I think it would be convenient if with this Amendment were discussed the other Amendments in the name of the hon. Member for Kidderminster (Mr. Nabarro) and his hon. Friends.
§ Mr. Nabarro
This is the master Amendment, and the ten Amendments which follow are as to three of them, consequential and, as to seven of them, Amendments dealing respectively with each of the seven nationalised industries which are covered by this particular method of Exchequer financing. Those seven nationalised industries were first named in the Finance Act, 1956, and they are the Electricity Council, the North of Scotland Hydro-Electric Board, the South of Scotland Electricity Board, the Gas Council, British Overseas Airways Corporation, British European Airways and the British Transport Commission.
The purpose of this Amendment is to substitute £2,007 million for £2,050 1356 million, a net reduction of £43 million in the aggregation of sums to be voted for these seven nationalised industries in respect of their capital investment programmes for the year ending 31st August, 1961.
Sir Gordon, I can hardly hear myself speak for the noise being made by the right hon. Member far Huyton (Mr. H. Wilson) in his conversation with you. I was not sure whether he is addressing the Committee or I am.
§ 12 m.
§ Mr. Crosland
On a point of order. As the hon. Member for Kidderminster (Mr. Nabarro) has totally lost the attention of the Committee, will he now finish his speech and kindly resume his seat?
§ Mr. Nabarro
I am sorry to have awoken the hon. Member for Grimsby (Mr. Crosland) by speaking a little louder than my normal tone, but now that he is wide awake again no doubt he will be able to follow my argument.
These are very large sums of money. The Committee should consider how the figure of £2,050 million—
§ Mr. Mitchison
On a point of order, Sir Gordon. Would it be possible for even the hon. Member for Kidderminster (Mr. Nabarro) to observe ordinary courtesy towards the Chair and his fellow Members?
§ Mr. Rees-Davies
On a point of order. Is it in order for the right hon. Member for Huyton (Mr. H. Wilson), having lost the entire audience of the Committee, to come to the Chair and engage in a long and loud conversation with the occupant of the Chair?
§ Mr. Nabarro
If I might now continue my speech, I was saying that the figures involved in this method of financing the seven nationalised industries to which I alluded are very large indeed. The proposition of my right hon. Friend the Chancellor of the Exchequer in the Clause is that for the year to 31st August, 1961, the aggregate shall be run up to £2,050 million.
In Section 36 of the Finance Act, 1958, we increased the figure from £700 million to £1,070 million. In the Finance Act, 1959, Section 36, we increased that figure to £1,620 million. This year, the Chancellor proposes to raise it from £1,620 million to £2,050 million, an increase of £430 million.
The first of the Amendments—[Interruption.] The hon. Member for Grimsby has repeated, Sir Gordon, that I have lost the attention of the Committee. On the contrary, the Tory benches are packed. All around me are Tory Members, while over there—
§ Mr. Nabarro
I am coming to that, Sir Gordon, but I was rudely interrupted, in case you did not hear the interruption, by the hon. Member for Grimsby suggesting that I had lost his attention. There are only seventeen of his Socialist colleagues on the benches opposite—
§ Mr. Nabarro
Very well, Sir Gordon. I have made my point.
This year, the Chancellor proposes to increase the sums of Exchequer advances by £430 million. Originally, in his Budget statement, he suggested that he would take powers for three years without any annual scrutiny by the House of Commons, but when the Finance Bill was published it was evident that he had conceded the point made in a number of Budget speeches by my hon. Friends and myself and had provided for an annual scrutiny of the sums involved, within Clause 72 of the Bill.
Unfortunately, there remains in this Clause one aggregate sum for all seven nationalised industries, which makes it 1358 impossible for the Committee on the Finance Bill to investigate and scrutinise whether the sum being spent by an individual industry is too large or too small. Neither are we able, on the Committee stage of this Bill, to debate the programme of that individual industry and to decide, as just one example, in the case of Scottish electricity, whether it would not be more economical to invest in nuclear powers stations in the south of Scotland instead of water or hydroelectric works in the far north. We have no opportunity of scrutinising that kind of matter for it has been ruled out of order to debate individual capital investment projects during the Committee stage of the Finance Bill.
Furthermore, it has been ruled that these individual projects may not be debated on the Consolidation Fund Bill. Therefore, private Members of the House of Commons are precluded from having any opportunity to bring within Parliamentary accountability these very large sums of money on capital account, before the money is actually spent.
My right hon. Friend the Member for Blackpool, North (Sir T. Low), during the debate on the procedural Motion, suggested that these matters should properly be dealt with on Supply days. Of course, he was wrong. The subjects for Supply days are selected by the Opposition and Members on this side of the Committee have no opportunity to make any selection.
The purpose of these Amendments is quite simply stated. It is to bring within the ambit of the Finance Bill as a transitory measure, individual annual accountability for each of the seven nationalised industries, before the money is spent. In the past we have been able to debate the Reports and Accounts of these industries and the large sums of money expended on capital account only after the money has been committed and expended. If we agree to the Amendments today, we should have some sort of opportunity on later stages of this Bill and, if the precedent were created and followed, in ensuing years on every Finance Bill, to debate the individual investment programmes of each of these seven industries. We have none of these facilities at present.
My right hon. Friend the Member for Flint, West (Mr. Birch), in the course 1359 of his Second Reading Speech on the Finance Bill, used these words:Lastly, there is that awful millstone round our neck—the financing of the capital expenditure by nationalised industries. Just before the Budget, Mr. Manning Dacey said in a speech:'Collectively, the public corporations do not earn enough to cover the cost of replacing capital used up in the course of the year's operations. After providing for capital consumption, they have had a combined deficit of the order of £200 million a year, and part of the Government's lendings below the line go to finance, not capital formation, but this current deficient deficit'As I understand it, most if not all the nationalised industries depreciate on the historical cost basis. … If the screw were put upon them I believe that they could do more internal financing by effecting economies. Even if they could not, is it sensible to tax ourselves in order to buy electricity below the true cost of producing it?"—[OFFICIAL REPORT, 3rd May, 1960; Vol. 622, c. 934.]Considerations of that kind, namely, the proportion of the capital investment programme of any particular nationalised industry which should be borrowed—and by "borrowed" I mean by resort to external borrowing either from the Exchequer or otherwise—and the amount which should be provided from internal resources, that is, from depreciation and profits or surpluses; the methods of accounting such deficits as may occur in the nationalised industries, notably the huge deficit on account of the railways and the £50 million deficit of the coal mines, are all matters which the House of Commons ought to be debating year by year.
As it is, we are precluded from doing so because year after year the Chancellor of the Exchequer insists upon this method in the Finance Bill of giving one aggregate sum. Our being ruled out of order by the Chair in trying to bring that down into individual amounts prevents Members of Parliament exercising proper accountability over these very large sums of money before committal.
On the last Clause, the Committee was concerned about relatively small sums for prizes on Premium Bonds. In this Clause, we talk of hundreds of millions of pounds, mostly found by the taxpayer within the Budgetary structure. I am not at all sure of the value of the Chancellor's proclamations concerning the control of public expenditure, during earlier stages of this Bill.
1360 Perhaps I might repeat a passage from the Second Reading debate on this Bill When my right hon. Friend said:The measures which I have just described will affect demand in the private section of the economy. I can assure the House that the Government are not neglecting the importance of applying the same more rigorous standards to the public sector as well, especially when they are considering proposals for further new increases in Government expenditure."—[OFFICIAL REPORT, 3rd May, 1960; Vol. 622, c. 890.]In Clause 72, there is a proposal, to use the Chancellor's own form of words, for a "new increase in Government expenditure"; an increase of no less than £430 million. But no hon. Member of this Committee knows how this vast sum is to be spent. Not one. There are no programmes published for any of the seven industries which I have mentioned. No hon. Member knows what power stations are to be built. No hon. Member knows whether they are to be conventional steam or nuclear stations nor whether they are to be water or wind or nuclear or steam stations in the north of Scotland, or elsewhere. No hon. Member knows how the British Transport Commission is to spend £180 million on capital account this year or which particular ventures are to absorb this large sum.
How can the Chancellor in any truthfulness claim that the House is being kept properly informed, or is properly scrutinising the sums being allotted for these nationalised industries? This is no party issue. Hon Members opposite have complained over and over again about this very issue. They say that Tory Members in the country criticise and malign the nationalised industries and that they have inadequate opportunities in Parliament of defending them. Indeed, the hon. Member for Kilmarnock (Mr. W. Ross) said as recently as 7th April,I shall be with the noble Lord the Member for Dorset, South and the hon. Member for Kidderminster if they return to Parliament's duty to address itself to Government expenditure and to the proper examination of Government expenditure."—[OFFICIAL REPORT, 7th April, 1960; Vol. 620, c. 643.]
§ Mr. William Ross (Kilmarnock)
That is why I noted the hon. Gentleman's complete absence from the House when we discussed many more millions of pounds on the Navy, Army, and Air 1361 Force Estimates. Then he showed no interest at all about Government expenditure.
§ Mr. Nabarro
I am grateful for that intervention. I should have thought that the hon. Gentleman who has been here for fifteen years would have realised that an hon. Member who intervenes in every debate is a crashing bore.
§ Several Hon. Membersrose—
§ Mr. Nabarro
When I have finished I will give way. I do not intervene in every debate; of course not. The hon. Gentleman does, and that is why he is a crashing bore.
§ 12.15 a.m.
§ Mr. Nabarro
Approximately fifteen; we will not bather with a few months.
Putting frivolous matters on one side, the hon. Member for Kilmarnock will at once join with me in saying that the problem of Parliamentary accountability in respect of the huge sums of money employed in the nationalised industries is very far from solved, and the purpose of these Amendments is to make progress towards solving it. The first purpose is to specify the aggregate amount for a single year and to reduce the amount provided in Clause 72 by 10 per cent. The amount in Clause 72, for this year's increase for the whole seven industries is £430 million. The first Amendment seeks to reduce that sum by one tenth, or £43 million. Then follows the seven other Amendments, each dealing with a specific industry, and later seeking to reduce the allocation of capital to each by amounts which, in aggregate equal the figure of reduction of £43 million in the first Amendment.
The Chancellor will not be able to reply by saying that this method is effective from a House of Commons point of view. Whether or not it is convenient for Members to have this expenditure of huge sums of money by the nationalised industries discussed at the tail end of a Finance Bill is a different issue, but the Chancellor 1362 cannot quarrel with me when I say that it is a thoroughly effective means of controlling the expenditure before the money is spent. If he does not want this method he should tell us what alternative method he proposes to give effect to the complaints and criticisms of so many hon. Members on both sides of the Committee have voiced in the last few months, to the effect that a major part of public expenditure inherent in the investment programmes of the nationalised industries is uncontrolled by the House of Commons, before the money is spent unless by a recourse of the kind proposed in this series of eleven amendments.
My ultimate objective is a separate Bill, to enable these sums to be lifted right out of the Finance Bill. Each year, as I postulated during my speech on 5th April, 1960, in the Budget debates, we should have a Capital Investment (Nationalised Industries) Bill, with eight Clauses, one for each industry, including the National Coal Board, specifying the amount to be sent on capital account. Then, the House of Commons could examine and debate all these important matters annually and adequately. For this year only I satisfy myself by putting down this series of Amendments, to make progress towards what I believe is a long-term objective.
§ Mr. John Peyton (Yeovil)
I do not want to take up the time of the Committee at any length, but I want to say a word in support of my hon. Friend the Member for Kidderminster (Mr. Nabarro). The aim of the Amendments is not to ask for some precise scheme, but to tell the Chancellor that our aim and object is to secure for Parliament an annual opportunity for effective discussion of each capital investment programme of each nationalised industry. It is unnecessary for me to remind you, Sir William, that it is out of order for me or any hon. Member of the Committee to discuss the capital investment programmes of any of these great industries. That means that Parliament is not in a position of being able to perform the duties commonly understood by the electorate to be laid on its shoulders.
We are not asking a great deal when we demand that borrowers should explain to lenders—[Interruption.] I shall wait a little for the noise to die down.
§ Mr. Charles Loughlin (Gloucestershire, West)
On a point of order. If the hon. Member cannot command my attention he has no right to complain.
§ The Deputy-Chairman
That is not a serious point of order, but I would ask the Committee to be as quiet as possible so that the hon. Member who is speaking can he heard.
§ Mr. Crosland
Further to that point of order, Sir William. I must point out that it was the hon. Member for Yeovil (Mr. Peyton) and a group of about four or five other Members round him who, while my right hon. Friend the Member for Huyton (Mr. H. Wilson) was speaking, made it very difficult for him to be heard because of their conversation. For the hon. Member, of all Members, to demand total silence from this side of the Committee is too much. Apparently he wants one law for the Tories and another law for us.
§ The Deputy-Chairman
Order. I understood that the hon. Member for Yeovil (Mr. Peyton) was seeking to address me on a point of order.
§ Mr. Peyton
It was my ambition to do so, Sir William. I was endeavouring to suggest that the hon. Gentleman, who is rapidly becoming a practitioner in self-righteousness, is preaching a bit too much to the Committee at this time of the night. Perhaps we could get on with the debate.
§ The Deputy-Chairman
Order. The Chair must be given a chance. I call the hon. Member for Central Ayrshire (Mr. Manuel) to address me on a point of order.
§ Mr. Manuel
I wanted to ask your advice, Sir William. The previous occupant of the Chair did not rule that the Committee was too noisy when my right hon. Friend the Member for Huyton (Mr. H. Wilson) could not be heard by those of us who were interested in his speech because of a great deal of noise and interruption from the other side of the Committee. Now when there is a smaller amount of interruption from this side, the Chair is demanding quietness when the hon. Member for Yeovil cannot command the attention of the Committee.
§ The Deputy-Chairman
The Committee knows the position quite well. If an hon. Member feels that there is too much noise, he is entitled to appeal to the Chair if he so desires. All that the Chair can do, and all I am doing, is to point out to the Committee that we should keep reasonable silence to allow whoever is addressing the Committee to be heard. Mr. Peyton.
§ The Deputy-Chairman
I think that the points of order have been sufficiently settled and that the Committee should get on with the business of dealing with this Amendment.
§ Mr. Peyton
I am much obliged. Perhaps we are none of us guiltless in this matter.
The point that lies behind these Amendments is one of great seriousness and should concern the Committee even at this late hour. The suggestion that I was attempting to make is that it is not unreasonable that borrowers of vast sums of money should be expected to explain to the lenders the details of the purpose for which those moneys are required. I am not for a moment counselling that Parliament should seek to 1365 interfere in the day-to-day management of nationalised industries, but I do not think that it is an excessive or unreasonable demand—nor is it made from a partisan or party point of view—that Parliament should be entitled to review the capital investment programmes which are financed out of the national purse.
§ Mr. Manuel
I am very pleased that the hon. Member is not introducing a party point. Do I take it that he feels that the £250,000 annually provided by the Treasury for Messrs. MacBrayne, who run steamer services among the Islands, should be regarded in the same light as the money allocated to the nationalised industries?
§ Mr. Peyton
I hope the hon. Member will forgive me if I do not go fishing in those waters. I must decline to do so at this hour of the night because I am frightened of catching a red herring.
§ Mr. Fernyhough rose—
§ Mr. Peyton
I will not give way again. I want to make a short speech and I hope that the hon. Member will allow me to make it.
The point which I insist on making, I hope very shortly, is that borrowers have no right to expect that lenders will forfeit their right to a clear explanation of the purposes for which the money is required. There are few more arid exercises than our normal Parliamentary discussions on the affairs of these great industries. We usually discuss matters which are long past, and the Reports on which our debates are based almost always consist in equal parts of gloom and antiquity.
The point which is often made to those of us who demand more effective Parliamentary control—and it is made again and again, with an innocent assurance which always surprises me—is that the Treasury can do this so well. Give the Department responsible for the industry more power and it will do the job so much better than the House of Commons can do it that is the argument. But in the past that has not been the case, and it is right for us in the House to express our profound disquiet at the lack of effective control over the programmes of these vast industries.
1366 Nor am I impressed by the argument which finally reveals itself to be one of administrative convenience. I well know that it is felt that it is much easier to give the House a global sum about which to argue and thus to avoid the necessity of going into detail and cutting up the sum into the share to be obtained by each industry. But in my opinion we in the House are not concerned with administrative convenience. We are concerned with seeing that the taxpayers' money is spent properly on the purposes for which it was advanced and that a full account is given to Parliament.
It is sometimes suggested that the capital investment programmes of these industries would be frustrated if they were too regularly examined. I do not believe that any Member of the Committee would seriously countenance such an argument. There is no Government Department which does not operate on yearly estimates. My right hon. Friend the Member for Flint, West (Mr. Birch), in a speech on the Second Reading of the Electricity (Borrowing Powers) Bill, which has been quoted by my hon. Friend the Member for Kidderminster, dealt with this point fully and clearly. I do not believe that it is a suggestion which can validly be made—a suggestion that the nationalised industries should be free from any kind of annual examination by Parliament in respect of their capital investment programmes. Our objective —
§ 12.30 a.m.
§ Mr. Mitchison
Would the hon. Gentleman allow me to intervene? I have been listening to his speech, as I did to the preceding one, with great interest. Many of his arguments seem to me to apply equally to cases where Government money is lent to private enterprise. We have had such cases lately. Do I understand that he would be in favour of a similar basis of examination in those cases?
§ Mr. Peyton
I do not know whether the hon. and learned Gentleman was present in the House during our discussion of the proposal to lend £120 million to two steel firms. I was here myself and I took part in the debate. I think that I made my views quite clear on that occasion, without going into them now, that I disapproved of the decision then taken.
§ Mr. Mitchison
I am much obliged to the hon. Gentleman for giving way 1367 once more. He did, in fact, I think, vote for the advances, although I would not charge my memory with that. Now that it is being done, on the argument that he has just given, it would look as if there ought to be a similar investigation into advances of public money to private enterprise. I wonder whether, without going into the past, the hon. Gentleman could tell us whether he agrees or disagrees with that suggestion.
§ Mr. Peyton
I am not going to follow the hon. and learned Gentleman too far. I will content myself by saying—I do not want to go into the whole business again—that at least on that occasion the projects for which the money was borrowed were fully and clearly examined. That is just the gravamen of our case on this occasion, that we do not have the opportunity. We do not even have the knowledge of the outlines of the capital investment programmes for nationalised industries so that we might be free to express our view whether they are meritorious or otherwise.
Mr. H. Wilson
We quite take the point both of the hon. Gentleman and of his hon. Friend about wanting to get more control over these things, and advance control, but surely he is wrong in saying that there is not the fullest Parliamentary control on the enabling Bill which enables money to be lent either to gas, coal or electricity undertakings, or whatever it is, just as there was similar discussion though not, perhaps, as fully in the case of steel. Therefore, if he is now trying to add to the enabling Bill procedure a more short-run control over advances to nationalised industries, by the same token he ought to be prepared to concede it in the case of private enterprise. We know a great deal less of what is going on in those firms than we do in the case of the nationalised industries on which we have full reports.
§ Mr. Peyton
I can only blame myself for not having made my purpose a little more clear, because I am sure that the right hon. Gentleman is quick enough to see it if it is made clear. I am demanding an annual examination. The borrowing powers Bills come at sporadic intervals, every three or four years, and circumstances often change.
1368 The whole purpose of this Amendment is to ensure that Parliament should have a regular and annual opportunity of discussing the investment programmes of the nationalised industries. I am not at the moment prepared to go into back history and into what happened in the steel industry, the cotton industry or any other industry. I am contenting myself at the moment with saying—and I say it with great seriousness—that Parliament should have an annual opportunity of reviewing the investment programmes of these nationalised industries.
The hon. Gentleman was less than just to himself. He made that point perfectly clear as far as we on this side of the Committee are concerned. We understand that he wants annual control of money voted in the general sense by the enabling Measure.
I used the word "powers" Where powers are taken to lend to a nationalised undertaking the hon. Gentlemen wants annual control over it. We understand that. We were trying to suggest to him that steel and cotton are exactly parallel to the Measures which give power to lend to the nationalised industries. If he insists on an annual control of the money advanced under these powers, would he not think it right that equally there should be an annual control over money spent on cotton, steel or any of the other industries? If the hon. Gentleman does not agree, is he not laying himself open to a charge of being partisan?
§ Mr. Peyton
I do not think I can accept that. I made my views on the question of the steel industry perfectly clear at the time, and I suspect that I should be ruled out of order were I to go into that question again now.
The point I am concerned to make is that the aim and object behind these Amendments is eventually to produce a situation where these nationalised industries can or should at least have the opportunity, or the duty, to play some part in raising their own capital requirements. Secondly, I should like—although it may be that this is vastly ambitious—to see restored to Parliament some vestige of its authority over these 1369 matters. I do not believe that it is good enough for us from either side of the Committee to continue to disappoint those people who still cherish some spark of hope that Parliament exists for the protection of the national resources.
§ Mr. William Blyton (Houghton-le-Spring)
There would have been one less hon. Member on these benches tonight had not the hon. Member for Kidderminster (Mr. Nabarro) informed me that he would refer to my weekend speech on the nationalised industries. Instead of 17 hon. Members present there would have been 16.
It is not for me to interfere in the row between the Government Front Bench and the back benchers opposite. Had it happened on this side of the Committee tomorrow the newspaper headlines would have been "Another split in the Labour Party" We have been twitted tonight on the fact that there are only 17 hon. Members on these benches while the benches opposite are crowded. We can understand that there are hon. Members opposite who wish they were at home and they are not pleased with the hon. Member for Kidderminster—
§ Mr. Blyton
Hon. Members opposite are present because the Government have to keep a House and a hundred hon. Members to go into the Division Lobby. I shall never forget that when the Labour Party were in power Lord Booth by stated, "We shall keep that up all night, we shall harry them to death" So hon. Members opposite should not twit us, because their record in this matter is not good.
I have a certain amount of sympathy for the hon. Member for Kidderminster on the question of accountability0—
§ Mr. Blyton
—but beyond that I do not go. The Tory view of the publicly-owned industries is reflected every day in this Chamber in the way in which hon. Members opposite attack the industries either in Questions or in speeches. The argument regarding accountability is directed against the 1370 nationalised industries. It is true to say that the only time the nationalised industries are discussed is when the Opposition provide a Supply day for the purpose.
We are not to blame for that. Hon. Gentlemen opposite will remember that the Leader of the House stood at the Dispatch Box and moved that the Select Committee on Nationalised Industries be set up. The hon. Member for Yeovil (Mr. Peyton) sits on the Select Committee for Nationalised Industries, so he cannot complain that he does not know anything. It is an act of moral courage to pick up all the papers on the railways in the Select Committee upstairs. The hon. Gentleman cannot say that he is ignorant of how the money has been spent and of the plans, because he has reams of paper on the subject.
I can understand the hon. Member for Kidderminster shouting from the house tops about accountability, but the hon. Member for Yeovil should be the last to shout. He has put his name to an Amendment dealing with the railways, but he has spent twelve months dealing with the railways in the Select Committee and he knows about every penny which has been spent and every scheme for modernisation which has been put forward.
§ Mr. Peyton
I have the great privilege of serving on that Committee with the hon. Gentleman. He will know, as I do, that we do not have the knowledge for which I ask now, namely, that the House of Commons should be fully informed before the event of the money which is to be spent.
§ Mr. Blyton
For twelve months I have listened to the Chairman of the British Transport Commission, who has justified every penny which has been sanctioned by the Government for modernisation schemes. I have never heard the hon. Gentleman complain that information has been withheld from him.
The money allocated by the Chancellor of the Exchequer to the nationalised industries is not a subsidy. It is borrowed and it has to be paid back at over 6 per cent. The National Coal Board has paid £258 million in interest to the Minister of Fuel and Power since vesting date but has paid only £54 off the principal.
1371 The hon. Gentleman talked about self-financing. Hon. Gentlemen opposite have stopped the National Coal Board from being self-financing for the whole time it has been in existence. They never allowed the Board to build up reserves. Why should they now demand that the nationalised industries be self-financing when they have stopped the National Coal Board over the last ten years from developing its own resources to try to finance its own capital expenditure?
The taxpayer should know that all the shouting tonight is only about lending money to the nationalised industries. It is a long term investment by the taxpayer, for which he is paid 6 per cent. [Interruption.] We in the North have known for a long time the opinion of the hon. Member for Sunderland, South (Mr. P. Williams). He should at least sit quietly and let me have my say, otherwise I shall be speaking for a long time. I know more about this subject than he does.
I say emphatically to the taxpayer that he is lending money as a long-term investment and he is receiving interest on it. I have already quoted the figures in relation to the National Coal Board. Accountability has been a thorny problem, and that is why these Amendments have been tabled. I have some admiration for the hon. Member for Kidderminster, whom I regard as an expert in fuel matters, but I think that he sometimes carries his play acting a little too far in the House of Commons. Nevertheless, I regard him as an expert.
How can the hon. Member for Yeovil expect a nationalised industry to submit each year every development scheme to the House of Commons and expect the House to discuss all the major development schemes? This applies to any of the nationalised industries mentioned in the seven Amendments.
First of all, we would not have enough Parliamentary time, because to discuss just one major development scheme in a nationalised industry we would need not a day but a week. We would need the advice of technicians and experts. We have found that out during the five years during which I have sat on the Estimates Sub-Committee. The Government turned down our recommendations that all major 1372 schemes should be put in the balance-sheets each year so as to give a progress report about the schemes for which money had been sanctioned. Hon. Members opposite have nobody but themselves to blame that the recommendation was not accepted. If what they seek by way of accountability have not been granted, hon. Members should not criticise this side of the Committee. They should take up the fight with their own Front Bench—and I shall not interfere.
§ Viscount Hinchingbrooke
One of the signs of general public dissatisfaction is when a subject becomes a running sore in Parliament, and there is no doubt at all that for the last six or seven years the question of the financing and management of the nationalised industries has been that running sore. I think it is time that the Government made some pronouncement to end that situation, and they should create a new method of accountability which is broadly satisfactory to both sides of the House.
I served on the original Select Committee on the Nationalised Industries which went into the ways and means by which those industries could be made accountable to Parliament. After a couple of years, the Committee's only conclusion was that a permanent nationalised industries committee should be set up to watch them. The hon. Member for Houghton-le-Spring (Mr. Blyton) and my hon. Friend the Member for Yeovil (Mr. Peyton) are members of that committee now. No doubt it has done wonderful work. No doubt reports are issued, but those reports do not really come on to the Floor of the House for debate, and they do not make much impact on the public. From that point of view, they are unsatisfactory.
The result is that year by year we have debates like this late in the day. I remember that one such debate in 1956 went on until 4 o'clock in the morning—the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) took part in it—during which we objected to the borrowing powers being given to the gas and electricity industries—trying to curtail the amounts, being frustrated, and having no solution offered by the Government. Repeatedly that sort of thing occurs and there is a good deal of opposition from this side. It cannot be satisfactory for Conservative Ministers to face 1373 it year after year. The situation must be halted.
I am one of the, perhaps, very few who regard the nationalised industries as an incubus on the body politic, although I do not by any means detest them as the hon. Gentleman tries to make out. On the contrary, one of my happiest recollections is working in a signal box during the 1926 General Strike. I adore the railways, and shall always do so.
What we want, however, is to see them hived off from the Exchequer and made independent and subject to market disciplines. It was a source of great grief to some of us when, in 1956, the present Prime Minister—then Chancellor of the Exchequer—took a wrong turning, as it seemed to us, in the financing of these industries. Because of a complex series of reasons that we could quite understand, he deserted the previous method, which was to finance the nationalised industries on the market by Treasury guarantee. It put out the general financing of the current debt, it was very awkward to fit in with the Government's financing programme, and so on. He made them responsible to the Exchequer, putting them below the line. From that time on, we have had these annual Measures.
Nobody, I think, wants to revert to the situation which was unsatisfactory before 1956. I would take two jumps at it and so arrange matters that the nationalised industry would go to the market. It would need a great deal of preparation in the market, I admit. It would need a very happy and affluent situation in public investment to be able to take up the requirements of the nationalised industries. It would need a good deal of reorganisation of the nationalised industries, particularly of the railways, before they would be ready to go to the market.
Mr. H. Wilson
On a point of order, Sir Gordon. While we all understand that this is a very important point and many of us wish to debate it on the Motion, That the Clause stand part of the Bill, is it in order on these Amendments, which are directed mainly to cutting the amounts available for individual boards or industries, to raise the whole subject of the financing of the 1374 nationalised industries and fixing the market in order that it can be done in another way? We are quite prepared to debate the matter on the other Question, but is it in order on these Amendments?
§ Viscount Hinchingbrooke
Further to that point of order, Sir Gordon. I understood that these Amendments were all being taken together and the debate in principle was being taken now and that the debate on the Motion, That the Clause stand part of the Bill, would be of relatively little significance.
Further to that point of order. I am not aware that you have indicated, Sir Gordon, that the debate on the Motion, That the Clause stand part of the Bill, will be of little significance. You advised the Committee that it would be for the general convenience that we should take the Amendments together, but that was because they were all of a very similar character. None of them, if I may say so, raises the wider issue which the noble Lord is now putting before the Committee. The Amendments raise merely the question of the amounts available for individual boards, and they were so spoken to by the hon. Member for Kidderminster (Mr. Nabarro). Is the noble Lord in order in trying to turn the debate on the Amendments into a general debate on the financing of the nationalised industries?
§ Mr. Nabarro
Further to that point of order, Sir Gordon. You will recall that, in the course of my speech—I am not sure that the right hon. Member for Huyton (Mr. H. Wilson) did not miss this part of it—I made it perfectly clear that the first of the 11 Amendments is the master Amendment dealing with the aggregation. There are then seven Amendments, one for each industry, and the amounts of the reduction in each of those Amendments added together make the total reduction moved in the first Amendment. By that means, Sir Gordon, the whole topic is covered by the 11 Amendments, including, I submit, the principle of this method of financing.
I am sorry to take the matter further, Sir Gordon. We fully understand what the hon. Member has in mind in his aggregation Amendment and his separate and specific Amendments, but I humbly submit to you, with respect, that these Amendments deal only with amounts. They do not raise the whole subject of what was in the Radcliffe Committee's Report or what might be discussed on the Motion, That the Clause stand part of the Bill. I submit that this debate should be relatively narrow.
Further to that point of order. I understand the point which the right hon. Member for Huyton (Mr. H. Wilson) has raised, but I believe that, in practice, it will be extremely difficult to reply fully to the points raised by my hon. Friend in these Amendments without saying a good deal about the general method of financing. I think it will be very difficult to separate the two.
Is the Chancellor of the Exchequer trying to suggest that we should, therefore, take the debate wider than what is covered by the Amendments to the point, for example, where we shall be discussing whether this money should be raised in the market? Surely, that goes very wide indeed of these Amendments.
§ Mr. Nabarro
It will be within your recollection, Sir Gordon, that each of these industries already has statutory powers to seek its moneys from the market or by Exchequer advances. For such sums as an industry may not wish to take up from Exchequer advances it can resort to the market. One of the purposes of the Amendments is to reduce the amount of money available to each industry. I submit, therefore, that we may discuss at the same time the very point which my noble Friend is making about recourse to the money market.
§ Mr. Mitchison
As I understand it, Sir Gordon, we are discussing Treasury advances and nothing else. We are not, therefore, discussing advances which public industries may borrow, and are authorised to borrow, in the open market. I understand the noble Lord to have been talking about just that. He was suggesting that there might be further recourse to the open market.
1376 Moreover, if I understood him rightly—I may have misunderstood him—the noble Lord was suggesting nothing less than a complete handing over of these nationalised industries to private enterprise through a sale or borrowing in the open market. If he was not suggesting that, I mistook him and will not press the point. On the first part, however, I submit that what is sought to be said now about borrowing in the open market goes well beyond the Amendments.
What we are discussing is Treasury advances, and reference has been made to borrowing in the open market. I have expressed the hope that it would be only a passing reference to that and that the Committee would not go into it in detail.
I raise the question only because we want to make as much progress as possible and to avoid duplication between the debate on the Amendments and on the Motion, That the Clause stand part of the Bill. The debate has, however, gone wide. Are we to understand from your Ruling, Sir Gordon, that what the Chancellor thinks will be necessary is permissible and that he may widen his reply, and, therefore, the debate on the Amendments, to a general discussion of the methods of financing the nationalised industries?
I had thought that the Committee would probably consider it most convenient for us to have just one debate covering the Amendments and the substance of the Clause, but I do not know what the Committee would wish to do.
§ Mr. Mitchison
Further to that point of order. The subject matter of the Clause is correctly indicated by the sidenote:Exchequer advances to nationalised industries and undertakingsI submit that on the Motion, That the Clause stand part of the Bill, it is not permissible to discuss other methods of financing nationalised industries.
§ Viscount Hinchingbrooke
I was not proposing to go into the structural alterations which would be necessary in the nationalised industries—
§ Viscount Hinchingbrooke
I am on a point of order. Sir Gordon will be good enough to rule on this when the opinions are expressed. I do not propose—I will pass rapidly from the point—to go into the question of the alteration in the structure of the nationalised industries such as would enable them to go to the market for future capital. I am saying that our efforts in this process in which we are now involved should be directed to that end eventually, but I was not proposing to go into the details of it. Am I in order in continuing on that line, Sir Gordon?
There are two situations before us. We do not want to go back to the pre-1956 situation—
§ Mr. Mitchison
On a point of order. I am sorry to interrupt the noble Lord, but I asked a question and I believe that it would be for the convenience of the Committee if we knew where we were. My question is whether it is permissible, either on the Amendments or on the Motion, That the Clause stand part of the Bill, to go beyond, except for casual reference, the subject of Exchequer advances to nationalised industries.
I do not see how, on the Motion, That the Clause stand part of the Bill, it is permissible to go much wider than in the debate on the Amendments.
§ Viscount Hinchingbrooke
At this late hour, I can say what I have to say fairly shortly. The Committee should differentiate between the borrowing powers Bills which we have from time to time on the nationalised industries, to which the right hon. Member for Huyton has referred, and these annual Parliamentary occasions on the Finance Bill. It is those other Bills which we have already passed which give the nationalised industries their borrowing powers. This Clause is concerned entirely with opening the Exchequer chest and allowing the money to be issued forth for the purpose of satisfying the claims of the nationalised industries for borrowing under the powers already granted to them.
Personally, I do not like a Clause of this sort appearing in a Finance Bill. All the other Clauses are concerned with raising revenue by taxation. This is a technical Clause which is included in the 1378 Finance Bill and which acts rather like the Consolidated Fund Bill acts, that is, it opens the Exchequer chest and permits these moneys to be issued forth, and I would like to see that process brought to an end.
My hon. Friends are perfectly right to ask for some annual Parliamentary occasion upon which the future financing of the nationalised industries can be regularly discussed. Nobody wants to do that on a year-to-year basis alone, because the nationalised industries are long-term borrowers—the Electricity Council, the Coal Board, the railways and so on all want to know where they are for a two, three or four-year period. I would like to get rid of this business of passing this money through the Finance Bill and discussing the future of the nationalised industries as we are at this moment.
I draw my right hon. Friend's attention to the proposal that on the next occasion when a nationalised industry borrowing power Bill comes along he should make an attempt, to use a term applicable to tomorrow, to bring the horses up to the starting gate together, that is to say, to bring all the nationalised industries into that Bill with their borrowing requirements for three or four years, with eight Clauses in the Bill.
§ Mr. Mitchison
Further to that point of order. I am sorry but we are discussing the Exchequer advances to the nationalised industries, and some Amendments to the Clause. What is being raised is the whole question of how this matter should be brought under Parliamentary control and the like. With respect, I cannot see how that arises on the Amendmenths. To follow the noble Lord's metaphor, what we are discussing is how many legs the horse is to have and not how the horse is to be brought up to the starting gate.
§ Viscount Hinchingbrooke
I am trying to advance reasons why I object to the Clause and why, in default of some explanation or proposal by the Chancellor of the Exchequer about what may be substituted for it next autumn or even next spring, I shall vote against it tonight. I do not like this Clause appearing in the Bill. I want other methods to be adopted and unless we can get some argument put forward about what is to be substituted—
§ Mr. Mitchison
Further to that point of order. How can that arise on the Amendment? It might arise on the Motion, That the Clause stand part of the Bill.
§ Viscount Hinchingbrooke
I thought you said a moment ago, Sir Gordon, that discussion on that Motion could not go wider than the aggregate of the Amendments.
The debate on the Motion, That the Clause stand part of the Bill, cannot go wider than the Clause.
§ Viscount Hinchingbrooke
I think that I had reached the end of what I wanted to say. I hope that my right hon. Friend is prepared to give some indication to the Committee that this very disagreeable process, which hon. Members on this side of the Committee have resented for years, will be ended and that the Government will come forward in a short time with a new series of proposals which will at once do with the nationalised industries what everybody wants to do, recognising the high purpose which they serve in the State, and which will satisfy Parliamentary accountability.
Any member of the Committee is entitled to speak if he catches your eye, Sir Gordon. I have no intention of curtailing the debate, but I want to make one or two brief observations on what the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) has said. If any hon. Members opposite, or any of my hon. Friends, wish to follow me, no doubt they will seek to catch your eye in the ordinary way, Sir Gordon.
There was one point which the noble Lord made with which I find myself in some degree of sympathy. It was one of his main points when, towards the end of his speech, he said that there was something inappropriate about putting 1380 this kind of Clause in the annual Finance Bill. The other Clauses refer to taxation remission and taxation increase and so on, whereas this—and he said it not unfairly—was something more appropriate to the Consolidated Fund Bill; in other words, it was something more appropriate to the regulating of exenditure rather than something concerned with the raising of expenditure.
There is a good deal to be said for that point of view, and one could almost say that to include this Clause in this Bill, and to use an old Parliamentary phrase, is tagging something on to a Bill the main purpose of which is to deal with taxation. None would say that the Chancellor is out of order; we should not have had this discussion had he been, but we are dealing with a Bill to raise taxation…and to amend the law relating to the National Debt…and the Chancellor is well within order when he includes this aspect of the National Debt.
I gather that the Chancellor's motive in bringing forward this Clause is to make it easier for the Government to administer the National Debt in the markets generally. Nevertheless, there is something to be said for the noble Lord's point of view; but, equally, I say to him that, whatever the rights or wrongs, whatever the merits or demerits of the general argument put forward by the noble Lord and the hon. Member for Kidderminster (Mr. Nabarro), it is our duty, instead of trying to achieve it by Amendments of this kind which are drafted in a form purporting to reduce the amount of money which can be borrowed, to see if it would have been better if the noble Lord and his hon. Friend had put down a Motion. They could then have sought to debate the matter in a proper manner rather than to do it by Amendments by the back door—not back door, but perhaps by the side door—to this part of the Finance Bill.
§ Mr. Nabarro
The right hon. Gentleman has forgotten what transpired on 7th April. The Chancellor had to move a procedural Motion to put this into the Finance Bill. My noble Friend and myself, and twenty other hon. Members voted against that Motion and against 1381 the idea of this method of financing in a Finance Bill, but we were defeated by the Government.
I remember the occasion; it took place at about ten minutes to eleven; a good deal earlier than we are discussing the matter now, but if the hon. Gentleman wants to raise in a positive rather than in a negative sense what was then done, I suggest to him that it would have been more appropriate if we had had a Motion in his name or that of his noble Friend.
However, we are now in the position that the Committee is being led along, whether we want to be or not, into a fairly fundamental debate on procedure. I do not think that the hon. Member for Kidderminster would deny that phrase; perhaps I am right in thinking that he came here with that intention.
We are being led along in that way when we ought more properly to be concerned with amounts of money.
What I should feel it appropriate to do very much depends on my understanding of the Rulings you have given, Sir Gordon. You will forgive me if I put it to you that I am still not quite clear about them. You ruled finally, in reply to the noble Lord, that he should make only a passing reference to alternative means of raising money. As far as I know, no Ruling was given to stop anybody talking about future methods of public control of this expenditure, and I thought I heard you say at one point that you did not see how the debate on the Clause could go any wider than the debate on the Amendment.
The question I want to talk about most is that relating to the period for which these powers are being given. The Clause provides that the period shall run until 1963. The Chancellor has taken his courage in both hands and is taking powers for three years compared with one year, as has been usual in the past. That has been very much queried by the hon. Member for Kidderminster, who wants annual control, although in a different form. Would it be appropriate, in discussing these Amendments, to deal with the 1382 question whether it should be one or three years, or possibly in perpetuity, or should we leave the discussion of that matter until we come to the Motion, That the Clause stand part of the Bill?
§ Mr. Nabarro
Is the right hon. Gentleman quite sure that he is right in what he has said? The Clause gives annual control. The first part of the Clause takes us to August, 1963, and paragraph (b) provides that:no advances shall be made under that section during either of the subsequent two years unless provision has been made by order of the TreasuryThat is an affirmative Order, which provides annual accountability.
The hon. Member is quite right. The reference to 1963 was a reference to the original powers given in the 1956 Act. I was misled by assuming that the reference was in accordance with what the Chancellor told us in the Budget debate, but I should have recalled that the Chancellor has produced a Bill rather different from his intentions in the Budget debate, owing to pressure from his hon. Friends. We debated the question whether he should take powers for one or three years, or an even longer period, last year and in previous years. Since last year we have had the report of the Radcliffe Committee.
Perhaps you would now tell us, Sir Gordon, whether this point should be taken now or in the debate on the Motion, That the Clause stand part of the Bill.
If there has been a discussion on those lines, I would hope we would not want any further debate.
I do not want to prolong the debate unnecessarily. The chief offender has now left the Chamber; he seemed to suggest that hon. Members on this side of the Committee have been holding up progress, but I think the Patronage Secretary would acquit us of any such action in the last few days. But if it is convenient to debate this point 1383 now rather than on the Motion, That the Clause stand part of the Bill, I shall be happy, always reserving the right to continue the debate further on that Motion if it should prove necessary.
When the present Prime Minister, then Chancellor of the Exchequer, first put a Clause of this kind into the Finance Bill of 1956—I am surprised to see the hon. Member for Kidderminster leaving the Chamber after all he has said during the period when I was alleged not to be listening.
That is not the part of our anatomies that we get cramp in when we listen to the hon. Member going on for Clause after Clause in the Finance Bill. But he is entitled to stretch his legs. We only wish he had done so about two hours earlier. We should have been home and in bed by now.
When the present Prime Minister introduced a Clause of this kind in the 1956 Finance Bill—and the noble Lord was right in saying that we were debating it in the not so small hours of the morning—the debate lasted for two hours and I believe I obliged for about an hour between 5 and 6 a.m.—a performance which I shall be only too willing to repeat if encouraged to do so by hon. Members opposite, although at this moment I do not feel so encouraged.
On that occasion the then Chancellor was talking about the arrangement which had obtained until that time, where the money was raised under Treasury guarantee on the market, with the exception of the special arrangement for coal. He said:There are two great disadvantages in that point of view, particularly in the present circumstances. The first is that, by and large, official support can only be given to these stock issues by borrowing the necessary funds on Treasury bills. That is the only way in which we can give support to those issues when they are not fully taken up in the market, and the continual issuing of Treasury bills adds to the liquidity of the banking system, and so often to the difficulties of operating monetary control. That is the first difficulty in the present circumstances.The right hon. Gentleman continued:The second is that frequent issues of the stock of these boards, which are made by 1384 Statute under Treasury guarantee, and therefore involve Government credit, have to be made at inconvenient times; not when it would suit the market, but at the particular time when a particular industry has reached the limit of its borrowing powers from the joint stock banks. The fact that they are going on at a time necessary to them, but not suitable for the broad management of Government credit and Government funding, prejudices the general Government programme of borrowing and refinancing and funding.He concluded by saying:I ask the Committee to accept the view"—this is the present Prime Minister—that since the Exchequer has in present circumstances to bear the burden of providing at least the bulk of the capital finances of these industries, it is better, in the wider interests of the management of Government credit and funding Government debt, that the Exchequer should be in control of the whole operation"—[OFFICIAL REPORT, 12th June, 1956; Vol. 554, c. 527–8.]As I understand it—I hope the Chancellor is not going to run away on this one—that has been the attitude of the Government ever since 1956, and it was a view which was fully underwritten by the Radcliffe Committee when it reported last August. I think the noble Lord will agree with that summary of what the Radcliffe Committee reported. I know that hon. Members opposite do not accept any Report which is inconvenient to them, whether it is Radcliffe or Devlin or anything else. I remember when there was another Report on the Bank Rate Tribunal two years ago, and we were all expected to accept that.
I agree that none of us does. But if there has been one thing more noticeable than anything else about the debates on this Bill, it has been the fact that the Chancellor has used the Radcliffe Royal Commission, when he was following its recommendations, as an argument against us, and when he was rejecting its recommendations he has not always followed Radcliffe. I admit that we have done the same. I agree that we do not have to follow Radcliffe on monetary policy in all its details. I have made clear that we do not support it in all its details, but we support it a good deal more than do hon. Members opposite.
I mention this for what it is worth. The Radcliffe Committee considered this matter with great expertise and with access to all the facts affecting not only the nationalised industries but the City of London, and took the view that this 1385 is the right way to go about it. No Chancellor of the Exchequer has ever got up at the Box since 1956 and said that this is the wrong way to do it. I do not think the present Chancellor thinks it is the wrong way to do it. I do not think he would have introduced this Clause if he had intended to run away from its impilcations this evening.
Nevertheless, successive Chancellors, following the decision of the present Prime Minister in 1956, have unfortunately only prolonged these powers for short periods ahead. In one case it was two years, but mostly it has been one year. Last year we tried to get the Chancellor to take powers for an indefinite period and we were voted down, no doubt to the delight of the hon. Member for Kidderminster. We pressed him on that matter at that time and certainly we hoped—we said it in the debate—the Chancellor could show a little more courage and take powers for a longer period ahead. We were delighted when we heard the Chancellor announce that he was taking powers for three years. But of course, trouble arose. Pressure was put upon him.
It was not altogether popular as a Budget, I understand, in the 1922 Committee on other grounds. As on dividend stripping two years ago, on Clause 26 this year and on this Clause on previous occasions, the Chancellor turned tail and fled under the pressure of the hon. Member for Kidderminster, though why he could not have found a better reason than that for doing it I cannot imagine.
We have this Clause on a one-year basis, and still hon. Members opposite are not satisfied. There may be a case for examining not merely this but all other aspects of Government expenditure on a more searching basis; we have some ideas about that. I think that the nationalised industries are the last item in the Budget to treat on this basis, however, because here are no industries in the country which are so much under the scrutiny of the House in one way or another, not to mention the scrutiny of the Press, as are the nationalised industries. The House gives three days every year for debating the nationalised industries, apart from 1386 Supply days, and we have often used Supply days for this purpose. In addition, as my hon. Friend the Member for Houghton-le-Spring (Mr. Blyton) said, these industries are fully investigated by the Select Committee on the Nationalised Industries.
What we complain about is that we have all this partisan "binding" by hon. Members opposite about the nationalised industries but not one of them suggest that similar powers be given in relation to private industries. We are voting very considerable sums of money to private industry. I should be out of order if I pursued that too far. Do hon. Members propose that we should go into the same detail about them? Is there to be a Select Committee on privately-owned industry comparable with the Select Committee on the Nationalised Industries? Are three days to be regularly allotted every year by the Leader of the House for the purposes of debating those industries? No one would suggest doing that, and yet Government money is going into those industries under conditions about which we know very little. Conditions in these privately-owned industries may change from year to year, and yet the money will continue to flow to those private firms under the powers given by the House. It might therefore be right for us to scrutinise the amount of money going to them.
The nationalised industries are very carefully scrutinised by Parliament. The partisan prejudices of hon. Members opposite would ensure that, if nothing else did. We have a very one-sided approach to this question. I hope—although I have not a great deal of hope, because I know how susceptible the Chancellor is to back-bench pressure—that on Report the Chancellor will go back to taking this power for a longer period ahead so that there is no question that it will not continue to be Government practice to raise money for the nationalised industries in this way and not to force them on to the market in ludicrous circumstances. If he wanted to force them on to the market, the whole basis of the financing and self-financing of these industries must be on a different basis. For instance, it would mean that we should have to alter the whole basis of railway financing and the question of road competition. 1387 Hon. Members cannot have it both ways. They cannot treat these industries as though they are monopolies under Parliamentary control and scrutiny in this way and at the same time fetter them so that they cannot even compete, as any private firm can compete, with some of their main rivals and competitors.
Clearly, whatever monopoly coal may have had, it no longer possesses. It is facing heavy imports of fuel oil at prices considerably less than the price of crude oil, which raises a very serious point; for if that is so, it clearly follows that the ability of the coal industry to finance itself is very much reduced by those circumstances. We know what has happened in one industry after another. As my hon. Friend the Member for Houghton-le-Spring said, when these industries sought to improve their financial position they were stopped by various kinds of administrative action by Ministers—the Minister of Power in the case of the coal mines, the Minister of Transport, and even the then Prime Minister in 1952, in the case of the railways. Therefore, we cannot really look at these things in the rather simpleminded way that the hon. Member for Kidderminster brings to these events.
I did not say that there was anything simple about the hon. Gentleman; I said "simple minded" We cannot look at the matter in the rather narrow-minded way that the hon. Gentleman looks at it, if he prefers that phrase. We certainly ought to look at the problem rather more widely. Although I do not think that this is the appropriate occasion for doing that, I think that the Chancellor should be given support to continue with his method of borrowing. I only hope that he will take powers to do it for a longer period than just one year ahead.
§ Mr. Jack Jones (Rotherham)
On a point of order. May I ask you, Sir William, if it will be possible to continue the debate on this series of Amendments after the Chancellor has spoken? I have been sitting here for 10½ hours and have not said a word.
I have no desire to bring the debate to a conclusion, and I shall look forward to hearing what the hon. Member for Rotherham (Mr. Jack Jones) has to say, but I think that it might help if I made a few comments on what hon. Gentlemen have said so far in the debate.
I am not going to deal with the history of the financing of the nationalised industries because that is well known to the Committee. I would only say that in present circumstances when these industries cannot raise money on the open market without a Government guarantee I believe that the method of direct finance from the Exchequer is beneficial to the Exchequer and also to the national economy.
A great deal of the interest of this Clause arises out of the mistaken belief, I think, that it is by this Clause that Parliament controls the borrowing of the nationalised industries. Of course that is not so. Each one of the nationalised industries has already been granted authority by Parliament to borrow up to a certain limit, and thus the power of the Electricity Council to borrow from all sources was increased from £1,400 million to £1,800 million under the Electricity (Borrowing Powers) Act, 1959. In addition, the Minister of Power has power to increase this limit by Order.
This Clause does not in any way fetter the borrowing rights which Parliament has granted to these industries or alter the borrowing limits which Parliament has already fixed. It merely opens to the industries the possibility of borrowing from the Exchequer the moneys which they are entitled to raise. The system which we wish to use in present circumstances, lending by the Exchequer rather than borrowing from the market, is a choice dictated by the interests of the management of the National Debt, as I have previously mentioned.
This method may have certain conveniences for the nationalised industries, but these are not the primary considerations. The Committee is being asked to approve the Clause not in order to give a right to the nationalised industries but in order to give the Exchequer greater 1389 flexibility. If the Clause were not passed the power of the nationalised industries to finance their investment programmes within the limits provided would not be one whit affected, but as Chancellor I should be seriously handicapped in my ability to manage the national finance.
The Clause is really a Treasury Clause and not a nationalised industries Clause. It is concerned with the technique of the management of the National Debt, not with the investment programmes of the basic industries. The amount prescribed in the Clause, £2,050 million, is built up in a rather complicated manner.
As Chancellor I am concerned with two quite separate calculations in this connection. In the first place, I am concerned with the amount which the nationalised industries in the execution of their approved investment programmes and in the light of their anticipated commercial prospects will need to borrow from the Exchequer during the coming year.
All estimates of Exchequer lending to the nationalised industries are calculated as to the national financial year. Estimates for borrowing are prepared for these years with as much precision as is practicable; though it will be appreciated that in the event these estimates may prove incorrect, because the industry's need to borrow either for fixed or working capital is influenced not only by the progress of carrying out the investment programme but by its current commercial fortune, because that determines the amount of self-financing it can do. So the result may be more or less favourable than the estimate. The amount for the financial year recently started was sot out in the financial statement presented art the time of the Budget. For the seven nationalised industries it was £482 million and I have already given a detailed breakdown of that sum.
Secondly, as Chancellor, I must take the necessary measures to ensure that in the period April to August, 1961, the Exchequer will have authority to issue funds to those nationalised industries. It is not practicable at this moment to calculate precisely what each one of those industries will need during these five months of next year. As I explained earlier, the calculations 1390 of borrowing from the Exchequer refer to financial years and not to five-monthly periods. At a later stage during this financial year there will be discussions with the industries in order to discover what their needs will be for the financial year 1961–62 and what can be approved; that is their needs for borrowing and for their whole investment programme. This figure is of course essential for the preparation of the Budget. But in the meantime I must make the normal prudent calculation's to ensure that I am able to meet the call for funds from the nationalised industries, provided those calls are within the statutory limits of borrowing which Parliament has prescribed for each industry.
How am I to calculate these amounts? There is no reason to expect that the need for funds will be very greatly different in the 12-month period, August to August, from the 12-month period of the financial year. Five-twelfths of £482 million is just over £200 million. Therefore, the Exchequer must be in a position to advance to the nationalised industries during the period 1st April, 1960, to 31st August, 1961, £682 million approximately. Last year Parliament authorised the Exchequer to advance up to £1,620 million by the end of August of this year. In fact, the Exchequer had advanced £1,356 million by 31st March of this year. The figure of £682 million must therefore be added to the figure of £1,356 million to produce the limit of the advances that the Treasury may make to these nationalised industries by the end of April, 1961. That addition comes to £2,038 million and it is that sum rounded up which produces the figure of £2,050 million.
I have considerable sympathy with hon. Members who find all this very confusing and who wonder whether it is the best method of providing Parliament with information about the amounts which the nationalised industries will be borrowing from the Exchequer in the coming year and of authorising the Exchequer to advance that money. I frankly admit that the present situation in really the result of piecemeal development and I should not wish tonight to define it as being either 1391 perfect or the best which could be devised to meet the requirements of the Committee.
The problem of the relationship between the nationalised industries and the Government, on the one hand, and Parliament, on the other, is very far from being a simple one. Parliament has several separate and legitimate interests in this matter, and we need to find a procedure which will give adequate opportunity for all those interests to be safeguarded. Parliament is interested and entitled to be interested in the investment programmes of those industries, to be informed of the broad lines of those programmes, and to be able, if it wishes, to examine and debate them before they are put into execution.
These investment programmes are likely to be available in the autumn. I made the point just now that, though the investment programmes will be available in the autumn, the amounts which will need to be borrowed from the Exchequer by the industries concerned cannot be known until much nearer the end of the financial year, that is to say, much closer to the beginning of the next financial year.
Two separate pieces of information are needed—first, the programmes, available in the autumn, and then at a later stage, February or about then, the estimated figures of what will need to be borrowed to meet those programmes during the coming financial year. The industries are not able to estimate their borrowing needs much before February, because those needs will depend, among other things, on their commercial prospects.
Secondly, Parliament is interested and entitled to be interested in the financial implications to the Exchequer of those investment programmes. Thirdly, Parliament is interested and entitled to be interested in and to be told if during the course of the year the financial implications for the Exchequer of the activities of the nationalised industries turn out to be very different from those which they were expected to be at the beginning of the year, namely, the expectations on which the Budget was based. Parliament has these three interests in respect of the nationalised industries, both as a group and also one by one.
Quite separate from these is Parliament's right to control the actual 1392 amounts of money which the individual nationalised industries are entitled to borrow, whether from the Exchequer or from any other source, through the borrowing Bills.
Those are the various parts of the puzzle which faces us. The Government now are examining these questions urgently in view of the representations which have been made from the House of Commons. It is our expectation that by the autumn we shall be able to make new proposals—agreeable, we hope, to the House of Commons—for the handling of these matters in the future on a more satisfactory basis, including supplying to the House of Commons information which hon. Members can examine and debate, both on the annual investment programme of each industry and, at a later stage, the estimated amounts which each industry will require to borrow from the Exchequer in the coming year.
If we are to meet the wishes of hon. Gentlemen, the essential thing is that those pieces of information should be available to the House of Commons for examination and debate before the event, before this programme is put into operation. In the light of this, I hope that the Committee will decide in due course to approve the Clause as it stands.
Mr. H. Wilson
In rising again, I want to make it clear that I do not want to preclude the right of any of my hon. Friends who I know were intending to address the Committee from doing so, but in view of the rather important statement made by the right hon. Gentleman I perhaps ought to make two points.
First of all, he has not been able this morning to give us in any detail what he will do. All he has said is that he is considering it, and he admits that the House has a right to information on the points he has outlined. He has not said how it is to be done—whether by Bill, White Paper or what—or what facilities there will be for debate. Therefore, we on this side must obviously reserve our comments until we see the proposals. However, lest he should think that it is to be as easy as all that, I say at once that we shall watch for this with some degree of suspicion.
That brings me to my second point. Since the Chancellor has not completed 1393 his deliberations and discussions—he says that the Government are still considering the matter—I hope that he will include in his considerations the equal, if not greater, need there is for the House to be provided with similar information about private industry. It would be extremely one-sided if he took into his consideration only the publicly-owned industries and not the privately-owned ones as well. And I am glad to see that the noble Lord the Member for Dorset. South (Viscount Hinchingbrooke) is so fair-minded as to concede that by what I took to be a gesture of assent.
I ask the Chancellor to go further; to look at the whole field of Government contracts and to see whether the House cannot be given information of what the Government expect to spend on such contracts. Some of them will, of course, come within the realm of security, but I think that the Committee will agree that we have recently had considerable evidence—particularly in regard to Bluestreak—of very serious waste in matters over which the House had no control whatsoever, whether ex post, ante post or anything else.
I therefore hope that if he is to do this in relation to the nationalised industries he will extend his examination to everything in which Government money is involved; particularly with those contracts that run four or even five years ahead—perhaps on a cost-plus basis—because we should like to know each year what the Government propose to spend in the following year. The Chancellor will have a better chance of satisfying the Opposition if he is scrupulously fair over this, and regards it as an exercise in the control of public expenditure and not just another episode in the vendetta of hon. Members opposite against the nationalised industries.
I only want to say that I am taking note of everything said by my hon. Friends and by hon. Members opposite. In the meantime, I perfectly understand that every member of the Committee will wish to reserve his position until the Government are able to announce their proposals.
§ Mr. Jack Jones
At the risk of being unpopular by speaking now—having sat through the debate—I want to suggest 1394 that for once the hon. Member for Kidderminster (Mr. Nabarro) should be encouraged to pursue the line of thought in these eleven Amendments. I welcome the fullest opportunity for the expenditure of public money on the nationalised industries to be examined on the Floor of the House, and from there to the taxpayers, because the more information the taxpayers get on that subject the more will they understand the extent to which those industries—now so necessary to keep us in the world's markets and to put our economy on a sound basis—were so sadly and badly neglected when they were in the hands of private enterprise.
The colossal sums of money that now have to be spent on them are a clear indication of the great need there was for that money to have been spent earlier on the coal industry, the railways, airways, aircraft and the rest. The more information we can get to the public in this way, the greater will be their awareness of the lack of real control there was when these industries were in private hands.
Yesterday, an Answer to a Parliamentary Question revealed that steel, my own industry, had to spend £8 million last year in bringing sheet steel from abroad, for the very simple reason that the capacity was never at any time put in to meet full employment and to meet the needs of a fully employed, sound economy in this country.
§ 1.45 a.m.
§ Mr. T. L. Iremonger (Ilford, North)
I was sorry to notice the tone in which the hon. Member for Rotherham (Mr. Jack Jones) finished his remarks, because I thought that he started on altogether the right note, saying that my hon. Friend the Member for Kidderminster (Mr. Nabarro) should be encouraged to pursue his line of thought. I think that the Committee would be well advised to unite behind my hon. Friend. It was very gratifying to find, although he had shown singularly little enthusiasm for the ideas of my hon. Friend earlier in the debate, that the right hon. Member for Huyton (Mr. H. Wilson), when he realised that my right hon. Friend the Chancellor had opened his mind in the way he did, was very quick to climb on the band-wagon and say that he could not go far enough for him.
Mr. H. Wilson
The hon. Gentleman should have listened to the speech I made earlier, when I made clear that I agreed with certain of the points which the noble Lord for Member for Dorset, South (Viscount Hinchingbrooke) had made, but I said that, if we were to extend the control of expenditure or scrutiny in that way, it should be widened to cover the othe things I mentioned. There was no question of climbing on the band-wagon.
§ Mr. Iremonger
One need only point out that the initiative did not exactly come from the opposite side of the Committee. It has been always the initiative of this side to argue that the nationalised industries should be properly accountable.
It is a great pity that this debate should be poisoned by the pro-nationalisation and anti-nationalisation schools of thought, both of which, I suggest, have been dead for the last five years and should now be interred. The Committee will have been gratified to hear the closing words of my right hon. Friend. There was a moment, I confess, when I thought that he might possibly answer the question raised by my hon. Friend the Member for Kidderminster as though it could be answered in terms of arithmetic. In fact, it is an issue of profound constitutional, economic and Parliamentary importance.
I think that my hon. Friend may well feel that he has opened a very wide question this evening which has been received in an extremely hopeful spirit by my right hon. Friend. He gave very slight indication of what his proposals would be, but I am quite sure that we are tonight, in considering these Amendments, touching upon a question which has been profoundly disturbing the country for many years, ever since we first realised that the opposition had no idea of what they meant by nationalisation and we, in our turn, realised that we had not the faintest idea of what to do about it, having been saddled with this unwanted incubus.
It is now a part of our social and political system. It raises very difficult constitutional questions which we are not yet in sight of solving. The Committee could do no better tonight than wish my right hon. Friend well in his deliberations and hope that he will bring to the 1396 House a scheme which will reassert the principle of Parliamentary accountability and which will enable us to say to our constituents that we have some idea of the part which is being played by the nationalised industries in the economy as a whole.
That is what it really comes to. The nationalised industries are one of the largest factors in the control of the economy which devolves upon the Government in a modern State. Parliament has for far too long been helpless. It is significant that the initiative in remedying this state of affairs has come not from the ranks of the Opposition but from the Government benches. I am sure that the country will be grateful if, in two years—I think that is the earliest we can hope for—we are able at last to evolve a scheme whereby we are able to discharge properly our responsibilities in regard to these very important industries and this very important part of the economy.
§ Mr. Mitchison
Far be it from me to seek to minimise the differences of opinion in the party opposite. I think, however, that the hon. Member for Ilford, North (Mr. Iremonger) has forgotten that it was his right hon. Friend the Leader of the House, from the Government benches, who recently showed no disposition to enlarge the scope of Parliamentary Questions about nationalised industries. Whether he was right or wrong is not the matter with which I am concerned today. That, at least, did not come from our side of the House.
I wish to make two points. I entirely agree that this is a serious matter. I further agree that it is not just a question of the nationalised industries. What we have to consider is the Parliamentary control over Government expenditure, both in relation to loans and grants to private industry and in relation to ventures of which Blue Streak was, perhaps, the most recent instance.
There are already two engines of Parliamentary control for Government expenditure. One is the Public Accounts Committee and the other is the Estimates Committee. They do their work very well. One of the difficulties about our procedure is that the work they do is so farely debated. What they are doing is to carry out a fairly detailed examination of various parts of the national 1397 expenditure. It is not something that the House of Commons, sitting as a House or Committee, could do. It is something that could be done by smaller Committees. The Estimates Committee does its work, as we all know, through Sub-Committees that are quite few in number. I hope that whatever the Government propose—
§ Viscount Hinchingbrooke
On a point of order, Sir William. This is not done in a spirit of spiteful revenge against the hon. and learned Gentleman, but he pulled me up when your predecessor was in the Chair about half an hour ago twelve or fifteen times for wandering a little from the terms of the Clause. Is it proper now, on the Amendments, to talk about the Select Committee on Estimates and the Public Accounts Committee?
§ Mr. Mitchison
Further to that point of order, Sir William. I am only following what the Chancellor said. If I am wandering in any way from the paths of strict order, it is only in strict reply to what the Chancellor said in his speech.
§ The Deputy-Chairman
What the noble Lord experienced while he was speaking is in my recollection, and I appreciate the point he has made. The debate has, however, gone rather wide, very much, I believe, to the convenience of the Committee. With that in view, I allowed the hon. and learned Member for Kettering (Mr. Mitchison) to proceed.
§ Mr. Mitchison
I have made my point, but let me repeat it shortly. I do not think that the House, sitting as a whole, is in a position to examine this kind of financial question. We ought not to neglect the possibilities of the two Committees that we have for the purpose.
I come now to my second point. I rather agree that the Clause is getting perilously near tacking. A Budget is, after all, Supply for the forthcoming year and it includes taxes that are intended to have a permanent character. What it does not include is taxes of an annual character that are to come in succeeding years. The tacking matter is very old, and I shall not trouble the Committee at this hour of the night with Erskine May, but if we apply that to the nationalised industries position, if the Clause had contained what I wish it had 1398 contained—provisions without a time limit—it would not have been tacking any more than a permanent tax is tacking. If it had limited itself entirely to one year, again it would not have been tacking any more than the annual charge on Income Tax is tacking. But when one takes one year and fixes the figure and then provides for two years ahead, neither of which is the year we are considering in this Budget, that is doing exactly what in the matter of taxation would be objectionable and is therefore objectionable in this case.
A one-year arrangement may or may not be defensible, but an indefinite arrangement, such as we on this side of the Committee have proposed on earlier occasions, would be preferable to this three-year hybrid which now appears with its Treasury Orders and affirmative procedure for the two succeeding years.
It is for that reason that I think that this matter goes beyond the question of the nationalised industries. It is a question of the proper control of Parliamentary expenditure as a whole, not merely of advances to nationalised industries. Secondly, if we are to do it, do not let us ask the House as a whole to do something which it has always chosen to do by Committees, because it cannot do it as a whole and its Committees can. If its Committees are used for the purpose, let us debate their reports. Thirdly, if this is tacking, and I repeat that it is getting very near it, it is due to the fact that the Chancellor of the Exchequer has not accepted the views of this side of the Committee and has insisted on putting a time limit of three years in the curious form he has chosen in this matter.
§ Mr. Nabarro
I thank my right hon. Friend for the conciliatory fashion in which he has met the objections of my hon. Friends and myself. I particularly liked his choice of words and I repeat them so far as I was able to write them down as he uttered them—"Parliament has the right to know, individually and in total, the capital sums to be spent by the nationalised industries". That was the whole purpose of my eleven Amendments. If in the coming autumn the Chancellor is able to implement precisely the promise in the form of words he employed tonight, then I am confident that my hon. Friends and I will be well satisfied.
1399 On a personal note. With Clause 72 of the Finance Bill I am gratified to be able to end my lengthy operations during the debates on the Budget and the Committee stage of the Finance Bill, on a note of amity with my right hon. Friend and to thank him most warmly for the few crumbs of comfort which he has given me at the end of these lengthy proceedings.
With those words, I beg to ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause ordered to stand part of the Bill.
§ Clause 73 ordered to stand part of the Bill.