§ 3.40 p.m.
§ Mr. R. Gresham Cooke (Twickenham)
Yesterday, hardly noticed, the House agreed on the nod to the Question,That a Supplementary sum, not exceeding £351,701,000, be granted to Her Majesty out of the Consolidated Fund, to defray the charge which will come in course of payment during the year ending on the 31st day of March 1968 for services included in the following Supplementary Estimates."— [OFFICIAL REPORT, 29th January, 1968; Vol. 757, c. 883.]There followed a long list of 31 items giving the details of the Supplementary Estimates.
I feel very fortunate today in being the first Member to have the opportunity of speaking on the Consolidated Fund Bill, which begins:We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom in Parliament assembled, towards making good the supply which we have cheerfully granted to Your Majesty in this Session of Parliament,"—perhaps the words "cheerfully granted" are an overstatement; the word "supply" refers to over £9.000 million—have resolved to grant unto Your Majesty the sum hereinafter mentioned;In Clause 1, the sum of £351,701.000 is mentioned.
The Winter Supplementary Estimates were put before us in a number of booklets which were laid on the Table. The first four, presented on 30th November, were Civil, No. 17, of no less than £201 million; Defence (Central), of £2.3 million; Defence (Navy), of £10 million; and Defence (Army) of –18 million.
Not content with the total of £231 million laid before the House on 30th November, the Government brought forward more Supplementary Estimates on 16th January. Note the date; the very day when the Prime Minister was about 1096 to make his statement on savings. With those revised Supplementary Estimates went two further documents, Nos. 64 and 65. The first Supplementaries, the Civil Supplementary Estimates, were really Supplementaries to Supplementaries amounting to £48 million. Then there were the revised Supplementary Estimates of £72 million, which was the final figure, making a total of £351 million.
Therefore, just as the Prime Minister was slaughtering all those sacred cows, knocking over those totem poles and giving us so-called savings, some a little bogus, of £300 million, the Departments were knocking those savings for six, utterly destroying them by bringing forward these Estimates for £351 million at the same time. The whole good that he was doing at the moment was completely undone by the Supplementary Estimates which went through on the nod. Just as the sacred cows were being slaughtered, more were being fattened up by his Departmental Ministers, and the totem poles were being refurbished behind him. The Prime Minister told us in his famous statement then that there would be a massive shift of resources to export. But at the same time the reverse was going on; there was a massive shift away from exports to home consumption in the Supplementary Estimates.
I calculate that each additional £40,000 of Government expenditure since the Government came to power in 1964 has meant an additional civil servant. Therefore, I claim that the extra £351 million means the introduction of 10,000 extra civil servants to administer these vast sums of money. They were the largest Winter Supplementary Estimates we have ever had, coming on top of the largest Civil Estimates we have ever had, totalling £7,700 million, and Defence Estimates of £2,000 million. As the Prime Minister said on 16th January, there has been an increase of 40 to 50 per cent. since 1964 in the Civil Estimates.
To see the full horror of this picture, one must study the revised report of the Estimates Committee. On page V of the First Report from the Estimates Committee, Winter Supplementary Estimates, one can see the full picture for the past four years. The Budget Estimates in 1964 on the civil side started at just under £5,000 million. In the next year 1097 they rose to £5,442 million, in the following year they rose by another £600 million to £6,000 million, and this year they rose by no less than £1,700 million compared with last year.
In addition, look at the history of the Winter Supplementary Estimates. In 1964–65 they were £60 million, and in 1965–66 they were £149 million. Last year they were £159 million, and now they have risen to £351 million, the highest Supplementary Estimates ever. [Interruption.] That is bad budgeting, as one of my hon. Friends has just observed. The Estimates Committee said:Your Committee wish once again to draw attention to the fact that for the third year running the Winter Supplementary Estimates are much higher than in previous years. This is mainly due to deliberate acts of Government policy determined subsequent to the compilation of the main Estimates, and only to a minor extent due to inaccurate estimating in the first place.In succeeding pages, one can see how this is made up. There is the 39 per increase in the Commonwealth services, with a Supplementary Estimate of £6 million. A lot of this is for Zambia, presumably arising out of the British Government's handling of the Rhodesian situation. In November, the Transport Boards wanted an extra £22 million to pay for the railways, etc. The Estimates Committee Report said:It is estimated that a further Spring Supplementary Estimate of about £7 million will be required.That has happened, so now we have Supper Supplementaries, Winter Supplementaries and Spring Supplementaries.
§ Sir Spencer Summers (Aylesbury)
Does my hon. Friend appreciate that the Supplementary Estimate by the Transport Boards is a repetition of the same inaccurate estimating that has occurred in previous years?
§ Mr. Gresham Cooke
My hon. Friend the Member for Aylesbury (Sir S. Summers) is Chairman of the Sub-Committee concerned and has detailed knowledge of what has happened. In the roads programme, because of Government policy, £3,100,000 had to be spent in addition due to the special winter programme announced by the Government as a measure to relieve the unemployment, which itself had been brought about 1098 by policies initiated by the Government a few months earlier.
Investment grants went up by 22 per cent., requiring a Supplementary Estimate of £50 million. The Ministry of Power shows an increase of 7 per cent. The Estimate for the Ministry of Agriculture has also increased. For the Ministry of Public Building and Works, the increase is 4.9 per cent. In the Defence Supplementary Estimates, the Navy gets an extra £10 million and the Army an extra £18 million. The Air Force is not mentioned.
All this, going on all the time, builds up the picture which gives rise to the lack of confidence among our creditors and foreigners. No doubt Socialist speakers in the country will say that this vast increase in Supplementary Estimates is all due to foot-and-mouth disease.
§ Mr. John Farr (Harborough)
My hon. Friend mentioned the Navy and Army Supplementary Estimates. Is not the R.A.F. Supplementary nearly £2 million under Class IX?
§ Mr. Gresham Cooke
My hon. Friend is probably right, and that additional Estimate is yet another reason for the expenditure getting out of hand.
As I was saying, no doubt Government speakers, briefed by Transport House, will say that all this is due to foot-and-mouth disease, but in fact it is only about one-tenth of the items. In looking further into this situation, the Estimates Committee produced its Seventh Special Report on 24th January. These revised Supplementary Estimates put on the Table on 16th January give a net increase of £72 million. The Committee reported:In the case of investment grants, however, the additional £50 million asked for in November was stated in the Estimates to represent about 75 per cent. of the total increase required. It was, therefore, a shock to your Committee to find that a further £39 million should be sought only some six weeks later … the Board of Trade admit that this demand is due to underestimating on their part …Later the Report comments:… the House will be asked to agree to these Estimates on 24th January … it is clearly impossible for Your Committee to make any Report to the House on them in the time available. Your Committee hope, therefore, that every effort will be made to avoid recourse to such a procedure in future.1099 How can the Estimates Committee deal with a demand for £120 million thrown on the Table at the last moment a few days before the Consolidated Fund Bill is due for discussion?
I return to the point that in HANSARD one sees a long list of Supplementary Estimates. In addition to those I have referred to, the rate support grant for local revenue is up by £22 million; the National Health Service is also up by £22 million; National Insurance is up by £16 million, and there are a large number of other sums, each under about £10 million. It all mounts up to the very large sum we are discussing.
This is really why our creditors do not trust us. On the one hand, the Government promise to economise and, on the other, splash the money about almost secretively, hoping that no one will notice. Probably no one would have noticed if I had not been lucky in the ballot. One of the problems facing the country is the loss of confidence brought about by this sort of thing.
Government expenditure is completely out of control. We are saddled with the most extravagant Government we have ever had. The electorate are beginning to realise this. As the little schoolboy said to the Prime Minister the other day, "I am now calling my kittens Conservative kittens because they are now old enough to have their eyes open."
§ Several Hon. Members rose——
§ Mr. Speaker
Order. It will help the Chair if it knows if hon. Members who rise in their places are seeking to speak in the particular debate the House is on at the moment.
§ 3.57 p.m.
§ Sir Spencer Summers (Aylesbury)
Anyone interested in the control of public expenditure by this House and concerned about the steadily increasing rate of growth of public expenditure generally will be greatly indebted to my hon. Friend the Member for Twickenham (Mr. Gresham Cooke) for taking his good fortune in the ballot to raise a matter of this kind. As Chairman of the Sub-Committee of the Estimates Committee which looked into those Winter Supplementaries which we had time for, I take 1100 the opportunity to make one or two observations on the Estimates themselves and on the procedure associated with this subject.
As my hon. Friend pointed out, out of the total of £351 million, about £201 million were the subject of Winter Supplementary Estimates presented to Parliament on 30th November. The Estimates Committee reported on that, for there was adequate time to do so. Those Supplementary Estimates came in roughly when expected, and the usual procedure for calling witnesses was gone through.
On each occasion when Supplementaries are presented, it has been the custom for a number of years for the Treasury to divide them into the categories—first, those attributable to a rise in costs; secondly, those attributable to policy decisions by the Government since the original Estimates were compiled thirdly, those falling into neither category. It is a telling factor in support of my hon. Friend's main proposition that the Treasury, in analysing the £201 million of Winter Supplementary Estimates presented in November, said that £109 million —more that half—was the result of deliberate acts of Government policy. How much of the remaining £130 million or so presented to Parliament since falls into that category it is impossible for us to say, because there has not been time for the Treasury to present to the Estimates Committee the customary memorandum analysing the Estimates in that way.
The fact that these Estimates are presented at such short notice is understandable. As the Estimates Committee has reported, it is due to the fact that there is great pressure on the Civil Contingencies Fund and there is, therefore, the need to submit extra Winter Supplementaries to Parliament in order to bail out the Fund. I want to say quite categorically that any suggestion that this situation is satisfactory because it could be put right by increasing the size of the Civil Contingencies Fund is one which would not be acceptable to the Estimates Committee. It was largely responsible, in conference with the Treasury a few years ago, for reducing to £75 million the Civil Contingencies Fund, which was then established at a much higher figure.
1101 It was thought quite inappropriate, at a time when the control of public expenditure by this House was to be tightened up, to have so large a reserve fund out of which expenditure could be taken and the House informed and brought to deal with the situation after the event rather than before. It was for that reason that the size of the Civil Contingencies Fund was reduced.
It may be asked: has the time come to look at that again because the value of money is going down while the size of public expenditure is consistently going up? In considering that situation, it is important to reflect that there are two types of Supplementary Estimate, be they in spring, summer or winter, which may be brought before the House. There are those which not only derive from acts of Government policy but which are attributable to some emergency. There may be some terrible tornado or an earthquake in some part of the Commonwealth which it is thought merits financial contribution from this country. We have had the scourge of foot-and-mouth, which could not possibly have been foreseen. There are, therefore, large items of expenditure which come forward unexpectedly, which are of quite a different nature to a number of the others.
I would put forward the suggestion that, if a little more elbow room is required, those which are genuine emergencies might be dealt with from a separate emergency fund, civil or defence, which would replace the traditional Contingencies Fund used for Government policy reasons, bad estimating and the like. The position is far from satisfactory. We are told that in order to bail out the Civil Contingencies Fund no less than £48 million worth of Supplementaries, which would normally have come forward in the spring, have now to be brought forward and passed by this House, with no proper report from the Estimates Committee and with no time for anyone outside the Estimates Committee to have regard to what is going on.
We shall be interested to see whether the Spring Supplementaries reflect the bringing forward to which I have referred. It is a most unsatisfactory situation and it does not permit the Esti- 1102 mates Committee to do its job properly. From time to time hon. and right hon. Gentlemen are good enough to pay tribute to the work of the Committee, but if the Government are to play ducks and drakes with the traditional procedure and deny us the opportunity to scrutinise these matters, it will make it a great deal more difficult for the Committee to do its work.
There are some minor matters which come up for discussion. I turn to the items which are the subject of the extra Winter Supplementaries amounting to £72 million. The first is for foot-and-mouth and the second investment grants. My hon. Friend the Member for Twickenham read out a very pertinent part of our Report, in which we said that we were shocked to discover that, having been asked only six weeks ago to approve a Supplementary £50 million for investment grants, which was deemed at that time to be 75 per cent. of the total, we were now asked to come forward with a further £39 million. The part of the story that I find utterly unconvincing is that we were told, in January, following a series of gross miscalculations on the part of the Department concerned with investment grants, that this figure would be the total and that the Department was capable for foretelling how many additional requests for payment will be brought forward from the special and the other areas in the remaining weeks of this financial year.
The Chief Secretary shakes his head as if to say that he has utter confidence in the Department concerned to assess accurately what will happen.
§ The Chief Secretary to the Treasury (Mr. John Diamond)
A Minister should never shake his head because it is always misinterpreted. I was only sorry that the hon. Gentleman, who carries such weight and such responsibility as Chairman of the Estimates Committee, should have thought it right to refer in such terms to the Estimates that have been made.
§ Sir S. Summers
I see no reason why the Government should be touchy about the Estimates that they put forward. What I am saying is that they have come for-yard yet again, six weeks after bringing forward £50 million, which purported to be 75 per cent. of the total, with a further £39 million. They say that they are 1103 quite sure that this will suffice for the rest of the year, and I say that it is quite impossible to gaze sufficiently accurately into the crystal to see what demands will come forward between now and 5th April.
If we are to be told that it is absolutely assured, that the Government have somehow issued some edict that further requests will not be accepted, that will make the situation quite different, but this is not mentioned in support of the additional £39 million which the Government have seen fit to bring forward.
§ Mr. Eric Lubbock (Orpington)
Has the hon. Gentleman investigated the allegation that a very big proportion of investment grants are paid in to capital expenditure incurred on ships constructed abroad, not in the United Kingdom?
§ Sir S. Summers
It might be that had we had the opportunity to examine the Department concerned in respect of this £39 million we might have lit on some aspect of the subject such as has been referred to. We have not had the Department in front of us and have not been able to find out whether there are any skeletons in the cupboard, which seems to be the case. What we have noticed is that we are being asked to vote very large sums of money to take account of policy hitherto pursued by the Government to bring nearer the date when payment is made following the incurring of the obligation. When some piece of machinery is ordered, there is clearly a time lag between the order and the receipt of the investment grant from the Government.
It used to be 15 or 18 months. We are told that it was to come down to 12 months. We were assured by the Department only a few weeks ago, that its confident ambition was to bring it down to six months. Scarcely has the document been printed in which this view is expressed than we are told that this is not to take place and is deemed to be one of the great cuts that will create confidence among foreign bankers. There is to be the 12 months' lag behind the incurring of the obligation to buy some piece of machinery and the grant made towards it. No longer is there to be a "concertina" effect taking place. It only 1104 goes to show how thoroughly bogus are a number of cuts about which the public have been given information and how at variance the Government now are with the policy that they have been pursuing only a few weeks ago. I repeat that we are greatly indebted to my hon. Friend, and I hope those who are increasingly concerned will play their part, however humbly, in curbing public expenditure on the part of this Government.
§ 4.10 p.m.
§ Mr. Ivor Richard (Barons Court)
I was not intending to take part in this debate. When I saw the list of subjects, it struck me that this debate might take place on an esoteric and technical level, but when I saw the name of the hon. Member for Twickenham (Mr. Gresham Cooke), who came first out of the Ballot, my suspicions were aroused. I must say, having heard the first two speeches from the other side, that all my suspicions have been confirmed. The hon. Member told us something about Civil Estimates, but he then went on to relate the fact that the Supplementary Estimates have been brought in because of some desire on the part of the Government to mislead both the people at home and those abroad whose business it is to add up the arithmetic of the British economy.
The hon. Member for Aylesbury (Sir S. Summers) has been raising points thoroughly worthy of the consideration of the House on the type of Supplementary Estimates there should be, whether there should be one emergency sum or not. This is a matter which should be considered by the House. What is wrong about the debate is trying to tie in that sort of point with the last few sentences in his speech and the last one in the speech of the hon. Member for Twickenham (Mr. Gresham Cooke). He is trying to say that the fact that Supplementary Estimates have been brought forward means that the Government's package deal does not represent any real cut in Government spending. That, as I understand it, is the burden of the point made by the Opposition.
The hon. Gentleman opposite knows the reality of the cuts made by the Government last week. Take the cuts announced in military expenditure.
§ Mr. Speaker
We cannot discuss the cuts that have been made. We are discussing what is in the Supplementary Estimates.
§ Mr. Richard
I was not proposing to discuss details of the cuts but merely the reality as opposed to the precise items cut or not cut. I hope the right hon. Member for Enfield, West (Mr. lain Macleod) will take the opportunity, if he is intervening in this debate, of emphasising again to his hon. Friends, to the country, and to people abroad that the cuts that have been made are real and substantial.
The other great omission in speeches from the other side was something that one always notices. Everyone is in favour of cutting public expenditure in the abstract. I know no better way of getting a cheer at a public meeting than by saying that, on the whole, the Government spend far too much money and that public expenditure should be cut. Everybody is in favour of cutting it in the abstract. If the hon. Gentlemen opposite were to get up and say how monstrous it is that the Government are spending so such money, how extravagant it is, it is the most extravagant Government we have had, no doubt he would get a cheer, but he cannot expect to get very much intellectual respect for that sort of argument. He must tell us not only that he is in favour of cutting public expenditure in the abstract, but in favour of cutting it specifically and say where he would make his economies. If he thinks the economies were not real economies, what economies would he like the Government to introduce?
§ Mr. Speaker
He will find difficulty in replying. The hon. Gentleman must confine his economies inside the Supplementary Estimate.
§ Sir S. Summers
The hon. Gentleman coupled my name with that of the hon. Member for Twickenham (Mr. Gresham Cooke). I moved an Amendment which would have the effect of deleting the charge for family allowances but he voted in the opposite way.
§ Mr. Richard
I am sure I did, and I hope I would always vote in the opposite way. The hon. Gentleman at least gives respectability to the argument he put forward at the end of his speech. He first spoke about the extravagance of 1106 the Government in not cutting expenditure and in moving forward the Supplementary Estimates. I would ask if we are to have an official reply from the Conservative Party as to where, in the Supplementary Estimates, they would like the Government to make cuts. Where would they like us to save the money we are being so prodigal in spending? Unless we have the specific as well as the abstract, it does not seem that the arguments coming from the other side are impressive.
§ 4.16 p.m.
§ Mr. John Page (Harrow, West)
It is fortunate and salutary that my hon. Friend has been able to arrange for this debate to take place on this side following the debate of yesterday. If the hon. Gentleman the Member for Barons Court (Mr. Richard) had taken the trouble to attend the debate yesterday—a debate attended by only one of his hon. Friends during the opening speeches—he would, at the beginning and the end of the speeches from our Front Bench, have had an exact answer to the question he rhetorically asks now. I would be out of order, Mr. Speaker, in repeating the cogent and evident answers which my right hon. Friend gave yesterday. The tragedy of this debate today and yesterday's debate is the acceptance of the inevitability of the growth of Government spending, which is universally accepted by all hon. Members opposite, including, I am disappointed to say, the Financial Secretary to the Treasury, who spoke yesterday. It was surprising and disappointing.
I concur with my hon. Friend the Member for Twickenham (Mr. Gresham Cooke) that these Supplementary Estimates are examples of the galloping increase in spendthrift housekeeping by the present Government. It will surprise some hon. Gentlemen opposite, but please those who normally sit below the Gangway, with the notable exception of the hon. Member for Dunbartonshire, East (Mr. Bence), that the way to reduce Government expenditure is to turn to "Marksism", and by "Marksism" I mean not Karl Marx but the late Lord Marks.
The late Lord Marks, three or four years ago, decided that, in order to make his organisation more efficient, procedures which used a lot of paper and 1107 unnecessary statistics should be demolished. It is an example to the Economic Secretary, and I wish he would pay a visit to Baker Street, if he has not already done so, to the headquarters of Marks and Spencer, to see how one great concern was able to reduce the paperwork and other administrative costs in a way which produced the following result. Over the years since these changes were made, 26 million forms do not have to be filled in, making a saving of 120 tons of paper. The number of employees in the company was reduced by 20 per cent., prices were cut by 60 per cent. and profits were greatly increased. I believe that the same principles should and could be followed by Government Departments.
I turn to Class 1, Vote 8 for the Inland Revenue. I draw attention to a most important Report by the Comptroller and Auditor General for 1966–67 dealing with the Vote in question. It refers to false claims to personal reliefs for Income Tax put in by immigrants living in this country. For many years, a number of us have been suspicious that the families for which allowances were being claimed might tend to be fictitious. A sample taken by the Inland Revenue, to its credit, started in April, 1966, shows that 55 per cent. of the claims for reliefs were fraudulent. This has resulted in a cost to the Inland Revenue of £5 million to £7 million a year and a total cost to date of between £25 and £30 million.
§ Mr. Speaker
Order. We cannot discuss the whole of the Inland Revenue's expenditure and policy on this Supplementary Estimate. If the hon. Gentleman looks at it, he will see that that item in the Estimates is for overtime and pay increases at the headquarters and Revenue local offices and salaries at the Valuation Office. He must link his remarks to that.
§ Mr. Page
I bow to your Ruling, Mr. Speaker, but I feel that some of the overtime may have been caused by the investigations which had to take place.
The Inland Revenue should be more economical in connection with a letter which came into my hands yesterday referring to the work of the Inland Revenue at Bootle. I will send the letter to the Treasury. A form was received by a 1108 gentleman in connection with an allowance for the further education of his son. Two similar requests were received from other Departments. I ask the Chief Secretary to see whether there might be better co-ordination between those investigating these allowances.
I turn to Class IV, Vote 11, headedBoard of Trade (Promotion of Trade, Exports, etc.) …There is much criticism in business and commerce of the Personal Exports Scheme. A lot of forms have to be filled in by potential exporters which they find inconvenient. Since we are discussing £9 million in a Supplementary Estimate for the encouragement of exports, I ask whether this aspect could be investigated. I can say from personal knowledge that the Personal Exports Scheme is more complicated than any I have ever encountered, and that is the view, I believe, of many businessmen who try to encourage personal exports.
I ask the Chief Secretary to get in touch with his opposite number at the Board of Trade to see whether the import and export of precious stones and jewellery, especially for re-setting, could be simplified, because otherwise some of the money which is being spent will be wasted.
I turn to Class V, Vote 4, concerning agricultural grants and subsidies. I wish to draw attention to what I consider to be a gross extravagance on the part of the Ministry of Agriculture, carried out—and this is most sad—in the name of good housekeeping in spending the taxpayers' money. Much too much checking is carried out of schemes which are put to the Ministry of Agriculture under the heading of grants and subsidies. The one which I would mention is the grant for piped water to allotments.
A year or two ago, the Chief Engineer of the Borough of Harrow, a man of impeccable efficiency in his profession, produced a scheme for piped water to allotments in Harrow which would be grant-bearing at the rate of £160—not a great sum in the context of the Ministry of Agriculture or of the budget of the Borough of Harrow, which runs into many millions of £s, administered most ably by efficient officers. To check the grant-bearing nature of the £160, two specialists were sent from the 1109 Ministry of Agriculture at Guildford—an engineer and, I believe, a surveyor—to check that the work was properly coordinated and would be properly carried out.
It is tragic to think that something which, in commerce, could have been settled by one letter or even by a telephone call should be expensively checked and counter-checked by a Government Department. It could be said, and it was at the time, that this action safeguarded the spending of public money. I believe that these visits may unnecessarily have cost the taxpayer and ratepayer £40, £50 or £60 and that these experts' time would have been better spent in cogitating whether grants for piped water to allotments in Harrow were justified on any grounds, which may well be doubtful.
I have given some specific examples. I should be grateful if the Chief Secretary would give his attention to the points which I have mentioned—the one concerning agriculture is rather ancient history, but the procedure still exists—to see whether Government spending could be restricted and whether valuable manpower, equipment and facilities in the Government service could be better used.
§ 4.30 p.m.
§ Mr. Cyril Bence (Dunbartonshire, East)
I hope that the hon. Member for Harrow, West (Mr. John Page) will forgive me if I do not follow him. I thought that his speech would have been far better made yesterday than today, because we are dealing with the Supplementary Estimates. For many years, I had the honour of serving on Sub-Committee G, of which the hon. Member for Aylesbury (Sir S. Summers) was a very effective and courteous Chairman. All who served on his Sub-Committee enjoyed his chairmanship. As a onetime member of the Estimates Committee, I was always impressed by the objectivity which its members brought to it, completely divorced from their political parties. That applies to the hon. Gentleman and equally to the hon. Member for Twickenham (Mr. Gresham Cooke).
When discussing Supplementary Estimates, I am reminded that the hon. Member for Aylesbury fought for many years to have the Winter Estimates split. He made a great case for it, and he was successful. All of us on the Estimates Committee thought that it was a tre 1110 mendous achievement on the part of the hon. Gentleman. However, by the time that he had finished speaking today, he had almost convinced me that it was a bad idea. Having split them, we now get the Winter Estimates followed closely by the Spring Estimates, without having time to discuss them.
§ Sir S. Summers
The hon. Gentleman has misunderstood the implication of what I said. Winter Supplementaries were presented in November and went through the proper scrutiny. What I was complaining about was the subsequent presentation of bogus Winter Supplementaries which there is no time to examine.
§ Mr. Bence
I do not know what the hon. Gentleman means when he talks about "bogus" Winter Estimates. About six or seven years ago, we had one set of Estimates presented to us in November, and the hon. Gentleman succeeded in convincing the Government of the day that it would be better to have some Estimates in the winter, and some more in the spring. When we got Supplementary Estimates in the spring, of course, we had no time to discuss them. Time and time again, we have had Supplementary Estimates coming forward in January, and have not had time to discuss them thoroughly.
Some point has been made about the growth of Government expenditure. I would point out to hon. Gentlemen opposite that a growth in turnover in monetary terms as a whole cannot run parallel with the Government's expenditure remaining static. That is asking for the impossible. If there is a general growth resulting in higher salaries and prices, Government expenditure must go along with it. It would be impossible to cut Government expenditure while expenditure elsewhere was expanding. To suggest that the salaries of teachers, civil servants and others should stand still while the general level of incomes and distribution of profits is rising would be quite unreasonable.
§ Mr. Bence
One of the reasons why there has been such controversy in the 1111 Estimates Committee about Supplementary Estimates is that the complaint has always been, "Why do we get these heavy Supplementary Estimates? Why cannot the Departments estimate more accurately?" That has been the stock question, year after year. It is not a new phenomenon. It has been raised time and time again, and it should be on the record that this has been the complaint of Sub-Committee G ever since it was set up. Year after year it has drawn attention to the failure of the Departments of State to make correct estimates.
One would imagine that the only people who make bad estimates are Government departments. However, anyone who works in industry knows that there is a great deal of false projection into the future. I could mention the names of many engineering companies which have made bad mistakes, and got themselves into serious difficulties. The Departments of State are no worse. The problem is that the penalties are different. Mistakes in commerce and industry have to be paid for by the people in them. Serious mistakes in a Department of State are paid for by the taxpayer.
§ Mr. Gresham Cooke
The hon. Gentleman must be aware that we are not asking for a standstill in the Estimates. The Prime Minister pointed out that his Civil Estimates have gone up 45 per cent. in the last three years, which is more than any inflationary tendency. We are saying that the Winter Supplementaries have gone up six times since 1964.
§ Mr. Bence
The Supplementary Estimates will increase in ratio to the general rise in Departmental expenditure over a period of years, of course. If one allows a percentage error, and there is a percentage increase in the projection, the percentage of error in forecasting will mean an increased sum to supplement the original Estimate. If the projection in 1967–68 is four times as much as it was in 1963–64, the margin of error is also expanded.
The increase in the Supplementary Estimates is not something which has arisen for the first time in the financial year 1967–68. It has always occurred. In every debate on the Consolidated Fund Bill, there is always the complaint that the figure is the highest ever and must 1112 stop. That has been said since 1951. Every year, Opposition hon. Members say that it is too much, that it is the highest Supplementary ever, and a Minister gives his reasons why it cannot be stopped. Still it goes marching on and on.
If it is to be stopped, everyone in the country must be asked to end seeking higher prices for their products, higher wages for their work and higher fees for their professional services. Only in that way shall we put an end to higher Supplementary Estimates and increased Government expenditure.
Hon. Members opposite object to any form of prices and wages freeze. If we start freezing the prices of every product in the country, we shall choke up investment. How many hon. Members opposite would invest in a project if there was no likelihood of a price increase in the next ten years? Anyone investing in a project expects to make increasing profits. Anyone manufacturing a motor-car today expects to be making more from a similar model in five years' time.
§ Mr. John Biffen (Oswestry)
Does the hon. Gentleman suggest that the price of colour television will be higher ten years years from now?
§ Mr. Bence
The hon. Gentleman has chosen one highly specialised product. The investment in colour television will be measured partly by the economic price which can be charged for it and partly by the market for it. The two will be matched. If I were investing in colour television those are the two features which I would consider. The higher the market in which it would go, the lower the price for the product I would provide. These are the sort of decisions that one makes in marketing a product.
§ Mr. Deputy Speaker (Sir Eric Fletcher)
There is nothing about colour television in the Supplementary Estimates.
§ Mr. Bence
I am sorry. I was led away by the hon. Member for Aylesbury. I rose only to point out that the hon. Member for Aylesbury, as chairman of Sub-Committee G when I served under his chairmanship, always made this plea about these Supplementary Estimates. This is not something which has just happened in the Supplementary Estimates whilst there has been a Labour Government. He has made this plea for years 1113 under previous Administrations. I agree with him. I think he is right to do it. This is what Parliament is for and he is right to do it. However, he did not do it when he was on this side. We did it. That is fair enough, because that is what the Opposition are for. I want to put on record that the hon. Member for Aylesbury has always made the plea against the Executive that there is not sufficient control, that there is not sufficient accuracy in forecasting, and this is why we have these Supplementary Estimates.
I am not on the Estimates Committee now, but, like him, I naturally regret that we have these heavy increases in the supplement to the current expenditure. I think that in industry, commerce and departments of State, the time has come for us all to think again about trying to solve our particular economic problem, not by putting up the price of our product or asking for more money, but rather by seeking for higher efficiency so that we do not have to ask for more money. We can do this merely by higher efficiency.
§ 4.42 p.m.
§ Sir Douglas Glover (Ormskirk)
The hon. Member for Dunbartonshire, East (Mr. Bence), of whom I am very fond—he is one of my best friends in the House—is rather like the Government's expenditure. When he gets up to make a speech it rolls on and on—[Interruption.] I do not mind, because I have not got the money to spend.
These Supplementary Estimates today unfortunately show just the tip of the iceberg. I am terrified at the thinking displayed by the hon. Getleman in his speech and that of the hon. Member for Barons Court (Mr. Richard). They say that, irrespective of the economy of the nation, the Government's total expenditure will go, on rising and one cannot stop it.
What has happened over the last three years? The Prime Minister apparently took pride in the fact that our expenditure on Civil Estimates has gone up by 45 per cent. and production has gone up by 1 per cent. It is obvious that this is creating an enormous burden for the public.
§ Sir S. Summers
Has my hon. Friend not forgotten that after the cuts public expenditure will be higher than before?
§ Sir D. Glover
After the most bitter Cabinet wrangle, with crocodile tears 1114 pouring down Downing Street in torrents, the Prime Minister comes to the House and tells us that, after going through the thing with a mangle, they are to reduce expenditure by £300 million, and on the same day they publish Supplementary Estimates of £351 million. The hon. Member for Barons Court who says that these cuts are not real cuts is not taking into account——
§ Mr. Richard
I am reluctant to confuse the hon. Gentleman with what I said. I was saying not that they were not real cuts, but that they were real cuts, and I was hoping to hear from the other side confirmation that they accepted, as we did, that the cuts that the Government announced last week were real, difficult and painful cuts in Government expenditure.
§ Sir D. Glover
I will concede this much to the hon. Member. Putting a charge on prescriptions is not a cut, because it will increase Revenue, but delaying the school leaving age is a cut. The Prime Minister has said that he will not increase the Civil Service. That is riot a cut. The actual cost will be the same in 1968 as in 1967.
The crisis that the Government are trying to deal with was created on our expenditure in 1966–67, not our projected expenditure in 1968–69. Here we have a prime example of Government profligation. With this enormous Government expenditure we have now got Supplementary Estimates, the largest we have ever had, of £351 million at a time when the Government's whole object, and that of every spending Minister, during the last 12 months ought to have been to keep within the Estimates that had been voted by Parliament. Instead they have shown again that they are so weak and queasy, so involved with their party squabbles, that they have not got the time to look after their Departments and have allowed over-expenditure on the already grossly inflated Civil Estimates of £351 million, which is jolly nearly 10 per cent.
Is it surprising, when the Government keep doing these things, that there is lack of confidence in this country overseas and lack of confidence in the Government's ability to govern at home? It is obvious that the Government have not got control of the governmental machine. It has been shown in every debate. It 1115 was shown yesterday by the hon. Gentleman who was talking about expenditure and saying that the Civil Service would automatically increase. This is just the sort of thinking that creates Supplementary Estimates of £351 million.
Everything is sacrosanct now. I am not on the Estimates Committee, but I am on a Public Accounts Committee. I do not know whether it is a promotion, relegation, or a sideways move. However, I remember some years ago talking to the accounting officer of one of the not very large spending Departments. I said, "How many have you got in your O. & M. division?". He said, "One hundred and seventy-seven". I said. "Can you tell the Committee how many people these 177 have saved?", because if they had not saved 177 they must be a charge on the Department. I should like to know how many O. & M. divisions in the Departments are themselves sacred cows, it is like all machines. Unless you are perpetually pulling them out of their boxes and dusting them down and having a look at them, the most efficient pieces of mechanism get corroded with rust. I believe that in a lot of Government Departments the pattern has gone on in the same format in that a great many of the things originally created to make for greater efficiency are now an increased burden. I think that there are a lot of these things which should be looked into.
I do not want to detain the House. My main theme is that until the Government can so control the financial affairs of the nation that this sort of Supplementary Estimate is not brought in front of the House and can show that they have in fact got a grip on their expenditure and are not allowing Government expenditure to rise faster than the gross national product—they have not show's any real evidence of this so far with their cuts—there will be no increase in confidence in the Government and, much more tragically, there will be no increase of confidence in the nation, and that means we will all suffer. Therefore, the sooner the Government resign the better for Britain.
§ 4.49 p.m.
§ Mr. Julian Ridsdale (Harwich)
I am grateful to my hon. Friend the Member for Twickenham (Mr. Gresham Cooke) 1116 for initiating this debate, because all of us are worried about the defeatism in the country which accepts the growing inevitability of Government expenditure.
Government expenditure between 1862 and 1869 went up by £3 million. The size of that Government expenditure exactly one hundred years ago was revenue £69 million, expenditure £71 million. In 1868, exactly a hundred years ago, the Conservative Government of the day were defeated because expenditure had risen by £3 million. They were defeated because the back benchers did not like Income Tax going up by 2d. in the £.
That underlines a little the kind of problem that we are up against today. We are discussing Supplementary Estimates of £351 million. This is an example of the complacency of the country. Nobody cares about the pennies. Everyone assumes that the pounds will take care of themselves. I welcome the debate, because I think that Parliament should pay much more attention than it does to these Estimates. We spend far too much time on legislation. and not nearly enough on dealing with Estimates such as these.
In 1939, the total Budget, revenue and expenditure, was £951 million. Today we are discussing Supplementary Estimates amounting to about one-third of the 1939 Budget, which was introduced just before we fought the greatest war in our history.
The hon. Member for Barons Court (Mr. Richard) threw out a challenge. He said that we on this side of the House talk about making economies in Government expenditure, but we never say how we will make the cuts. The Estimates ask for a sum of £2,340,000, to enable overtime payments to be made to people employed in the Inland Revenue. Is this because of the overtime worked on administering the Selective Employment Tax and Corporation Tax? Is this part of the reform of taxation which the Government have brought in? Their tax reforms have led to more complicated taxation, and the need for people in the Inland Revenue to work more overtime. I am sure that they are considerably overworked, and the Chief Secretary knows this.
What proposals could be put forward to alleviate their burden? I put forward a simple proposal. and one that I have 1117 made before in the House. Why not have more indirect taxation, and move away from direct taxation?
§ Mr. Ridsdale
I know that, Mr. Deputy Speaker, but I am concerned about relieving the burden of work which is now placed on people in the Inland Revenue Department.
§ Mr. Deputy Speaker
May be, but still we are not concerned with taxation in this debate. We are dealing with the Supplementary Estimates.
§ Mr. Ridsdale
I come now to Class IV, Vote 13 which deals with investment grants. This shows that a figure of £89 million was given and then withdrawn. This is part of the cut that never was.
Class VI, Vote 7 calls for an additional £22 million. I am sure that this would n at have been necessary if the Government had been able to hurry their reform of local government, and had introduced regional government, which would have given us better control over local government expenditure than we have today.
Class IX, Vote 2 deals with the supply of furniture and equipment. The increase here is £400,000. No doubt this equipment is required for the extra 24,000 permanent, and 30,000 temporary civil servants. Extra money is also required for increased electricity, gas, and water charges. The figure here is £1,050,000, a greater increase than expected. I should like the Chief Secretary to explain this, and tell us which Government Departments are being wasteful with their electricity.
Finally, I come to Class XI, Vote 1 which deals with grants for the B.B.C.'s Home Services. The grant for general purposes shows an increase of £5,950,000. We are told:The additional amount required is due to increases in licence issues following new measures to combat licence evasion.I would like a better explanation than we have so far had about this. This seems an enormous sum to pay for the collection of licence fees. Is not there a simpler way of dealing with this?
I do not want to go on for too long, though I should like more time in which 1118 to go into the detail of these Estimates. I agree with my hon. Friend the Member for Twickenham (Mr. Gresham Cooke). We are alarmed at the growth of these Supplementary Estimates, which are now six times what they were in 1964. If this is allowed to continue, international confidence in this country, which is now declining, will decline even faster. I hope that we shall soon have in power a Government who are more concerned about expenditure than is the case at the moment.
§ 4.57 p.m.
§ Mr. John Farr (Harborough)
I, too, am grateful to my hon. Friend the Member for Twickenham (Mr. Gresham Cooke) for raising this immensely important subject and giving us an opportunity to discuss it.
It is ironic that only a handful of hon. Members are present in the Chamber today to discuss an extra expenditure of £351 million, when last week, when we were discussing an alleged saving of £300 million, the House was packed and there was great applause from the benches opposite for the Prime Minister's wonderful economies. It is ironic that discrepancies of the kind disclosed in these Estimates can be considered by a handful of hon. Members, with apparently little interest among most hon. Gentlemen opposite.
The hon. Member for Dunbartonshire, East (Mr. Bence), and one or two others on the benches opposite, seemed to say that these Estimates were more or less what one should expect, because no one can stop expenditure increasing annually. As my hon. Friend the Member for Ormskirk (Sir D. Glover) said, we on these benches contest that. We do not accept this inevitable rise in prices and wages, even though hon. Gentlemen opposite seem more or less conditioned to them.
What we are asking for is not a cessation of the annual increase in expenditure—we do not mind the increase if we get value for it—but a more intelligent estimate of expenditure for the fiscal year, so that the Government do not repeatedly have to come to the House at this time of the year for approval for these ever-increasing sums of money.
If someone were running a business and his accountant handled things in this 1119 way, he would have to go. No efficient business can be run on this kind of basis. To run the country satisfactorily, many of the methods employed in an efficient business must be employed in Government management. The hon. Member for Dunbartonshire, East, who I am afraid is not present now, said that it had always been so and that there were always regular annual increases in the Supplementary Estimates, but we were told in 1964 and 1966 that this Government would change all that, would bring in modern methods of running the country, would not follow the old pattern of a hazardous guess hundreds of millions of £s out, but would brush things up and make them more efficient. The only result is the steady increase in the inaccuracy of the original Estimates.
Two or three particular points in these Estimates strike me as particularly significant. First, the total of about £352 million extra is a vast sum, working out at £7 per person or £25 per family or 10s. extra tax per family per week. It is a tremendous sum and it is absolutely appalling that the original Estimates could be out to this extent. One studies the documents from the Vote Office to try to break it down as it is broken down in column 883 of yesterday's HANSARD, and one or two things are immediately striking.
First is the extra expenditure for the Commonwealth of £8,348,000; one sees straight away that special extra aid to Zambia accounts for nearly £7 million. If, in the Prime Minister's own words, this country is to pay its way in the world, we cannot afford to pursue these hallucinatory practices against Rhodesia. This added payment to Zambia of £7 million is related to the ridiculous imposition of sanctions on Rhodesia. Whether we like it or not, we cannot afford to pursue such will-of-the-wisp policies with such disastrous results. Again referring to the comparison with a company which is efficiently run, if such a company cannot pay its way, it goes bankrupt and the same applies to a country. Unless it is efficiently run, as we have seen with devaluation, it will go bankrupt.
One then turns in this list to the Transport Board item of another £30 million to be spent on nationalised transport, on supporting British Railways and the London Transport Board. Nearly all 1120 that sum—£28,800,000—is an additional subsidy to British Railways, which will suck the taxpayer to the extent, it is estimated, of about £155 million this financial year alone—an ever-increasing sum. That is nearly £3 million a week, a record level. One would think that a Government anxious to economise, regardless of party doctrines, would do something about British Railways to make it more economical instead of saddling the country with a vast new Transport Bill which will cost another £30 million or £40 million. What a way to handle things.
The only Estimate which can definitely be said to be entirely unexpected is, of course, the tragic one for agriculture, almost entirely due to the outbreak of foot-and-mouth disease, totalling an extra £32 million. No one could have foreseen that tragedy, and I am sure that our policy, which has put up the cost of recompensing farmers for the slaughtered animals, is absolutely right and should be continued. But there are possibly other decreases in the calculated amounts in the agricultural Estimates which have not yet come to light or been shown. For some time, for instance, the deficiency or support payments for beef and pork have been running at nil, far lower than was originally estimated, and I can trace no indication in this document of an allowance or decrease in that respect.
I do not want to go into microscopic detail on these Estimates, because so few hon. Members are present and many other subjects are due for debate. I am only sorry that we have not had a day or two days on this very important addition to our tax bill. I would have liked to go into every line and page of the Estimates, as would many of my colleagues, to search into these reasons and try to ensure that there is not such a gross inaccuracy in other years.
One example which shows up the chaos of the Government planners is the Supplementary Estimate for extra expenditure on overseas works and buildings—many millions of £s—in areas which, as announcel only last week, we are leaving at a very early date. The anomaly strikes one forcibly. At the same time as the announcement of a policy of scuttle from east of Suez, the Persian Gulf, Singapore and Malaysia, we are spending millions more than we 1121 expected on permanent buildings to house our troops who will apparently no longer be there.
Could not this computer-minded Government get a little more efficient and get their books in better order? The people of this country were promised, in 1964 and 1966, better and modern Government in this technological age and we do not expect these blundering errors to continue in future years.
§ 5.8 p.m.
§ Mr. William Small (Glasgow, Scotstoun)
I recognise the philosophy of the economic man, the statistician, who can allow nothing for flexibility, yet in terms of representative Government, if some aspect of national life merits a Supplementary Estimate, there are hon. Gentlemen in this House who will criticise it by way of Questions and Motions. I would admit a great claim for increased expenditure on the hospital services, for instance, it the hospitals were extended to provide for one of the new kidney machines to restore health, yet no one can foresee these things. If there were a rise in crime, most hon. Members on both sides would rightly demand extra expenditure for an efficient police force.
Percentage-wise, the Supplementary Estimates on this occasion are not so graphically exhaustive as the party opposite suggest in their charges of Government extravagance.
Industrialists demand selective and expert knowledge of opportunities for exports. It is vital that we make this information available, but we must pay for it. Abroad there are the turnover tax, the added value tax and various other impositions, and our exporters should be fully informed about them so that they can compete in tendering. Whatever services are provided, they must be pa id for from the public purse.
In many spheres we are being overshadowed by our competitors, who are leapfrogging us because our techniques are not adequate. However, industrialists and others are doing their best, spurred on by the Government, to compete with foreign companies and the 22 million people who are employed in this country, 8 million of them with productive skills, are helping to keep us in the forefront in the export sphere. We must continue to set up training establishments in the 1122 engineering, jute, agriculture and other industries—but we must pay for these things to be done. If our economic health is to be sustained, we must be prepared to pay to sustain it. Only in that way will we be able to pay our way. I fear that too much special pleading goes on, particularly on the part of hon. Gentlemen opposite, at a time when we must be selective but be prepared to invest in training and other schemes.
§ 5.12 p.m.
§ The Chief Secretary to the Treasury (Mr. John Diamond)
My hon. Friend the Member for Glasgow, Scotstoun (Mr. Small) is absolutely right in saying that there is nothing in these Estimates which calls for the sort of anxiety which has been expressed by hon. Gentlemen opposite.
It may be convenient if I deal with the main issues that have been raised—that is, the total size of the Estimates, the question of timing, the accuracy of forecasting and, in particular, the question of the investment grants. There have been a number of other detailed items to which I have been asked to draw the attention of my right hon. Friends, and I will certainly do that. But on the main topic, which relates to the general size of the Estimates, I imagine that the House would rather that I dealt with that than a host of detailed items.
We are dealing with Estimates for supply, something different from public expenditure. Time and again hon. Gentlemen opposite have mentioned that the difference between their point of view and ours is that they simply do not accept what they say is apparently accepted by us—the inevitability of the growth of public expenditure. I have no knowledge of what is inside the minds of hon. Gentlemen opposite, but I do have knowledge of what happened to public expenditure while they were in power.
To put the matter in its true perspective, I remind the House of the information which I gave in answer to a Question a short time ago about the rise in public expenditure, in constant terms, in the period since 1960–61. For the first five years the average increase in expenditure was a little over 4½ per cent. per annum, and it went up each year, the first year by 4 per cent., the second by 7½ per cent., the third by 1 per cent., the 1123 fourth by 5½ per cent. and the fifth by 5 per cent.
Hon. Gentlemen opposite say that they have certain views about this, but the practice of it is exactly as I have described it over that period; a rise of something over 4½ per cent. per annum. We have not been in office for that period and it is difficult to refer to the earlier years of Labour administration, because the early years of any new Government are conditioned, in terms of public expenditure, by what their predecessors planned and arranged. I should be astonished, however, if our figures for a similar period do not turn out to correspond fairly closely with the same rate of growth to which I have referred. The indications are already to that effect.
Thus, I do not accept that there is this clear distinction—on the one hand the Opposition saying, "We do not ever believe in the growth of public expenditure", and, on the other hand, the Government saying, "This rise is inevitable". Hon. Gentlemen opposite have drawn attention to the fact that, in sharp distinction from us, they do not believe in this growth while, they say, the Government seem committed to the inevitability of increased public expenditure.
§ Mr. Gresham Cooke rose——
§ Mr. Diamond
I shall be referring fully to the hon. Gentleman's speech. If, at the end of my remarks, he does not consider that I have answered his questions, I will give way. I am grateful for the remarks he made because certain matters need explaining, and that is what I intend to do. I am as anxious as he is to ensure that there should be no misunderstanding, which can easily arise, from a superficial glance at the figures, about the attitude of the Government vis-à-vis the House and the Estimates Committee, and that there should be no misunderstanding abroad. I appreciate the hon. Gentleman's remarks about the need for confidence abroad.
I will, therefore, concentrate at the outset on the size of the Estimates and see how they compare and what proportion they represent. I will try to break them down a little. We are dealing with £351 million, which is unquestionably a large figure. It equals about 3.7 per cent. of 1124 the total supply expenditure. Of this figure, £120 million represents two quite special amounts; one, the foot-and-mouth disease compensation figure of £30 million—which nobody has criticised or suggested could have been foreseen—and the other, the £90 million for investment grants.
The first point to realise about investment grants is that, for the first time, they are coming under the control and scrutiny of this House, something which never happened before because previously they were allowances set off against one's tax payments, and nothing was seen of them in Parliament—except when we agreed the total figure at Budget time. Nothing else could control the flow of money to those who applied for payments of this sort.
At the start of the year, it was the intention of the Government to make a three quarters payment in respect of investment grants. As the year advanced the Board of Trade found that it could cope with the flow of demand. It also found that it could accelerate the payment which it wanted to do to encourage more firms to invest. Thus, it was increased to four quarters and, later in the year, improved again to five quarters. The main reason for the large increase as compared with the original position was the improvement from three to five quarters' payments.
One can control payments, but one cannot control the speed with which firms apply for them; and the variety and speed of demand is astonishing. Some firms are still applying for expenditure incurred right at the start of the scheme. Others are applying immediately they are entitled to apply. One begins with a new scheme like this and finds that it is impossible to estimate with accuracy the speed with which individual firms will make application. This is relevant to the criticism which the hon. Member for Aylesbury (Sir S. Summers) made in such forceful terms. In other words, one cannot control the speed of application, but one gets used to it so that in time, and as the scheme develops, one can be more certain of the facts.
When the November Supplementary Estimates were brought forward they were based on the 75 per cent. formula. The hon. Member for Aylesbury knows better than anyone else—because he is the most 1125 well-informed, well-respected, authoritative Chairman of the Estimates Committee—that this 75 per cent. formula is a well-accepted formula for dealing with uncertainties of this kind. But as we move forward from November, and the end of the period is the end of March, no one can any longer claim that uncertainty.
I am quite sure that if in January one had put forward a 75 per cent. formula, the first response would be, "Could you not do better than that and have a shot at 100 per cent.?". The hon. Member was critical on this point and used most extravagant language, but it has never been the case yet that a single Supplementary Estimate after November has been put forward on the 75 per cent. basis. It has always been on the 100 per cent. basis.
The criticism which the hon. Member made about "someone who did not know the first thing about it" being entitled to ask for 100 per cent. is wholly misplaced. I hope that I have satisfied him that we were carrying out a practice acceptable to his Committee and were going on the principle, on which I and my predecessor have gone, of giving the best information to this House at the earliest possible time.
§ Sir S. Summers
I do not think the right hon. Gentleman has grasped the kernel of my complaint. I am not complaining that when in November the fig ire of £150 million was put forward 75 per cent. was the best estimate. What we complain about is that without adequate time to study the next figure, £39 mi lion, it was not only put forward sooner so as to permit us to examine it, but it is claimed to be accurate for the succeeding two months. That is a claim I cannot think the Government are entitled to make.
§ Mr. Diamond
The hon. Member made more than one complaint. I was dealing with his first complaint and I was coming to the second one about not leaving this House and his Committee adequate time to study the matter before having to pass it under the Consolidated Fund procedure. I am sorry to have to refresh his memory, but the first complaint was about the comparison between the 75 per cent. and the 100 per cent. and the unlikelihood that anyone would be able to claim 75 per cent. in November and yet 1126 100 per cent. in January. The increase, as the hon. Member recognises is nothing like £39 million. Half of it is the switching from 75 per cent. to 100 per cent., and £20 million is not such an enormous figure. It is large in relation to a £75 million float which is all I have to play with. I shall come to the very interesting proposal he made about the Civil Contingencies Fund. I hope I have explained why the investment grant figures appeared as they did and why I am entitled, as I am sure the whole House recognises, to regard that as a separate and special item unrelated to the normal situation of increases in Estimates known as Supplementary Estimates.
To return to the point I was making about the total size of the Supplementary Estimates, if one takes of the £120 million I have referred to, the £90 million for investment grants and £30 million for foot-and-mouth disease, the figure we are concerned with is 2.4 per cent. of the total supply. In 1965 that figure was 2.7 per cent. In 1966 it was 2.5 per cent. As this year it is 2.4 per cent. I think I am entitled to say that there is no need for the kind of anxiety that has been expressed in so many, speeches.
§ Mr. Gresham Cooke
Because the total supply has gone up enormously in the last three years, although the percentage may be the same, the total increase is very much more.
§ Mr. Diamond
I have dealt with the question of total supply. I am glad the hon. Member repeated it, because his leader was in some doubt whether this figure was in the mind of the hon. Member. The best expression of the increase in total supply is not money alone because supply here is to central government and one must bring in local government and all the relevant matters contained in the phrase, "Public expenditure". I have explained the increase in public expenditure which went on under the hon. Member's Government and which had his support and his vote on every occasion when it was increased.
That deals with the question of the total size. The next question I have to deal with is that of inaccuracy of estimating which has been alleged. It has been compared with the much better estimating which, it is said, goes on in 1127 private industry. I was interested in this, because I am not wholly inexperienced in this field. I am a great deal more experienced in terms of years in that than in my present office, which I have occupied for less than four years.
I shall give the run of figures in terms of the Estimates. I have taken the last 10 years, which I hope the hon. Member will regard as a reasonable run of figures. I can give the detailed figures if he likes. The average difference between the Estimate and the outturn—the extent to which the estimate was inaccurate—is plus 0.3 per cent., that is to say, the outturn came to a mere 0.3 per cent. more. For every £100 estimated 0.3 per cent.—6s.—was wrong. The hon. Member alleged that that compared unfavourably with private industry. I practised in private industry for many years. I know of no firm which has found it possible to estimate with that degree of accuracy— none whatever. Perhaps I have too limited an experience; I have been a chartered accountant for only 40-odd years.
§ Mr. Farr
While, of course, I accept the right hon. Gentleman's figures as to the accuracy without hesitation, I should be grateful if he could let me have details for the individual years. I believe he gave an average figure. My attempt at comparing private industry with the performance of the Government was to say that a private individual firm or company would have been bankrupt if it had carried on in this manner.
§ Mr. Diamond
There are any number of hon. Members present who have most responsible positions in private industry. If they can say from their own knowledge that firms with which they are concerned over the last 10 years calculated the total of their outgoings with the same degree of accuracy, I invite them to do so—silence.
§ Mr. John Page
I do not want to enter into an argument in which I am sure I would be brilliantly surpassed by the Chief Secretary, but he has been talking about the total of outgoings. When estimating in industry, the total of one's outgoings is not at all the most difficult thing to estimate. What is difficult to estimate is what one's sales will be. It is much easier to know what overheads will be, except things like rates. There 1128 is a point in this which concerns outgoings, not turnover.
§ Mr. Diamond
It may be one or the other, but certainly a firm which did not estimate its outgoings would be bankrupt in no time. Civil servants, who have enormous experience in this field, and clearly this is to their credit, perform their duties with enormous care under every succeeding Government. They have managed to produce estimates, although we are running at figures of something like £10,000 million, of 0.3 per cent. accuracy. If the hon. Member wishes to have the run in the last few years, starting from 1960–61, they were plus 3.5 per cent., plus 1.5 per cent., minus 2.3 per cent., minus 1.1 per cent., then, with a change of Government. plus 0.1 per cent. and plus 0.4 per cent. I make no point that it has been ten times more accurate during our stewardship than it was under our predecessors, although I repeat that the whole of the credit is due to the civil servants, who serve both major parties with equal loyalty and diligence.
§ Sir S. Summers
Are we to take it that this includes all Supplementaries, including the original Estimates, and therefore includes the second and third thoughts in the tenth and eleventh months?
§ Mr. Diamond
The hon. Gentleman is quite right. I am comparing Estimates with outturn. As he well knows, "out-turn" means at the very end of the year after including all Supplementary Estimates and, indeed, revised Supplementary Estimates.
Now that I have dealt with the question of the total size and whether these Estimates were reasonably accurate, I return to the main point made by the hon. Gentleman in his most interesting opening speech on the question of the timing. It is important that we should get this right. Inevitably I shall become a little technical now, but I know of no technicality which I regard as more important than that the House should have all the information it needs, and as early as possible, in the matter of the supply of money, which is one of the fundamental rights of the House. The House grants certain privileges to the Executive to spend the money on its behalf, but the 1129 House, and only the House, has the right to raise the money. This is fundamentally our concept of democracy.
The first question is: why did we put in these revised Estimates? We are no longer on the question of size. I have disposed of that question. The question now is: it being known that these Estimates were exceeded, should we have put them in on 16th January, the first day the House met after the Christmas Recess? I know of no better day on which to inform the House of expenditure of this kind than the first day. I know of no other basis on which to approach the topic.
Of course it was a most inconvenient day. Of course I was consulted. Of course I consulted, or advised, my right hon. Friend the Prime Minister. Of course I knew that he was making his speech, and this was going on at the same time. Of course I knew that there might be superficially an awkwardness or embarrassment about the two things happening at the same time. What did the hon. Gentleman want me to do—sit on these Estimates and not tell the House? I thought that it was my duty to advise the House immediately. That is the end of the matter. Of course it was my duty to do that.
The hon. Member for Aylesbury, who is Chairman of the Estimates Committee, says, "But by doing that you place us, the Estimates Committee, in an awkward situation. We then do not have sufficient time to examine the Estimates". I understand that, and would want to meet it. As the hon. Gentleman knows, this is not the first time that we have been faced with this problem. An exactly similar problem arose earlier on. In February 1957, we had exactly the same problem of a revised increased supplementary. That situation was exactly on all fours with this. That Supply was voted fourteen days after being notified to the House. This Supply was put forward on 16th January. Fourteen days after the 16th brings us to the 30th. M' watch tells me that it is the 30th today when we are debating the matter. This is exactly on all fours with the 1957 situation. We are giving the House exactly the same amount of time that it was given by our predecessors in February, 1957.
1130 The hon. Member for Aylesbury says that that is still not enough time. I agree. This is why I am coming to the most interesting proposal the hon. Gentleman made. He said—he wagged a warning finger whilst he said this—"If the Government, or the Treasury"—I forget which he said—"come back to us and say that the answer is to increase the Civil Contingencies Fund. I would not agree".
The Government know the views of the Estimates Committee with regard to the Civil Contingencies Fund. I served on the Estimates Committee many years ago. As the hon. Gentleman pointed out, this matter was settled a few years ago, namely, in 1955. The Fund was settled at £75 million. I am prepared to do whatever the House instructs me to do. I am the servant of the House, handling its money. This is not an unusual position for me to be in, in view of my background. I am prepared to do whatever the House wants me to do.
However, the House must be aware of the facts. The fact is that we are dealing with £10,000 million of expenditure. The Civil Contingencies Fund—my float —is £75 million, two days' float. Does the hon. Gentleman allow his petty cashier, never mind anybody with real responsibility, as little as two days' float? I and those who serve me have to calculate, on the basis of moneys coming in and going out. We cannot stop payments. There would be a fuss if the Government stopped paying. I have to calculate within an accuracy of two days, not knowing what income will come in, but knowing that at the end of the year there is little coming in and very little room for manœuvre. I am, therefore, compelled, if I am not going to fall short in my payments, to leave as little as possible to the Civil Contingencies Fund, because it is only £75 million.
The hon. Gentleman must realise the position that he asks the Government to take up if we were to accept his first proposal or the alternative one, which is an interesting one and one which I would want to examine, although I see difficulties about it straightaway, of having a separate Contingencies Fund for Emergency Contingencies as opposed to normal contingencies. I would certainly want to examine that. I want the hon. Gentleman to realise, however, that in 1131 1955 when this figure was fixed it was a figure of 2 per cent. It was a float of 2 per cent. of the total. Mine is a float of ¾per cent. of the total. The float then would amount to £200 million now, not £75 million. That would be a very different figure, indeed. If the hon. Gentleman is merely saying that he was right in 1955 but wants to move with the times, £75 million would become a Civil Contingency Fund of £200 million.
These are important issues. They are not party issues. They are important issues relating to the problem of money management of the Fund which the House puts at the disposal of the Government and over which I, as Chief Secretary, have certain responsibilities.
Therefore, in terms of time of course these problems arose—the problem of coinciding with a most thoughtful speech forecasting future public expenditure by my right hon. Friend the Prime Minister, the problem of not giving the Estimates Committee the time we would have wished to have given it to examine the Estimates fully. However, the overriding principle which I have adopted throughout is—when in doubt give the House the whole of the information as soon as possible. We have done that. I hope that I have satisfied the House that we have acted reasonably.
§ Mr. Gresham Cooke
Would it help it in future the Treasury were to publish these figures in the Recess so that at least the Clerks and those on the Estimates Committee could be preparing the ground?
§ Mr. Diamond
That technically would be publishing to the House—I recognise that—but it would not give the information to the House in the real sense in which we believe that it should be done.
§ 5.40 p.m.
§ Mr. lain Macleod (Enfield, West)
With his usual calm courtesy, the Chief Secretary has told us that, in his view, the enormous sum we are considering is unavoidable and, in any case, unexceptionable. I hope briefly to show that I do not accept that attitude.
The total of revised and Supplementary Estimates for 1967–68 which have been presented to date is no less than £462.5 1132 million. Having dealt with about £111 million, we have today to consider £351.7 million. The Chief Secretary will agree that it is absolutely right that we should discuss the matter, and we are therefore indebted to my hon. Friend the Member for Twickenham (Mr. Gresham Cooke) for raising it, and particularly to such hon. Members as my hon. Friend the Member for Aylesbury (Sir S. Summers), who gave us the benefit of his special experience and made some most important suggestions.
The sum involved is a record figure. Some of it is unavoidable, the most obvious case being the large payments that had to be made to carry out the policy of slaughter to deal with foot-and-mouth disease, which both sides of the House believe to be correct. Nor is it in dispute—and here I take up what the Chief Secretary and the hon. Member for Dunbartonshire, East (Mr. Bence) said—that over the years, decades and centuries there is a steady and inexorable rise in public expenditure. The mere lifting of salaries as time passes would account for that over the years. In addition, it is not possible when one deals with sums now running into tens of thousands of millions of pounds to expect precision, and it would be foolish to call for it.
I am more than prepared, as are my hon. Friends, to make every conceivable allowance for all those matters. Even so, the reality is that we were presented with a Budget finely tuned to within £500,000. We remember all that stuff about "steady as she goes", and how nothing could conceivably be done which would wreck that elaborate calculation by a quarter or half a million pounds, but we are now considering £462.5 million-worth of revised and Supplementary Estimates.
I should be very surprised if the Chief Secretary does not agree in his heart that the truth is that expenditure, even after the exercises we have seen, is still largely out of control. The Chief Secretary tried to show that the error, which I think is 3.7 per cent. overall, could be reduced to 2.4 per cent.—I think that I have got his figures right—if one took out the two biggest items and then contrasted the result with some previous years. Of course that is so, because then we are contrasting a doctored figure with 1133 the whole figure for previous years. If I were allowed to do the same thing to those previous years, I have no doubt that I could obtain figures which would show the reality of the size of the figure of £351.7 million which we are considering, which is, as has been said more than once without challenge, six times the figure of 1964.
I agree with my hon. Friend the Member for Aylesbury that it is very unsatisfactory that Parliament should be in the position that we are in. But I also agree with the Chief Secretary that he was right on the very first day after the Christmas Recess to put the position before Parliament as openly as he could that is not in dispute. The House of Commons Paper No. 64 says in paragraph 6 of the Memorandum:From Parliament's point of view the effect of the procedure is to diminish the amount of expenditure which might otherwise be incurred in anticipation of the granting of the necessary funds by Parliament.I regard that as a somewhat disingenuous comment. From Parliament's point of view, and particularly the Opposition's, the reality is that there is a diminished control by Parliament, and diminished opportunities for the examination of these enormous sums. This is acknowledged it the subsequent paragraph.
The real difficulty is the risk which we have got into, because the total Supplementary Estimates are unusually high, of exhausting the Civil Contingencies Fund—the float, as the Chief Secretary accurately described it. My hon. Friend the Member for Aylesbury made an important suggestion. I recognise the validity of the Chief Secretary's point that with the vast sums we now deal with the £75 million in the Fund decreases all the time as a proportion, and therefore its value to the Chief Secretary as pocket money dwindles. But, because this is one of the few checks that Parliament imposes, it is most important that there should be a rigid Statutory limitation to the Civil Contingencies Fund. I am sure that the Chief Secretary agrees.
I had hoped that the hon. Member for Barons Court (Mr. Richard) would return, because he asked me some questions. He said that at first he had not thought of speaking, but then decided to do sc. I think that the House will 1134 agree that his first thought was wiser. In his absence, I shall refer only briefly to the points he made. Of course, as my hon. Friend the Member for Ormskirk (Sir D. Glover) said, although some of the cuts were "phoney" some were real, and that was why the Opposition did not divide against the main Question when it was put last week.
But the reality which many of my hon. Friends have emphasised, and to which we must return as I conclude my brief speech, is that even if one takes the whole £300 million—and much of it, particularly the £80 million saving on investment grants and the savings on civil servants not being engaged, is unreal, to put it mildly—the whole of that has been swamped by the amounts now before us. It is a pathetic attitude of the hon. Member for Barons Court and other people constantly to whine to the Opposition that they cannot see where this terrible sum can be reduced.
It is especially the Chief Secretary's job to control public expenditure; that is what the job of Chief Secretary was created for. Therefore, any failure here is especially his, and it is apparent that there has been a failure. What we found deplorable in the excellently calm dissertation he gave this afternoon was that there was not a single word of recognition that he has failed in the job he was particularly asked to do.