§ 1. Reimbursement with interest of all expenses properly chargeable to capital account which have before the passing of this Act been, or may after the passing of this Act be, incurred by the Minister in providing the relevant works.
§ 2. Reimbursement with interest of all expenses properly chargeable to capital account which may after the passing of this Act, but before the end of the period specified in subsection (1) of section (General limitations on power to levy tolls) of this Act, be incurred by the Minister in providing additions to, or improvements of, the relevant works.
§ 3. Defraying all expenses (including administrative expenses) which are properly chargeable to revenue account and are incurred during the toll period by the Minister or by any other Minister of the Crown or government department in, or in connection with, the maintenance, repair or renewal of the relevant works, or of any such addition or improvement as is mentioned in paragraph 2 of this Schedule, or the operation during the toll period or services or facilities provided by the Minister in connection with the relevant works or any such addition or improvement.
§ 4. Making such provision as in the opinion of the Minister is adequate for defraying the expenses properly chargeable to revenue account which are likely to be incurred in, or in connection with, continuing after the end of the toll period to maintain, repair and renew the relevant works and any such addition or improvement and continuing after the end of that period to operate services or facilities provided by the Minister in connection with the relevant works of any such addition or improvement.1076
§ 5. Making such provision as in the opinion of the Minister is equivalent to that which would be required for keeping the relevant works and any such addition or improvement insured (both during and after the toll period) if they were owned and maintained by a commercial undertaking.
§ 6. Defraying all expenses (not falling within any of the preceding paragraphs) which are incurred by the Minister in consequence of the provisions of this Act.
§ 7. Provision for interest on any deficiency which may arise during the toll period in the revenue produced by the tolls as compared with the amounts required to be raised by the tolls for fulfilling the purposes specified in paragraphs 1 to 6 of this Schedule.—[Mr. Swingler.]
§ Brought up, and read the First time.
§ Mr. Swingler
I beg to move, That the Schedule be read a Second time.
This is the Schedule to which I referred in relation to the new Clause on the limitations of the powers. It is a full statement of all the matters that we discussed in Committee concerning the costs involved in building the Severn Bridge, its maintenance and renewal, possible improvements, and so on, which have to be taken into account in drafting the accounts and calculating what revenue is to be raised by exercising the power to levy tolls.
§ Mr. Powell
I must again try to tempt the Parliamentary Secretary to his feet, with the premission of the House, because, although this is a new Schedule to a Bill which has not excited very wide interest, although it is of considerable importance in itself, and although this is an unusual hour on a Friday afternoon for the House to be legislating, this Schedule does something very remarkable, if not entirely unprecedented.
I refer to the provision in paragraph 4 of the Schedule which includes, among the items, the cost of which is to be defrayed by the tollssuch provision as in the opinion of the Minister is adequate for defraying the expenses … likely to be incurred in … continuing after the end of toll periodto do various things. During the period of 40 years, or 40 years plus multiples of 5, the Government propose to collect money in order to make provision for subsequent expenditure.
This is a very remarkable innovation in our public finances. As the House is 1077 aware, unlike any individual member of the community, the State cannot itself save against the future, but must, broadly speaking, consume as it produces. This raises the question whether there is some concept here that a fund might be built up during the toll period for expenditure after the period. But this in itself would be a very remarkable proceeding. Is anticipated future expenditure to be capitalised at a certain number of years' purchase, and that sum to be accumulated by the yield of the toll? If so, what is to be done with that sum? Presumably it will not be invested in equities, and of course we all know that if it is invested in gilt-edged securities that is equivalent to its expenditure in the current year.
This is what makes this part of the Schedule so remarkable. It appears to be a case of the Government seeking to accumulate a capital sum in one period against liabilities to be incurred in a subsequent period, and this is so extraordinary and, I believe, so novel that I draw the attention of the House to it in this way. I am sure that the House would be grateful if the Parliamentary Secretary would cast some light upon the way in which this financial operation is to be performed—whether, for instance, this provision is to be used for writing off parts of the National Debt or whether it is to be invested, how it is to be held, and over what period the subsequent expenditure is to be capitalised for this period.
§ Mr. Swingler
May I have the leave of the House to reply? I am always delighted when it is possible to introduce something truly novel, but I am disappointed and frustrated on this occasion, in spite of what the right hon. Member for Wolverhampton, South-West (Mr. Powell) said. We have been forestalled. This provision, as some hon. Members know, has already been included in relation to the Forth Bridge and to the Tay Bridge. We have taken the precedent of the law on the Forth and Tay Bridges and incorporated it in relation to the Severn Bridge. I do not know that anybody worried too much about it in relation to the Forth Bridge.
1078 It is a very simple idea that during the period of the power exercised to levy tolls, the necessary sum should be raised which, if properly invested, would give a return which would cover the annual maintenance costs of the bridge in the future. A very simple concept lies behind the legislation. We calculate the sums to be raised in relation to the maintenance costs of this very expensive project when we are considering the period when the power to exercise the toll has lapsed or when Parliament has decided that it should cease. The aim would be to calculate the sum required, as an investment, to give a return to cover the annual maintenance costs of the bridge, taking one year with another.
As in all these calculations, we consider what would be a legitimate amount of revenue which the Minister might decide to raise by charging tolls and we calculate the capital sum necessary to give an interest which would cover the maintenance costs. It is a fair calculation, as already incorporated in relation to the bridges over the Forth and the Tay.
§ Mr. Powell
With the permission of the House, I would say that it is ironic that in the matter which we were discussing on the first new Clause the Government should have relied on the difference between their situation in building this bridge and that of the authorities which have built the other toll bridges, whereas now they are relying on the identity of their situation to justify this provision.
However, I deduce from what the hon. Gentleman has said that there is no question of a sum being here funded, that this is merely a notional calculation in order to arrive at a global total within which the revenues from the bridge are to be embraced. In those circumstances, I do not propose to raise further objection to this new Schedule.
§ Question put and agreed to.
§ Schedule read a Second time, and added to the Bill.
§ Order for Third Reading read.—[Queen's Consent, on behalf of the Crown, signified]
§ Bill read the Third time and passed.