HC Deb 01 July 1955 vol 543 cc659-86

11.5 a.m.

The Financial Secretary to the Treasury (Mr. Henry Brooke)

I beg to move, That the Bill be now read a Second time.

If hon. Members will be good enough to look at the Explanatory and Financial Memorandum to the Bill they will see that I have prepared a kind of five-course meal for them today. As in any good meal, the five courses are distinct and different, although there is a unity between them.

This is not a Finance Bill. What makes the unity of a Finance Bill is that its Clauses are concerned with taxation. This is not a tax Bill, but it has this unity of purpose, that it is presented to authorise advances of various kinds and to simplify accounting and administrative procedures. My speech is bound to fall into five parts. Perhaps I may best suit the convenience of the House if I speak shortly about each of these five courses or Clauses.

The purpose of Clause 1 is to reduce the financial limit of the Civil Contingencies Fund. The ceiling for that Fund was fixed in 1946 at £25½ million, by the then Government. It was reduced from that figure in 1950 to £126½ million, and it is now being carried on at that figure from year to year under the Expiring Laws Continuance Act. If no further legislation were passed before 31st December of this year the Fund would revert to its original capital of only £1½ million.

The Government have carefully considered what should be done in this situation. We are convinced that there is no longer any need for a figure as high as £126½ million, and, therefore, propose a reduction of £51½ million, fixing the new ceiling at £75 million. We have most carefully considered whether we could reduce the ceiling further. I would like to see the top limit of the Civil Contingencies Fund kept as low as practicable, but I will explain why we finally came to the conclusion that we should recommend £75 million, no higher and no lower.

Nowadays, there are about five purposes for which the Civil Contingencies Fund is needed and used. I will not weary the House by going through them all; some are more important than others. The one which will at once occur to every hon. Member is the value which the existence of this Fund has in the case of some natural disaster. The East Coast floods are vividly in the memory of many of us. There is nothing in the Votes presented at the beginning of a year to cover disasters which cannot be anticipated, yet a situation may arise in which the Government, and, indeed, the whole House, would wish for money to be immediately available. If there were no Fund of this kind one would have to go through the whole procedure of presenting a Supplementary Estimate and then passing through all its stages a Consolidated Fund Bill to make the money available for payment. Through the existence of this Fund an immediate advance can be made, though it is customary to inform the House of what is being done if any situation of that kind arises.

That is the obvious primary justification for the existence of the Civil Contingencies Fund, but it is by no means the largest cause of drawings upon the Fund. Money is principally required from the Fund nowadays for advances to Departments in anticipation of Supplementary Estimates, particularly during the closing months of the financial year, in February and March. Supplementary Estimates are normally presented in early February, but they are not finally approved, and the Consolidated Fund Bill is not passed, until the very last day of the financial year, and Departments may by then be hard pressed for money which has to be made available through their Supplementaries. The Civil Contingencies Fund can tide them over. If the Fund were not used for this purpose it might mean that the House had constantly to face Consolidated Fund Bills at all times of the year, instead of confining those Bills in the normal course to two a year, one in July and one in March.

No final charge can ever be borne on the Fund. The Fund makes advances, but those advances have to be repaid. In order that they may be repaid, someone must come forward with an Estimate or Supplementary Estimate, and after that Estimate is approved it is covered by a Consolidated Fund Bill, and the money is thus released and the Civil Contingencies Fund can be reimbursed.

Sir Patrick Spens (Kensington, South)

Has the Supplementary Estimate to be introduced and the money repaid in the same financial year?

Mr. Brooke

No, that is not necessarily so. The money may be repaid in the following financial year in certain circumstances.

I think there are people who imagine that the Government can, as it were, get away with payments not duly authorised by Parliament through using the Civil Contingencies Fund for that purpose. That is not the case. Whenever a drawing is made on the Fund the Government have to come to Parliament with a Supplementary Estimate and get the approval of the House.

Now I reach the main question of this Clause; some hon. Members may think it the main question of the Bill: why a figure of £75 million? Let me give one very cogent reason out of several I could adduce. There is a part of Government expenditure now where estimating at the beginning of the year is peculiarly difficult, and that is in connection with the policy, which I think is approved in all parts of the House, of agricultural price guarantees. When an estimate for the ensuing year is being prepared for any ordinary service it is relatively easy to estimate with some accuracy what will be required for the ensuing twelve months—unless there is a change of policy which woud necessitate a Supplementary Estimate. However, it is quite impossible, even for the very wisest of us, to foresee what the course of farm prices and the product of our farms is to be.

Both of those may depend substantially on the weather of the year. If we could foresee in January or February what the weather will be in June and July we might be very much happier people—or we might be sadder people, I do not know; but there is this substantial element of uncertainty. If it is impossible to get this estimate absolutely correct it does not mean that there is bad estimating going on, but simply that in this case there are factors which cannot be foreseen. Therefore, what the cost will be at the end of the year of the agricultural guarantees is more unpredictable than almost any other form of Government expenditure, and the figures involved can be very substantial.

Let me illustrate that in this way. The total annual value of output from United Kingdom farms of those products and commodities to which guarantees apply is about £1,000 million. If, therefore, there should be an unanticipated fall of only 5 per cent. in prices that may mean that an extra £50 million is required to make good the guarantee. I am using the agricultural illustration because I regard this as the most compelling example of the kind of difficulty which the Civil Contingencies Fund must be available to help us through.

Perhaps I can carry it a little farther by referring to the experience of last year. Last year the Fund was carried on at this ceiling previously fixed by the Labour Government of £126½ million. The peak demand at any time during the financial year did not exceed £37 million. That suggests that, perhaps, a lower figure than £75 million as a permanent ceiling could be taken, but we were lucky last year in this, that the cost of the guarantee in respect of cereals was £13 million less than we had estimated. It might easily have gone the other way. It might have been £13 million more, and if it had been £13 million more we should have required from the Fund not £37 million but £63 million.

I hope that the figures I have given will prove to the House and satisfy it—because it should be satisfied on this matter—that with the present arrangements, with Government expenditure runing at anything like its present level, and with this agricultural price guarantee policy being pursued, it would be unwise to fix the ceiling below £75 million. Certainly, if there were a radical change in the total of Government expenditure, if the policy of agricultural support prices were in some new circumstances to be modified, I should be the first to say that this figure of £75 million should be reconsidered. But, until then, it would be unwise to lower the ceiling and, in my view, it would be improper to maintain it at a higher figure than £75 million.

Clause 2 on the Bill provides for the method of financing a potato guarantee scheme. Such a scheme has been agreed among the parties concerned and I understand that an Order under Section 4 of the Agriculture Act, 1947, is shortly to be made which will give legal effect to it. I am not going into the details of potato marketing. I am entirely unqualified to do that, but under any such scheme—and I am not prejudging the detail of the scheme or whether the House will accept it—money is likely to be needed for two distinct purposes.

The first purpose will be to make good the guarantee of the deficit, or a substantial part of the deficit, incurred by the Potato Marketing Board in working the scheme at the end of the year. Quite clearly, that is a financial burden which must fall on Votes on the Budget and be met from year to year, but money will also be needed for quite a distinct purpose, that is for providing the Board with working capital. Under the scheme which is now under discussion, the Board will also be making advances to growers during the year and may need substantial sums for that purpose.

If no such legislation as this Clause were passed, not only the money to implement the guarantee but also the very substantial sums required to provide the Board with capital would have to be provided from Votes and would fall on the Budget above the line. The first financial consequence of introducing the scheme would be that a sum of possibly £20 million would have to be found out of this year's Budget. Working capital for purposes such as this can, with entire propriety, be found, in Budget parlance, from below the line and that is the proposition embodied in the Clause. I hope that the House will approve. A limit of £30 million has been set in the Bill for these advances below the line.

Clause 3 is the shortest Clause of the Bill. Its purpose is to help make sure, first that local authorities in Northern Ireland are enabled to borrow for housing, school building, and other purposes for which local authorities require capital moneys, at rates similar to those available in England to local authorities through the Public Works Loans Board. Secondly, it is to ensure that local authorities in Northern Ireland are not held up for lack of funds which they can borrow.

The Northern Ireland Government maintain a Government Loans Fund which is similar to our Public Works Loans Fund and they undertake to finance the Fund in the normal way by market issues of stock. But it was found in 1950, when right hon. Gentlemen opposite were in office, that it was not always possible or convenient for the Northern Ireland Government to replenish that Fund with issues of stock on the market. Sometimes an issue may be inconvenient, sometimes the rates may be particularly unfavourable just when the money is needed, and nobody would wish local authorities to be held up for money needed for good purposes just because it had been impossible to replenish the Loans Fund at suitable rates at that moment.

The Miscellaneous Provisions Act, 1950, therefore provided for loans up to £15 million from the Exchequer to the Government of Northern Ireland to cover, as it were, any difficult periods, though the main responsibility for replenishing the Government Loans Fund continues to fall on the Government of Northern Ireland and that it recognised. At present, I must advise the House that advances to the Northern Ireland Government under the 1950 legislation have reached over £14,500,000 and we are coming very near the statutory limit of £15 million. This legislation has worked quite well and smoothly hitherto and it seems right to ask the House that the limit of £15 million in the 1950 Act should be raised to £30 million, which is all that Clause 3 does.

Clause 4 perhaps arouses the greatest popular interest, though I doubt whether it is the most important. If agreed to the Clause will abolish the Road Fund, which has been a favourite phrase among politicians and newspaper men and the public for a good many years. What with raids and one thing and another the Road Fund has had a chequered history. It was established in 1920 and it was fed by hypothecated revenues from motor taxation up to 1937, but since 1937 no further hypothecated revenues have been paid into the Fund. Instead, the Fund has been fed direct from the Exchequer. In other words, the Road Fund was originally like a tank that was fed by a particular stream. Now, for the last eighteen years, that has ceased to be so and the Road Fund is a tank connected with the main and the money flows through that tank from the Exchequer and is used for road expenditure.

The Crick Committee said in 1950 that no useful purpose was served by retaining the Road Fund. There is further supporting evidence for that from the Second Report from the Select Committee on Estimates for the 1953–54 Session, which says: Your Committee consider that it would lead to greater clarity in the Estimates and more information being available to Members if the Road Fund were abolished, and expenditure on roads provided for in a normal departmental Vote. They, therefore, recommend that, subject to there being no reasons of policy for the continuance of the present system, consideration should be given by the Treasury to the introduction of the necessary legislation. This is the legislation which I am now submitting to the House.

The House may inquire why, at this particular time, the legislation should be brought forward when we have been rubbing along like this since 1937 and up to now no action has been taken on either of the recommendations which I have mentioned. There is a particular reason, apart from the general one that I am sure it is a good thing to get rid of unnecessary accounts and unnecessary accounting. The particular reason which I have in mind is that, as the House is aware, from the beginning of the next financial year the responsibility for Scottish highways is being transferred to the Secretary of State for Scotland. If the Road Fund is then still in existence we shall yet further complicate our accounting by trying to distribute a Great Britain fund as between two Departmental responsibilities. I hope that the House will agree that the sensible thing now is to act on the recommendations made and to abolish the Fund. The last new account of the Fund will appear for the year 1955–56, and any moneys to the credit of the Fund will then be repaid to the Exchequer.

I have heard some anxiety expressed lest this will mean that diminished information will be available about the Government's road policy and road progress. Some hon. Members may be aware of this fine Blue Book, entitled, "Report on the Administration of the Road Fund." If there are any fears of that kind, let me assure hon. Members that the Government have no desire to use the abolition of the Road Fund as a means of withholding this sort of information. My right hon. Friend the Minister of Transport and Civil Aviation has authorised me to say that.

Finally, Clause 5, which is the longest Clause, deals with perhaps the simplest matter of all. The sole purpose of the Clause is to simplify the accounting and administrative arrangements for dealing with unclaimed Government stock, dividends and redemption money. The House will notice that we are repealing statutes of 1870 and even 1866, but, in fact, the conception underlying the provisions of the statutes which we are repealing goes right back to 1816 when most elaborate statutory provision was made for ensuring the proper keeping of records of any unclaimed moneys of this kind so that there could be no disappearance of them and so that members of the public, solicitors and others would be able to pursue their inquiries and ascertain whether they or any of their clients were entitled to any of these moneys.

Under the legislation which we are desiring to repeal, stock on which no dividend has been claimed for ten years has to be transferred by the bank to the National Debt Commissioners. Any dividends remaining unclaimed for five years and redemption moneys remaining unclaimed for one year must be similarly transferred. The bank is required to keep lists of transfer items, and the Commissioners must keep duplicate lists. I hope that the House will accept from me that the old statutory provisions are involving a great many people in a great deal of unnecessary work.

I assure the House and the public that if Clause 5 is agreed to it will make not the smallest difference to any member of the public or professional man who may be concerned about any of these unclaimed moneys. Just as before, if people wish to make an application for anything, they will make that application to the Bank of England. It will be dealt with rather more swiftly than hitherto because the arrangements will be thus simplified, but the rights of no member of the public are interfered with or lessened in any way.

What Clause 5 does is to dispense with the requirement that stock on which no dividend has been claimed for ten years must be transferred to the National Debt Commissioners. It relieves the bank and the Commissioners of the obligation to keep special duplicate lists of these unclaimed stocks and dividends, and it enables the bank to make payments to the Commissioners in respect of unclaimed dividends and redemption moneys in bulk periodically instead of individually for each stockholding as at present.

The House may wonder whether there are large or small amounts of money involved in all this. It may be of interest to mention that over recent years unclaimed dividends on Government stock have been averaging £134,000 a year. If there is any presumption that that money is piling up rapidly and a lot will become available, I must reveal the fact that claims for these unpaid dividends from previous years—valid claims—have been running at the rate of £135,000 a year, so that there has been a good deal of money passing to and from between the Bank and the National Debt Commissioners.

As I said, the public will notice no difference. They will still make their claims to the Bank of England. If, as I hope it does, the saying, "Safe as the Bank of England" still runs in this country, the public can be sure that if they have an entitlement to any of these moneys they will be able to get them.

I said that this was a five-course meal. I do not suggest for a moment that these are dainty courses, but I hope that I have made them perhaps more easily assimilable by the House, and I trust that the House will agree to our incorporating them and digesting them in our legislative system.

11.36 a.m.

Mr. Douglas Jay (Battersea, North)

I remember that when I introduced the Miscellaneous Financial Provisions Act, 1950, I described it as a four-legged animal with an abbreviated tail. The right hon. Gentleman has described this Bill as a five-course meal. It is a rather peculiar meal in certain respects. In the first place, each course is more indigestible than the last; and, in the second place, most of the spice is in the fourth-course and the meat in the first course.

I propose mainly to address myself to the meaty part of the Bill, and I would only say about Clause 4 that I wonder whether the real reason why the Government have chosen this moment for abolishing the Road Fund is that they waited until the right hon. Gentleman the Member for Woodford (Sir W. Churchill) had resigned the Premiership before finally laying this ghost.

The substantial proposal in the Bill is to establish a Civil Contingencies Fund of £75 million as a permanent peacetime arrangement. I do not think that the Financial Secretary altogether made clear to the House what a radical departure this is in our system of financial control. To begin with, he never really set the thing in perspective by recording the history of the Civil Contingencies Fund, although he went back to some early dates on some of the other Clauses.

The Fund actually stood at only £120,000 right up to 1913, and then it was raised to £300,000. Then, of course, we operated on votes of credit right through the First World War. From 1919 to 1921, in very exceptional circumstances, the Fund stood at £120 million, but from 1921 to 1939 it was reduced to £1,500,000, and up to now that has been the normal peace-time figure. After the war, as the Financial Secretary correctly said, we put it at £251½ million until 1950 and then reduced it to £126½ million. But now we are being asked to approve a permanent arrangement for £75 million compared with £1½ million before the war.

In justifying this, the Financial Secretary said that it was very awkward to provide money in advance of Supplementary Estimates and very difficult to estimate everything aright, and that the House would not wish to be troubled—I think this was his expression—with perpetual legislation to make these moneys available. This is rather a new doctrine. Some people might say—I think the right hon. and learned Gentleman the Member for Kensington, South (Sir P. Spens) might to some extent agree with me—that it is a dangerous doctrine. I think Mr. Gladstone would have turned in his grave if he had heard the Financial Secretary enunciating these principles. The whole basic principle of Parliamentary control of expenditure is involved in the use and the size of the Civil Contingencies Fund.

I do not think that the House, even under this Government, has fallen to the point of inertia at which it does not wish to be troubled—I think the Financial Secretary said bothered—with its essential task of control over Government expenditure. I think the Financial Secretary must have forgotten what some of his own colleagues said, notably the right hon. Gentleman the then Member for Blackburn, West, who has now been translated to another place, about this principle in the debates in 1950. For instance, he said on 28th June, 1950—we always seem to discuss these things at the identical time of year although Governments may come and Governments may go— I am sure that hon. Members opposite appreciate that the Civil Contingencies Fund is a sort of petty cash at the disposal of the Executive. They can do what they like with it, and, therefore, it is most important that we should watch the amount which they have. No business worth talking about leaves too much money in the till for the use of those who have charge of the till."—[OFFICIAL REPORT, 28th June, 1950; Vol. 476, c. 2308.] Then he went on to speak about the control of Government expenditure, and many other hon. Members on the Tory side of the House spoke in the same strain at that time. The present Minister of Education became more precise and said how large he thought the Fund ought to be in peace-time. He said: … judged by pre-war standards, £5 million would be enough provision to make for underestimating."—[OFFICIAL REPORT, 28th June, 1950; Vol. 476, c. 2324.] That is to say, he thought £5 million was the proper size for the Fund. There is a remarkable contrast between the £5 million suggested then and the £75 million which the Financial Secretary suggests today.

Moreover, during the Committee stage of the Bill, in 1950, the then Conservative Opposition moved an official Amendment to reduce the figure from our proposed £126½ million to £50 million; that is to say, they advocated £50 million in 1950, although five years further from the war and from exceptional methods of finance, the Financial Secretary has now said that he must have £75 million. Indeed, the present Minister of Works, who moved that Amendment, and who is always given to rather strong language—at least, when in opposition—spoke very emphatically in favour of it. He said: … the main mischief which we suffer from having a very big Civil Contingencies Fund.… it leads to a lack of full Parliamentary control over Government expenditure, and it leads to the possibility of the public being misled at times critically important in political history.—[OFFICIAL REPORT, 10th July, 1950; Vol. 477, c. 1066.] That was a grave and portentous warning about the possible misuse of this Fund by the right hon. Gentleman.

The present Financial Secretary was, in that debate, so impressed by the arguments and warnings from those two right hon. Gentlemen that he then voted in favour of reducing the Fund to £50 million. For that reason we ought to ask the right hon. Gentleman for a better explanation of why he has been converted, five years' later, to a much higher figure. The right hon. Gentleman said that the main reason for all this was that we had agricultural liabilities and that agriculture was dependent on the weather. Mr. Gladstone would have turned in his grave again if he had heard that the estimating for the Budget is now so dependent on the weather that it is impossible to make any accurate estimate.

What the Financial Secretary did not say was that since 1950 the operations both of the Ministry of Food and of a number of other trading Departments have been enormously curtailed. The main ground I gave for halving the Fund in 1950, but still keeping it at £125 million, was that the Ministry of Food and the Board of Trade as well as the other trading Departments, were operating in commodities in bulk purchase deals all over the world on a very large scale. I think that the annual turnover of the Ministry of Food was then about £1,600 million.

The Government claim today, however, to have abolished the Ministry of Food. It is true that the Government are spending even more this year on Food Estimates than before the Ministry was abolished, but since the Government claimed at the Election to have abolished it, it is strange that the right hon. Gentleman should come forward today and give its vast financial operations as a reason for having a larger Civil Contingencies Fund than he favoured in 1950. After all, if today the Ministry of Food, or whatever it is called, has to implement these agricultural guarantees as far as home agricultural produce is concerned, in 1950 it was dealing with both home produce and foreign commodities on a huge scale; it was still dealing in wheat and coarse grain bought from all over the world.

Therefore, we need a little more explanation from the right hon. Gentleman why, in these circumstances, he has thrown over completely his distinguished colleagues in the Government and has totally reversed the policy which his party was putting forward in 1950. Until we have had that, the House should be slow in giving the Government these new and far-reaching and permanent powers, which tend to relax the essential control of the House of Commons over Government expenditure.

11.40 a.m.

Sir Patrick Spens (Kensington, North)

I have always felt that my profession has lost a great advocate in the right hon. Gentleman the Member for Battersea, North (Mr. Jay). It is astonishing with what conviction he seemed to be able to stand at the Box today and argue the case which he opposed successfully in 1950. It must rejoice all our hearts that the leading spokesman for the Opposition has taken the line that he has taken today. Of course, I welcome it enormously because the only justification for the previous figure of £126½ million was the disastrous ventures of bulk buying, and so forth, that were practised by the Socialist Government.

None the less, from the Conservative point of view we have to consider care- fully the suggestion that has come before us that we should make a permanent limit of £75 million for the Civil Contingencies Fund. It is true that the Fund is one of the factors which has reduced the control of this House over expenditure. It is one thing to have before us an Estimate for expenditure during a coming period and which has, therefore, not been incurred; it is quite a different thing to have a Supplementary Estimate brought before this House in order to repay money which has already been advanced from that Fund and has been spent.

It puts the majority in support of the Government in a position where it is obvious that they cannot carry their objection, if the spending be spendthrift and unnecessary, to a Division against the Government unless they are prepared to change the Government. Under those circumstances, the whole system of the Civil Contingencies Fund and of advances made out of it, even at a later period—not even, as my right hon. Friend has said in the same financial year necessarily; a Supplementary Estimate brought forward to authorise the repayment of those advances is a problem of finance which this House ought to look at with care and some apprehension.

When we think of the total expenditure of the Government in 1955–56 and remember that it is not just the Ministry of Agriculture or the Ministry of Food which have access to the Fund but every Department which is met by some sudden and unexpected expenditure, it may well be said that £75 million is not too great a cushion for the Government as a whole to have against unexpected emergencies. At the same time, this amount is a pure guess, and an Estimate made under present circumstances and in anticipation of policies by certain Departments which may not be the same three, four, five, ten, fifteen years' hence.

The only point I want to ask my right hon. Friend to consider very seriously is whether it is right to make this a permanent provision. If we do repeal the annual Act so that it does not come before us each year, it ought to be brought up at least within three years, and Clause 1 should be amended so as to make the £75 million a ceiling for a period of three years. In that time we shall know, not what the weather has been, but what is the policy of a particular Department, whether it has worked or not, and whether £75 million is enough or whether it has turned out after three years to be too much.

While I welcome most warmly the reduction from £126 million, I doubt whether a case has been made out for making this £75 million a permanent ceiling. I should like to suggest to my right hon. Friend that he should consider whether it would be possible to put a limit of three, four or five years on this figure as a permanent ceiling.

11.52 a.m.

Mr. Ernest Davies (Enfield, East)

I feel that we should not let Clause 4 pass without some words of obituary over the poor old Road Fund. It seems to me somewhat ironic that today we are discussing this Bill to wind up the Road Fund when, on Monday, we shall be discussing the Road Traffic Bill. That Bill proposes an increasing number of regulations for road vehicles, with a view to increasing safety on the roads. Quite clearly, the only way in which safety can be increased is by a greater expenditure on roads than is the case today.

I feel that this decision to wind up the Road Fund is really an admission of failure on the part of successive Governments to utilise it in the way in which it was originally intended. As the Financial Secretary pointed out, the revenues were originally hypothecated for the construction of new roads and the improvement of existing ones, but when he was giving a history of the Road Fund he did not go back far enough because he did not go back to the origin of the Fund which Lloyd George instituted in 1909. That was the first occasion on which taxes imposed on vehicles using the roads were to be hypothecated for the purpose of improving the country's road system.

So the Road Fund existed for a considerably longer period than the Financial Secretary indicated, during which it was used for the purpose for which it had been instituted. In fact, right up until the end of the financial year 1936–37, the Road Fund was operated as was the original intention, though there had been up to that time considerable raids made upon it.

I can well see the argument for the abolition of the Fund now. There is a strong case for it, because there is no longer any pretence that there is any link between the taxation of motor vehicles and the fuel tax and the amount that is spent on the roads. As a matter of fact, the total taxation from these sources amounts to about £400 million a year and less than £50 million is being spent on the improvement of existing roads and on new construction under the present programme of the Government.

I believe that the idea of the Road Fund and of hypothecating this revenue was the right idea and it was a fair and just method of taxing the motorist in order to provide him with suitable highways. The principle was adhered to from 1909 until 1936. In fact, that was so much so that when it was not possible, during the First World War, to spend all the funds which went into the Road Fund on constructions and improvements, a considerable amount was repaid after the war.

It is true that the right hon. Gentleman the Member for Woodford (Sir Winston Churchill) was the first to conduct a raid on the Road Fund. That was in 1926, but he, of course, did it in his typical gentlemanly fashion, and he got away with taking the revenue and, at the same time, retaining the principle. Therefore, he cannot be attacked for destroying it. He did leave with the Road Fund two-thirds of the revenue which went into it for the purpose for which it was originally instituted.

It is regrettable that in 1936 Mr. Neville Chamberlain completely abolished the whole idea of the assignment of specific taxation for road reconstruction. From then there has not been, as the Financial Secretary said, a flow from the main tank into the Road Fund for the purpose of constructing roads and for improvements. There has, in fact, been only a trickle and sometimes the stream dried up completely. It is most unfortunate that the trickle has never become a flood.

The great advantage of the Road Fund—and this is why I regret its passing—is that it made possible a planned road programme, that by assuring finance for that programme it provided some continuity of road work, and there was the assurance that the continuity could go on at an increasing pace because revenue from motor taxation and the like was steadily increasing.

Without the assurance of the finance being available for carrying out a longterm programme there cannot be any continuity in a road programme. We have experienced that under successive Governments for some time now. As long as the amount to be spent on the roads is determined by the annual Budget of the Chancellor it is, in effect, subject to all the influences of national finance and not only to the influence of the economic situation but to the desire, on occasions, as has happened recently for certain priorities in the Budget for electioneering purposes. So the road programme is dependent entirely upon the whims of the Chancellor if it is subject to this annual grant.

It is not that we are suffering from lack of road plans for construction of new highways or improving existing ones. We have, in fact, a surfeit of plans. What we lack is the finance to carry them out. The House will recall that in 1946 the Labour Government introduced a ten-year road construction programme and then passed a Special Roads Bill for the purpose of constructing motor ways. Unfortunately, because the Road Fund did not exist in the way it was originally intended it should, it was impossible to carry through the programme or engage in any new construction whatsoever.

That programme is still there, but no one can say that the programme of the Government is a carefully thought out plan. It is a jumble of schemes which have been brought in with a view to satisfying certain pressures here and there.

I suggest to the Financial Secretary that, while it may be there is a case for the abolition of the Road Fund because it has ceased to fulfil its original function, I think that before its abolition serious consideration needs to be given to the whole question of the financing of the road programme. Several proposals to finance such a programme and to ensure its continuity have been made. One scheme put forward with much to commend it was the raising of a loan fund and the financing of new construction by loan. I am glad that on the last occasion we debated that subject the Parliamentary Secretary to the Ministry of Transport and Civil Aviation did not brush that suggestion aside in the same cavalier way which he had used on previous occasions and that an indication was given that consideration would be given to the possibility of such a loan.

It would be helpful to the House if the Financial Secretary gave us an assurance that the abolition of the Road Fund did not preclude the finding of other ways of financing the road programme. I should like an assurance that the Treasury is taking into consideration the various proposals put forward and that before the Bill becomes an Act an announcement will be made in the House about how the road programme will be financed in future in addition to the usual grants through the Exchequer.

12.1 p.m.

Lieut.-Colonel Marcus Lipton (Brixton)

I share, to some extent, the view that has been expressed by previous speakers that the Financial Secretary has not provided a very full explanation of why he now puts forward a maximum sum of £75 million as the top limit of the Civil Contingencies Fund. No factual evidence was adduced to indicate that the £75 million was the right figure. The Financial Secretary merely said that it was the right figure, but gave no explanation of why he thought it would be adequate. He told us only that in the last financial year the Ministry of Food was £37 million out in its Estimate and that if something else had been out in that year, the figure would have been £63 million.

Mr. H. Brooke

I did not say that the Ministry of Food was £37 million out in its Estimate. What I said was that the peak demand on the Civil Contingencies Fund for all purposes at any time during the year was £37 million.

Lieut.-Colonel Lipton

My recollection is that very substantial Supplementary Estimates were suddenly flung at the House towards the end of the last financial year, and that the figures far exceeded the sum of £37 million which has been mentioned by the Financial Secretary.

It is true that the weather is always a problem to this Government, past Governments, and the general public, but that cannot be put forward as an argument in support of this proposal which the Government are now asking us to consider. The Government's agricultural policy may bring about a state of affairs in which the £75 million limit suggested in Clause 1 will be quite inadequate. There is a growing lack of confidence throughout British agriculture in the present Government and I very much hope that that lack of confidence will not be proved to be so well founded that this £75 million Contingencies Fund will be made woefully inadequate.

It is true that in 1950 the Financial Secretary was what we might describe as a £50 million man and for that reason he supported an Amendment which was pushed to a Division by his colleagues. The only thing that can be said in favour of the Financial Secretary is that he was sufficiently wise not to take part in the debate on that occasion and so he does not have to eat the words which he would no doubt have used had he taken part in the debate.

With regard to Clause 2 and the extra money required for potatoes, we can only express the hope that there will not be a natural disaster affecting potatoes which will make the sum of £30 million inadequate.

We did not get all the information about Clause 3 which I should have liked. I should have liked to know whether these increased advances have anything to do with the unemployment situation in Northern Ireland and whether they are calculated to make some contribution towards reducing, or minimising the unfortunate effects that have been manifesting themselves in Northern Ireland for some time. All we know is that local authorities will be enabled to borrow more money than hitherto, that the amount they can borrow is to be doubled. I do not know what effect the granting of this permissive power to the Government of Northern Ireland will have on the unemployment which has been an unfortunate feature of Northern Ireland for some time.

My hon. Friend the Member for Enfield, East (Mr. Ernest Davies) rightly pronounced something in the nature of a funeral oration on the Road Fund. It is unfortunate that the Road Fund has been allowed to continue for so long and to mislead those people who are interested in the roads of this country. About £400 million a year has been collected from motorists, but only about one-tenth of that amount has been spent on the roads. That is an unsatisfactory, if not somewhat dishonest, state of affairs, and it is only right that the actual situation should be made to correspond with what the Government are doing.

To that extent, therefore, the Road Fund should be abolished. Those who are interested in the future of the roads would like to know—if not today at least in the near future—what other machinery the Government are to have; that is to say, whether the time has not come for a new form of a national highway authority to be set up which would be able to raise money by loans and thus take the handling of the whole of the road problem out of the present somewhat fortuitous machinery by which the Government deal with it.

Clause 5 deals with various procedures relating to unclaimed interest. The Financial Secretary said that about £134,000 a year is unclaimed. I presume that he meant by that that £134,000 had not been claimed for ten years. Although £134,000 was not being claimed, £135,000 was being paid out. That means that the total accumulated balance of unclaimed dividends is being reduced at the rate of about £1,000 a year. The right hon. Gentleman did not tell us what the total amount of these balances was, and how much money in the way of unclaimed dividend was at present held by the Exchequer or whatever fund deals with unclaimed balances.

It may well be that some of these dividends have not been paid for many years. In those circumstances, if it is never likely to be claimed, perhaps the time has come to take the whole sum back into the Exchequer. There is an analogy in the case of the "Big Five" banks, where millions of pounds have been lying idle for many years. The time seems to have come when the Government, or the Treasury, should clear up all these moneys and deal with these unclaimed dividends, and also call in these vast sums which are lying unclaimed in the coffers of the Big Five banks. The Government have so little with which to occupy themselves in the next four or five years that I make that suggestion as another matter which deserves their consideration.

The right hon. and learned Gentleman the Member for Kensington, South (Sir P. Spens) made a suggestion about limiting the operation of Clause 1 to a period of three years. I shall await with interest what the Financial Secretary has to say in reply to that proposal, which merits consideration.

This is another of those Bills which the Government bring forward on Fridays, because otherwise the House would not have anything to do, and an unfortunate impression would be created in the minds of the public if the House sat for only two or three days a week or two or three months in the year. To avoid that danger it may well be that, from time to time, we shall have submitted to us useful little Bills of no very great importance which may remove some anomalies and help to keep the House occupied and persuade the general public that the Government are, in fact, doing something.

12.13 p.m.

Mr. Archer Baldwin (Leominster)

It is somewhat unusual for me to take part in a financial debate, but I have done so because I thought that possibly some more unwarranted attacks and irresponsible statements might be made about wheat and grain deficiency payments. The hon. Members who made those attacks are not here today, and I propose to answer them at some future date when they may be present to reply.

All I wish to say now is that Clause 1 deals very largely with the amount of money which it may be necessary to pay for the very large deficiency payments which are now being made to the farming industry. My right hon. Friend spoke of the uncertainty of the amount and said that that was the reason for keeping the figure at £75 million. He mentioned the uncertainty of the weather. I suggest that there is another uncertainty which has a bearing on the amount of deficiency payments which the Treasury may have to make to the industry, and that is the uncertainty about the amount of dumping which may take place during a particular year.

During the year that is just ending, very large sums which will be paid as wheat deficiency payments—I presume out of this Fund—will be necessary because the French Government have been dumping wheat in this country at from £10 to £12 per ton less than they pay their own farmers for it. I suggest to my right hon. Friend that it will reduce the claim on the Fund if the Government take the necessary action to stop dumping, and to prevent that and other dumping which now takes place, so making it necessary to finance the agricultural community.

This problem must be watched carefully. We, as farmers, are accused of being high-cost producers, but if facts are examined very carefully it will be found that we are no more high-cost producers than are the farmers in any other country. However, we cannot compete with dumping. I will not pursue that matter, but it has a bearing on the Fund on which claim will be made.

I should like to support my right hon. and learned Friend the Member for Kensington, South (Sir P. Spens), who suggested that the period should be one of three years. The trend of world prices is such that the demand on the Fund by the farming community will, in my view, be considerably reduced by the end of the next three years. It would be an excellent idea if we could revert to something near the pre-war figure for the Fund. If these deficiency payments are reduced to a large extent, it will be possible to alter Clause 1.

In reference to Clause 2, I am sorry that it has seemed necessary for the Potato Marketing Board to approach the Government for funds. I want the agricultural industry to be divorced from all Government control. I cannot help feeling that the Potato Marketing Board might have financed the Board in the same way as that which the Milk Marketing Board adopted when it started operations. I believe that it went to two of the principal banks and borrowed a considerable sum of money. Therefore, it was completely independent of the Government. I wish that the Potato Marketing Board would take a leaf from the book of the Milk Marketing Board or the Hops Marketing Board and be completely independent. Then we should avoid the gibes that farmers are always coming to the Government for assistance of one kind or another.

I conclude by replying to the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton), who said that the present system caused a great lack of confidence in the Government among farmers. All I say is that that was not very obvious during the General Election.

12.18 p.m.

Mr. H. Brooke

If I may have your permission, Mr. Speaker, and that of the House, I should like briefly to reply to the debate. I was very glad to see my hon. Friend the Member for Leominster (Mr. Baldwin) taking part in a financial debate. I appreciate what he said but, as mention has already been made in the Gracious Speech of certain anti-dumping action that may be taken, I hope he will forgive me if I do not anticipate any future debates that the House may have on that subject.

On the question of the methods of borrowing which the Potato Marketing Board may employ, I in no way wish to prejudge any matter of that sort. My one concern is to ensure that if the new Board desires to borrow working capital from the Government for its purposes, then that will not, as a matter of Exchequer accounting, have to fall on the Budget of the year. The sole purpose of the Clause is not in any way to control or direct what the Board does; it is simply to render it possible for advances of this kind to be made, if it is desirable that they should be made, in such a way that they will fall below the line.

The right hon. Member for Battersea, North (Mr. Jay), who has himself been concerned with Measures of this kind, drew a comparison between the £75 million mentioned in this Bill as the ceiling for the Civil Contingencies Fund and the £120,000 which as he quite rightly said, was the limit up to 1913. He will, of course, be the first to appreciate that the scale of the Budget and of Government expenditure generally has changed since then as a result of two wars. If he looks back to 1913, he will discover that the Budget for the years up to that date regularly fell below £100 million, whereas at present we are providing about £3,000 million for Civil and Revenue Department expenditure.

Mr. Jay

The right hon. Gentleman will recall that the calculation of the present Minister of Education in 1950 was that, based on that argument—comparison with the size of the Budget pre- war—the proper figure for the Civil Contingencies Fund today would be £5 million.

Mr. Brooke

I was only beginning to develop my argument to the House. A good deal has happened since 1950.

In 1950, when right hon. Gentlemen opposite were in power, Government trading was being carried on on a far larger scale than the Opposition of that day thought to be desirable. There was a clash of opinion between the two sides of the House. Since then, Government trading has disappeared, but this new system of agricultural price support has been brought in, and I hope that I am entitled to say that it has, for the time being, the approval of both sides of the House.

In that sense the position has changed since 1950, and I must advise the House that with this system of agricultural price support, with the size of the Budget of the present day and with the other possible calls on the Civil Contingencies Fund, whatever may have been the right figure in 1946 or 1950, £75 million looks to the Government to be the right figure today.

My right hon. and learned Friend the Member for Kensington, South (Sir P. Spens) made a speech to which I listened very carefully. Before I deal with his main point, may I be excused if by any chance I misled him and the House by a reply which I gave on the spur of the moment to a query which he raised, because I may possibly have misunderstood what he said. I will look at it in the record afterwards.

It is, of course, true that there may be an advance from the Civil Contingencies Fund outstanding over the turn of the financial year. But I do not want to give the right hon. and learned Gentleman the impression that the Treasury can lightly contemplate advances made in anticipation of a Supplementary Estimate where the relevant Supplementary Estimate is not being brought forward in the same financial year. Indeed, a predecessor of mine, in 1925, said, in explanation of the purpose and conditions of this Fund that … any necessary advances to meet deficiencies on existing Votes or for new services are, wherever practicable, and that is with rare exceptions, included in Supplementary Estimates for the same year, instead of in Estimates for the succeeding year. That is on record in Report of the Public Accounts Committee, and that is still the practice.

My right hon. and learned Friend raised the question whether this should be permanent, or whether it should last for, let us say, three years. I do not take it that he was stressing one period against another. I will readily give consideration to the suggestion that he made. I am bound to say—and I want to be quite fair with him—that unless there is a very substantial change in the scale of Government expenditure, or unless we depart radically from the present system of agricultural price support, I cannot foresee a sufficient change in the situation within the next three years that would justify Parliament reconsidering the figure of £75 million. I do not want to close my mind to that, and I give this pledge straight away, that as I think I made clear in my opening speech, my desire is to have this ceiling as low as possible. Parliament can at any time legislate afresh to alter and lower the ceiling of £75 million.

The hon. Member for Enfield, East (Mr. Ernest Davies), while, I think, approving the abolition of the Road Fund, stressed the necessity for a planned road programme. It is a properly planned road programme upon which the Government are now embarking. My right hon. Friend the Minister of Transport and Civil Aviation told the House on 2nd February: Her Majesty's Government are working to plans which will take a good many years to complete, but which are intended to provide this country with an up-to-date road system."—[OFFICIAL REPORT, 2nd February, 1955; Vol. 536, c. 1097.] That is going forward. I think that it may be found to compare favourably with the ten-year plan of the Labour Government to which the hon. Gentleman referred—the plan of 1946—which, at the end of five years, had not produced a trace or a smell of a motorway. Our plan was announced this year.

There is no intention on the part of the Government, by abolishing the Road Fund, of ruling out of court other possible methods of financing road expenditure in future years. Questions have been asked in the House recently on this matter. On 3rd May, my right hon. Friend the Chancellor of the Exchequer said that … we could quite well carry this burden on the Budget for the time being, and then, if the burden increased, we might well have to adopt other devices."—[OFFICIAL REPORT, 3rd May, 1955; Vol. 540, c. 1511.] The hon. Member for Enfield, East suggested that it was solely owing to financial restrictions that we could not be spending more money at the present moment. That is not the case. The road programme is not just a matter of the Chancellor ladling out the money. It is a matter of the plans being ready and the resources available for going forward with them. At present, these are the restricting factors, and not the impossibility of providing money from the Budget if the road programme expands in the way in which it is planned to do. If circumstances render it impossible to carry the expenditure on Votes in a future year, my right hon. Friend has made it perfectly clear that he will not rule out of court other methods of financing it.

Mr. Jay

Is the right hon. Gentleman suggesting that in the four years of the previous Government's life it was not doing anything to prepare plans in advance of the time when the money was available?

Mr. Brooke

I was only suggesting that what we are doing now looks more likely to produce practical results in a reasonable time than the ten-year plan of 1946, to which the hon. Member for Enfield, East paid such high tribute.

The hon. and gallant Member for Brixton (Lieut.-Colonel Lipton) spoke of substantial Supplementary Estimates being presented last year. He, perhaps, conveyed to the House that last year everything concerning the Ministry of Food went wrong. If I remember rightly—I may be mistaken—the Supplementary Estimate brought forward by the Ministry of Food in respect of these price guarantees was not one for many millions but for a token figure of £10. That was because the overspending in certain directions was, as I explained, offset by this saving of £13 million on cereals. But one cannot be certain that in some year all the inaccuracies may not, by the course of prices be caused to go in the same direction, and that the wrong one.

The hon. and gallant Gentleman also asked whether this proposal concerning Northern Ireland local authority expenditure was to meet unemployment in Northern Ireland. I am not responsible for the use to which this money is put either by the Northern Ireland Government or by the local authorities in Northern Ireland. I think that the hon. and gallant Gentleman was under the impression that in Clause 3 we were talking about the whole of the funds available for lending to Northern Ireland local authorities. That, as I tried to explain previously, is not the case. These loans are simply supplementary to the funds which the Northern Ireland Government themselves may be able to provide for their Government Loan Fund by the issue of stock on the market; and these additional loans from the Exchequer are designed to carry over difficult periods.

The hon. and gallant Gentleman was the only hon. Member to refer to the interesting Clause 5 of the Bill. I wish to assure him that it is not the case that colossal sums of money are lying about somewhere, unused and ungetatable, arising from unclaimed Government stocks, dividends or redemption money thereon. If the hon. and gallant Gentleman will look at Clause 5 (9), he will see a provision whereby any excess over £100,000 shall be applied in such manner as the Treasury may direct towards the redemption of the National Debt. It is, therefore, not possible to answer his question about how much in aggregate has piled up from failures or omissions to claim, because all that is retained is a sufficient balance, not exceeding £100,000, and the remainder is paid over to the Treasury.

That does not mean, of course, that someone who has a claim may find that it cannot be met, because all the money available has been paid over to the Treasury towards the redemption of the National Debt. There is no danger whatever of a member of the public finding that his money is not available owing to its having been swallowed up by the Treasury. It is a safeguarding subsection which simply re-enacts the law as it has stood on this matter hitherto, that any excess over £100,000 shall be paid over to the Treasury.

I hope that I have dealt at not too great length with the main points raised, and I trust that the House will now be willing to give the Bill a Second Reading.

Question put and agreed to.

Bill accordingly read a Second time.

Committed to a Committee of the whole House.—[Mr. E. Wakefield.]

Committee upon Monday next.