HC Deb 16 July 1954 vol 530 cc909-20

Resolution reported, That, for the purposes of any Act of the present Session to increase the limits imposed by section thirty-nine of the Electricity Act, 1947, on the amount outstanding in respect of borrowings of the British Electricity Authority and Area Electricity Boards and by section forty-two of the Gas Act, 1948, on the amount outstanding in respect of borrowings of the Gas Council and Area Gas Boards, it is expedient to authorise such increased charges on the Consolidated Fund and payments into the Exchequer under the said Acts of 1947 and 1948 as may, by reason of the Treasury's power under those Acts to give guarantees in connection with the borrowings in question, result from increasing the said limits in the case of the said Act of 1947 from seven hundred million pounds to fourteen hundred million pounds, and in the case of the said Act of 1948 from two hundred and fifty million pounds to four hundred and fifty million pounds.

Resolution read a Second time.

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."

2.22 p.m.

Mr. Geoffrey Bing (Hornchurch)

I am sorry to delay the House on this matter, but I think that this Resolution is so badly drafted and so unclear in its meaning that this is one occasion on which the House ought not to accept the decision of the Committee in the matter.

May I call the attention of the Minister who will no doubt deal with it to the actual wording of the Resolution and invite him to explain to the House exactly what it means, because, with great respect to those hon. Friends of mine who have given this matter considerable thought, we have not been able to make out what it means.

One would normally expect the Minister to speak first, and then for some reply to be made from the Opposition Front Bench. But now, apparently, that such a procedure is considered improper, it falls to a humble back bencher to raise these matters in the first place in order to give the Minister an opportunity of replying. If hon. Members will refer to the text of the Resolution, they will see that it says: That, for the purposes of any Act of the present Session to increase the limits imposed by section thirty-nine of the Electricity Act, 1947"— That is common form, and then it goes on to say—and this is the part on which I should like some explanation from the hon. Gentleman, because it is most abscure and was not discussed when we dealt with the matter earlier, on the amount outstanding in respect of borrowings, of the British Electricity Authority and Area Electricity Boards and by section forty-two of the Gas Act, 1948, on the amount outstanding in respect of borrowings of the Gas Council and Area Gas Boards… One of those statements taken by itself is perfectly comprehensible, but when the two are put together in this form, it requires some rather more fuller explanation than we have so far received. It is the duty of this House to be particularly careful in matters of finance, and I should have thought that hon. Gentlemen opposite, having come to power on a policy of economy, would make it clear what money they are asking Parliament to vote. It appears to me that by drafting the Money Resolution in this way it is quite unclear to the House what it is that it is being asked to vote.

The Resolution goes on to say: It is expedient to authorise such increased charges on the Consolidated Fund and payments into the Exchequer under the said Acts of 1947 and 1948 as may, by reason of the Treasury's power under those Acts to give guarantees in connection with the borrowings in question… To which of those borrowings does it refer? We are, I think, entitled to have some reasonable explanation from the Minister as to the meaning of these words. The Resolution continues: results from increasing the said limits in the case of the said Act of 1947 from seven hundred million pounds to fourteen hundred million pounds, and in the case of the said Act of 1948 from two hundred and fifty million pounds to four hundred and fifty million pounds. On which of those amounts is that outstanding? That is really the question to which it would be valuable if we could have some answer from the Minister. I hope that before we pass from the Report stage of the Financial Resolution we shall have a clear explanation of it from the Minister.

Mr, Leslie Hale (Oldham, West)

I suggest that it is a very extraordinary thing that after we have spent same time criticising the expenditure of a much smaller amount, we should come to the stage later in the day when the Minister does not think it worth while to rise in order to say something about an expenditure of £900 million.

Mr. Bing

He does not know how he has spent it.

Mr. Hale

If I recollect the debate of last Friday correctly, the expenditure was very strongly criticised by the hon. Member for Kidderminster (Mr. Nabarro), who is, unfortunately, not now in his place to support us in raising this matter.

If I go to my bankers and ask for £500, I am received with a dubiety which, I am told, has nothing to do with my personal integrity, but which is entirely due to instructions received from the Exchequer which says that it is injurious to the finances of the country that overdrafts should be increased or loans made on personal security.

Now we are being asked, without so much as a nod of the head from the Minister, to authorise a grant of £900 million. We are being asked to authorise the raising, by the two great and important authorities, of this extra money. Those of us who have a care for the public exchequer feel that some explanation should be given.

When the right hon. Gentleman rose to move the Second Reading of this Bill, he began with the most lavish tributes to the electricity and gas industries and to the steps that they had taken. He said that a reduction in the use of coal had been effected by this method, and that he hoped, by the granting of these large sums, that still further economies would be effected, while at the same time productivity was expanded. He referred to the fact that in America the increase in the consumption of electricity is about 10 times what it is in this country although America has only a population three times the size of ours. He was strongly in favour of the development of the productive capacity of electricity, both for business and for domestic consumption. He referred specifically to the use of labour-saving appliances in the home as desirable, in addition to the necessity for expanding so that we could increase the productivity of the country. Then, quite suddenly, at the end he announced that he had agreed to appoint a committee to review the whole operation of nationalised electricity and nationalised gas.

It is very extraordinary that the Minister should come forward and say, "I want to double the amount of loans available to both these nationalised industries, and, at the same time, I propose to conduct an inquiry to see that they are being properly run." One would have thought that before being asked to give complete carte blanche for a sum of £900 million, we should be told for what period it is to be borrowed, how far the House could go back on such a decision, when it is expected that the report of the committee will be forthcoming, what is the ambit of the terms of reference of this committee with regard to capital expenditure, and to what extent it will consider the development of the two industries and the amount of capital development that can be absorbed by them.

2.30 p.m.

Until we have that information I suggest that it is premature for the Minister to ask us to consider this Money Resolution—and to have to consider it with no information at all is an affront to the House. We are falling into the habit of finding, day-by-day, Ministers coming to the House who have not read their briefs and who expect things to go through on the nod and appear to have some assurance that business will go through without criticism. I exempt the Minister of Agriculture from that charge; he does not expect business to pass through without criticism, but most Ministers seem to think that they can propose some action and have it accepted without any discussion of any kind.

Surely this is a proposal of great importance. It is intended to cover very many years and it will mean a complete alteration of the planning of our industry as it proceeds. I imagine that the Minister is quite familiar with the report on materials prepared by a committee in America which makes it perfectly clear that a survey of the available raw materials is a vital matter in this connection. The right hon. Gentleman will not suggest, however much he improves the economies made in the use of coal, that he will not need more coal as this capital development goes through. No matter what economies he makes, he will use more coal in the end. From where is that coal to come? Is the right hon. Gentleman taking any steps to recruit more men into the mining industry? Or are we to spend money on these gas and electricity production plans without having arranged for the supply of the necessary fuel? That is the sort of thing which has happened in the past.

I ask the Minister to remember that the House is sitting this afternoon at some inconvenience. Most of us want to get to our constituencies tonight but we are here because we feel that we should not allow the Leader of the House to put on the Order Paper a whole mass of subjects on the assumption that they will be passed on the nod and without discussion. I ask the Minister to tell us what his intentions are with this £950 million, and whether they are honourable. What effect will the appointment of this Committee have upon the development plans which he envisages? Are the development plans to be held up until the Committee has reported or are they to go forward notwithstanding the possibility that the Committee may report against them?

Is it necessary that the House should at the moment vote the whole of this sum, which is to cover many years and which is to be guaranteed by the Treasury, as I understand it, at the cost of the Consolidated Fund? It seems to me that the Minister is taking a very large step in a very small Bill without placing much information before the House and I ask him to give us all the information that he can.

The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. L. W. Joynson-Hicks)

The hon. Member for Oldham, West (Mr. Hale) has asked for a reply to the questions which he put. If I were to follow him into the complete story which he sought to have disclosed to the House upon the Report stage of the Money Resolution, I am sure that I should be incurring the displeasure of the Chair. The answer to most of his questions were, of course, given on Second Reading of the Bill.

Mr. Bing

No.

Mr. Joynson-Hicks

There will be plenty of opportunity during the further consideration of the Bill, in the event of the hon. Member wishing to pursue the matter, for my right hon. Friend or myself to answer the questions which he seeks to pose.

Perhaps I may deal with the main question of the hon. and learned Member for Hornchurch (Mr. Bing) who confined himself to the Money Resolution. If the hon. and learned Gentleman studies the wording he will see quite clearly to what it refers. This Money Resolution is the machinery for enabling the Bill itself to be rendered effective. The Treasury guarantee is being increased in order to meet the borrowing powers which will be sanctioned by the Minister, as stated last week, with the approval of the Chancellor of the Exchequer.

Those powers will be increased from the £700 million contained in the pre vious Act in the case of electricity, that sum having been approximately exhausted, to £1,400 million for the future: and in the case of gas, from the £250 million contained in the previous Act—a sum which is now virtually exhausted—to £450 million for the future. That is all we are doing at the moment. If, at subsequent stages of the Bill, I can help hon. Members, I assure them that I will do so. I have not come unprepared to deal with these points. We are fully desirous of assisting the House in any way in which it requires assistance.

Lieut.-Colonel Marcus Lipton (Brixton)

I cannot regard the Parliamentary Secretary's explanation as at all satisfactory. It boils down to this: he said the purpose of the Money Resolution was to provide a sum of money to enable the Bill to which it is attached to be operated. But that answer can be given to any question on any Money Resolution and it is only a little longer and more verbose than the answer which I was given by the Secretary of State for Scotland when I asked him why he was moving a Money Resolution in connection with a Bill in which he was interested.

The Parliamentary Secretary advanced, as an excuse for not dealing with the points put by my hon. Friend the Member for Oldham. West (Mr. Hale), the proposition that on Second Reading of the Bill last Friday all the information which my hon. Friend required was given. But that is not so. If the Parliamentary Secretary will refer to that part of his speech which dealt with the financial aspect of the matter, which he will find reported in columns 2593–4 of the OFFICIAL REPORT for 9th July, 1954, he will see exactly what he said. If I quote his words the House will see how inadequate were both his statement last week and his statement today. The hon. Gentleman said: I was asked whether these issues disrupt the money market. The answer is that the issue is not one of £900 million, the overall sum which is referred to in this request for borrowing powers, nor is it even the sum of £500 million to which my hon. Friend the Member for Bristol, North-West referred. It was quite clearly set out by my right hon. Friend, who, when moving the Second Reading of the Bill earlier today, said that if the Bill becomes law 'it will enable me to sanction, with the approval of the Chancellor of the Ex chequer, the raising of such loans within such limits as may then be prescribed, as may be needed in my judgment to finance from time to time the capital works required in the nation's interests.' That makes it quite dear that there is no question of an uncontrolled sum being thrown on to the market at an unforeseeable time, but that when these public issues are made, they are only made subject to the authorisation of my right hon. Friend and with the approval of the Chancellor of the Exchequer."—[OFFICIAL REPORT, 9th July, 1954; Vol. 529, c. 2593–4.] That is all the information that we have about this Resolution. The Parliamentary Secretary said it was not a matter of £900 million, not even a matter of £500 million. I suppose that if he were pressed he would move down a little and say that is was not a matter of £400 million, £300 million or £200 million—or where would he stop? The House is being asked to give, through this Money Resolution, an authority to raise such loans from time to time as may be needed in the judgment of the right hon. Gentleman the Minister of Fuel and Power.

We have not got the faintest idea of the period within which the Minister contemplates having to make use of the authority that this Money Resolution seeks to provide. I can see what happened. He did not expect, when the Leader of the House arranged for this matter to come on the Order Paper today, that he would have to do more than come here and just nod his head. He thought that would be the end of the business. Unfortunately, he has not had time to brief himself. He has not a piece of paper in his possession on the basis of which he can give any information at all. I have never seen a Treasury Bench look so bare of documents and papers as it is at the moment. Surely that entitles me to say that the Ministers have come here unprepared to give any information on this Money Resolution.

For those reasons, I protest in the strongest possible terms against this cavalier treatment of the House. We know that by the decision of the Government, Friday is a non-subsistence day, but nevertheless we are entitled to a little more substantial fare than has been provided for us by the Minister of Fuel and Power and the other representatives of the Government whom we see on the Front Bench this afternoon. The House is entitled to a higher standard of competence and respect from the Government spokesmen, particularly when they want us to give them the power to play around with £900 million. They want to do it on the nod on a Friday afternoon when there are few Members present.

I should like to associate myself with what has been said by my hon. and learned Friend the Member for Horn-church (Mr. Bing) and my hon. Friend the Member for Oldham, West (Mr. Hale). Even if ours are the only three voices raised in protest against this extraordinary behaviour of the Government, we are justified in taking up the time of the House for a few moments to give vocal expression of our dissatisfaction.

Mr. H. Hynd (Accrington)

The House is entitled to express its resentment at the offhand way in which the Parliamentary Secretary replied to the questions quite properly put by my hon. Friend the Member for Oldham, West (Mr. Hale). I have no doubt that when his chief replies later he will be able to give us some further information.

I associate myself with the questions that have already been put, but I approach this matter from a different angle. I am pleased that the borrowing powers of these bodies are being increased. I believe that the limitation was only applied in the first place because hon. Members opposite were a little scared about the possible success of the nationalised gas and electricity organisations, and they were trying to put some kind of limitation upon their activities. I think that it is a measure of their success that those limitations are now being reduced and that these bodies will have an opportunity to borrow much greater sums of money. To that extent we can regard this Bill as a compliment to the efficiency, initiative and success of these two great nationalised industries.

But there is a phrase in the Bill to the effect that the Treasury may guarantee the redemption or repayment of any interest on any such borrowings. That is something with which the House must concern itself. What protection is there going to be, first of all, to this House, and secondly to these nationalised concerns against some heavy financial calls under that part of the Bill? Whilst not sharing the financial theories of my hon. Friend the Member for Nottingham, South (Mr. Norman Smith), I am a little apprehensive about the way in which the financial people in the City can manipulate these borrowings when they have to take place. It seems to me that there is a danger that when these nationalised bodies find themselves in the position of having to raise some additional capital, they may be forced to do it at a time when the money market declares that they have to pay more interest than they think they ought to pay, and that may result in the House having to find the money for this guarantee. I hope that when the Minister replies he will be able to give us some assurance on that point.

2.45 p.m.

Mr. Harold Davies (Leek)

I am delighted to see the Parliamentary Secretary to the Ministry of Agriculture here. (On the Second Reading the Minister said: It is rather interesting to see how during the last year capital investment was spread, particularly in comparison with other industries. Transport and communications—that includes the Post Office—took 11.9 per cent.; manufacturing industries took 23.6 per cent.; other industries took a total of over 10 per cent.; whereas housing…took no less than 27.3 per cent."—[OFFICIAL REPORT, 9th July, 1954; Vol. 529, c. 2594.] We welcome the extension of housing, but we have to watch the economy. What I object to is the offhanded way in which rural electrification is dealt with, particularly in relation to agriculture. We have had no explanation of the plans of the Government. It is essential—and this is not put forward in any cantankerous or jocular way—in this difficult transitional period to realise that all this talk of defence and protection disappears completely if, in this hydrogen bomb age, with radioactive seas, we cannot produce a modicum of food to keep the country going. A larger proportion of this capital investment should be allocated to rural electrification than is allocated at the moment. I should like the Parliamentary Secretary to the Ministry of Agriculture to say something about this problem. Apparently, by the way he nods his head—

Mr. Speaker

That problem does not arise on the Report stage of the Money Resolution.

Mr. Archer Baldwin (Leominster)

Three years out of date.

Mr. Davies

That is typical of the Conservative way—three years out of date. The real truth is that there is more disturbance in British agriculture today than there has ever been in its history—

Sir Thomas Moore (Ayr)

Nonsense.

Mr. Gerald Nabarro (Kidderminster)

Would the hon. Gentleman take the trouble to bring himself up to date by reading the statement which was put out by the British Electricity Authority in the last 48 hours, saying that the remaining 150,000 farms in the United Kingdom not at present electrified will be connected up in eight years, that is, by 1963?

Mr. Speaker

Order. Both hon. Members are out of order. We are now dealing with the Report stage of the Money Resolution. That does not enable hon. Members to go hack over the Second Reading of the Bill.

Mr. Davies

It is exactly because of that that I did not raise that point. There is one other point which I think would be in order, and it is this. Do the Government think that they have enough capital investment in this hydrogen bomb age? Is the expansion of electricity to be above ground or below ground? If we go on with all this expansion of electrification and with all the apparatus—

Mr. Speaker

Order. That matter does not arise out of the Money Resolution.

Mr. Davies

This is my final sentence, Mr. Speaker, which I will try to keep in order. I hope that the Government will realise that they may not have enough capital investment for the development of electrification in an island which may be attacked by a hydrogen bomb.

Mr. Frederick Willey (Sunderland, North)

I intervene briefly only because it is time that somebody said a kind word about the Minister and the Parliamentary Secretary and because I am sure that my hon. Friends would not wish their criticism to be understood to be personal criticism of the right hon. Gentleman and his Parliamentary Secretary. We all know that the right hon. Gentleman is under savage attack from the 1922 Committee and it is significant that the hon. Member for Kidderminster (Mr. Nabarro) has allowed this attack without saying a word.

We endeavour to raise these matters on Money Resolutions when we can because this Government do not believe planning. They have abandoned planning. The measure of planning is finance and it happens time after time that, when Departments think out schemes, they do not take into account the impact upon the national economy and so they are surprised if anyone suggests that we must look at the size of these things in financial terms and in terms of the national economy.

That is why my hon. and learned Friend the Member for Hornchurch (Mr. Bing) and my hon. Friends have raised this matter today, and that is why we are getting increasingly alive to the question of the Money Resolution. The party opposite who have spoken a lot of nonsense about economies never raise these points, and Money Resolutions go through without question. They have showed no vigilance on this matter, in spite of what they said at the time of the Election.

My other point is more significant. The critical question is whether the country can afford this capital construction. I hope I have made it clear that we are not especially critical of the right hon. Gentleman, but we are critical of the Government he serves and we intend to remain vigilant about these matters in order to ensure that they are properly thought out in terms of the national development and of what the country can, and ought, to afford.