HC Deb 02 December 1965 vol 721 cc1730-44
Mr. Peyton

I beg to move Amendment No. 11, in page 3, line 43, to leave out "£415,000,000" and insert "£357,000,000".

The Deputy Chairman

It might be for the Committee's convenience if Amendments Nos. 10 and 12, in page 3, line 43, leave out "£415,000,000" and insert "£400,000,000" and in page 3, line 43, leave out "£415,000,000" and insert "£247,000,000" were discussed together. I gather that it is intended that Amendment No. 11 alone be moved.

Mr. Peyton

I am obliged, Mr. Bowen. That arrangement would be most convenient.

I should like to repeat my earlier apology to the Committee that these Amendments are somewhat obscure. On the other hand, amending a money Bill of this kind is not easy and one can do it only by naming specific sums of money hoping subsequently to indicate what those sums of money represent, although I have given the Minister a rough indication of the purpose of these Amendments.

First, I refer to Amendment No. 10. The point is perfectly simple. On one page of the White Paper the Government say that they are writing off a deficit caused by the interference of successive Governments in the Coal Board's affairs which prevented the Board from having recourse to a price increase. This is something with which I think we can all agree. The Government's conclusion is that it would be proper to write off the accumulated deficit of £91 million.

On the next page of the White Paper the Government get tired of condemning sin and decide that it is more fun to commit it. The Minister smiles; I hope that he enjoys it. The clear suggestion is that the Board, which applied in July for permission to increase prices in September, was constrained by the Government not to take this action, the Government taking the view that, in view of the public interest in this industry, which I do not challenge, reference to Mr. Aubrey Jones was demanded. The evidence has piled up. It is doubtful what Mr. Aubrey Jones can do with this proposition. However, this is something which we hurl not at the head of the Minister but at the head of his rather interfering colleague the First Secretary of State, who is nearly always the source of such trouble.

Mr. Michael Foot (Ebbw Vale)

Is it part of the hon. Gentleman's argument that the Government should never interfere in any circumstances to keep down the price of coal?

Mr. Peyton

I am simply saying that it is highly undesirable that Governments should interfere in nationalised industries' affairs and that they would do far better to follow the patterns which they have set out, particularly now that we have adopted, with the accord of both sides of the Committee, the principles of the White Paper on the financial obligations of nationalised industries.

Let me explain the point with which I am principally concerned about the £15 million. The Government confess that, as a result of interfering with the Board's activities, they have involved the Board in another loss of £15 million over and above that for which relief is provided in the White Paper. The gains to the Board under the White Paper are £20 million in interest and £10 million in depreciation. This is an annual saving. In addition, there is, apparently, the £15 million.

However, the footnote on the same page of the White Paper says that provision is made for £25 million. It is stated clearly that the amount which it is expected will be needed to cover the deficit for this year is £25 million. This would appear to be in direct contradiction to the text of the White Paper. This is something to which I would particularly draw the Minister's attention and on which I should like an explanation. The Minister would not embark willingly on this sort of activity. In the long run it is likely to be injurious to the interests of the customer, the taxpayer, the industry and the nation as a whole, and we do not approve of it.

I turn now to Amendment No. 11 which proposes to reduce the figure of £415 million to £357 million. As I mentioned on Second Reading, the Government have given some account of the write-off to the point of £357 million. Then, with a smoothness not permissible in others, they simply state that they think it right, in view of the extent of currently unprofitable operations, to take a cautious view of the future earning powers of the Board's colliery assets and, the contraction in the market which is now taking place and which seems likely to continue, to allow for some further increase in the amount of unremunerative investment which should be written off. 8.0 p.m.

This sort of argument is pursued on the following page, where the point is that the Government, following that argument decided in the summer to propose the cancellation of about £400 million of the Board's outstanding liabilities. It should be made absolutely clear. The Government, having already given a figure amounting to £357 million, simply, on a cautious view, rounded it up to £400 million. I really do think that that needs some very much more detailed explanation than we have yet had. We do need to hear from the Government some justification for this fairly massive figure of £400 million added on to what are the large figures which we have under consideration. I must ask the Minister for a very clear explanation of what is involved here.

The third Amendment concerns the figure of £110 million. This is a further reduction from the figure which we have got down to £357 million, in the previous Amendment, and by this reduction we arrive at a figure of £247 million. That £110 million relates to the second category of pits which are mentioned in paragraph 7 of the White Paper: In 1964 over 150 of the Board's pits with a capital investment of about £140 million incurred losses before charging anything for unavoidable overheads, for nterest or depreciation on their capital … These unprofitable pits number about half of the Board's collieries including some that are due to close because there is no hope of making them economic or because their reserves are exhausted … We would rather like to know how these pits are subdivided. I am sure that this concern is felt by hon. Members opposite who represent areas in which these pits are situated.

That paragraph went on to say that there are others, including some under reconstruction, whose fortunes are expected to recover. I have already paid my tribute to the brevity of the White Paper, and I do not want to take away from that tribute, but we want some amplification here, for it seems wrong to jumble up together, almost in the same sentence, pits which are uneconomic, pits whose reserves are exhausted, and pits which are at the moment under major reconstruction; because surely, it must be the case that a pit under reconstruction must not merely have a chance of recovery but should surely be one of the bright jewels in the industry's crown. We would really like a great deal more clarification as to how these different categories sort themselves out.

I know there is a good deal of interest in this Bill and that many hon. Members are waiting to discuss a later Clause so I do not wish to prolong my remarks now, but I do hope that neither the right hon. Gentleman nor the Parliamentary Secretary will take these points lightly. I am not asking for a great speech about the coal industry. We have expressed our general views on this industry, and I wish to take nothing back from what I have said about it, but I am very much concerned about these three points.

First of all, intervention, which I cannot believe to be well judged by the Government in the Board's affairs. Then I hope that the Parliamentary Secretary will explain this difference of the £15 million and the £25 million and the apparent contradiction in the White Paper itself, the fact that £15 million is mentioned in the text, whereas the footnote speaks of Allowance for possible deficit in 1965–66: £25 million. This I have not yet been able to work out for myself at all. Perhaps the Parliamentary Secretary can help us. The next point, as I said, is this gloriously casual piece of arithmetic, in which we arrive at a figure of £357 million and say, "That is rather an inconvenient figure to have; let us round it up to something else; anyhow, we take a rather cautious view of this; let us make it a bit more." So we end up with this fine figure of £400 million. I am only surprised that they did not go on with it a little further! However, these are serious Amendments, and I hope that the Parliamentary Secretary will answer them in detail.

Mr. John Morris

I do not wish to take a technicality but perhaps some of the accounting difficulties have arisen because of a very slight misconception in the way the Amendments have been formulated. All they would do, especially the first one, would be to leave a balance of £15 million from the cancellation of the debt under the previous paragraph of the subsection. Subsection (1,b) says: the Board shall credit the sum of £415,000.000 to their reserve fund". A similar remark would apply to the following two Amendments. It is the previous part of the Clause which is the operative one so far as the actual amount of cancellation is concerned. This part of the Clause—with the Amendments with which we are now dealing—as the White Paper, in paragraph 9, indicates, are merely accounting provisions in that The substance of the foregoing proposals will be reflected in the Board's accounts in the following manner. This Clause with which we are now dealing contains the accountancy provisions for giving effect to that intention of the Government expressed in the White Paper.

The hon. Gentleman questioned the figure of £15 million, which was the first issue he raised. Paragraph 8 of the White Paper explains: To provide the Board with a measure of relief for the additional debt it will consequently incur, the Government propose that the total amount of the Board's debt to be cancelled shall be £415 million … This £15 million is an aid to the Board to meet any difficulties which may arise from what we consider to be a very right thing—to postpone price increases till, as we say in the White Paper, the need for the price increase has been publicly established. We have said: The Board, however, judges that, after all the proposed adjustments have been made, price increases will still be required. We think, as we say, that in view of the importance of coal to the economy, it is desirable that the case for such increases shoud be publicly established… The hon. Gentleman has questioned the difference between this figure of £15 million and the figure of £25 million to which he referred. As I say, after allowing for the effect on capital reconstruction the Government had to take into account the possibility of a substantial deficit in the current year, and indeed, I think interim results have shown it to be a very right, proper, prudent and cautious attitude so far as the Government are concerned. We want the Board to start 1966–7 as clear as possible, so we decided to allow the writing off of all deficits against the reserve fund of up to £25 million. The postponement of the price increase involves the Board in additional borrowing, and towards this the Government decided to provide relief to the extent of £15 million.

It is not possible to quantify exactly at this moment of time the effect on the finances of the Board of the postponement of any price increases which may take place. What we say is that whatever they may be, we will provide £15 million. That is the measure of our relief as set out in the White Paper and that will increase the figure from £400 million to £415 million.

The hon. Member for Yeovil (Mr. Peyton) asked how the figure of £400 million was arrived at and he made basically the same point as he made on Second Reading, that the Government had rounded up the figure. On Second Reading, I faced this issue as frankly as, I hope, I always do. This is the issue. The problem confronting the Government was not to decide how much of the Board's investment was unremunerative at a date in the past, but what part of its capital was unlikely to be unremunerative in the years ahead.

In approaching the problem, the Government had in mind the heavy losses which had been incurred in many of the Board's coalfields—there is no need for me to go into them at this juncture—implying a low earning capacity for their assets in future, and the large number of pits which had failed to earn anything towards their interest charges.

Looking to the future, we had to consider whether the amount of unremunerative capital in 1964 was more likely to increase or decrease. This is not a question which could be answered by an arithmetical calculation. Many of the elements that would have to be put into the sum are not predictable with sufficient certainty or precision. I have in mind, for example, as I said earlier, the rate of improvement of productivity, the extent to which the Board can hold its labour force together—this is an important and crucial point, particularly in the profitable coalfields—and the level of demand for coal at varying prices.

All I can say is that, seeing the difficulties with which the Board is confronted and having regard to the extent of the currently unprofitable activities and to the expected further contraction in the market for coal, the Government thought it right, in the circumspect language of the White Paper, to take a cautious view of the future earning powers of the Board's colliery assets. With the amounts required for coke ovens and the cumulative deficit, we accordingly decided on the sum of £400 million as the right amount for cancellation.

As I am sure the hon. Gentleman will agree, this was not a matter of arithmetic; it would be impossible to arrive at an arithmetical calculation. This was judged, and it was the judgment of the Government on this issue. We have been proved to be right in taking this cautious view by the interim results for the last six months. Having regard to those interim results, I do not think that anyone can contend that the Government have taken a wrong decision, but rather that it is a prudent one and right in the circumstances.

Mr. Peyton

The hon. Gentleman has not mentioned my third point concerning the £110 million. We should like a distinction to be drawn between the pits which are hopelessly uneconomic or have had their reserves worked out and, on the other hand, the reconstructions, to which, one would have thought, no financial measures would be appropriate. The Parliamentary Secretary has not dealt with this point.

Mr. Morris

I thought that I had done so to the best of my ability without particularising the difference between the two categories. I said that we had come to a conclusion, after looking at the whole of the industry's assets and that, bearing in mind that there were these unremunerative assets, the prudent decision was to take all these matters into consideration and that the right figure should be £400 million.

8.15 p.m.

Having regard to all these imponderables, it would not be possible to calculate this matter precisely. I conceded this on Second Reading, when I said that we had arrived at a figure of £357 million and that having regard to the circumstances of the industry, which was going through a period of reorganisation, it would be right to round it up to £400 million.

Similar remarks apply to the difference between the two categories of pits to which the hon. Member for Yeovil has referred. Some of them, as he suggests, are in process of reconstruction. One hopes that that reconstruction will be effective and that they will return to the "black" in the fullness of time.

When looking at an industry which is extractive and which is full of geological surprises, some of them disappointing, one cannot look at the whole picture of the industry with arithmetical precision. That is what we had hoped to avoid. Looking, however, at the industry's finances as a whole, and looking especially at the last interim results of the Board, we think that this is the right figure. To try to particularise or break it down into component parts might well be an interesting exercise, but looking at the whole of the Board's finances—knowing that some pits will change their categories, some, we hope, will improve, but others, because of geological accidents and surprises, may go down into a lower category—it is not possible with all these imponderables to quantify with fine precision.

Mr. Peyton

I do not want to prolong the debate unduly or to raise its heat, but I am very disappointed with the Government's answer. The Parliamentary Secretary tells us that this is not a matter of arithmetic and I readily agree with him. Certainly there was nothing resembling arithmetic in the answer which we have just heard from him. The hon. Gentleman tells us that it is a matter of judgment. I would call it something much more rude.

The Parliamentary Secretary tells us that the Government feel that they have done the right thing. In that, the Government are not unique. Governments have a way of feeling that they have done the right thing. They would be astonishingly optimistic if they expected Oppositions to agree with them. Speaking for the present Opposition on this subject, I must tell the hon. Gentleman that we do not agree that this is the right way to explain the problem to Parliament. We are not in possession of the full facts. It may be that the Government have hit upon the right figure, but it is a very chancey progress by which they have arrived at it. This is the sort of thing which makes us want to bring these matters back to Parliament more often so that Governments will not get away with quite such loose calculations as we are here presented with.

I cannot believe that it is right to include in a paragraph of this kind words which appear to indicate an intention to write off the capital of a pit which is now under reconstruction. That must be wrong. At least, the Government have reached these figures. I do not particularly quarrel with the £110 million —I recognise that there are difficulties —but I am very disappointed with the explanation.

As to the £15 million and the £43 million, I am far worse than disappointed. This is a very sloppy method of present-

ing things to Parliament. There may be justification for what is in substance being done, but there is none at all for the way in which it has been offered to Parliament in this unsatisfactory form. Therefore, I can only say to my hon. and right hon. Friends that in the circumstances I advise them to protest in the only way open to them by going into the Lobby in support of the Amendment.

Question put, That "£415,000,000" stand part of the Clause:—

The Committee divided: Ayes 131, Noes 109.

Division No. 10.] AYES [8.20 p.m.
Allen, Scholefield (Crewe) Hannan, William Pannell, Rt. Hn. Charles
Armstrong, Ernest Harper, Joseph Peart, Rt. Hn. Fred
Atkinson, Norman Hazell, Bert Pentland, Norman
Bacon, Miss Alice Heffer, Eric S. Perry, Ernest G.
Bagier, Cordon A. T. Herbison, Rt. Hn. Margaret Popplewell, Ernest
Beaney, Alan Horner, John Probert, Arthur
Bence, Cyril Howarth, Harry (Wellingborough) Randall, Harry
Binns, John Howarth, Robert L. (Bolton, E.) Rankin, John
Bishop, E. S. Howie, W. Redhead, Edward
Bienkinsop, Arthur Hughes, Emrys (S. Ayrshire) Rees, Merlyn
Boston, Terence Hynd, H. (Accrington) Rhodes, Geoffrey
Bowden, Rt. Hn. H. W. (Leics S.W.) Hynd, John (Attercliffe) Roberts, Goronwy (Caernarvon)
Boyden, James Irvine, A. J. (Edge Hill) Robinson, Rt. Hn. K. (St. Pancras, N.)
Bradley, Tom Jeger, Mrs. Lena (H'b'n&st.P'cras,S.) Rose, Paul B.
Brown, R. W. (Shoreditch & Fbury) Jenkins, Hugh (Putney) Ross, Rt. Hn. William
Buchan, Norman (Renfrewshire, W.) Jones, Dan (Burnley) Shore, Peter (Stepney)
Butler, Herbert (Hackney, C.) Jones, Rt. Hri. SirElwyn (w. Ham, S.) Short, Rt. Hn. E.(N'c'tle-on-Tyne,C.)
Carter-Jones, Lewis Jones, J. Idwal (Wrexham) Short, Mrs. Renee (W'hampton, N. E.)
Chapman, Donald Jones, T. w. (Merioneth) Silkin, John (Deptford)
Coleman, Donald Kerr, Mrs. Anne (R'ter & Chatham) Slater, Mrs. Harriet (Stoke, N.)
Corbet, Mrs. Freda Lawson, George Snow, Julian
Cousins, Rt. Hn. Frank Leadbitter, Ted Stones, William
Craddock, George (Bradford, S.) Lee, Rt. Hn. Frederick (Newton) Swain, Thomas
Crossman, Rt. Hn. R. H. S. Lever, L. M. (Ardwick) Symonds, J. B.
Dalyell, Tarn Lomas, Kenneth Taylor, Bernard (Mansfield)
Darling, Ceorge Loughlin, Charles Thomas, George (Cardiff, W.)
Davies, G. Elfed (Rhondda, E.) MacColl, James Thornton, Ernest
Davies, S. O. (Merthyr) Mclnnes, James Tinn, James
Dell, Edmund McKay, Mrs. Margaret Urwin, T. W.
Doig, Peter Mackenzie, Cregor (Rutherglen) Walden, Brian (All Saints)
Dunn, James A. McLeavy, Frank Warbey, William
Dunnett, Jack MacPherson, Malcolm Wells, William (Walsall, N.)
Edwards, Robert (Bilston) Mallalieu, E. L. (Brigg) White, Mrs. Eirene
Ensor, David Mallalieu, j. P. W. (Huddersfield,E.) Whitlock, William
Finch, Harold (Bedwellty) Mason, Roy Wilkins, W. A.
Fitch, Alan (Wigan) Mellish, Robert Willey, Rt. Hn. Frederick
Floud, Bernard Mendelson, J. J. Williams, Clifford (Abertiliery)
Foot, Michael (Ebbw Vale) Milne, Edward (Blyth) Williams, Mrs. Shirley (Hitchin)
Garrett, W. E. Morris, Charles (Openshaw) Williams, W. T. (Warrington)
Gregory, Arnold Morris, John (Aberavon) Willis, George (Edinburgh, E.)
Griffiths, Rt. Hn. James (Llanelly) Neal, Harold Wyatt, Woodrow
Hale, Leslie Noel-Baker, Rt.Hn.Philip(Derby,S.)
Hamilton, James (Bothwell) Orbach, Maurice TELLERS FOR THE AYES:
Hamilton, William (West Fife) Padley, Walter Mr. O'Malley and Mr. Ifor Davies.
Hamling, William (Woolwich, W.) Page, Derek (King's Lynn)
NOES
Alison, Michael (Barkston Ash) Box, Donald Craddock, Sir Beresford (Spelthorne)
Allan, Robert (Paddington, S.) Brinton, Sir Tatton Curran, Charles
Allason, James (Hemel Hempstead) Bromley-Davenport, Lt. -Col. Sir Walter Dance, James
Anstruther-Gray, Rt. Hn. Sir W. Brooke, Rt. Hn. Henry Davies, Dr. Wyndham (Perry Barr)
Balniel, Lord Buck, Antony d'Avigdor-Goldsmid, Sir Henry
Batsford, Brian Bullus, Sir Eric Dean, Paul
Beamish, Col. Sir Tufton Burden, F. A. Digby, Simon Wingfield
Biffen, John Campbell, Gordon Eden, Sir John
Biggs-Davison, John Carlisle, Mark Elliot, Capt. Walter (Carshalton)
Bingham, R. M. Chichester-Clark, R. Elliott, R. W. (N'c'tle-upon-Tyne,N.)
Blaker, Peter Cooke, Robert Eyre, Reginald
Farr, John Lubbock, Eric St. John-Stevas, Norman
Fraser, Rt. Bn. Hugh (St'fford & Stone) McAdden, Sir Stephen Shepherd, William
Fraser, Ian (Plymouth, Sutton) MacArthur, Ian Smith, Dudley (Br'ntf'd & Chiswick)
Gammans, Lady Mackie, George Y. (C'ness & S'land) Spearman, Sir Alexander
Gardner, Edward McNair-Wilson, Patrick Steel, David (Roxburgh)
Gibson-Watt, David Maitland, Sir John Studholme, Sir Henry
Giles, Rear-Admiral Morgan Maude, Angus Summers, Sir Spencer
Gtesham Cooke, R. Mawby, Ray Talbot, John E.
Griffiths, Eldon (Bury St. Edmunds) Maxwell-Hyslop, R. J. Taylor, Edward M. (G'gow, Cathcart)
Griffiths, Peter (Smethwick) Meyer, Sir Anthony Thatcher, Mrs. Margaret
Harris, Frederic (Croydon, N.W.) Mills, Stratton (Belfast, N.) Thomas, Sir Leslie (Canterbury)
Harris, Reader (Heston) Mitchell, David Thomas, Rt. Hn. Peter (Conway)
Harrison, Brian (Maldon) Mott-Radclyffe, Sir Charles Thompson, Sir Richard (Croydon,S.)
Harvey, Sir Arthur Vere (Macclesf'd) Munro-Lucas-Tooth, Sir Hugh Thorpe, Jeremy
Harvey, John (Walthamstow, E.) Noble, Rt. Hn. Michael Turton, Rt. Hn. R. H.
Hawkins, Paul Nugent, Rt. Hn. Sir Richard Tweedsmuir, Lady
Heald, Rt. Hn. Sir Lionel Osborn, John (Hallam) Walker, Peter (Worcester)
Hopkins, Alan Peel, John Wall, Patrick
Hordern, Peter Percival, Ian Webster, David
Johnston, Russell (Inverness) Peyton, John Whitelaw, William
Kerr, Sir Hamilton (Cambridge) Pym, Francis Wilson, Geoffrey (Truro)
Kershaw, Anthony Quennell, Miss J. M. Wise, A. R.
King, Evelyn (Dorset, S.) Rawlinson, Rt. Hn. Sir Peter Wolrige-Gordon, Patrick
Kirk, Peter Renton, Rt. Hn. Sir David Younger, Hn. George
Lancaster, Col. C. G. Roberts, Sir Peter (Heeley)
Langford-Holt, Sir John Russell, Sir Ronald TELLERS FOR THE NOES:
Mr. McLaren and Mr. More.
Mr. Peyton

I beg to move Amendment No. 13, in page 4, line 4, at the end to insert: Provided that the Minister shall not consent to any such sums being applied for the purpose of financing any revenue deficit which may from time to time have been incurred by the Board. The Amendment can be dealt with very briefly, but this is not to say—[An HON. MEMBER: "Good"] The hon. Gentleman should be careful. I have dealt with most of the Amendments under my hand fairly shortly, but, if provoked, I could, of course, always lend myself to that verbosity which I associate with some hen. Gentleman opposite: I would not wish to specify any names.

The purpose of the Amendment is partly to applaud the Government on the principle which is enunciated in the White Paper, that the newly established reserves shall not be used to cover any deficit after this year. In paragraph (9) of the White Paper are these words: Thereafter"— that is, after this year— it is not intended to allow revenue deficits to be written off against this reserve. We have all had experience, I think, of Governments with very good intentions who sometimes fall down on those intentions. Here is one comparatively rare case in which I can at least congratulate the Government wholeheartedly on their intentions. They are pure and they are good—in this instance. I do not wish to be quoted without those last words.

We should like to have this written into the Bill. Ministers change and Governments are immensely influenced by changing circumstances and the desire to do what is most convenient to them, nearly always for short-term considerations. Therefore, although there may be some difficulty about accepting these words, I should like to see the Bill amended in this way.

Although I have moved the Amendment with such commendable brevity, I hope that the right hon. Gentleman will not underrate the importance which we attach to it. Our concern is considerably enhanced by the past record in this kind of activity. I need not remind the right hon. Gentleman that £91 million is the accumulated deficit to which we have just said goodbye. We do not want any misuse of the reserve now established by the Bill.

Mr. Alison

I would add a few words in support of my hon. Friend the Member for Yeovil (Mr. Peyton). This is not entirely an academic point. As the Parliamentary Secretary will be aware from page 5 of the White Paper, in the current year there is provision to write off—or at least the possibility of writing off—as an allowance for possible deficits in 1965–66, the sum of £25 million. He will also notice that the total which is to be written off this current financial year is by no means the total sum provided for of £415 million but is only £256 million.

It is, therefore, conceivable that in the next financial year, the balance of this reserve fund still being in hand, the Minister might be tempted once again to make provision to write off a deficit of up to £25 million. If that happened, the Board and the Minister between them would have power to write off not only the £30 million, for which we have now provided, for special borrowing but a repetition of the £25 million which is to be written off against the reserve.

We seek a specific undertaking that the £25 million to be written off against the reserve this year will not be repeated in subsequent years, and that recourse will be had to the special provision for borrowing up to £30 million.

Mr. John Morris

I hope to emulate the brevity of the hon. Member for Yeovil (Mr. Peyton). I appreciate his object, which is the same as ours, as I made clear on Second Reading. With respect, the Amendment is both unnecessary and unworkable. I need not go into the details of why it is unworkable but, as for its being unnecessary, the safeguard which exists in the Bill against the kind of situation which the hon. Member seeks to avoid is in the borrowing limits prescribed under Clause 1(3).

For example, with the borrowing in February, 1966, as we estimate, around £635 million, the net investment of £10 million per annum in ancillary activities and a deficit of £30 million on the order books, the borrowings after two years would total £685 million, at which point the Government, as a matter of normal prudence, would be bound to come to the House for an Order. If there were then a prospect of further deficits, the Minister would have to explain to the House how he proposed that the matter should be handled. This is the best safeguard of all. The manner in which the varying limits have been drafted avoids the kind of situation which the hon. Gentleman and my right hon. Friend seek to avoid.

The Government have expressed their firm intention of avoiding this kind of situation. Our intentions have been made clear in the White Paper, and I also made them clear in the Second Reading debate. Further, we believe that there are adequate means of preventing this kind of situation from occurring by the very nature of the borrowing powers limits in themselves.

Mr. Peyton

What the Minister is saying is that under no circumstances will the Minister give his consent to the use of this new reserve to cover revenue deficits after this year. Is that correct?

Mr. Frederick Lee

indicated assent.

Mr. Peyton

I am obliged to the Parliamentary Secretary and his right hon. Friend. It is nice to be able to say that after what I have just said. On that basis, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause ordered to stand part of the Bill.