg) has allowed himself to be led astray.

§ Mr. Wigg
I am sorry if I have been led astray, Sir Charles, but I thought I was in order in replying to the hon. Member for Dumfries.
In common with my hon. Friend the Member for Newcastle-under-Lyme (Mr. Swingler), I very greatly regret the absence of the Secretary of State for War. He has a great deal to answer for. The Army, as we all know, is in a deplorable condition. Its discipline is slack, recruiting is low, and tonight we have been given by my hon. and learned Friend, in his astonishingly able speech, the fact that, on the basis of this Report, the people in the Canal Zone have been robbed with the connivance of the right hon. Gentleman, who has not even the courage to come here to defend his actions.
The right hon. Gentleman knew of this Report. It has been in the Vote Office for some time, and there have been plenty of opportunities for him to have repudiated the charges which we make; but he has not. What has he done? He has hidden, as has been his practice on previous occasions, behind the patient and, if I may say so, kindly figure of 180 the Under-Secretary of State, for whom I have sympathy. He has once again to face the fire; to face the music.
Let me remind the Under-Secretary of State that we gave warning a little more than two years ago, when we had a similar debate to that which we are having tonight; and there is some connection between the two debates in that we are in the same difficulty now because, as my hon. and learned Friend has pointed out, the Resolution of 1879 was never intended for the purpose for which the Government now use it. It was concerned with trifling sums and not the very much larger amounts which appear before us tonight, and about which we complained two years ago. On that occasion, I was allowed to deal with this question of financial control, and the implication of administration through regulations. I did then say that the conditions of control are archaic, out-of-date, cumbersome, and inefficient: and the Under-Secretary agreed with me. He then said: I now come to the point raised by the hon. Member for Dudley (Mr. Wigg) about the archaic form of the accounts. I agree with a great deal of what he said. We may remember that 18 months or two years ago a body of opinion in the country thought the whole system of national accounting was out of date and that, instead of being on a cash basis, it should be on an income and expenditure basis."—[OFFICIAL REPORT, 26th June, 1952; Vol. 502, c. 2577.]

§ The Chairman
If I allowed that, I apologise for being negligent, for I ought not to have done so.

§ Mr. Wigg
If you say that, Sir Charles, you put me in great difficulty because, since becoming an hon. Member of the House, I have always tried to base my remarks on your rulings. I have considered those rulings, and those of other holders of your office, and I would point out, with respect, that I am not quoting from remarks of my own, but from a speech made by the Under-Secretary, who added: I do not think there is much hope of being able to select one facet or slice of the national accounts for this purpose, but I will take up the question again."—[OFFICIAL REPORT, 26th June, 1952; Vol. 502, c. 2577.] In other words, we had the categorical assurance, on behalf of the Government, that the points made in that debate on this particular subject would be looked into and that the form of the accounts would be examined. But two years have 181 gone by. What has been done? I will tell the Committee what has been done—Nothing.
It is a queer fact that the major measures which have been taken to the advantage of the Army during the life of this Administration have been taken under pressure from these benches and often in the teeth of the resistance of the right hon. Gentleman. Here is another example. The Opposition would be failing in its duty if it did not point out that what we are examining tonight is the culmination of a system of accounts which was tied up with the wars of the 17th century. It has nothing whatever to do with either the finance or the control of discipline of a modern army.
It is only in times of peace that we have this elaborate and archaic nonsense. As soon as a war comes along, this system of financial control is thrown into the wastepaper basket and we have quite another system of control. In other words, when an army is engaged in mobilisation, during its period of greatest organisational difficulty, it has to switch over from one method of control to another. Can one wonder that the disorganisation which is implicit under even a perfect mobilisation system is much the worse for that?
The Under-Secretary of State would be serving the interests of the country and certainly of the Armed Forces if he would go so far as to say, "This is, after all, the culmination of the financial control which we have at the moment, which goes on, throughout the Session, and we really cannot do anything about the Motion before the Committee tonight except to ask for its acceptance." But could we not get from the Government an assurance that, assuming they are in office one year from now, they will look into this matter and implement the promise that was made by the hon. Gentleman? I will willingly give way to him—

§ The Chairman
I think that the hon. Member is trading on my mistake of two years ago in making that request.

§ Mr. Wigg
I do not want to detain the Committee by quoting all the precedents on this point—

§ Mr. Emrys Hughes
On a point of order. About the mistake of two years ago, Sir Charles, do I understand that 182 you are ruling yourself out of order retrospectively?

§ The Chairman
I am ruling myself out of order, and I apologise. I am very sorry that I was wrong then, but I think am right now.

§ Mr. Bing
We on this side never feel that you have given a ruling which we would in any case dispute, and we would like you to appreciate that, Sir Charles, when you approach your ruling of 1952.

§ Mr. Wigg
If, as I take it, Sir Charles, your intervention is not jocular but is serious, and you are going back on your ruling of a year ago, there are a variety of rulings that we have had on this subject over the past few years, starting in July, 1948. We then had a ruling from the Chairman of Ways and Means that The hon. 'Member cannot discuss the eventual disposal of the surplus.

§ Mr. Hughes
Who was "The hon. Member"?

§ Mr. Wigg
My hon. Friend the Member for South Ayrshire (Mr. Emrys. Hughes).

§ Mr. Hughes
I thought so.

§ Mr. Wigg
The Chairman continued: That question may only be discussed on the Estimates in which that item appears. The only question here is why there is a surplus."—[OFFICIAL REPORT, 2nd July 1948; Vol. 452, c. 2476.] So that we have a ruling in 1948 that we can deal only with surpluses. Next, we go on to 1949. On that occasion the Chairman said: I ought to inform the hon. and gallant Gentleman that it is not competent to inquire the reason for a deficit, though he may inquire the reason for a surplus."—[OFFICIAL REPORT, 11th July, 1949; Vol. 467, c. 147.]

§ Then, in 1950—

§ The Chairman
I have no doubt that these rulings have been given, but at the moment the only question before the Committee is: That the application of such sums be sanctioned. There may have been rulings that have been wrong, but the ruling at present is that we can discuss only: That the application of such sums be sanctioned. I must ask the hon. Member to confine his remarks to that.

183

§ Mr. Wigg
But with respect, Sir Charles, it puts my hon. Friends and myself in a difficulty if we come to this debate and arm ourselves with the rulings given in 1948, 1949 and 1950, and again in 1952—and I would refer particularly to 1952—and then we are told by you that a mistake was made by you last year and that your ruling on that occasion was wrong. With respect, I hope that in those circumstances you will reconsider your ruling on the Motion of my hon. Friend the Member for Newcastle-under-Lyme (Mr. Swingler), and will accept a Motion to report Progress, because we are placed in a most difficult and almost intolerable position if, in fact, armed as we are with rulings from four debates, we are now told that they are all in the wastepaper basket and that we have to approach the problem from an entirely new angle. I hope, therefore, that you will be kind enough to accept the Motion to report Progress.

§ Mr. Swingler
On a point of order. Sir Charles. In view of what my hon. Friend has said, could we now have a clarification of your ruling before we go any further? As I understand it, you have ruled that we can only discuss how the certain sums mentioned in this Motion may be devoted, but surely it is in order, as it has been on previous occasions, to discuss how these sums arise? How are we to discuss this Motion adequately unless we are able to discuss the reasons whereby these sums arise, which we are asked to devote to certain purposes, which means that we must discuss the reasons for the deficits and surpluses?

§ The Chairman
The only question before the Committee is that the application of such sums shall be sanctioned; that is to say, the Committee approve the use in this case of a form of accounts setting off deficits on some of the Department Votes against surpluses on other Votes. The Committee has to decide whether this system of accounting shall be followed. If we now decide against it, the only result would be that the Department would have to effect the same result by introducing an Excess Vote. This Committee has no power to debate details of either the deficits or surpluses which arise on the appropriation of accounts, which have now been closed and have been scrutinised by the Public Accounts Committee.

184

§ Mr. R. T. Paget (Northampton)
Further to that point of order, Sir Charles. Surely, if we are to debate whether a surplus shall be applied to a deficit, we have to consider what the deficit is, how it arises, and whether it is proper to write it off in that manner? How can one discuss the question as to whether a surplus should be applied to a deficit with any sense of responsibility for public money unless one considers whether the deficit ought to be written off in this way? If deficits have been improperly incurred, I should have thought—and I put this most respect, fully—that it was a gross offence to the public, whose money this is, to allow the matter simply to be written off without any Estimate being brought before this House or any account given of how this money was wasted. I submit, respectfully—that if the question of setting off surplus and deficit is to be taken at all. it can only be done on the basis of looking at the deficits and seeing if they are proper ones to write off.

§ Mr. N. Macpherson
May I direct your attention, Sir Charles, to the fact that the items of which the two hon. Gentlemen opposite have complained have not actually given rise to deficits and that in the total deficit these amounts do not occur?

§ The Chairman
That is not the point. The hon. and learned Member for Horn-church made his point perfectly clear and in order. It was that it should not be done in this way but that there should be an Excess Vote, and he stuck to that point pretty accurately. That is all that is before the Committee—whether or not this system of accounts should be adopted. If the Committee does not want it, it will have to come as an Excess Vote.

§ 11.0 p.m.

§ Mr. Hale
May I seek your guidance here, Sir Charles, having heard the hon. Member for Dudley (Mr. Wigg)? I have heard you say that you have come to amend your ruling given in 1952. I have looked carefully through the debate on this topic in 1952, and, so far as I can see, you did not give any ruling of that kind at all. It was the only occasion in history when I addressed the House without any intervention from the Chair.

§ The Chairman
I have made my apology for a mistake I did make.

185

§ Mr. Wigg
As I was endeavouring to follow in the steps of the hon. and learned Member for Hornchurch from a rather different angle, I trust that the Under-Secretary will be in order in dealing with the point he made two years ago, when we were discussing exactly the same point. We were then complaining about this particular method of dealing with the matter, and we were saying that there ought to be Excess Votes. We got an assurance from the hon. Gentleman that he agreed with us, and that this particular method, as applied to the Army, was archaic and out of date. He gave the assurance: I will take up the question again". The point, which has the support of my hon. Friends, is that if the Government will promise to implement what was said two years ago—very good, let them have their Motion. But surely we ought not to be given an assurance in 1952, and no action then taken by the Government. In 1954 they came down to this Committee and asked us once again to approve a method of balancing—or juggling, if that is the right word—deficits and surpluses, rather than using the method of an Excess Vote. Here my hon. and learned Friend has logic and morality on his side, because he has pointed out that the reason why the Secretary of State for War has not chosen to introduce Excess Votes is because he is afraid of the political implications, once the country understands what is involved.
If the right hon. Gentleman came to the House and asked for a Supplementary Estimate on the basis of the robbery and overcharging for troops in the Canal Zone, particularly when recruiting is falling, he knows the kind of Press he would get. Therefore, with the connivance, may I say the non-understanding connivance of the Patronage Secretary, as he does not understand a lot of what goes on in the House, this particular method is chosen, which, in my submission and that of my hon. and learned Friend, is an abuse of legislation which was never intended for this purpose.
I say that this arises from the fact that the financial control of the Army is as out-of-date as the Army Act was when we set about it in 1952. We pleaded with the Government on the Army and ultimately they accepted our point of view, and I am again pleading with them in their own interests. This is a point of view with which I do not think one hon. 186 Gentleman on this side would dissent. The decision then taken was right in the interests of the Army, of the country, and in the interests of the financial control of the House of Commons. I am saying on this vital issue of the financial control of the Army that once again the Government should bow to reason.
This is not something for which a Conservative Administration is especially responsible. It was carried out under a Labour Administration, and, before that, under a Liberal Administration. It has been in existence for getting on for 100 years, but, in the light of modern conditions, it is shown to be absolutely and completely out of date.

§ Mr. Hale
It is obsolete.

§ Mr. Wigg
"Obsolete" is the word. The Under-Secretary agrees with us. I am willing to give way to him. He can bring the discussion to a very rapid conclusion. All he has to do is to say that he meant what he said as reported in col. 2587 of the OFFICIAL REPORT for 26th June, 1952.
Was the Under-Secretary misleading the Committee on that occasion or not? Will he tell the Committee? Did he really mean what he said? Did he mean the Committee to accept his words when he said that he would take up the question again? What has he done during the past two years? Did the Secretary of State for War, with his notorious pig-headed obstinacy, prevent him from doing it? If so, why did not the hon. Gentleman resign? Or can it be that the really effective control of the Army rests not with the Secretary of State for War but with the Minister of Defence? Can it be that the Secretary of State went to the Minister of Defence and that as this was a matter which concerned all three Service Departments—

§ The Chairman
The hon. Gentleman is going beyond the Motion now.

§ Mr. Wigg
I am coming back to it.

§ The Chairman
I hope the hon. Gentleman will come back to it speedily.

§ Mr. Wigg
I thought I had not wandered very far from what I said in June, 1952, and I am quite willing to cut short what I have to say if the Under-Secretary will tell the Committee whether he honestly meant what he said on 26th June, 1952, and what has happened since. 187 All I am trying to do is to find out what is the basis of the Government's policy in this matter. In 1952 the Under-Secretary was asking for time. He asked that the Motion should be passed and said that he would then look into the question again. The Opposition accepted what he said. It may well be that some of his hon. Friends would have risen in protest had they known that nothing was going to be done for two years. However, nothing has been done for two years.
Consequently, I put these questions to the Under-Secretary. Is it that he tried to do it and that the Secretary of State for War stopped him? I then move on from that point and ask whether, if that is the case, the Secretary of State wanted to carry out this reform but, as it affected the Navy and the Air Force and other spending Departments, he had to go to the Minister of Defence. Is it that the Minister of Defence turned it down? If so, why did not the Secretary of State for War resign? I can imagine no greater blessing to the Army than if that action had been taken.
Or is it that the Minister of Defence wanted to do it and went to the Cabinet and found out that, after all, the Prime Minister when he was soldiering at Omdurman did not have that form of accountancy and what was good enough for the 4th Hussars at Omdurman is good enough for today—

§ Colonel Gomme-Duncan
The 4th Hussars were not at Omdurman. The Prime Minister was with the 21st Lancers.

§ Mr. Wigg
I would never suggest that what was good enough for the 21st Lancers is good enough for the Black Watch or the 4th Hussars.

§ Mr. Bing
Would not my hon. Friend agree that the Prime Minister has changed his regiment as often as he has changed his party?

§ Mr. Wigg
I do not know about that, but I have a strong suspicion that the Prime Minister takes a very deep interest in the details of the Army, and it may well be that he vetoed the policies of the Minister of Defence. We all know that the Minister of Defence is in a very weak political position. He certainly cannot protest with any strength against action by the Prime Minister.
188 I can understand the Under-Secretary keeping quiet about this if it has been a subject under discussion for the last two years both by the Cabinet and the 1922 Committee. In which case it probably has to get permission of both. Perhaps, Sir Charles, you would now consider the Motion to report Progress. We have had no statement from the Government benches: there is no representative of the Ministry of Defence present, the Secretary of State for War is not here, the Leader of the House is probably having his usual nap, and the Prime Minister is not here.

§ Mr. Emrys Hughes
Is not this a question for the Minister of Supply, and he is not here?

§ Mr. Wigg
In the circumstances, I would ask you to consider such a Motion.

§ The Chairman
I have considered it, but cannot accept it.

§ Mr. Hugh Dalton (Bishop Auckland)
I think it would be convenient, as you have ruled, Sir Charles, you cannot accept the Motion, if someone could speak on behalf of the Government. I do not know who is in charge. Is it the Financial Secretary to the Treasury, or is it the Under-Secretary of State for War?

§ The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter)
Had the right hon. Gentleman not risen, I should have done so in an endeavour to deal with the point of financial procedure involved, but naturally I gave way to him.

§ Mr. Dalton
I am much obliged, and I hope I will not impede the right hon. Gentleman in accepting the proposal I make, which is that the Government should withdraw this Motion on their own initiative. Let us consider it in the light of day when the Press can report the Government's defence of the series of extraordinary statements many of which have been quoted by my hon. and learned Friend the Member for Hornchurch (Mr. Bing) in this remarkable Army Appropriations Account by that very distinguished civil servant, Sir Frank Tribe, now Comptroller and Auditor General. I do not wish to prolong the debate if the Government would indicate that they would be willing to postpone this discussion for a day or two.
I did not study this paper until this evening when my attention was drawn to 189 it, but it does appear to contain a number of extraordinary charges. Whether they are true or not is a matter for the Government spokesman to indicate. They show a considerable lack of financial control, which I am sure the right hon. Gentleman will regret, in many parts of the world. Particular reference has been made to the proposed Territorial Army camp at Trawsfynnydd in the neighbourhood of an airfield at Llanbedr, where I remember spending happy hours at a Fabian summer school in 1909. I regret very much that on this ground, hallowed for me by youthful memories, so much money seems to have been wasted.
We pass from this to the Canal Zone. It appears—and in this I am anxious to help the Government—that only a few hours ago in another context, but relevant to this matter, the right hon. Gentleman the Chancellor of the Exchequer was explaining, in reply to the debate on the Third Reading of the Finance Bill, his eagerness to reduce needless and unproductive expenditure on defence. This report of the Comptroller and Auditor General is stuffed with scandal about waste of money, nominally on defence, through gross inefficiency, partly by Government Departments, who should be brought to book in this House, and partly by private firms not named, but including the private firm which has been rooking our troops in the Canal Zone and making a profit of 7½ per cent. on the transaction.
11.15 p.m.
These matters are too grave to be debated at this hour. I suggest, and I have reason to hope, that the Financial Secretary should postpone it. He will no doubt wish to have the aid of his right hon. Friend the Chancellor, with whom we all sympathise in his desire to do something for the older people. He can do it out of savings which can rightly be made out of this grossly unnecessary defence expenditure, which is not promoting our defence. These matters should be examined in the light of day and under the procedure which it is permissible for us to use of the Excess Vote.
The present procedure is totally inappropriate to the matters with which we are faced. The proposal, in the name of the Patronage Secretary is, "That the application of such sums be sanctioned," namely, the excess of surpluses over de- 190 ficits. As you have indicated, Sir Charles, it is out of order for us to argue that the procedure is inappropriate, and the proper course is for the Government to seek an Excess Vote, in the light of day and at a reasonable time, and not only to defend their actions but to indict the persons indirectly mentioned in this Report who have wasted public money and abused the advantages which the Government have conferred upon them.
I end as I began, by asking the Financial Secretary, in collaboration with his colleagues, to adjourn this debate so that the whole matter can be considered at a more appropriate hour of the day.

§ Mr. Boyd-Carpenter
The right hon. Member for Bishop Auckland (Mr. Dalton) who has filled the office of Chancellor of the Exchequer—[Interruption]. I hope that the right hon. Gentleman will not tempt me by his interruptions to get out of order and into anecdotes of his régime, which he might find embarrassing—has completely misunderstood the procedure with which we are concerned tonight. If he is anxious to discuss anything in the Report of the Comptroller and Auditor General, normal opportunities for so doing exist, whatever procedure we follow on this Motion.
It would be impertinent on my part to seek to remind the right hon. Gentleman of the facilities which are at the disposal of the Opposition for the discussion of such matters as they may wish to raise. If the right hon. Gentleman and his hon. Friends desire to raise these matters, the Secretary of State for War will no doubt be able to deal with them.
We are here concerned, under the rulings which you have given, Sir Charles, with a narrow point of financial and accountancy procedure. We are concerned, as I understand it, with this very simple question: The Army Accounts for 1952–53 have shown on some Votes a surplus totalling £8,282,978 14s. 2d.—I ask the Committee to note the "2d." as evidence of the selectivity of the accountancy methods of my right hon. Friend—and there were deficits on other Army Votes of £2,045,533 7s. 11d.
As I am sure the right hon. Gentleman and other Members will be aware, the Service Estimates are constructed in a somewhat different way from the Civil 191 Estimates. They are divided into a number of separate Votes. It so happened that, in the year with which we are dealing, 1952–53, there was a surplus on certain Votes and a deficit on others. What is proposed in the Motion is no more and no less than the application of so much of the surpluses as is required to deal with the deficiencies.
As to the propriety of that time-honoured procedure and its application in this case, the Committee may be interested to know that the matter was dealt with, in the normal way, provisionally by a Treasury Minute, and came, in the normal way, before the Committee of Public Accounts. That Committee reported—presumably a few days before 25th May, when the Report was ordered by the House to be printed—in these terms: Your Committee have reviewed the exercise by the Treasury, in relation to Army and Air Votes, of their powers under the annual Appropriation Act to sanction provisionally, subject to subsequent confirmation by Parliament, the application of surpluses on any Votes of a Service Department to meet deficits on other Votes of the same Department. They see no reason why Parliament should not sanction the virement temporarily authorised by the Treasury in their Minutes laid before the House in February, 1954. I may say that I agree with the right hon. Gentleman the Member for Bishop Auckland about the pronunciation of the somewhat eclectic word "virement."
Therefore, on the point with which I understand we are concerned—that of the propriety of the accounting procedure involved—we are fortified in the view we have put forward by the Report of the Public Accounts Committee. It is open to this Committee or the House to disregard that Report if it so wishes. On the other hand, I think most hon. Members have a very high regard for that Committee and its servants, and I do not think we should be wise lightly to suggest that that Committee would recommend the sanction of a procedure which was subject to all the objections which hon. Members opposite seem to see in it. At any rate, there we are, proceeding in the normal way for dealing with these Votes, with the recommendation of the Public Accounts Committee in support of our procedure.
As I understand it, the real objection of the hon. and learned Member for 192 Hornchurch (Mr. Bing) to our following this procedure was not that there was any impropriety in doing so—indeed, it is a very obvious procedure to follow—but that by following it we deprived him and his hon. Friends of an opportunity of having a little fun talking about the affairs of the War Office. That, I understand, is really the nub of the hon. and learned Gentleman's objection. He suggested that it would have been better from that point of view had we taken the Excess Vote. I suppose that the hon. and learned Gentleman and the right hon. Member for Bishop Auckland, who supports him, appreciate that if we had put down an Excess Vote for the financial year ending 31st March it would have been taken up by the Guillotine before the end of the last financial year, and would therefore have been no more subject to separate discussion than under the procedure which we are now following.

§ Mr. Wigg
The hon. Gentleman is not correct. We had a Supplementary Army Estimate in January, 1953, and these accounts relate to the year 1953–54. Therefore, the Government would have asked for a Supplementary Estimate over a year ago.

§ Mr. Boyd-Carpenter
I hope that I am wrong in suspecting that the hon. Gentleman is confusing a Supplementary Estimate with an Excess Vote. It would be most surprising if he—who follows these matters so closely—should do that. We are here concerned not with the question whether or not a Supplementary Estimate could have been detected as being likely to arise during the financial year, 1952–53, but whether we should deal with these surpluses and deficits by the method of a Monk Resolution or the Excess Vote. The point I put was that if we had dealt with it by the method suggested by hon. Members opposite it would have been caught up by the Guillotine at the end of the last financial year, unless it was put down by the Opposition. The question whether this matter should be discussed still rests with the Opposition. They have the means of raising this in all the ways open to discussion.

§ Mr. Hale
The right hon. Gentleman knows perfectly well that there has never been a Session in which so many scandalous things have arisen that the 193 Opposition have wished to discuss. There are 75 Motions on the Paper for which no time is given by the Government. We were being criticised by the Government the other day for not allowing them time on a Supply Day to discuss Crichel Down, which appears to be a dispute of their own. The right hon. Gentleman knows perfectly well that subject after subject is pressing on our time so that we are able to spare two or three hours only on Supply Days for important subjects, and now he says that when the Government seek to get away with the loss of millions of pounds, some of them by fraud, the Opposition should supply time and put down a Motion.

§ Mr. Boyd-Carpenter
I do not accept for a moment the accuracy of the allegations the hon. Gentleman makes. Indeed, we are not concerned with losses. We are concerned overall with surpluses, as he would know if he had followed the Motion. So far as the allegations of fraud are concerned, if he or any of his hon. Friends wish to make allegations of fraud against the Department, let them take an appropriate opportunity to make those charges and face the rebuttal those charges would undoubtedly meet. As to the hon. Gentleman's point about Supply Days, I was under the impression that the Opposition were having some difficulty in finding suitable subjects for Supply Days.
We are not in any degree diminishing the opportunities of discussing this by the procedure we are following. That is a point that hon. Gentlemen opposite really must meet. Unless they meet it I am afraid they will give my hon. Friends the impression that they are creating a mountain out of a molehill and that these charges are being made on this occasion because, as they themselves know and have said, my hon. Friend cannot answer them—instead of making them on the appropriate opportunity.

§ Mr. Wigg
On a point of order. Surely it is an abuse of your ruling, Sir Charles, for the right hon. Gentleman to suggest that we have hidden behind your ruling? That is a suggestion that we know what your ruling would be before we came into the Committee. We were going on the ruling given by your predecessor two years ago. We did not know what your ruling would be till you gave it. Is it not a scandalous thing for the right hon. 194 Gentleman to make the suggestion he has?

§ Mr. Boyd-Carpenter
I am sorry if the hon. Gentleman—

§ Mr. Wigg
I do not mind what the right hon. Gentleman says. I know him.

§ The Chairman
I am sure the ruling I have given has been reinforced.

§ Mr. Wigg
I am not challenging your ruling, Sir Charles. I accept it. I say it is a scandalous thing for the right hon. Gentleman to say we on this side of the Committee have made allegations knowing they cannot be answered. The hon. Gentleman cannot reply because he has not the guts to reply.

§ The Chairman
I hope we shall not shout abuse at each other in this way.

§ Mr. Swingler
Sir Charles, was not my hon. and learned Friend the Member for Hornchurch (Mr. Bing) perfectly in order in dealing with the parts of the Report which he did? Would not the hon. Gentleman be in order in dealing with them, too? I do not understand 'how the right hon. Gentleman can state the Government cannot deal with them.

§ The Chairman
The hon. and learned Member was in order in giving the reasons why he thought there should have been an Excess Vote, but it would not be in order to go into the details without relating them to the reasons.

§ Mr. Fernyhough
I presume that if the Government gave an explanation in answer to my hon. and learned Friend they would be in order?

§ The Chairman
In explanation of why there is not an Excess Vote.

§ Mr. Dalton
If the Under-Secretary of State for War, whom we are glad to see here, were to rise in his place and seek to make a statement, you would not order him to sit down, Sir Charles.

§ 11.30 p.m.

§ The Chairman
I call any Member who rises in his place, but I do not say that I should let him go on for ever.

§ Mr. Boyd-Carpenter
I was reassured by your concluding sentence. Sir Charles.
195 By following this procedure we are not shutting out, or seeking for one moment to shut out, the discussion of any point which the Opposition desire to raise. Had we followed the Excess Votes procedure in the last financial year, there would have been the same result. I beg the right hon. Gentleman to appreciate that we are not running away from any challenge which, on an appropriate occasion, the Opposition seek to make. We are concerned to apply the normal procedure established over many years and recommended by the Public Accounts Committee for normally dealing with the surpluses and deficits with which we are concerned.
I do not think any case has been made out for departing from this practice and for ignoring the report of the Public Accounts Committee. All the matters which hon. Members may desire to raise in the Department of my right hon. Friend the Secretary of State for War are matters which they have ample, but other opportunities to raise.

§ Mr. Hale
I propose to follow the narrow line laid down by my hon. and learned Friend the Member for Horn-church (Mr. Bing), but I hope I shall be in order in replying to one or two of the less fortunate observations of the Financial Secretary, whose intervention in the debate was rather less helpful than his interventions normally are.
When I mentioned the word "fraud," for example, the right hon. Gentleman suggested that this was something which I introduced into the matter instead of the Comptroller and Auditor General having introduced it. If he cares to refer to the detail of the items on pages 42 and 43 of the Report, he will see a whole series of items which can be explained only by fraud or by such gross neglect in the handling of public money as would bring one within the ambit of the criminal law. It is right that we should say this.
I want to say this by way of exordium before I turn to the more limited scope of my speech. My hon. Friend the Member for Dudley (Mr. Wigg) said that the control of these accounts is a matter of very great importance. It is a fundamental of the constitution that the Army should be subservient to Parliament. 196 Every year we pass an Army Act in pursuance of a policy laid down in 1688, because it is part of our constitution that the Army shall be subject to annual Parliamentary control and that its figures shall be subject to annual approval. If not, of course, we have the possibility of Fascism in this country; if not, we have the possibility against which our ancestors sought to guard. It is not a matter to be facetious about. It is not a matter on which the Financial Secretary should say, "Hon. Members want to have their bit of fun," when we raise an issue of this fundamental importance.
The Financial Secretary is completely wrong about virement. We have had the process since 1879. It was used in dealing with small balances here and small balances there; it was a simple, desirable, useful technique. Those, indeed, were the days, or shortly after the days, when Hume would occupy the House all night debating a lost half-crown. What are we dealing with today? The Financial Secretary said it is not a matter of losses at all but a matter of surpluses—we are dealing with £8 million surplus. But we are dealing with the question of whether that £8 million should be used to balance a whole series of losses and a whole series of matters which come so near to criminal negligence that one has to be restrained in one's language about them.
I have the greatest respect for the Members of the Front Bench opposite; I have not the slightest doubt that they are very good husbands, that they pay their rates and that they behave with infinitely more respectability than ever I do, but it is unfortunate on a matter of this kind, of vast figures and great detail, with serious allegations being made in the Report against the conduct of Her Majesty's Government, that the whole of the Front Bench should be occupied by a set of bric-a-brac and that no responsible Minister should have been here from the start of the debate.
The Financial Secretary always tries to be informative, but, if I may say so, he sometimes discloses more than he intends. Tonight he was full of explanations, so I thought, as to why the Under-Secretary of State could not reply and why he, himself, could. That, I think, raises one or two questions of procedure, and one of those is that the least said 197 the better. Therefore, the Financial Secretary to the Treasury intervened to say merely that what we suggest is impossible.
My hon. and learned Friend the Member for Hornchurch approached this matter with his usual reserve and modesty, but he did not call attention to one of the most important aspects; the matter which was passed over quite casually by the Comptroller and Auditor General when he talked about the expenditure of the British section of the Commonwealth Land Forces in Korea. Now this is a classic example of how Army accounts can be handled in such a fashion until no one seems to care. It is a story of a complete lack of control, and even of discipline. Indeed, it is nothing short of amazing that the real charge which we are able to make is that there has been no discipline at all. Nobody, apparently, seems to think that it is his duty to render accounts correctly, or even to render them on time. The Comptroller and Auditor General states that some accounts for a whole area for a whole year have not been produced.
So far as the forces in Korea are concerned, we find an astounding situation. Through the responsible official in Australia, and the distribution of the various land forces participating in the occupation of Korea, we are told that no cash adjustments were made, but that some were made during the year under review, and that adjustments have since been made in respect of accounts notified as at August, 1953; and that the United Kingdom share amounted to £46,500,000—about 55 per cent.—which is the proportion of the liability we are due to pay to Australia in respect of that year. Maintenance costs reported as at that date are given as £14,900,000. What are those? We just bung in £14,900,000, to which—

§ The Chairman
I do not think that the hon. Gentleman is exercising the same ingenuity as his hon. and learned Friend. This speech is out of order.

§ Mr. Hale
I am sorry, Sir Charles, but my hon. and learned Friend was not exercising ingenuity. He was speaking of matters of great constitutional importance, and now I am merely trying to put before the Committee, in, I would say with great respect, quite brief detail, 198 another aspect of this same constitutional issue. I did not think that my hon. and learned Friend was merely being ingenious.

§ The Chairman
I am asking the hon. Gentleman to use sufficient ingenuity to keep within order.

§ Mr. Hale
I am sorry, Sir Charles, but I could not hear what you said.

§ The Chairman
The hon. Member's remarks are not being related to the Motion before us.

§ Mr. Hale
May I then submit that that ruling is not in accordance with the one which you gave a short time ago when you said that it was permissible for hon. Members to call attention to limited items and to question the application, or otherwise, of the principle of virement to this Vote. I have simply called attention to an amount of £14,900,000 which has presumably been overpaid, and in much the same terms as those used by my hon. and learned Friend. He called attention to the preceding item, where we are involved on expenditure on fruit in the Middle East. He called attention to that fact, and to other matters in this Excess Vote.—[Interruption.]
I do not know how I can make it clearer. I have said it on three occasions. I have dealt with the process and history of virement. I have said—I am open to be challenged by anyone in the Committee—that the process of virement has never been used before in these circumstances. Never before has the process of virement been used for covering up payments of this kind or for stopping a debate upon them. That is a discrimination, Sir Charles, that I am wholly unable to understand.
My hon. and learned Friend said that we should not use the process of virement because the facts disclosed by the Comptroller and Auditor General in the preceding paragraph involve a loss of £1½ million. I am saying that we should not use the process of virement for this because of the facts disclosed in the next paragraph involving an initial over-payment of £14,900,000, and, I was about to add, substantial payments since, according to the view of the Comptroller and Auditor General. In my opinion, the argument is precisely the same and is based upon precisely the same grounds. 199 I hope I shall be in order at least in making one observation about the intervention of the hon. Member for Dumfries.
The hon. Member made a remarkable intervention. He said that we could not refer to the loss of £93,000 on the camp at Penrhos because we could refer only to surpluses, and he suggested that we should not discuss the matter before we took the vote. He said that we should vote and then try to use our ingenuity in dealing with it after we had made the appropriation. In a democratic House of Commons, which has a constitution, that is the most extraordinary suggestion I have heard made for a long time.

§ The Chairman
I have stopped the hon. Member for Dudley (Mr. Wigg) from pursuing that point, and I hope it will not be pursued now.

§ Mr, Hale
These are the facts which we have to consider. I am not arguing the point, Sir Charles, or going into details. A whole series of allegations of complete inefficiency is disclosed. How do we deal with them? There was a day in the history of the House when the way of dealing with this would be for the Minister to resign. Labour Ministers have resigned. What has happened? The Secretary of State for War has never come near the House from start to finish of the debate.

§ Mr. Wigg
Where is the Under-Secretary?

§ Mr. Hale
He is no longer with us.
The Motion is put down on the Order Paper by the Patronage Secretary. No statement is made to the House. No opportunity is taken at the end of Questions for the Secretary of State for War to come and say that he deeply regrets to have to disclose a grave loss of public money. No Parliamentary opportunity is taken of bringing to the notice of the House the whole of these grave matters. The whole thing is done in a skulking manner, which should be a matter of grave complaint.
The Financial Secretary tried to suggest that the debate could not continue. We suggested at the earliest stage of this discussion that the Chairman should report Progress and we should take an opportunity of considering the matter. 200 My right hon. Friend the Member for Bishop Auckland (Mr. Dalton), a former Chancellor of the Exchequer and a man of the greatest possible experience in these matters, got up at an early stage and suggested that we take an opportunity of discussing this matter in accordance with Parliamentary usage and the dictates of Parliamentary propriety.
This is not a party matter. A waste of public money, a lack of Parliamentary control and a lack of financial control are matters for both sides of the House. The Prime Minister constantly refers to the House as the "grand inquest of the nation." The hon. Member for Dumfries does not think so. Surely, it is a matter on which Members on both sides should be getting up and saying—

§ Mr. N. Macpherson
On a point of order. I understood you to say, Sir Charles, that it was out of order for the hon. Member to make that reference. He has made it a second time. Surely, in that case, it would be in order for me to make a reply.

§ The Chairman
I thought that the hon. Member for Oldham, West (Mr. Hale) was just working up for his peroration.

§ 11.45 p.m.

§ Mr. Hale
The last time I addressed the House I was 'paying a great tribute to the hon. Gentleman. He is a little ungrateful. I was merely saying that the hon. Gentleman did not seem to regard this House as the grand inquest of the nation—

§ Mr. Macpherson
I do.

§ Mr. Hale
I thought he was contemplating not a grand inquest of the nation but an inquest on the constitution, which is a different matter. But, Sir Charles, I hope that one of my hon. Friends will seek to move the Motion to report Progress once again, because it would be a tragic event in the history of the House if we permitted the use of procedure to bury events and to bury facts and figures of this kind, to suppress the use of accountancy and to suppress a frank explanation of grave matters. None of us ought to consent to that. We ought all to welcome the opportunity of bringing to light matters that ought to be brought to light, of providing an investigation into facts which should be investigated, in 201 order to maintain the reputation for financial purity which has been one of the treasured possessions of this House for centuries.

§ Mr. Edward Heath (Lord Commissioner of the Treasury)
rose in his place, and claimed to move,"That the Question be now put."

§ Question, "That the Question be now put," put, and agreed to.

§ Question, "That the application of such sums be sanctioned," put accordingly, and agreed to.

§ II. Whereas it appears by the Air Appropriation Account for the year ended the 31st day of March, 1953, that the aggregate Expenditure on Air Services has not exceeded the aggregate sums appropriated for those Services and that, as shown in the Schedule hereto appended, the

Schedule
		DEFICITS	SURPLUSES
No. of Vote	Air Services, 1952–53 Votes	Excesses of actual over estimated gross Expenditure	Deficiencies of actual as compared with estimated Receipts	Surpluses of estimated over actual gross Expenditure	Surpluses of actual as compared with estimated Receipts
		£	s.	d.	£	s.	d.	£	s.	d.	£	s.	d.
1.	Pay, &c., of the Air Force	—			93,697	10	8	2,809,269	13	1	—
2.	Reserve and Auxiliary Services	—			91	14	0	34,715	13	1	—
3.	Air Ministry	—			—			63,728	11	7	1,704	5	3
4.	Civilians at Out-stations	—			119,108	2	10	204,567	17	9	—
5.	Movements	—			—			8,489	2	6	780,127	15	8
6.	Supplies	5,317,538	15	4	—			—			1,083,353	3	9
7.	Aircraft and Stores	—			—			12,914,288	8	3	524,968	19	7
8.	Works and Lands	—			1,189,462	8	5	17,874,232	17	1	—
9.	Miscellaneous Effective Services	67,426	0	3	110,767	13	8	—			—
10.	Non-effective Services	25,777	10	6	—			—			146,045	9	10
11.	Additional Married Quarters	—			5,399,897	1	2	484,804	9	4	—
—	Balances Irrecoverable and Claims Abandoned	9,496	18	8	—			—			—
		5,420,239	4	9	6,913,024	11	7	34,394,096	14	4	2,536,199	14	l
		Total Deficits £12,333,263 16s. 4d.	Total Surpluses £36,930,296 8s. 5d.
		Net Surplus £24,597,032 12s. 1d.

§ Motion made, and Questions proposed, "That the application of such sums be sanctioned."—[Mr. Boyd-Carpenter]

202

§ net surplus of the Exchequer Grants for Air Services over the net expenditure is £24,597,032 12s. 1d., viz.:

	£	s.	d.
Total Surpluses	36,930,296	8	5
Total Deficits	12,333,263	16	4
Net Surplus	£24,597,032	12	1

§ And whereas the Lords Commissioners of Her Majesty's Treasury have temporarily authorised:

(1) the application of so much of the realised surplus on Vote 8 for Air Services as is necessary to meet the net deficit of £4,915,092 11s. 10d. on Vote 11 that would otherwise have been met by issues out of the Consolidated Fund under the Armed Forces (Housing Loans) Act, 1949;
(2) the application of so much, of the remainder of the said total surpluses on certain Grants for Air Services as is necessary to make good the remainder of the said total deficits on other Grants for Air Services.

203

§ Mr. Swingler
I think it is a very regrettable thing if the Government should seek once again to set an example this financial year of gagging the debates on these very large sums of money squandered by Government Departments. The right hon. Gentleman the Financial Secretary seems well contented with the fraud and gross negligence that is detailed in these Reports and seeks to prevent Parliamentary debate upon them by using the Whips department of the Tory Party. It is once again necessary to protest against this procedure, and I want to give four reasons why the Committee should not pass the Vote from the Air Ministry which is now presented to us.
The first reason is because of the very much larger sums that have been voted to the Air Ministry in recent years, and that, I believe, is a sufficient reason why we should not pass this Motion in the form in which it is put. We have to bear in mind that the Estimates of the Air Ministry that have been presented in recent years, and in particular in this year 1952–53, were not fully debated in the form in which Estimates used to be debated years ago, in the years to which the Financial Secretary has referred. The Financial Secretary ought to know, even if he does not appear to at the moment, that in 1952–53, to which these sums relate, the Estimates of the Air Ministry were subject to the Guillotine, and most of the Votes from which either of these surpluses or deficits arises in this Motion were never discussed by Parliament. They may have been discussed by the Public Accounts Committee, but I maintain that we ought not to pass this Motion.
In explanation of this Motion, we are presented with these appropriation accounts, and they are entitled: Air Services Appropriation Account of the sums granted by Parliament for Air Services for the year ended 31st March, 1953. Every Member of the Committee knows that that is a false statement, and that these grants were never approved by Parliament, only in a purely technical way. They were grants made by the Government; they were presented to Parliament in a "White Book" that probably ran over some 300 pages, of which perhaps the first dozen were discussed by Parliament, then, under the Guillotine procedure introduced in 1948, the rest of the Votes were never debated by Parliament.

204

§ The Deputy-Chairman (Sir Rhys Hopkin Morris)
That does not appear to me to arise under this Vote. What arises here is that these sums should not be voted in this form but that an Excess Vote should be brought in to deal with them. That is in order, but to deal with the other point is not.

§ Mr. Swingler
I am sorry, Sir Rhys, but I was trying to develop an argument that they should not be voted in this form, and my reason for saying that was precisely because they have not been discussed in any other form.
If I may put the argument in this form, perhaps you would agree that it is permissible. I would be prepared to agree with the arguments of the Government, that if all these Estimates that may lead in any particular financial year to surpluses or deficits are fully discussed by Parliament as well as by the Public Accounts Committee, this Committee could then perhaps easily accept a Motion in the form in which it is now put—that the surpluses should be devoted to the deficits. But I maintain that this Committee ought not to accept this Motion in this form, which according to you, Sir Rhys, means we are not allowed to discuss the individual items.
We ought not to accept a resolution which stifles discussion on the individual items. I maintain that that is borne out by the fact that we have had Supplementary Estimates from the Service Departments in recent years when we have had deficits such as are described in the Motion. Last year we had a Supplementary Estimate when the War Office required more money for the pay of the Armed Forces, which permitted Parliament to discuss the question of pay and recruitment in the Armed Forces.
But the Motion before the Committee is admittedly a piece of constitutional trickery. It is admitted by the Financial Secretary that it has been deliberately devised to stifle Parliamentary discussion. He asserted that the Motion was drawn in such a way that we could not discuss the items in it and that if the Opposition wanted to discuss it, it would have to provide its own Parliamentary time for it. His conception was that the Government should vote itself money and if the Opposition wanted to discuss it, it must provide the time.
205 The Government produce Service Estimates of the money given by the Treasury to the Air Ministry and Guillotine them through Parliament and then, if there is any loss, fraud or negligence, they produce a Motion which cannot be discussed and say, "If the Opposition want to discuss the scandal outlined by the Comptroller and Auditor General, the Opposition must provide the time for it." That is a technique of constitutional trickery. It is combined with the use of the Guillotine to stifle Parliamentary discussion on the Services.
In 1952–53 hardly any of these Votes of the Air Ministry were discussed by Parliament. The Financial Secretary cannot deny that. All that was discussed by Parliament was Vote A, and that was subject to very stringent Rulings from the Chair. Does anybody on the Treasury Bench deny that none of the Votes to which these surpluses or deficits relate was discussed? They were all guillotined. It must be admitted by the Government that these Estimates, involving millions of pounds, were never scrutinised by Parliament. It may be that they were scrutinised by the Public Accounts Committee, but they were not allowed to be discussed by Members of this Committee.
We have voted large sums of money to the Air Ministry. Now we are told that enormous surpluses or deficits have arisen. In one case the deficit is over £5 million, and the deficits total more than £12 million. There should be full Parliamentary discussion of these deficits and of the losses, frauds and gross negligence outlined in the Report of the Comptroller and Auditor General, and the Government should provide the Parliamentary time for the discussion. That in itself is sufficient reason for opposing the Motion.
There is another reason. With the technique of using the Guillotine to stifle Parliamentary discussion of Service Estimates and of producing manoeuvring Motions in this form, there has also grown up the practice of deliberate overestimating in the Service Departments. No one on the Treasury Bench can deny that. Take the Ministries we are discussing now—

§ The Deputy-Chairman
That may be correct or not—I do not know—but it is not in order to discuss that on this Vote. The only matter that can be discussed 206 on the Vote is the argument advocating an Excess Vote.

§ Mr. Swingler
What I am arguing, Sir Rhys, is that acceptance of the Motion in the form in which it is drawn encourages deliberate over-estimating by the Service Departments and enables the Service Departments to get away with whatever accountancy or estimating they please. That is borne out by the fact that of recent years they have overestimated, and there have been surpluses on a considerable number of Votes. Then we have a Motion of this kind permitting them to transfer those surpluses in whatever way they please without adequate Parliamentary scrutiny.
12 midnight.
Therefore, this Motion ought to be analysed into particular deficits and surpluses. When there is a deficit, the Department should bring forward a supplementary Estimate so that there can be full Parliamentary discussion about why this accountancy arises. We cannot be satisfied with accountancy which allows a surplus of £17 million on one Vote, or a deficit of £5,250,000 on another. That is completely incompetent accountancy by the Air Ministry, and this Motion and that affecting the Army Estimates shows they have been deliberately over-estimating their requirements to the Treasury on certain Votes. The total result is a surplus of £24 million, and it is the Treasury who require that, because we have the Chancellor of the Exchequer coming to the Box and saying that he wants to cut the defence Estimates. Here we can see why we cannot cut them, because the Air Ministry has deliberately over-estimated.

§ The Deputy-Chairman
The hon. Gentleman is far away from the Motion before the Committee.

§ Mr. Swingler
I am sorry, but I understood from your predecessor that we were allowed to develop arguments to show why this Motion should not be accepted in this form. I have tried to show that because these Estimates were not properly debated they are now brought forward. Because of the large sums involved and the need to cut defence expenditure and the incompetent accountancy the Motion should be taken back or rejected and the 207 deficits and surpluses brought forward separately so that Parliament can reassert its financial control over the Air Ministry.

§ Mr. Boyd-Carpenter
The procedure with which the Committee is dealing on this Motion is precisely the same as that on the Army Votes. The Committee will not therefore wish me to go through the procedure again. We are again concerned—after the submission of the provisional Treasury Minute to the Public Accounts Committee, and the Committee indicated that they saw no reason why Parliament should not authorise the sums of money set forth in the minute—with the figures on the Order Paper and whether the practice the Committee followed on the previous Motion should be carried out here.
The hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Mr. Swingler) adopted the same argument as his hon. and learned Friend the Member for Hornchurch (Mr. Bing) developed on the previous Motion. He said that in his opinion this procedure was unsuitable because he would have liked a fuller opportunity than we have had on this Motion for discussing certain aspects of the Air Ministry's Votes. This is not, to use his own phrase, a procedure devised to stifle discussion. It is a procedure which provides for no more or no less discussion than would be provided in instances of Excess Votes which would have been swept up by the spring Guillotine. Therefore there is nothing in that point.
The hon. Member then sought to introduce the new argument that some means should be devised to debate the merits of this matter more fully, because the Estimates in the original debate had not been fully and adequately discussed.
I have here the HANSARD reporting the concluding stages of those very 1952–53 Estimates. I discovered that the discussion on them commenced at 3.33 one afternoon and terminated at 12.51 the following morning, without any Motion from my right hon. Friend the Patronage Secretary. I do not know what the hon. Member means by saying that the Estimates were not fully discussed, as there was certainly the opportunity to discuss them. My hon. Friend the Under 208 Secretary, as is usual on these occasions, performed a marathon in seeking to answer a very large number of the questions that had been put to him in the course of the debate.

§ Mr. Wigg
I do not want to detract from the compliment that the Financial Secretary has paid to his hon. Friend, but it is less than fair for him to claim as a mark of credit that the Patronage Secretary did not intervene on that occasion. We have come to know the ways of the Patronage Secretary very well. He never shows any generous disposition towards the Committee because, as soon as we get Vote A, he will move to report Progress. The Government have done that before; they have done it consistently. Those of us who have been here since 1945 will know what different treatment we got from our own Front Bench, even when we were criticising our own Ministers. If the Government cut us down in one way we shall seek every opportunity to keep the House or the Committee in order to have the discussion we could have had if the Government had given us half an hour of explanation from the responsible Minister.

§ Mr. Boyd-Carpenter
The only objection to what the hon. Gentleman has said is that it is not founded on fact. He seeks to get away from the fact that discussion proceeded in a perfectly normal way so long as was desired, on the very occasion to which the hon. Gentleman referred. That discussion did not in fact terminate on Vote A, because there was a reply to the hon. Member for South Ayrshire (Mr. Emrys Hughes) on the subject of additional married quarters. It is an argument based on a false conclusion of facts for the hon. Member for Newcastle-under-Lyme to say that we should abandon the normal procedure in this case because there was not an opportunity to discuss the original Estimates from which this Motion is derived.

§ Mr. Swingler
I cannot accept that statement. In the present Motion there is mention of 11 Votes on the Air Estimates. From his perusal of the discussions, is the Financial Secretary prepared to say that there was full Parliamentary discussion and scrutiny of those 11 Votes, involving many millions of pounds?

209

§ Mr. Boyd-Carpenter
I am not concerned to answer that question. I am concerned to deal with the hon. Gentleman's point that there was no opportunity for discussion. If that opportunity was not taken, I cannot help that. From the speech of the hon. Member for Newcastle-under-Lyme, I thought that he was under the impression that the debate in question had been closured. If he now tells me that he was not under that impression I accept it, but in that case I am bound to say that I cannot really see the relevance of what he was trying to say.
We are here concerned with applying the normal procedure. We are not denying the House any accustomed or normal opportunity to debate these matters. I have always found my hon. Friends in the Service Departments only too anxious to defend their Departments when opportunities offered. It falls to them to occupy this Box somewhat less frequently than some others of us, but they always seem eager to do so, and I am certain that if the Opposition desire to exercise one or other of their normal rights in the matter my hon. Friend will be prepared to deal with any of the allegations in the Report of the Comptroller and Auditor General or any other allegation that any hon. Member desires to make. That is the normal run of Parliamentary discussion of these matters.
But I do say that it is quite wrong, quite unfair, wholly inaccurate and completely outside precedent for the hon. Member for Newcastle-under-Lyme to suggest that this is constitutional trickery—to use his own phrase—or that this Motion, which has been moved for many years and which has received, as a procedure, the approval of the Committee of Public Accounts, means anything more than the normal method of applying such part of the surpluses on some of the Votes as is required to meet the deficits on others.
How these circumstances arose, and why—whether the Service Departments overestimated or not—are interesting and important questions which, on an appropriate occasion, the House will no doubt wish to debate. My contention is that they really do not arise now. Here we are concerned with moneys that have been spent and surpluses that have arisen. We are concerned not with the why and 210 wherefore of the matter, but with the practical accounting procedure to follow. This is the accounting procedure which the House has followed on previous occasions, and nothing that has been said this evening has convinced me that it is not the appropriate procedure to follow on this occasion also.

§ Mr. James Callaghan (Cardiff, South East)
I am sure that nothing which has been said will convince the Parliamentary Secretary that this is not the appropriate procedure, because there is no other procedure that could be devised which would give him an easier ride than he has had tonight—and certainly no other that I know which would ask the House of Commons to transfer sums of money from one Vote to another without any of the responsible Ministers—who are not, on this occasion, the Financial Secretary—being present to give the Committee an explanation why this should be done. I do not know why, this year, the Financial Secretary has taken upon himself the rôle of answering all these questions. This is unique in my experience.

§ Mr. Boyd-Carpenter
We are concerned here with a certain financial procedure which is initiated by the laying of a Treasury Minute before the Public Accounts Committee. My right hon. Friend the Chancellor is responsible for that Treasury Minute and the procedure which flows from it. It therefore inevitably falls to me to justify the expenditure.

§ Mr. Callaghan
We always like to have the Financial Secretary with us on an occasion like this, but I am asking why we should not have had the pleasure of hearing from the Under-Secretary. It is not too late. It would not be without precedent. He has been present previously on discussions of this Vote; so has the Under-Secretary of State for War and so have I, in the past, on discussions of the Navy Vote. I wonder why the Financial Secretary is seizing so many opportunities to speak. Perhaps there is to be a re-shuffle in the Government, and he thinks that this is the best way of showing his diligence and persistence. I hope that he will be rewarded when the reshuffle takes place, because I feel that he deserves a reward for his ingenuity in defending this procedure, to which we take great exception on this occasion.
211 12.15 a.m.
We have heard the Financial Secretary's opinion on procedure, but that does not influence us one tiny bit. It may be, as the Public Accounts Committee thinks, that it is appropriate for the sums to be transferred in this way, but the question we ask, the question of the flock of back benchers opposite, who, we are told, are going to get the Chancellor to reduce the defence Estimates next year, ought to be asking is why an excess Vote is not provided to enable us to discuss the circumstances in which we have to find another £5 million in respect of oil and fuel. We are being asked to find it even though it may be disguised as a surplus, and the only explanation is that it arises mainly from an increase in Customs duties. If we had an opportunity of discussing this on an Excess Vote, I should certainly ask the Under-Secretary of State for Air, who would then be in a position to reply, why it is that he should have to find £5 million—

§ The Deputy-Chairman
The hon. Member began by saying "if." There is not, however, an Excess Vote, and he is going beyond the bounds of order.

§ Mr. Callaghan
I will drop the word "if" immediately and say that an Excess Vote should be provided to give us the opportunity of asking why the Secretary of State should need £5 million extra although the Army does not want anything on this account at all. I do not find the same degree of misappropriation by the Air Ministry as by the Army, and I offer the Under-Secretary of State for Air that much comfort, but we should still like to hear from him. On another occasion on 26th June, 1952, the Parliamentary and Financial Secretary said: I am very glad to have this opportunity of answering the various points that have been made. I agree with the Member for Oldham, West (Mr. Hale) that it seems odd—"—[OFFICIAL REPORT, 26th June, 1952; Vol. 502, c. 2556.] He went on to deal with some of the odd points. I do not think he satisfied my hon. Friend, but at least we did hear from him.
Why is there this coyness on the Treasury Bench tonight? Are Ministers frightened of the Patronage Secretary, even though he is not here? His deputy 212 is here, of course. Are the eloquence, acumen and wit of the Financial Secretary to the Treasury such that he can answer for all Ministers? If so, let us get rid of them. We have heard a case for an increase in the salary of Junior Ministers. Let us get rid of these other Ministers and increase the Financial Secretary's salary out of the saving. Let us have another transfer of money.
We think the Government are treating us with much less than their customary courtesy. I ask the Under-Secretary of State to answer the questions that have been put to him. There may be other questions. It is well known to this Committee that if we cannot at first get a reply we go on till we do. The quickest way to dispose of the business is for the Under-Secretary of State to tell us what this is all about. We have had an example that he will not get up or cannot or has been forbidden to get up.
I want the Under-Secretary of State for Air to cut the debate short by rising to his feet—this is a perfectly proper request—and giving some answer, apart from the mere procedural answer given by the Financial Secretary. We strongly believe that when sums of this order are at stake an Excess Vote should be provided in order that they may be properly discussed, and it is no answer for the Financial Secretary to tell us that it can be done on the Estimates. Those are the Estimates there are what has gone wrong. That is why we want a second opportunity to debate them. The debate which took place when Votes A, I and XI were discussed may or may not have been satisfactory, but this is the net result and, if the original Estimates proved to be out, it is not improper to ask that the Government should make their case showing why they were wrong and what they propose to put them right.
They should not hide behind a Treasury Minute which says, "We will hide these deficiencies and ensure that the public gaze does not light upon the losses because we will see whether, by a process of virement, which was originally to be applied to small sums to be transferred between Vote and Vote, we cannot disguise the whole operation and pretend that there is a surplus when on many of the individual Votes there is a deficit."
213 Does the Financial Secretary think that this is the proper way of doing it? If so, why does he think Parliament provided originally for separate Votes of this nature to be set out? This procedure was provided in order that Parliament might have the right to make this scrutiny and in order that Departments and Ministers should not slide behind surpluses here and deficits there in order to present a picture which looks smooth on the surface but which, when you begin to dig into it, reveals the degree to which the Estimates have been wrong.
The Under-Secretary has had an opportunity to study his brief—and I know that a full and adequate brief is provided on these occasions—and I hope that he will now answer the questions, particularly those in relation to Vote VI. Why is he asking for another £5 million? Why does he think we should be expected to sanction his part of this transaction—a deficiency of actual, as compared with estimated receipts, of £5 million for additional married quarters? I am not asking him to explain it—merely to say why he thinks the Committee ought tonight to agree to transfer some £5 million which should have been spent on additional married quarters, and has not been spent on them, in order to attempt to bolster up a surplus in some other part of his Vote.
Whatever may be the constitutional position, or the procedural rights and privileges, we think the situation reveals a pretty sorry state of affairs. I wish the Government back benchers, who are said to be seeking to reduce expenditure, would concentrate on the millions of pounds which seem to be thrown away in these surpluses. It is no use the Financial Secretary saying, "We have spent less." It is true that overall less has been spent, but equally it is true—if he will focus his attention on the first item in the Schedule—that over £5 million more has been spent, and some of it is accounted for by fraud and some by negligence and some by losses, all of which are brought out by the Comptroller and Auditor General.
The Financial Secretary came close to challenging what the Comptroller and Auditor General said on the matter. I hope he will not challenge it, because it is well known that the Comptroller and Auditor General is an independent servant in these matters who probes into 214 them and produces the proper answer. If he heads his column, "Fraud, negligence, loss, balance irrecoverable and written off," I am prepared to stake what he says against anything which may be said by any Financial Secretary to the Treasury at any time in defending his Government, because the Comptroller and Auditor General has nobody to defend. He only wants to get at the truth. and that is the reason why we believe that a much more suitable opportunity should be given to the Committee to probe into this issue.
I invite the Under-Secretary of State for Air, who has a great reputation for courage, to ignore the Financial Secretary to the Treasury, to forget the Chief Whip, and to get up and tell us, without transgressing the rules of order—

§ Mr. Boyd-Carpenter
He cannot.

§ Mr. Callaghan
I am sorry to keep the Committee, but the Financial Secretary is really making it impossible for me to sit down. He intervenes from a sedentary position, and, I gather, says that it is impossible for the Under-Secretary to speak while keeping within order.

§ The Deputy-Chairman
I think that this is wide of the Motion which is before the Committee.

§ Mr. Bing
Surely, Sir Rhys, my hon. Friend is perfectly in order in suggesting that the Under-Secretary could reply by dealing with these various charges by arguing that it is unnecessary to proceed by way of an Excess Vote, and that the matter could be resolved by virement? Therefore, there cannot be any objection to his speaking.

§ Mr. Callaghan
I cannot see what is possibly out of order in arguing that a Minister should reply to charges which are made about his own Department.

§ The Deputy-Chairman
Perhaps not, but this is developing into an argument by itself.

§ Mr. Callaghan
Then, as I cannot ask the Under-Secretary for Air to reply, may I ask what change is being made in our procedure by rulings from the Chair which make it impossible for that to be done?

§ The Deputy-Chairman
Whoever replies is not a matter for the Chair.

215

§ Mr. Boyd-Carpenter
Perhaps, Sir Rhys, I might say that your predecessor in the Chair did indicate that the rulings given in 1952, under which my hon. Friends were able to deal to some extent with this matter, were later considered to be too wide and were not, therefore, being followed this year.

§ The Deputy-Chairman
I thought that I tried to make that clear in my own intervention; whether the procedure adopted here is the correct one, or whether there should be another form of procedure by way of an Excess Vote.

§ Mr. Hale
May I call attention to the ruling of your predecessor who said, quite correctly, that he thought he had erred, having regard to the observations of the Financial Secretary to the Treasury, in his ruling in 1952? I called attention to the actual debate on the Navy Appropriation Account in 1952, to which the Parliamentary Secretary replied, and pointed out that your predecessor had not given any order, and that no order had been given from the Chair from the start to finish of that debate.

§ The Deputy-Chairman
It is a matter for the Government as to who should reply.

§ Mr. Swingler
Could we have it quite categorically that it would be in order for the Under-Secretary of State for Air to reply?

§ The Deputy-Chairman
That is not a point of order; that is not for me to answer.

§ Mr. Wigg
The Chairman of Ways and Means has apologised for an incorrect ruling given two years ago. But, prior to 1952, we had debates in the three preceding years, all of which were replied to by the responsible Service Minister, and this is the first occasion we have had the Treasury coming down to "crack the whip." It was a jibe by the Financial Secretary that the Service Minister concerned tonight is unable to reply. With great respect, that clearly is not so. Perhaps it would be for the convenience of the Committee, Sir Rhys, if you would be kind enough to tell us in what way the ruling tonight modifies the doctrine which all of us here have accepted from 1948 onwards.

216

§ 12.30 a.m.

§ The Deputy-Chairman
The only effect of the ruling tonight is to limit the scope of the debate. As I understand it, that is all that the ruling is concerned with. I am not concerned with who replies to the debate.

§ Mr. Callaghan
I am obliged, Sir Rhys. We now see that it is by no ruling of the Chair that the Under-Secretary is unable to reply. He is quite able to reply if he wishes to do so, and the only reason that he does not rise is because of some arrangement made either between the Patronage Secretary and himself or the Financial Secretary and himself. If he denies all that, it is clearly his own disinclination to serve the Committee which prevents him from getting on his feet. He cannot have it every way.
My hon. Friends will want to keep this debate going in order that we get some service from the Under-Secretary of State for Air and to find out what he has to say within the limits of order, pre-1952 ruling, about these matters. This debate could have been over long ago but for the intervention of the Treasury on this issue, which has in some way prevented, although this is now denied, the Under-Secretaries getting up and making the cases for their Departments that they ought to make, that they traditionally make and that, I have no doubt, they want to make now and are perfectly free to make on the same basis as the pre-1952 ruling from the Chair, which, it was said tonight, went unfortunately a little wide.
We are now back to the pre-1952 position, in which I myself replied to these debates. My hon. Friend the Member for Aston (Mr. Wyatt) has replied to them, Mr. Aidan Crawley replied to them when he was Under-Secretary of State for Air, and there must be abundant precedents. Why the Government Treasury Bench want to be so obstinate to keep a handful of us here and a great many more of their own supporters is beyond my comprehension. Perhaps the 1922 Committee will have something to say about it in the privacy of its meeting on Thursday. For heaven's sake let us have a reply from the Under-Secretary of State for Air and get away home.

217

§ Sir Herbert Butcher (Holland with Boston)
I do not want to trespass on the time of the Committee except to say that it is right that some tribute from these benches should be paid to the appearance of the hon. Member for Cardiff, South-East (Mr. Callaghan) in air debates. I feel sure that the large number of Members of the Opposition who had the misfortune to leave before he took up the debate will greatly regret that they missed so historic an event. I congratulate the hon. Member on having maintained the whole of his audience for the whole of his speech. He started when he had seven of his supporters here, and he finished with the complete galaxy that is ranged behind him. I feel sure that that will be a tribute both to his skill and to the assiduity of their attendance.
I just want to express to the hon. Member one word of advice if he will allow me. He is seated next to a very distinguished figure, the right hon. Member for Bishop Auckland (Mr. Dalton), who is a former Chancellor of the Exchequer and who, after two of his colleagues had moved to report Progress in an earlier debate and after he himself had intervened, in some peculiar way did not press the matter to a Division. I hope that the younger and more active leader of the Opposition will have the courage to take the matter to a Division should be so wish.

§ Mr. James Simmons (Brierley Hill)
Owing to the action of the Government Front Bench, I am speaking on rather unusual ground. The Army is my particular subject, and I hoped to say something as far as the Army Appropriation is concerned, but the same principle applies to the Air Appropriation Accounts.
The Financial Secretary has told us that this is an age-long procedure, that what we are making a fuss about has been done year after year and why do we not accept it and let him go home to bed? They told us that about the Army Act. On this occasion we are trying to bring to bear arguments against a phoney manipulation of figures, against juggling with the national finances, against this archaic method of finance, as the Under-Secretary of State for War called it in a previous debate.
218 I am concerned because it is unintelligible, and I am only a simple chap. The lads in the Army and Air Force could not understand the implication of the mass of figures which we have under this system, but if there were a straight Excess Vote, even the rank and file in the Services would understand what was being presented.
Now we are being told that all these Votes have been discussed already. Yet only one or two Votes were discussed on the original Estimates, and that fact is probably the reason why we are having a debate on this Vote this morning.

§ Mr. Swingler
Actually only one Vote was discussed.

§ Mr. Simmons
Yes, Vote A was discussed for the Army. If we are to discuss only one and then rush through in Committee 10 Votes without discussion, the Government will have to come back with a surplus on the one side and deficit on the other side, put a bit here and take a bit out there. This is not a serious way in which to carry on the national finances. I have heard it suggested that national lotteries might be run for boosting the national finances. That would be preferable to the put-and-take method we have in this Vote.
Because we are not told what will be done with this Vote. We are simply asked to give a blank cheque. There is a deficit here, a surplus there. All right, take some of the surplus, wipe out some of the deficit, no questions asked, never mind what caused the deficit. No, we must not ask that. Never mind what caused the surplus. No, we must not ask that. Just keep our mouths shut. There might be too many nasty stories flying about. There might be too many public inquiries demanded by the 1922 Committee if we go into too much detail as to why there is a surplus or a deficit. All we have to do is to wipe out some of the deficit with some of the surplus.
We suggest that this is the wrong way. We suggest that if there is a deficit there should be an Excess Vote of this House to make it good. Think of what could be done with the deficit of £12 million. We are here dealing with a surplus—

§ Mr, Bing
On a point of order, Sir Charles, I think there are fewer than 40 Members present in the Chamber.

219

§ Mr. Gerald Nabarro (Kidderminster)
Further to that point of order, Sir Charles, I have just counted and there are 47.

§ Mr. Callaghan
There are 43.

§ Mr. Nabarro
Forty-seven.

§ The Chairman
There are 40 Members present.

§ Mr. Nabarro
Wrong again.

§ Mr. Simmons
I was pointing out that enormous sums of money are involved here—a surplus of £36,930,000 and a deficit of £12,333,000—and we are asked blindly to allow the Government, without them having to come to the House and without discussing how best to deal with these deficits, to do exactly what they like. I would suggest that probably some of this money might go to assist the disabled ex-Service men in whom I am interested, but I cannot say that. I can only give an overall general method of dealing with the problem.
We have had the short debate on the Army brought to an untimely end. Now the Brigade of Guards has gone, no doubt with their bowler hats to collect salutes, and we are on the Air Force. We shall probably have the Navy later on. But I am going to say that it is a disgrace and a scandal that these matters affecting the Services of this country should be dealt with in this hole-and-corner way at this time of the morning because the Government will not give adequate and proper time to it.
We have had no discussion for three years on the Army Act; we have had Guillotine discussions on the Service Estimates, and more and more it appears to me that it is the policy of this Government to prevent discussion on the commissions and pay of the men and women of the Services. I believe it is our duty to keep a very keen eye on the way the money is expended, and to see that it really goes for the defence of this country. But if we are to allow this put-and-take method to be pursued, we shall not know what money is being spent. We want to know that the money voted by Parliament for Defence does not go to buy carpets at £572 each. We want to know that the money the House votes for defence does not go to buy second-hand carpets, then to be told by 220 the Comptroller and Auditor General that they could have got new carpets for much less. I know that is in the previous year's Report, but it is the same principle, and that is the whole point. This runs through all the years: these things are going on all the time.
This Army, Navy, Air Expenditure Committee meets on one occasion to discuss these Votes, and this is the only opportunity we have to consider the Report of the Comptroller and Auditor General. Yet it is brought on at this time of the night, with no major Ministers present. The Patronage Secretary has now come in, no doubt having donned his bowler hat and collected his salutes in Birdcage Walk. The Secretary of State has not been here all night, and with no major Ministers here the Committee is being treated with utter contempt by the Government on this very important question of the fighting Services.
We are supposed to be proud of our fighting Services, and we are supposed to be determined that we shall give of our best to those who have always given of their best to us. Yet we have been presented with these two Votes. I am discussing this one on the ground that it is the wrong method. I am discussing it at a grave disadvantage because I am an Army man and do not know much about the Royal Air Force, but I say that the same principle applies to the Air Estimates as to the Army Estimates. This House ought not to allow this financial juggling to take place on these Estimates.
I hope, Sir Charles, that if the Under-Secretary's reply is not satisfactory, and if my right hon. Friends feel it to be necessary, you will accept a Motion to report Progress.

§ 12.45 a.m.

§ Mr. Bing
I do not want to delay the Committee for any great length of time in dealing with these Estimates, but I want again on the Air Estimates to press the argument that I presented to the Committee on the Army Vote. It is even more applicable in the case of the Air Estimates.
We ought to have these matters separated. We should vote the deficiencies separately, and then have the surpluses put 221 back properly into the general account. There was not a constituency in which hon. Members opposite did not shed tears over the fate of the old-age pensioners. Everything was to go first to the old-age pensioners. Why could we not meet the case of the old-age pensioners? Because the Chancellor had not got £45 million with which to do it. But if one adds together the Army surplus and this very big surplus of £36 million, we have got to £44 million already. The Service Departments over-estimated and said "You cannot give anything to the old-age pensioners because we need the money." Yet they did not need the money. The fate of the old age pensioners has been the battle-cry of hon. Gentlemen) opposite for the last two months. Surely the House ought to debate this matter.

§ Mr. Wigg
On a point of order, Sir Charles. Would it not be as well for the hon. Member for Kidderminster (Mr. Nabarro) to get to his feet if he wishes to address the Chair and not carry on a conversation which is interrupting my hon. and learned Friend?

§ The Chairman
I could not hear what the hon. and learned Gentleman was saying.

§ Mr. Bing
The House ought to look at these matters in a little more detail. The Financial Secretary gave two reasons why the Committee should not deal with the matter now and why it should not be dealt with by way of Excess Vote. He said that the matter could have been dealt with when the Estimates were presented. He also said that the matter should have been looked at by the Public Accounts Committee and only if it suggested there was something particularly important ought the House to deal with it.
Either one or other of those arguments may be good, but they cannot both be. The Estimates come up in March, and the Public Accounts Committee does not report until the end of May. So it is quite impossible for us to wait for the Report of the Committee to consider whether there should virement. We cannot possibly discuss the matter on the Estimates in March if the Report of the Public Accounts Committee is not to come out until the end of May.
Possibly the brief was given to the Under-Secretary of State for Air to read 222 and then it was decided that he had better not speak and that the Financial Secretary should speak in extempore fashion. Otherwise I am sure the Financial Secretary would not have made such a gaffe as that.

§ Mr. Boyd-Carpenter
Had I used that argument it would have been a gaffe. If the hon. and learned Gentleman had paid attention he would know that I did not state that this was a matter to be left to the Public Accounts Committee. I said that the procedure had been approved by that Committee. I did not say that the investigation of any particular allegations relating to the Service Departments was passed to the Public Accounts Committee, nor would I have said so.

§ Mr. Bing
The right hon. Gentleman is not being fair to himself. What he did was to read out the last sentence of the Report, which states that they see no reason why Parliament should not sanction the virement temporarily authorised by the Treasury in their Minutes laid before the House in February, 1954. There are other reasons why this should not be dealt with in the form we are now dealing with it. I do not want to go into great detail, but Vote 8 is one of those on which large surpluses arise. Those surpluses have been set against all sorts of losses, but they ought never, to my mind, to have been set against those losses which arise from policy matters but should be discussed on a different basis. We want to know whether they should be set off against sums of money which include, if one looks at the stocktaking losses, deterioration of cement in the Canal Zone at the time of the abrogation of the 1936 Treaty.
These matters should not be set against large sums of money which have come to the Treasury on different grounds. If one looks at the Report and explanation with the Vote one sees there is a surplus of £17 million, not an inconsiderable sums these days. The greater part of that is due to new works, additions and alterations each amounting to £10,000 and upwards. All we know is that is due to changes in planned works services, political uncertainties and alterations to the programmes of the United States Air Forces. To set off against a deficiency caused in different 223 ways sums of money which come because of an unexplained change in policy by the United States Air Forces is an entirely inept method of accountancy, and one in which the House should not indulge. We see also that the decision is due mainly to works structural plant being diverted to export and delivery of other plant falling below expectations. That is a separate matter that should have been debated separately, as it is entirely different from particular types of losses.
When one comes to examine the losses one is struck by the way they differ from last year. For example, cash losses last year amounted to £9,000: this year they were £64,000. We have had no explanation of this: perhaps we shall get one from the Under-Secretary for Air. They are things we ought to be told about. On page 33 we see that damages to two Royal Air Force Training Establishments were assessed at £1,639, but the amount recovered was only £81. If we had an Excess Vote we could examine this matter, but it is extraordinary that only £81 could be recovered. Were there only two people involved in this who could be fined, or what?
Then there is the huge item: Barrack Damages written off under powers delegated to air-officers Commanding…£17,402. We ought to have from the Under-Secretary of State for Air some explanation of this item. It may be possible for him to reply in this debate on these matters, and I hope he will do so. He can demonstrate that these matters need not be dealt with in this way at all.

§ Mr. Callaghan
Has my hon. and learned Friend noticed in Paragraph 23 of the Estimates that the Air Ministry have actually given power to commanding officers to write off losses and to raise the ceiling to £500?

§ Mr. Bing
Exactly, These matters may not seem very large, but on the Excess Vote procedure we should be in a position to have an explanation why the Ministry give power to write off losses. The cost-of-living is about twice as big under the present Government over what it was before, and perhaps that is the short explanation. If it is, we ought to have it.
224 I do not want to detain the Committee, but I would give one or two more illustrations and show how the matters might be dealt with. Item 34 on page 38 is: Deficiencies of stores revealed at 24 stock-takings at depots at home and abroad. They were stock-taking errors. Treasury authority was obtained in each case, to a total of £138,277. This is a large item, which it is proper for us to examine. We cannot go into each case, but on the Excess Vote procedure we could take one or two items so that it would be felt that there was some general control.
It is only fair to say that this document is more satisfactory than the Army document, even if the sums are larger. The Army document shows a degree of irresponsibility which is fortunately missing in the case of the Royal Air Force. That is all the more reason why Ministers might be allowed to get up and speak. I can understand why it was necessary for the Chief Whip to prohibit the Secretary of State for War, but this does not obtain with the Air Force.
There may be a very good reason why it is necessary for commanding officers to know that it might be their unit which is picked on by the Committee for examination, and that the responsible Minister may have to answer, as otherwise we cannot have public accountability. If people think there will not be the Chief Whip to get up and say: "I move the Closure" before the Minister can possibly reply, we shall have commanding officers acting in a highly responsible way. I remind the Committee of the gentleman who gave the orders for the bowler hats and the umbrellas. Even in the Air Force it is necessary that officers should feel themselves subject to public scrutiny.
1.0 a.m.
It is no use hon. Gentleman thinking they can evade their Parliamentary responsibilities by evading debate, or even by moving the Closure. It is clear that if we do not get the Under-Secretary up on this occasion we shall certainly find an occasion on which we shall have an opportunity for discussion. If we find it, I hope there will be a great many complaints from the 1922 Committee or elsewhere that the time is inconvenient, and that hon. Members are kept back from their holidays or made to sit up all night in order to do so. Here was an 225 occasion when the Government could have withdrawn this Motion and proceeded by way of an Excess Vote, giving the House a day for a discussion of the matter. They have failed to do so, and they must not blame the Opposition if it takes a convenient opportunity to consider the constitutional issues which are raised. I am sure that hon. Members opposite will not mind spending a night out of bed in order that we may have an opportunity of discussing this matter.

§ Mr. Heath
rose in his place, and claimed to move, "That the Question be now put."

§ Question, "That the Question be now put," put, and agreed to.

§ Question, "That the application of such sums be sanctioned," put accordingly, and agreed to.

§ Resolutions to be reported this day.