HC Deb 07 April 1960 vol 621 cc697-708

Motion made, and Question proposed, That, notwithstanding anything to the contrary in the practice of the House relating to matters which may be included in Finance Bills, provision may be made in any Finance Bill introduced in the present Session for giving effect to any Resolution which may be passed by a Committee of the whole House and agreed to by the House for the purpose of continuing the power to make advances under section forty-two of the Finance Act, 1956 (subject to the limits for the time being in force on the borrowing powers of the bodies to which such advances may be made), and repealing the limit contained in that section on the total of the advances which may be so made.—[Mr. Amory.]

9.58 p.m.

Mr. Gerald Nabarro (Kidderminster)

A certain amount of comment has been made during debates in the last few days that hon. Members do not take adequate opportunity to probe the policies of Her Majesty's Government in regard to accountability in public expenditure. The hon. Member for Kilmarnock (Mr. Ross), in the course of a most interesting speech, a tew hours ago, drew attention to this fact and was constrained to say that he would travel a good way with me in this matter.

This evening, I am seizing the opportunity of a procedural Motion on the Order Paper, and I cannot go outside the bounds of procedure and talk about the merits or otherwise of investment in nationalised industries. I am merely seeking to dissent from the continuing practice of financing nationalised industries within a section of the Finance Act.

Before I do so, I should like to trace in a few words what has occurred in this matter during the last four years. I am extremely sorry that I shall have to detain the Chancellor of the Exchequer after his arduous period of four days.

It being Ten o'clock, the debate stood adjourned.

Proceedings on the Motion relating to Finance Bill (Procedure) exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[Mr. Redmayne.]

Question again proposed.

Mr. Nabarro

I apologise to my right hon. Friend for detaining him still further, but this is a matter of very great importance in principle. My right hon. Friend paused in the midst of his speech a few moments ago and asked a question, to which I responded, on the matter of public investment in nationalised industries. It is carried out, of course, within the framework of the Budget and the resulting Finance Act. It is for that reason that the procedural Motion stands on the Order Paper tonight immediately following the Budget debate.

The history of this matter is a little curious. In 1956, under Section 42 of the Finance Act of that year permission was given by the House for the first time for £700 million to be provided from Exchequer funds for the financing of certain State industries. These industries are seven in number. They are the Central Electricity Generating Board, the Gas Council, the British Transport Commission, the British Overseas Airways Corporation, British European Airways, the North of Scotland Hydro-Electric Board, and the South of Scotland Electricity Board. The powers were taken for £700 million for two years only.

In 1958, the powers were renewed in Section 36 of the Finance Act of that year for a further period of one year. In 1959, similar powers were taken which renewed the sum of money required for a further period of one year, expiring this year. In the first two-year period, £700 million were involved. For the next period of one year £370 million were involved, raising the figure from £700 million to £1,070 million, and in 1959 the sum of money was again raised, from £1,070 million to £1,620 million.

The Chancellor of the Exchequer has told us that he proposes to continue this method of financing. He says that he bases his decision on the recommendation of the Radcliffe Committee. It would be out of order this evening—you were kind enough, Mr. Deputy-Speaker, to advise me before the debate—for me to discuss the merits of this method of financing nationalised industries. I do not cavil at that, but what I am representing to the House is the danger of the position which now arises.

Three weeks ago, we had a startling decision in the House, given by you, Mr. Deputy-Speaker, startling because it reversed the views previously held as to—

Mr. Deputy-Speaker (Sir Gordon Touche)

As a matter of fact, it did not reverse any decision at all.

Mr. Nabarro

If I may complete the sentence, Mr. Deputy-Speaker, I was saying that it reversed the views previously held by a large number of private Members, myself included, who were entirely misguided, for we had always thought that we could debate the capital investment programmes of nationalised industries on the Consolidated Fund Bill. We were then told that we could not, and we accepted that decision. Then we explored with the Clerks how we could debate these capital investment programmes.

I am sorry that my hon. Friend the Member for Louth (Mr. C. Osborne) is not in the Chamber at this moment. The Chancellor referred to his letter in the Daily Telegraph today and I wanted to refer to it as well. We sought to ascertain how we could debate these huge sums of money, provided so largely by the taxpayers from budgetary funds, before the money is spent.

You have ruled, Mr. Deputy-Speaker, that we cannot do it on the Consolidated Fund Bill. We have been told by the Clerks that the only way we can do it is on a Finance Bill. When the Chancellor presents his Finance Bill this year, I have no idea what sum of money he will put in it for nationalised industries. All I know—I am sure that the Chancellor will agree with me—is that his last powers were taken under Section 36 of the Finance Act, 1959, which created a maximum of £1,620 million under that provision. They have to be renewed this year. I do not know how much money he is to call for. It may be, I fancy, perhaps another £400 million, but we now have it clearly stated that we may debate, when that Clause is reached, any capital investment project of any of the State boards to which I have referred.

The Chancellor is taking these powers for three years. The purpose of this Motion is to put into an appropriate Clause of the Finance Bill a sum of £500 million—or some such sum; it may be £450 million or £550 million—which, once it is through this House, is a forward commitment over three years over which Parliament will have no control whatever as to annual expenditure. What I want to say to the Chancellor, before we pass this Motion, is that three years ahead is much too long a period. I am not going to give him this money for three years.

Mr. Deputy-Speaker

The hon. Member will appreciate that the three-year period really depends on the next Motion, which is the Financial Resolution. This Motion is purely procedural.

Mr. Nabarro

I apologise, Mr. Deputy-Speaker. This Motion is very narrow and I am doing my best to keep within the rules of order while making my point.

I do not cavil at this method of financing the nationalised industries, but does the Chancellor think it wise that, in the later stages of the Finance Bill, a group of my hon. Friends and I should be placed in the position, if we are to safeguard capital investment moneys in the State Boards, of having only a single opportunity on that occasion of challenging any one of hundreds of different capital investment projects in these seven boards?

Does my right hon. Friend really think it a good thing that on the appropriate Clause of the Finance Bill, for example, there should be a debate about the wisdom, or otherwise, of the Secretary of State for Scotland vesting £15 million in the North of Scotland Hydro-Electricity Board, and the advisability or otherwise of a particular project being built at Loch Shin? Is that an appropriate topic for a Clause in the Finance Bill?

If we want Parliamentary accountability, then this is the only place and time that we can debate these matters. Is it a good thing that we should debate, in the appropriate capital investment provision for British Overseas Airways Corporation, the type of aircraft it is to buy in the next five years? Does the Chancellor really think that it is sound Parliamentary practice that the wisdom, or otherwise, of employing certain kinds of jet aircraft on a trans-Atlantic route should be debated in the later stages of a Finance Bill? Does he think that the provision of a North Midlands gas grid and the investment programme for it should appropriately be discussed in one of the later stages of the Finance Bill?

No, Mr. Deputy-Speaker. Without prejudice to the Chancellor's position, he has claimed that he wants to give to my hon. Friends and myself proper Parliamentary accountability. He said so today.

The Chancellor of the Exchequer (Mr. Derick Heathcoat Amory) indicated assent.

Mr. Nabarro

I see that he is nodding his assent. My appeal to him this evening is not to press this procedural Motion, because if he does he will put my hon. Friends and me in a rigid position. He will cause us—and I say this in all sincerity and without wishing to cause him embarrassment—when the appropriate Clause of the Bill is reached —and I have again consulted the Clerks to find out how far I would be in order —to move a reduction in the aggregate sum under that Clause, and then move for alteration of each of the constituent parts in capital sums for each nationalised industry.

The effect of that in the later stages of a Finance Bill might be to cause a debate on capital investment in nationalised industries to go on for days on end. It might do. I want those debates and I want to emphasis that nationalised industries have to be adequately financed.

Mr. Charles Pannell (Leeds, West)

And debated.

Mr. Nabarro

And debated—I am grateful to the hon. Gentleman.

The purpose of my speech is to try to get proper debate in proper conditions before the capital sums are spent.

My hon. Friend the Member for Louth has again left us—

Mr. Frederic Harris (Croydon, North-West)

He never came back.

Mr. Nabarro

Perhaps he will feel that the reasonable thing to do is to apologise tomorrow to my hon. Friends and myself for his allegations that we never try to circumscribe and check public moneys being spent and that we have never protested in the past. On the contrary, I have been protesting in this vein for the last eight years. The Chancellor this time is not re-enacting these provisions for a single year, as he did in 1958 and 1959, but, in this procedural Motion, is proposing to re-enact them for three years, a period longer than ever before.

Mr. Deputy-Speaker

I am sorry, but the hon. Member is mistaken. That comes in the Money Resolution, later.

Mr. Nabarro

I am sorry to drift out of order. The Motion is very narrow, but I am trying to keep within order.

I hope that I shall be in order if I refer to a speech which has been severely criticised and which I made last Tuesday. I hope that the passage which I am about to quote will not be criticised, for it found general agreement on both sides of the Committee at the time. I said: I want to drive the present Chancellor of the Exchequer"—

Mr. James Callaghan (Cardiff, South-East)

On a point of order. Can we have your Ruling on this, Mr. Deputy-Speaker? Is it in order for an hon. Member to quote from a speech other than that of a Minister of the Crown in the same session?

Mr. Deputy-Speaker

I think that the hon. Member for Cardiff. South-East (Mr. Callaghan) is referring to the rule about proceedings in another place. It is quite in order to quote one's own speech in this House.

Mr. Nabarro

Anybody would think that I was the Archbishop of Canterbury.

I said: I want to drive the present Chancellor of the Exchequer to a position whereby … he will take this Clause for financing nationalised industries out of the Finance Bill and have instead an annual Bill called …" Nationalised Industries (Capital Investment) Bill", with a separate Clause for the annual investment required for each of these State boards. By that means, we can devote appropriate scrutiny to it."—[OFFICIAL REPORT, 5th April. 1960; Vol. 621, c. 312.] I make that suggestion to the Chancellor again this evening. I ask him to withdraw this procedural Motion. I ask my right hon. Friend the Patronage Secretary—and I am delighted to have him listening to me—to consider what will happen to his timetable on the Committee stage of the Finance Bill if my hon. Friends and I—and this is in no way a threatening gesture—[Laughter.] I am perfectly serious—put down Amendments dealing separately with the investment programme of seven nationalised industries in order to get a proper scrutiny and accountability for them and involving all the technical considerations inherent in investment in State boards. I say to my right hon. Friend the Chancellor and to the Patronage Secretary that a debate of that kind would be wholly unsuited to the later Committee stages of a Finance Bill.

I hope that the Chancellor will give some consideration to this matter, recognising that a new situation has now arisen. It was not until we were ruled out of order on the Consolidated Fund Bill—my hon. and gallant Friend the Member for Knutsford (Lieut-Colonel Bromley-Davenport) is the cause of all this—[Laughter.] He is; it was his advanced meter reading college at Knutsford that was the cause of it. He raised it on the Consolidated Fund Bill and complained about capital expenditure. You, Mr. Deputy-Speaker, pulled him up and said, "This may not be debated". I questioned it. I was ruled to be wrong by you, and your decision was confirmed by Mr. Speaker. I then began to probe around to find out where and when I could raise it.

I found out. The Patronage Secretary is very cross with me at present. [Laughter.] I am not cross with him; he is a friend of mine. I hope that he will not be cross with me this evening for trying to prevent further embarrassment to his colleague and himself in the Whips' Office, and to the Parliamentary timetable when we get to the Committee stage of the Finance Bill. If this procedural Motion goes through without some assurances from the Government, there will be grave trouble during the last ten to fourteen days of June, and the early days of July.

10.16 p.m.

The Economic Secretary to the Treasury (Mr. Anthony Barber)

I think that I can deal fairly briefly with the points made by my hon. Friend the Member for Kidderminster (Mr. Nabarro). Indeed, I must perforce do so because this is a purely procedural Motion and, unlike the following Resolution to which you referred, Mr. Deputy-Speaker, you ruled that I could not on this occasion deal with the suggestion which was made by my right hon. Friend the Chancellor when he opened his Budget that we should on this occasion take powers for a period of three years. Lest my hon. Friend should think that I am in any way shirking that issue, I shall be allowed, as I understand from you, Mr. Deputy-Speaker, to deal with that point on the next Motion.

This Motion, as it was last year, is a purely procedural one. It is not as you have said, Mr. Deputy-Speaker, in any way concerned with the merits. Indeed, my hon. Friend said in passing a moment ago that we were going to have a certain amount of trouble on the Finance Bill when it came to the Committee stage if this Motion went through.

I would remind him, with the best of good humour, that I looked up what happened during the Committee stage of the Finance Bill last year when dealing with a similar clause, and the only reference I could find to my hon. Friend was a remark by the right hon. Member for Huyton (Mr. H. Wilson) that he was not present for the debate. [Laughter.]

Mr. Nabarro

Before hon. Gentlemen opposite laugh too loudly, perhaps my hon. Friend will go back to the Treasury and look up my correspondence with his predecessor asking what consideration was being given to this matter by the Radcliffe Committee, and the reply from the Treasury that the Radcliffe Committee was dealing with it and would be making recommendations. It was because my hon. Friends and myself were awaiting those recommendations that we did not raise the matter on the Finance Bill as it was to be renewed for one year only. I hope that my hon. Friend will apologise for his unjustified allegation.

Mr. Barber

I am sorry that my hon. Friend takes things so much to heart. I am subject to correction, but I do not think that the Radcliffe Committee pronounced on any aspect concerned with whether or not this matter should be considered in the Finance Bill, It did pronounce on the general question of financing the national industries, and I shall be happy to refer to that, too, when we deal with the next Motion.

I would tell my hon. Friend that the Finance Bill is concerned primarily with the revenue and the national debt, and that it is not the practice of the House, without a Motion of this kind, to include a provision authorising expenditure of this sort. I appreciate the point of view of the hon. Member in favour of a separate Bill. But I am sure that he would be the first to agree that the way in which we finance nationalised industries—especially if we do so by direct means from the Exchequer—has a considerable bearing on the financial and economic policy of the Government.

It is because we consider that this aspect of financing the nationalised industries is so tied up with the general financial and monetary policy of the Government that we think it should be included in the Finance Bill. Whatever views my hon. Friend may take as to the way in which the nationalised industries are to be financed, I hope that he will agree that if this matter is to be considered at all in a Bill it should be considered in the Finance Bill, as it was in 1956, 1958, and last year.

My hon. Friend will note that the Motion contains some very important words in brackets. It says that the advances to be made under Section 42 of the 1956 Act, to which he referred, are to be made subject to the limits for the time being in force on the borrowing powers of the bodies to which such advances may be made". Consequently, under the Finance Bill when it becomes an Act, if this procedural Motion is passed, as my right hon. Friend hopes it will be, any advances made by reference to that Section must be authorised by this House. There are precedents for this, since the same thing happened in 1956, 1958 and 1959, and so far as I know nothing contained in the Radcliffe Report has any bearing on this procedural Motion. Since it is so closely connected with the financial and monetary policy of the Government, it seems preferable that it should be dealt with in the Finance Bill, regardless of its merits.

Sir Spencer Summers (Aylesbury)

Perhaps my hon. Friend will answer a question that is puzzling at least one hon. Member. If this procedure is adopted, are there or are there not opportunities, during the lifetime of this Parliament, for debating the capital expenditure of the nationalised industries other than in the debates on the Finance Bill?

Mr. Barber

Yes. I can put the matter very generally. This procedural Motion and the following Motion, dealing with the Money Resolution, have been put down in order that we may have in the Finance Bill a Clause the main concern of which is to deal with the method of financing the nationalised industries. In other words, if these Motions are not passed tonight, and if the matter is not included in the Finance Bill, the nationalised industries' funds will have to be obtained from the market and guaranteed, as they were before 1956. In any event, quite apart from these provisions, this House will have the opportunity, as it has in the past—as referred to by the words in brackets—of approving or not approving the borrowing powers of the nationalised industries.

Mr. Nabarro

I must strongly disagree with the last statement made by my hon. Friend the Economic Secretary. There is nothing to prevent the Government from bringing in a separate Bill to finance the nationalised industries.

Mr. Deputy-Speaker

Order. The hon. Member cannot make a second speech.

Mr. Nabarro

Then may I ask a question? Will the hon. Gentleman tell the House why a separate Bill is considered impracticable? It is no use referring to these borrowing powers Bills; we get them every three or four years, whereas we want an annual scrutiny.

Mr. Barber

I am sorry; I certainly did not mean to say—I do not think I said—that it was impracticable. I meant, as I think I said, that in the view of the Government it is undesirable that we should have a separate Bill.

Mr. Nabarro

Why is it undesirable?

Mr. Barber

For the simple reason, as I tried to explain, that we consider this a matter so closely bound up with the Government's financial and monetary policy that it is a fit subject for inclusion in the Finance Bill. That is the view which has been taken during the past few years, and I hope that we shall take the same view this evening.

Question put and agreed to.

Resolved, That, notwithstanding anything to the contrary in the practice of the House relating to matters which may be included in Finance Bills, provision may be made in any Finance Bill introduced in the present Session for giving effect to any Resolution which may be passed by a Committee of the whole House and agreed to by the House for the purpose of continuing the power to make advances under section forty-two of the Finance Act, 1956 (subject to the limits for the time being in force on the borrowing powers of the bodies to which such advances may be made), and repealing the limit contained in that section on the total of the advances which may be so made.