§ Motion made, and Question proposed,
That it is expedient to authorise the Treasury, during the six years ending on 31st March, 1972, to issue out of the Consolidated Fund sums not exceeding in the aggregate four hundred and thirty million pounds, to be applied as appropriations in aid of moneys provided by Parliament for those years for defraying expenditure by the Ministry of Defence and the Ministry of Aviation—
so, however, that the sums so issued for any year shall not, in the case of either Ministry, at any date exceed in the aggregate the total amount proposed to be so issued to defray their expenditure on the matters above referred to by the estimates upon which this House has, before that date, resolved to grant sums to Her Majesty to defray such expenditure for that year.—[Mr. Diamond.]
- (a) in the purchase from the Government of the United States of America of military aircraft, or parts, equipment or other articles for, or for use in connection with, military aircraft, or
- (b) in making payments to that Government in respect of costs incurred by them in connection with any aircraft, equipment or other articles so purchased, including in particular costs of development and testing and of training persons in their operation or maintenance,
§ 10.3 p.m.
§ Mr. Emrys Hughes (South Ayrshire)
I think we should have an explanation of why we should pass this Motion tonight. I understand that tomorrow we are to a have a Budget in which the whole financial arrangements of this country will be discussed and in which the Chancellor of the Exchequer will present us with a very grim picture of the economic and financial plight of this country. We are asked, on the eve of the Budget statement, to authorise the Treasury to issue out of the Consolidated Fund £430 million for the purchase of aircraft from America. I cannot imagine anything less expedient than this at the present time.
The Prime Minister is urging us that we have to increase exports and to keep a very careful eye on imports, yet it is proposed to commit this country to an expenditure of £430 million on the purchase of aircraft, which I understand are to be bombing aircraft, from the United States. This will not help the economic 1377 situation; it will make it more difficult. We are asked to bring about a great increase in productivity. For what?—in order to pay for bombing aircraft from the United States, the case for which has not, I believe, been made out. We are expected to do this "on the nod" and we have not even had any attempt to justify this enormous expenditure.
§ The Chief Secretary to the Treasury (Mr. John Diamond)
I am most anxious that the House should have the full benefit of all the comments that my hon. Friend want to make at a time when the House will be anxious to give them full consideration and when the House will be seized of all the relevant information. I do not want my hon. Friend's speech not to be heard by everybody who would be most anxious to pay the fullest regard to everything he has to say.
Perhaps, therefore, I might remind my hon. Friend that the function of tonight's Motion not to authorise the purchase of the aircraft of the kind on which my hon. Friend is basing his argument, but is merely a technical precursor to the Bill which is to be introduced but which cannot be introduced, as my hon. Friend knows, without this kind of procedure. Once this procedure is out of the way and the Bill is introduced, I am sure that the House would be delighted to listen to the arguments, the case and the questions which my hon. Friend, or any other of my hon. Friends, might care to put.
§ Mr. Hughes
I have been here long enough to beware of these technical preparations. Once we are engaged on the technical preparations for the expenditure of this huge sum, we are surely committed to it. If my right hon. Friend the Chief Secretary wants to make time so that we can consider our arguments in greater detail, all he has to do is to withdraw the Motion and postpone it for a more appropriate time.
Here we are embarking upon something which makes absolute nonsense of the economic policy of the Government. I suggest that the country cannot afford to go one step forward in embarking upon an expenditure of £430 million. If this is so irrelevant, immaterial and unecessary, why on earth is it brought before the Committee at this time of night?
We are entitled, therefore, to get a full explanation from whoever is responsible 1378 for explaining why these bombing aircraft are necessary for the country and how they will help the country's economic position. A warning should be uttered that there is strong opposition in the country to embarking upon very large expenditure on bombing aircraft at all.
Surely, the technical arguments should be introduced at this stage. When the country needs more money for education, more money for advanced factories, for the mining areas and for the building of factories for producing the goods to export to remedy our economic state of affairs, it is complete nonsense for us to sanction, in any preliminary or any other way, this expenditure on bombing aircraft from America.
I cannot see how the bombing aircraft will help the country's interests. We are to be committed to continuing the arms race. This £430 million will be spent on expensive bombing aircraft which, presumably, will carry the hydrogen bomb or the atomic bomb. At the same time, we are told that we must also embark, and we are embarking, upon a considerable sum for expenditure on other forms of nuclear warfare—the Polaris submarine.
I know that we are not discussing that expenditure in this debate, but when this country will tomorrow be calling upon its citizens to tighten their belts and imposing new taxation because our economic situation is precarious, it has to be made clear that this proposal is quite out of keeping with the arguments that the Prime Minister is using.
So I say that we must try—if I may use a military metaphor—to fire a few shots across the bows of this particular project, and if we can postpone our arguments till another time let us postpone this discussion, and let the Chief Secretary to the Treasury take back this enormously expensive programme which I believe will militate against what we need most in this country—a constructive effort to build the factories which will produce the goods which will save this country from economic crisis. Representing the constituency I come from, I say we want advance factories to provide work for miners who are shortly to be unemployed. We are totally against this embarking upon expenditure for bombing aircraft which will be a burden on the finances of this country and for which there is no 1379 possible military or economic justification.
§ 10.11 p.m.
§ Mr. John Rankin (Glasgow, Govan)
I am not at the moment concerned with the merits of the Resolution. What concerns me at the moment is the procedure. Paragraph 1, if I understand it correctly, gives to the Chancellor the right to expend £430 million. If he finds that that sum is not in the kitty he can extend the period of payment over six years, and if over the six years he still cannot, or thinks he cannot, meet the £430 million, then, under paragraph 2, he has power to issue Government scrip at, I assume, something like 5 per cent. or 6 per cent. in order to cover the £430 million. So that instead of a down payment he will spread the payment for aircraft over a number of years at the rate of something like £20 million or £21 million of £22 million every year. He will add to the capital burden which we presently bear. That, as far as I understand it, is the gist of our purpose tonight.
I fully realise, as my right hon. Friend has said, that a Bill will shortly be presented and that we can then debate the issues which have been so well raised by my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes). I am not going to say anything tonight about the Spey/Mirage. We said enough about that during the last Parliament. What seizes me is this figure of £430 million. I think that at this stage we are entitled to ask, where has this figure come from? I have taken a fairly active part in the debate about the F111A and so on. The sum of £350 million has been mentioned as the cost, and so has the sum of £300 million. On 13th April, 1965, when we had a debate on this issue at the time of the Budget, the Secretary of State told us that over the next five years we would not have to spend more than £20 million in dollars, yet now we are told that over the next six years we are facing a commitment of £430 million.
All that I am doing is directing the attention of the House to that startling fact. I may develop it later if I am fortunate enough to catch the eye of the Chair, but I think it is our duty tonight to face the fact that £20 million of specu- 1380 lative payment has become £430 million of actual and not merely potential demand. Surely this is a matter of sufficient importance to warrant the close attention of the House, especially when we are being asked to think about paying a sum of that magnitude on the night before, we are told, we are to have a really tough Budget. At the moment when we are talking about deflation, and about the difficult prospect ahead of us, we are told that we have so much up our sleeves that we can think of spending £430 million.
Those are the points which occurred to me when I read this Resolution, and doubtless they occurred to many of my hon. Friends and right hon. Friends, too. I therefore felt it my duty to do my best to put them before the House so that Members can think over them before we get to the real debate on this matter.
§ 10.18 p.m.
§ The Chief Secretary to the Treasury (Mr. John Diamond)
I think that it might be for the convenience of the Committee, which apparently does not prefer to treat this as a purely formal matter and allow it to go through on the nod, if I were to explain very shortly indeed what is the purpose of this Resolution.
As my hon. Friend said, this Resolution is merely paving the way to a Bill which the Government propose to introduce, which will have the effect of authorising the Treasury to borrow some money. When that Bill is introduced the Government will, of course, explain precisely the purpose, the nature, and the extent of the borrowing, but, according to the procedure of the House, it would not be proper for the Government to introduce such a Bill unless this House, in Committee of Ways and Means, had first given preliminary consideration to it, and in that way paved the way for the introduction of the Bill.
I hope that I can make it clear to my hon. Friends, both those who have spoken and those who may wish to speak, that the debate could perhaps the more conveniently take place—one recognises that it is a debate of considerable interest—when the Bill is introduced, and on which full information will be before the House. But if it is any convenience to the Committee I can immediately say that the 1381 sum of £430 million is arrived at because that is the amount which the American Government are prepared to loan in respect of the acquisition of three aircraft—not just one—the Hercules and the Phantom as well as the F111A. That is the amount which the American Government are prepared to loan, and the Treasury wishes to take power to borrow that sum in a way which will give the House the fullest possible control of every single item of expenditure each year, as it is being incurred, even though the cost is being met out of borrowings and not out of Votes provided by the House.
I am sure that it will meet with the approval of the House that we should remain in complete control, as if it were a Vote item each year. Therefore, arrangements are proposed which will mirror what will be going on on the other side of the Atlantic. That is to say, at the point at which the American Government provide funds for the American manufacturer of the aircraft or its equipment, there will be mirrored the same incurring of costs in Votes in this House, so as to give the House the fullest possible control of the annual expenditure being incurred and, I repeat, even though it is not being met out of the resources of this country but is being met by borrowing—which borrowing, in the fullness of time, will have to be repaid.
There are many details with which I could burden the Committee, but I doubt whether, at this hour, it would be the unanimous wish of the House that I should do so. I therefore hope that with this short explanation of the function of this procedural Resolution I will have satisfied my hon. Friends not only of the nature of it and of the wisdom of the Government in preparing the way for a Bill which will secure to the House complete control of expenditure of this kind, but—and this is a matter within your discretion, Mr. Deputy Speaker, and that of my hon. Friends—that the proper time for a debate on the substance and the merits of the case would be when the Government introduce their Bill.
§ 10.23 p.m.
§ Mr. S. O. Davies (Merthyr Tydfil)
This is not the first time that I have been compelled strongly to object on the Floor of the House to the Government's squandermania on foreign aircraft, which 1382 displaces so many of our own work-people. I have had experience of this in my constituency, and I know that my right hon. Friend has been skating on very thin ice this evening, but if this Motion goes through there is no gainsaying the fact that it will be a committal on the part of those who allow it to go through ultimately to purchase these aircraft from a foreign country, namely, the United States.
§ Mr. Diamond
I am grateful to my hon Friend for giving way. I hesitate to interrupt, and do so only to make it clear that in saying that the passage of this Resolution would be a commitment he is completely mistaken. It represents no commitment of any kind. The commitment arises on the ordering of aircraft, and that commitment has already taken place. What is being sought in due course, under a Bill, is increased power for the Treasury to borrow, and the time when the approval of the borrowing takes place is when that future Bill is passed. The passage of this Resolution does not commit my hon. Friend to anything of the kind that he has been suggesting.
§ Mr. Davies
But the purpose for which that money will be borrowed is the purpose of purchasing foreign aircraft, and that will displace our workers as it has displaced workers in my constituency. Their skills have been scrapped. Speaking on behalf of over 1,200 of my constituents, I cannot support the Motion. I say that with the skills, knowledge and craftsmanship that exist in this country it is wrong for the House to give power for the exercise of this stupid and uneconomic, if not disastrous, squandermania on the part of the Government.
§ Question put and agreed to.
1. That is is expedient to authorise the Treasury, during the six years ending on 31st March 1972, to issue out of the Consolidated Fund sums not exceeding in the aggregate four hundred and thirty million pounds, to be applied as appropriations in aid of moneys provided by Parliament for those years for defraying expenditure by the Ministry of Defence and the Ministry of Aviation—
2. That the Treasury be further authorised, for the purpose of providing sums (or any part of sums) to be so issued, or of providing for the replacement of all or any part of sums so issued, to raise money in any manner in which they are authorised to raise money under the National Loans Act 1939 (any securities created and issued for that purpose to be deemed for all purposes to be created and issued under that Act).—[Mr. Diamond.]
3. That provision be made for and with respect to—
§ Resolutions to be reported.
§ Report to be received Tomorrow; Committee to sit again Tomorrow.