NATIONALISED INDUSTRIES (SELECT COMMITTEE)

HC Deb 11 February 1969 vol 777 cc1181-274

Mr. Speaker

I wish to announce that I have selected the Amendments standing in the names of the hon. Member for Poplar (Mr. Mikardo) and the hon. and gallant Member for South Fylde (Colonel

5	That a Select Committee be appointed to examine the Reports and Accounts of the Nationalised Industries established by Statute whose controlling Boards are appointed by Ministers of the Crown and whose annual receipts are not wholly or mainly derived from moneys provided by Parliament or advanced from the Exchequer; and of the Post 5 Office, the Independent Television Authority and Cable and Wireless Ltd.; and to examine such activities of the Bank of England as are not—
	(i) activities in the formulation and execution of monetary and financial policy, including responsibilities for the management of the gilt-edged, money and foreign exchange markets;
10	(ii) activities, as agents of the Treasury, in managing the Exchange Equalisation Account and administering Exchange Control; or
	(iii) activities as a banker to other banks and private customers.

I welcome this opportunity tonight to move this Motion because it provides an opportunity to deal with suggestions that the Government are dragging their feet over the question of Select Committees in general and this one in particular. This is not so.

Speaking first for myself, those who care to look at the relevant passages of the OFFICIAL REPORT and at my speeches outside the House will know that for many years, both in opposition and in Government, I have been a consistent advocate of the vital need to provide new Parliamentary checks to executive Government and the importance of Select Committees in that rôle.

Moreover, the Government have been vigorous in pursuing the experiment of specialist Select Committees. I appreciate that this is a matter in which the House naturally takes a great deal of interest. In addition to the proposal to set up a Select Committee on Scottish Affairs, I have it in mind to propose another Select Committee on overseas aid and development when the Committee on Agriculture has completed its work.

I am informed by the House authorities that, with these developments and the recent establishment of a number of sub-committees, we have now reached the absolute limit of the facilities available, not only in terms of clerks, but also of accommodation, shorthand writers, and even the printing of proceedings. Of course if, when the time comes, the House decides to establish

Lancaster). I suggest that as they are linked we may discuss the two together. I call the Leader of the House to move the Motion down to line 12.

6.30 p.m.

The Lord President of the Council and Leader of the House of Commons (Mr. Fred Peart)

I beg to move,

the specialist committee system on a permanent basis and of a certain magnitude, the necessary facilities would have to be provided. But it is evidence of the Government's determination to give the experiment a fair wind that they are setting up these committees to the absolute limit of the available resources.

I regret the delay in setting up this particular Select Committee this Session. The reason for this, however, was the reverse of a snub to the Committee. I hold my hon. Friend the Member for Poplar (Mr. Mikardo) and his colleagues in very high regard. They have worked hard in this Select Committee and have produced some excellent reports. I pay tribute to their work and once again confirm that there is no attempt to snub the Committee in any way.

The House knows that the Committee proposed a sweeping extension of its order of reference. The Government have not been able to accept such a sweeping extension, for reasons which I shall explain. Rather than appear to ignore the Committee, however, I have taken every opportunity to try to resolve the differences of opinion. These attempts have naturally taken quite a time. I fear that they have not been successful, though I believe that the terms of the Motion reflect the Government's wish to meet as far as possible the Select Committee's proposals without compromising the essential safeguards for other interests.

As the House will be aware, the background to the present proposed terms of reference lies in the special Report of the Select Committee on its terms of reference published in June of last year. Since 1956, when the Select Committee on Nationalised Industries was first set up, the terms of reference have remained unaltered each Session, except that, from the Session 1965–66 the Post Office has been specifically included by name. The Order of Reference has been: To examine the reports and accounts of the nationalised industries established by statute, whose controlling boards are appointed by Ministers of the Crown, and whose annual receipts are not wholly or mainly derived from monies provided by Parliament or advanced from the Exchequer". The Select Committee came to the conclusion in 1968, in its special Report, that these terms of reference were unduly restrictive. It concluded that the terms of reference should be extended to provide for far more generalised terms of reference. Such generalised terms of reference would enable the Committee to examine all bodies which are or could be subject to control by the Government, other than those already falling within the scope of the Estimates Committee or the traditional field of the Committee of Public Accounts. In particular, the Committee listed 11 bodies which it considered suitable for its investigation. Of these, three were accepted by the Committee as not being of pressing concern—the National Seed Development Organisation, Letch-worth Garden City and the General Practice Finance Corporation. [HON. MEMBERS: "Hear, hear."] I am glad to acknowledge support from both sides of the House.

Then there is the Horserace Totaliser Board, which is an important category of its own. To be frank, the Government thought that the activities of this Board were relatively so limited that it was most unlikely that the Select Committee would wish to give high priority to an inquiry into it. I now understand that this may not be so. I at once give this assurance, therefore: if the Select Committee, when it has examined the possibilities, wishes to inquire into the Horserace Totalisator Board, I would at once propose an addition to its order of reference to enable it to do so immediately. [HON. MEMBERS: "Hear, hear."] As hon. Members will see, I am in a conciliatory mood tonight.

There are seven other bodies into which the Committee wished to have new powers to inquire. First, there are individual companies operating in competitive situations in their particular industries; British Petroleum and the three aircraft companies, Beagle Aircraft Ltd., S.B. (Realisations) Ltd., and Short Bros. & Harland. Secondly, there are three bodies—the Independent Television Authority, Cable & Wireless, and the Bank of England—which have some parallels with the nationalised industries insofar as they are governed by statute on lines somewhat similar to those of a nationalised industry, and contain some element of monopoly. The Government accept that, in principle, the Committee's order of reference should be extended to cover this latter group.

The conflict of opinion therefore resolves itself in practice into two questions. First, should the Committee be empowered to inquire into these individual companies operating in competitive industries, and secondly, should there be any limitation to its powers to inquire into the Bank of England?

The Government have given the most careful and detailed consideration to the views of the Committee on these points, and I will, in the rest of my speech, concentrate on them.

As a preface, however, let me say publicly what I have already told my hon. Friend the Member for Poplar, the former Chairman of the Committee, privately; that if the order of reference I propose is accepted by the House, my right hon. Friend the Chief Secretary and I would be happy to appear before the Committee to be examined further in the details of its order of reference. I see that my hon. Friend the Member for Poplar is in his place. If he was not here earlier, I would like to inform him that I paid tribute to him and the work of his Committee.

The Government have concluded that it would be contrary to the public interest for either British Petroleum or the aircraft companies concerned to be also included. The fundamental point about British Petroleum and the aircraft companies is that they are commercial concerns operating in highly competitive markets at home and overseas. For them to be subjected to this sort of public examination would seriously hamper them in competing in these markets. Their competitors of course would not be subject to scrutiny in this way. It would also leave room for misunderstandings.

Mr. Joel Barnett (Heywood and Royton) rose—

Mr. Peart

My hon. Friend can make his point later. My right hon. Friend the Chief Secretary will reply to the debate in detail. I will, however, give way to my hon. Friend the Member for Heywood and Royton (Mr. Barnett) if he wishes.

Mr. Barnett

The Public Accounts Committee, for example, considered the Bristol Siddeley affair and matters were sidelined which could have been of harm to the company concerned.

Mr. Peart

I understand that hon. Members will argue about sidelining, but this is the view and I confirm it. This is the Government view and no doubt it will be explored in greater depth by my right hon. Friend the Chief Secretary who will reply. We feel that this is a fundamental point which could harm those concerns which operate in a highly competitive market. It would also leave room for misunderstandings which could damage those concerns about the nature of the Government's relationships with them.

For example, it is a well-known fact that the Government do not use their shareholding in British Petroleum to interfere in the commercial management of the company. It could damage the company if any impression got around that there were any change in this respect. For all these reasons the Government consider that this is not the time for the Select Committee on Nationalised Industries to start its inquiries into these companies in the competitive field.

Turning to the Bank of England, the House will see that the Government proposes that three areas of the Bank's activities should be outside the Committee's remit. The first of these—and it also comes into the second—concerns its activities in the formulation and execution of monetary and financial policy. Here I should emphasise an important difference between the Bank of England and the nationalised industries with which the Committee has been hitherto concerned.

The nationalised industry boards have definite statutory responsibilities for which they bear the final responsibility; the Ministers concerned have supervisory responsibilities, but do not share the executive function. The Bank of England, on the other hand, has no similarly defined exclusive field of responsibility. Instead, on the formulation and execution of monetary and financial policy, it is essentially and inextricably linked with other bodies, principally the Treasury and other Government Departments, in advising on policies for which it is the responsibility of Ministers to answer to Parliament.

For the Select Committee to examine the Bank on its part in all this would be arbitrarily to separate out what is one contribution only to the essential amalgam of formulation and execution of a policy which it is for Ministers, and specifically for my right hon. Friend the Chancellor of the Exchequer to expound and defend to Parliament.

Perhaps I could briefly refer to the other two exclusions. For the second one—managing the Exchange Equalisation Account, and administering exchange control—in addition to being concerned with the arguments I have just been making, there is a supplementary formal reason for its exclusion: the Bank conducts these activities as the agent of the Treasury which is statutorily responsible and is subject to examination on this by the P.A.C. The third exclusion, relating to the Bank's activities as a banker to other banks and private customers, speaks for itself. There must be complete confidentiality of the banker-customer relationship. This is in fact a legal right of the other parties concerned.

It has been represented to me that the effect of these restrictions—which apart from the terms of reference would in any case also be embodied in Ministerial instructions of guidance to official witnesses in their evidence to the Committee—will be to leave the Committee with a purely residual function. It has been said that it has been left with little more than conducting an inquiry into the Bank's note-producing activities. This criticism is quite unfounded. The Select Committee will be able to examine the general relationship between the Treasury and the Bank, in terms both of constitutional position and of actual working relationships, so long as the examination does not seek to inquire into particular occasions or specific aspects of policy. In this connection, my right hon. Friend the Chancellor of the Exchequer authorises me to say that he would be happy to appear before the committee, possibly accompanied by the Governor and senior Treasury officials, to discuss his own views on the relationship between the Bank and the Treasury.

The Committee will also be able to examine the way in which the Bank is organised to discharge its various responsibilities. If, therefore, the Committee concentrates on the Bank's position in general, and does not seek to discover what advice it has given, or what action it has taken, on a particular issue, I do not think any serious difficulty should arise.

Mr. Speaker, as a consistent advocate of the need to extend Parliament's control over the executive, I have considerable sympathy with the view that as a matter of principle the terms of reference of such a well-established and well-tried Committee as this should be in entirely general terms. However, I think I have shown that this cannot be done at this stage—

Mr. Ian Mikardo (Poplar)

Why not?

Mr. Peart

—without danger to the other parties involved. Certainly, it marks no lack of confidence in the proposed Select Committee which has earned a justified reputation in these matters. Indeed, I would like to put the Motion to the House in the following spirit. We are not in a static situation. I mentioned earlier the setting up of another new Committee to deal with overseas aid. I believe this experiement should be given a fair wind because we believe it right that committees should be introduced in that spirit. As experience grows, circumstances change. In the meantime I propose a substantial and, I believe, a very valuable extension to the Committee's powers and so I commend it to the House.

Mr. Speaker

May I announce to the House, since many hon. Members present did not hear me at the beginning of this debate, that I have selected the Amendments in the name of the hon. Member for Poplar and the hon. and gallant Member for South Fylde. I suggest that we take them together because they are linked. I will invite the hon. Member for Poplar to move his Amendment if he wants to do so at this moment.

6.48 p.m.

Mr. Ian Mikardo (Poplar)

I beg to move, in line 2, leave out from 'Industries' to 'whose' in line 3 and insert: 'and other bodies in which the State has a controlling interest'. I thank you, Mr. Speaker, for selecting this Amendment. As you, Sir, have said, this and the following Amendment—in line 4, leave out from 'Exchequer' to end of line 12—stand together. The effect of the two taken together would be to substitute for the order of reference for the Select Committee which in the Motion is proposed by the Government the one which the Select Committee itself recommended in the special report which it made to the House during last Session. That is to describe the effect of the Amendments.

May I now say what is the purpose of the Amendments? Their purpose is not as some commentators have thought to open up—certainly their purpose is not primarily to open up—the secret places of the Bank of England to public gaze. If that is a purpose at all, and I shall try to show it is not a principal one, it is a secondary and narrow part of the problem. The purpose of these Amendments is to establish the principle that Select and Specialist Committees of the House are independent bodies responsible to the House, and responsible only to the House, and are not creatures of Ministers who can limit their activities.

I fear that I must weary the House for a few minutes by going back over the history of the matter. It is familiar to most hon. Members, but there may be one or two who, in the pressure of other affairs, have not followed it closely. The difficulties and differences which have arisen over the order of reference of the Select Committees stem from the very worthy attempt which was made by my right hon. Friend the Member for Coventry, East (Mr. Crossman), when he was Leader of the House of Commons, and in which he had the enthusiastic support of the House, to improve our procedures to give the House a better check on the decisions and actions of the Government.

The thesis which was advanced by my right hon. Friend the then Leader of the House, and which was approved by the great majority of the House was that, over recent years the imbalance of power between the Executive and the Legislature has widened and that within the House the imbalance of power between the Front Bench and the back benches has widened. The thesis of my right hon. Friend was that that one way in which that imbalance could be adjusted, if not corrected, was through the use of Select and Specialist Committees acting as invigilators—I think "watchdogs" was the in-phrase—of at least some of the work of Ministers.

This goes back a long way. The Select Committee on the Estimates and the Select Committee on Public Accounts have exercised, in one form or another, that sort of watchdog activity over the direct work of Government Departments. Over the years, and for many years before I had the honour to be a member of it, the Select Committee on Nationalised Industries has fulfilled the same functions in respect of the public corporations.

But there are some enterprises, there are some parts of our economic public life, in which Ministers exercise control and in which they are responsible for spending a good deal of public money but which are neither Government Departments nor public corporations; and up to this very day there has been no machinery for scrutiny, except, in some cases, the ex post facto examination by the Select Committee on Public Accounts, which, if I may say so in the presence of its distinguished Chairman, does a great job but which by its order of reference is limited to examining things after they have happened. Except for a partial examination by the Select Committee on Public Accounts, in some cases only, these public enterprises, which are neither Government Departments nor public corporations, but in which—I repeat—Ministers exercise a great deal of control and power and in which they spend a great deal of the taxpayers' money, are free from the surveillance of the representative of the taxpayers, namely, Members of the House of Commons.

My right hon. Friend the Member for Coventry, East drew the attention of the House to this gap in our machinery of control, to this gap in the relations between Parliament and the Executive. He did so in the most graphic terms in a debate on the procedure of the House which took place on 14th December, 1966, and in which he said this: … we have to face the growing power of the State, the ever-widening expansion of Whitehall's activities, the ever-enlarging number of civil servants and agents of the State. At present"— I emphasise this next passage— huge tracts of this public sector are virtually screened from accountability to the House of Commons."—[OFFICIAL REPORT, 14th December, 1966; Vol. 738, c. 485–86.] In a later debate on the same theme, when my right hon. Friend had started us off on this process of procedural reform, which overtook us like some sort of fever but which maintained its temperature for all too short a period, he said this—and in what ringing terms: The spirit of inquiry, without which a revival of Parliamentary control of the Executive cannot be achieved, is making itself felt in Whitehall."—[OFFICIAL REPORT, 19th April, 1967; Vol. 745, c. 605.] Paradise is just around the corner.

My right hon. Friend later, under questioning from another of my right hon. Friends, made it clear—I know that he was speaking with complete sincerity—that he did not see the use of Specialist and Select Committees as being an effective instrument in this process of correcting the imbalance between back benches and Front; he did not see the use of Specialist and Select Committees as an effective instrument for creating accountability of Ministers to the House in those areas where previously there had been no accountability; he did not see them as being as effective instrument, unless their activities were free from limitation by Ministers.

During questions on the Business Statement on 29th June, 1967, my right hon. Friend the Member for Easington (Mr. Shinwell) asked the then Leader of the House this question: … may we have an assurance that these Specialist Committees … are independent and that they have the right to determine their own functions and activities without any interference or restriction on the part of the Government? My right hon. Friend the then Leader of the House replied in this way: I can give my right hon. Friend that assurance ".—[OFFICIAL REPORT, 29th June, 1967; Vol. 749, c. 761.] The present Leader of the House is a friend of mine in much more than the conventional sense in which we use the word in the House. I am most indebted to him for the kind and courteous way in which he moved the Motion and for his more than friendly references to the Select Committee. I nevertheless want to ask him how he squares what he said today, when he reserved the right to use the rein—he said "I will exercise a light touch. I shall not pull the brake up hard or drag at the bit, but I do reserve the right to hold the reins"—with what his predecessor said about giving these Committees the right to determine their own functions without any restriction on the part of the Government. How can my right hon. Friend, by any conceivable stretch of the imagination, find the very detailed Motion which he moved to be not in conflict with the quite specific undertaking which my right hon. Friend the previous Leader of the House gave?

Since we all thought—and I am sure that we were right—that my right hon. Friend the Member for Coventry, East meant what he said at the time, some of us wondered how we could help him to close this gap which he had mentioned. We started some discussion with him. They were very good, friendly and productive discussions, as one would expect. There were some differences of view—much the same as those to which we have listened in this debate.

In the end, the then Leader of the House said, "No one has had a close look at this gap. Someone ought to have a look at it. Why don't you"—he was speaking to me—"ask your Committee to examine their own order of reference? You can start by getting expert evidence about what are all these bodies which are neither Government nor public corporation and which therefore fall outside the ambit of control, but in which Ministers nevertheless exercise at least some measure of control and spend some money." I am speaking of a period almost precisely 12 months ago.

We were both anxious to avoid the situation which happened last year in which the Select Committee was not set up until about this time and did no work at all for several months. My right hon. Friend said to me, "If you ask your Committee to do this job of examining the gap in its own order of reference, and if you will report, say, at the beginning of July, that will give the Government the month of July in which to examine your Report and to reach a conclusion in the matter so that the Committee can then be set up immediately the new Session starts, without any delay, and we can avoid this long gap."

The Committee carried out faithfully its part of the bargain. A Sub-Committee under the chairmanship of the hon. and gallant Member for South Fylde (Col. Lancaster) made a close, a careful and, if I may be allowed to say so, an extremely well-balanced study of the order of reference and the whole field of activities of the Select Committee, where they overlapped and where points were not covered. We presented our Report, as we had been asked to do, in the first week of July, to be precise on 4th July last year.

We have not yet had any rejoinder from the Government to that Report. Not only did the Government not carry out their undertaking to reach a conclusion on the matter before the end of the Recess, so that we could be set up immediately the new Session began, but we are still waiting for their reply to the Report. Although my right hon. Friend the Leader of the House has spoken kindly of the Committee, I do not believe that it can be said that he has treated the Committee with courtesy if the first reply which we get to a carefully considered document is for us to see a Motion slapped down on the Order Paper.

Mr. Peart

I hope that my hon. Friend will not make that accusation. He knows that time and again I had informal consultations with him. I am rather surprised at that accusation.

Mr. Mikardo

My right hon. Friend should not be surprised. Of course we had informal consultations, but there is a limit to the extent to which that represents a reply to a submission by a Committee in a Report. Such consultations inevitably have a large amount of confidence attached to them. I see that my right hon. Friend nods agreement. I should not feel free after such consultations to go out and discuss with a lot of people what had been said at them. There are 17 other members of the Committee, besides myself. I am not the boss of the Committee. I am its servant. Although my right hon. Friend may have spoken to me, there are 17 members who have a justified grievance in the fact that, having carefully examined this matter of our order of reference, and presented a detailed and considered Report, they did not receive what it is normal for a Select Committee to receive, a Government reply to their Report. And they have never had it to this day.

I must describe our examination. We had the advantage of being given by the Treasury a list of all the bodies which might conceivably fall within the area which we were considering. We were very surprised to find, and I am sure that hon. Members will be surprised to hear, that there were and are as many as 34 of them. This was the list which we received from the Treasury and which they annotated most helpfully, and which was further explained in the most helpful evidence given by a witness from the Treasury.

We looked at them all very closely, one by one. We ruled many of them out of our purview because they fell or ought to fall more appropriately within the terms of reference of some other Select or Specialist Committee. Others were ruled out, as my right hon. Friend said, because they are so small and their activities are so limited that manifestly it would be wrong to bother the House with reports upon them.

But that left seven which we wanted included. There were the Bank of England, B.P., the Independent Television Authority, the Horserace Totalisator Board, Cable and Wireless, Beagle Aircraft and Short Bros. and Harland. There are two Short Bros. companies but, for simplicity, I have put them together. on six of the seven—all of them except the Horserace Totalisator Board—the sponsoring Ministers put up the same sort of objection to their being included within the Committee's order of reference as that which my right hon. Friend put up tonight.

It would take far too long, it would weary the House far too much, and I should be abusing your kindness far too greatly, Mr. Speaker, if I went over all the details of those grounds. That is a job for Committee and not for the House. But the Committee came to the conclusion unanimously—and all its Reports since I have been a member have been unanimous Reports—after examination in detail, and sympathetically, of all the objections advanced by Ministers to the inclusion of these bodies within the order of reference, that these objections did not stand up to serious examination. I invite hon. Members to read the transcript of the evidence, which is appended to the Report. I am sure they will agree with me when they have read it that the objections put forward by Ministers did not stand up to examination.

No doubt it is because they did not stand up to examination that the Government have changed their mind—it is always good to see people change their minds, for it shows a welcome lack of inflexibility—and have included in the order of reference three of the bodies which the Ministers said could not possibly be included in the order of reference without doing desperate damage. When I hear my right hon. Friend talking about the aircraft companies and B.P. being commercially damaged by their being included, I am a little sceptical, because that is exactly what we were told about the other three bodies which the Government have now decided to include. They have now included Cable and Wireless, the Independent Television Authority and, with the limitations set out in the Motion, the Bank of England.

Those limitations really are a subject for careful study and consideration. I think that they require the minds of Aristotle and of Maigret in order to figure out what they really mean and what the effect of them would be in practice. My right hon. Friend says that within the framework of them there can be a meaningful examination of the Bank of England.

Since the Motion has been on the Order Paper—and it has been there for some weeks—all sorts of people have had a look at it and have tried to make an assessment of whether a meaningful examination of the Bank of England could be carried out within the framework of the Order. So far, the voting is as follows: for the proposition that a meaningful examination could be conducted with these terms of reference, a member of Her Majesty's Government; against the proposition, everyone else who has had a look at the Motion.

Even if my right hon. Friend can command a majority in the Lobby tonight, and I have little doubt that he will be able to do so—he finds himself in a tiny minority everywhere else. I have consulted a number of people who are wise in the procedures of the House and in these matters. Not one of them believes that a meaningful inquiry could be carried out.

I do not know whether my right hon. Friend has read the article in the Financial Times the other day by Mr. David Watt, the very well-informed political editor. Mr. Watt wrote: … the Treasury has come up with new terms of reference for the Committee which are drafted so as to exclude almost any meaningful discussion of the Bank's affairs. As they stand, these terms of reference … leave precious little for the Committee to discuss except the price of the doorkeepers' uniforms and the decor of the canteen. That sounds a bit like a journalistic flight of fancy, but I assure the House that on the basis of the serious examination I have made of these terms, with the help of a lot of advice, I think that Mr. Watt's description is not far short of the truth.

My right hon. Friend says—and he says that he says it with the support of my right hon. Friend the Chancellor of the Exchequer—that he is quite happy to have a meaningful inquiry into the Bank. My right hon. Friend the Chancellor, friendly-like and a bit condescending, has said, "Yes, you can have a meaningful inquiry". That is what I will not accept. I do not think either the Chancellor of the Exchequer or the Leader of the House has the right to make us this concession or to deny us anything. This is the principle of the issue.

Of course, I say at once—because I am not a babe in arms, whatever other defects I may have—that any examination by any Committee of this House into the Bank of England would have to be carried out with a great deal of discretion, and of course it would have to be carried out within limitations. But every one of the inquiries we have carried out has been carried out with discretion and every one of them has had to be carried out within limitations, because every nationalised industry has confidential transactions.

I have no doubt that the confidential transactions of the Bank of England are both larger in number, larger in scale and perhaps more sensitive than the confidential transactions of other nationalised industries. But it is all a difference of degree and not of kind; of size and not of principle.

Every nationalised industry has confidential relations with customers. It buys and sells land and property and premature disclosure of that could be damaging. Some of the industries have confidential relationships with Governments and other public bodies in other countries, and in my years of membership of Committees of this House I do not recall a single question put to any witness which caused him the least embarrassment. I do not recall a single question put to any witness which he appeared to have any hesitation in answering. And, of course, any request from a witness to add a footnote to what he had said—perhaps a little thoughtlessly at the time—or to excise from the published version something that he had said—because it was a bit sensitive, has virtually without exception been granted.

So the question is not whether an investigation into the Bank of England should be carried out within limits. That goes without saying. The question is—who decides the limits? I do not believe that it can be seriously held that a Committee of this House is not capable of deciding its own limits.

The limitations included in the Motion arise from the fact that, initially, the Treasury resisted having an inquiry into the Bank of England at all. It put up a number of reasons, and, like the reasons put up by other Ministers in respect of other industries, they did not stand up to examination. I do not want to go through them. I shall mention only two, because they are highly germane to what my right hon. Friend the Leader of the House said about the relationship between the Bank of England and the Treasury.

First, he said that the Governor of the Bank of England is in a sort of rather special relationship, a kind of civil servant relationship, to the Treasury as an adviser and that the advice which a Permanent Secretary gives to a Minister is necessarily confidential and not the subject of inquiry. That does not stand up. The Select Committee, like all other Select Committees, is constantly taking evidence from senior civil servants and has never failed to distinguish between what questions are proper to the civil servants and what questions should only be asked of the Minister.

In any case, if the Governor of the Bank of England is a civil servant he should not be running around the world making speeches about policy. No other civil servant does it. He cannot have it both ways. He cannot sit on that fence.

Then my right hon. Friend said that some of these enterprises have competitors who are not subject to the same sort of Parliamentary scrutiny in their own country. That was said about the Bank of England. It was said that if we did this it would be the only central bank susceptible to Parliamentary surveillance. That is not true either. Those hon. Members who are familiar with the scene in the United States will know that the Federal Reserve Bank appears before the Banking and Finance Committee of the Senate and several of its sub-committees with very great frequency indeed, and—I quote Mr. Watt again— Almost every other Western country provides for some Parliamentary oversight of its Central Bank precisely because they are independent. I cannot understand why the Government are making an issue of the enterprises which they have left out. Indeed, that interests me more than the Bank of England, which they have partially put in. My right hon. Friend said that some of them are commercial organisations competing in a highly competitive market. But what on earth is B.E.A. if it is not a commercial organisation competing in a highly competitive market?

What is the difference of principle between B.P. and B.E.A.? My right hon. Friend has said nothing to answer that. I cannot help feeling that the Government have made rather an ass of themselves over this whole business. They have thrown into question the sincerity of their attitudes towards Select and Specialist Committees in general, which I quoted earlier. To return to the thesis of the former Leader of the House, we cannot use these Committees as a check on the escalating powers of Ministers if these same Ministers are to decide on their own say-so what the Committees are or are not allowed to examine.

The editor of the New Statesman put it very well over the weekend when he said: What is the good of having a watchdog if he is only allowed to bark when the burglar gives permission? That is particularly true in this case, because over the years the watchdog has proved to be such an amiable and well-behaved watchdog. This is throwing into question the whole of the Government's sincerity in their attitude towards the House, towards the surveillance of the House.

I have not followed it closely, but I believe that there were some Members who thought that the Government's treatment of the Select Committee on Agriculture left something to be desired. I read the other day with interest the Third Special Report of the Select Committee on Education and Science, which also seemed to be chafing a little under the reins held by my right hon. Friend.

Mr. Peart

Is my hon. Friend not aware that Agriculture and Education were set up as experimental Committees and it was agreed that they should extend the experiment by a further period? Extensions were given and they were enabled to complete their work. Agriculture is nearly finished—

Mr. Derek Page (Kings Lynn)

Nonsense.

Mr. Peart

The hon. Member should not say "Nonsense". As the Minister responsible for supporting and attending the Agriculture Committee, I can say that we gave every assistance as a Government. If my hon. Friend repeats that charge from a sedentary position, he is wrong.

Mr. Mikardo

I will not argue with my right hon. Friend about that. I have never been a member of that Committee and I have not followed its affairs very closely, but what I said is within the recollection of the House. I will say it again, and I think it stands up. I believe that some hon. Members thought that the Government's treatment of the Select Committee on Agriculture left something to be desired. As a statement of fact that is absolutely incontrovertible. What the Select Committee on Education and Science said in its Third Report is on the record, and "he who runs may read". It is not very happy with the treatment given it by the Government.

What convinced me that it is time to worry about the Government's sincerity in these matters is the fact that they have put the Whips on this discussion tonight. This is, above all, a House of Commons matter. I do not recall seeing anywhere in the election manifesto of my party or any other party anything about whether the House should have Select Committees. I do not recall any occasion on which this has been a matter of controversy between the parties and that is what Whips are about. I would have thought that this was a pure House of Commons matter and if this is not the sort of matter on which there should be a free vote I cannot think of one.

If the Government are to devalue the Committees in this way they will have difficulty manning them. Already those responsible for manning them have found some difficulties. It would be quite impossible to get hon. Members to serve if they are to be thought of as stooge organisations which can never really influence the course of events and can never decide for themselves what to do. I certainly would not want to serve under those conditions. Like every other hon. Member I am ready to put in time and effort if there is the possibility of a worthwhile end but if it is a question of having to dance like the organ-grinder's monkey then I can find other ways of putting my time and effort to better use in the service of my constituency.

I end by saying that I deeply regret, not only for its own sake but because of the implications which I have described, the Government's decision not to make this a free vote. I urge hon. Members on both sides of the House to take a free vote, to treat it as a free vote, because if we cannot consider a Parliament issue as Members of Parliament we do not deserve our jobs.

7.28 p.m.

Colonel C. G. Lancaster (South Fylde)

I want to support the hon. Member for Poplar (Mr. Mikardo) and say that I think he dealt with the problem in a most reasonable and helpful way. I have worked with him now for two years, and have gained a great respect for his impartiality and obpectivity in dealing with these matters. Tonight he was both impartial and objective, although he said some strong things. No doubt he feels very strongly.

I want to talk about the Bank of England, not because I consider it the most important issue for us, but it is one over which there have been more misunderstandings and mishandlings than others. As a result it has become something of a cause célèbre. I want to spend a little while in trying to get clarification on something which is far from clear not only to myself, who may have to carry out this inquiry, but to the Clerks to the Committee and to the Committee generally. As the hon. Member said, it is far from clear to the Press and people elsewhere. I join with the hon. Member in this Amendment in order to get this clarification.

I want to confirm what happened first. As the hon. Member said, we discussed this with the then Leader of the House, now the Minister for Social Security, in February. He suggested that we should have a review of the various matters which escaped the consideration of the House in one form or another, and Sub-Committee B was instructed by the Select Committee as a whole to undertake this review. The Select Committee has two Sub-Committees, A and B. Co-ordination is maintained by the Chairman of the Committee taking part in the activities of Sub-Committee B and my taking part in the activities of Sub-Committee A. When we submit our report in draft form it is considered by the Select Committee as a whole. Whatever goes out from the Select Committee is the work and decision of the Committee as a whole.

We carried out that order of reference more than six months ago and we have not yet received an answer to the recommendations which were embodied in the report. We said in that report: Future Nationalised Industries Committees will not wish to act otherwise than within the intentions of the House in appointing those Committees; and they will accordingly not wish to start inquiries in an atmosphere of doubt as to the propriety of their proceedings. It is in that position we find ourselves this evening. It is by no means clear what the order of reference in regard to the Bank means, and I want to ask one or two questions, which I hope will be answered from the Treasury Bench at the end of the debate, so that we can be aware not only of what our responsibilities are in carrying out this inquiry into the Bank, but also what will be the position of those giving evidence from the Treasury, the Bank or elsewhere, so that they know the intention of the Committee and the framework within which it will operate.

The Order Paper refers to: (1) activities in the formulation and execution of monetary and financial policy, … the management of the gilt-edged, money and foreign exchange markets. We should like an explanation of the meaning of the words "activities", "execution" and "management". If this means that we are not to inquire into discussions between the Treasury and the Governor of the Bank, we recognise that we are not concerned with past, present or future discussions. We assume such discussions must go on all the time, and we are not party to those discussions. Additionally, we realise that we have no concern with the current operating policies of the Bank in the gilt-edged, money and foreign exchange markets. The Committee presumably would not expect to be told at what point the Bank might intervene to support gilt-edged, or what action it might take to support sterling. Those are matters with which we would not concern ourselves. What we concern ourselves with, once policy matters have been decided, is how the machinery works; how the Bank carries out its activities; how free it is to operate in regard to the joint stock banks; and its relationship with the I.M.F. There is a whole range of matters which, if denied to the Committee, would make a review almost valueless.

The Leader of the House, from what he said this afternoon, does not intend that that should happen, but it would be valuable to have a discussion with him, the Chancellor of the Exchequer and possibly the Governor of the Bank, so that we may be clear about our position. I hope that those discussions will not take a form which will go further to make our position a hopeless one, since we do not wish to embark on an inquiry of that sort, nor would we serve any good purpose by doing so.

My mind goes back to 1955 when the Select Committee was first set up. At the end of a short period we found that our terms of reference were so tight that we served no good purpose. A year was lost, and it was not until those terms were extended that we settled down to do the work we have done in the ensuing 12 years. We recognise that there are areas of confidentiality, with which I will deal later.

I want read out what is our general view on how that inquiry might be undertaken: If a future Nationalised Industries Committee were empowered to investigate the Bank, your Committee believe that the inquiry would, in general, be addressed to the question of how Government policy, as devised by Governments and administered by the Bank, was actually put into effect; equally the question might arise of how far other policies, if decided upon, would be workable; but they believe that, if future Committees followed the principle of their predecessors they would not seek to establish either what economic policies, past, present or future, ought to be followed. That is perfectly clear. We are not concerned with policy as such; we are concerned with how policy, having been made, is put into effect.

As the hon. Member for Poplar said, over a period of years confidential matters have come before the Select Committee on many occasions. We have on one or two occasions asked questions which were necessary in the context of what we were considering but which witnesses have not been unduly anxious to answer. As as example, I remember some years ago asking one of the air corporations how many of a particular type of aeroplane it had ordered. The witnesses were not particularly anxious to give us the answer, but we wished to have it merely to get the matter into context. The number did not appear in our report; nevertheless, it enabled us to go on with our inquiry in a much more efficacious way than would otherwise have been the case.

Perhaps I might give a unique example of confidentiality. In the course of inquiring into the telecommunications side of the Post Office, a small sub-committee, of which I and the hon. Member for Poplar were members, went to the United States for discussions with American Telephone and Telegraph. Although that is a very large concern which has a large sector of the industry under its control, it has some competitors in what is a highly competitive industry. We explained that we had come to America on a grant and that we must take a full note of all that the company was prepared to tell us. The company was most generous and disclosed almost everything we asked. On our return to this country we wrote out a full note but we told the American Telephone and Telegraph that before the note appeared in our report we would ask it to delete anything which was inimical to its commercial interests. We sent that note, and it did not alter a syllable. That is an example showing that we can deal with confidential matters in a responsible way.

But it is not for me to speak for the Select Committee. The Press have said all that needs to be said, and have always treated the Committee in a most generous way, paying tribute to the objective and impartial manner in which the Committee has carried out its duties; never more so than during the two years in which the hon. Member for Poplar has been Chairman. During that period the Committee has carried out four major inquiries, without division within this all-party Committee, but in the same objective and dispassionate manner as had been the experience hitherto.

Of course, there are differences of opinion and we have different political philosophies on either side of the Committee, but we have learned to work together, to discard our personal feelings and to work within the framekork of the conditions which is laid down by the Government of the day. As a result, we have not concerned ourselves with policy matters in general, although there is a grey area where policy cannot be discarded. We set about seeing how these corporations carry out their activities, what are their functions, where they are free agents, where are they servants of the Treasury and how they operate in various conditions.

I, and probably most hon. Members, do not pretend to know a great deal about the Bank. I should like to know more, as would most hon. Members, and it is the purpose of this inquiry that we should have a clearer picture of how it carries out its functions.

With the intervention by the Government more and more into commercial and industrial activities, it is necessary to have these Select Committees. The work of the Estimates Committee and the Public Accounts Committee is invaluable, and I hope that the work which we have done has been useful. The specialist Committees also are doing valuable work, and it would be a healthy situation if it was recognised that they can and do play an important part. If that recognition is forthcoming and at the termination of this debate we can have some clarification of our terms of reference with regard to the Bank of England and if in the subsequent discussions which have been suggested by the Leader of the House we can thrash out the matter effectively with the Chancellor, the Governor and the Leader of the House, today's debate will have served a good purpose.

7.41 p.m.

Mr. J. T. Price (Westhoughton)

We have listened to two very temperate speeches from my hon. Friend the Member for Poplar (Mr. Mikardo) and the hon. and gallant Member for South Fylde (Colonel Lancaster). If I cannot speak with the weight of experience in the matter from which they have drawn in addressing the House, I hope to follow them in temper and tone and put to the House a serious issue about which many of us are deeply concerned.

During my period of years as an hon. Member, I have served on many Committees of the House, both Select Committees and others which were perhaps not so select. One does not speak as a novice in these matters, and no hon. Member who has served on the Select Committee on Nationalised Industries would make an issue of this one if there were not some real reason which the House should know.

From my contacts with public life and public affairs, it has always been my understanding that a central bank is a very important institution. In all highly developed countries, it is the cornerstone of commercial and economic activities. Often, from our varying philosophic points of view on the different sides of the House, we have made different cases about the attitudes which society should adopt towards the banking system, and I would not be so reckless as to make any wild dogmatic statements about it today. We are not here for that purpose. However, I say with all sincerity that the banking system—not only of this country, which is one of the key financial countries, but of all the civilised countries—is such that it is greatly misunderstood. The reason is that it is cloaked in secrecy. We tend to regard our financial institutions as sacred white elephants, and it is that which causes a great deal of dismay and worry to people who should know more about it.

We are not always dealing with these matters theoretically. Very often, we have to deal with the economic consequences of vital information being withheld from the public. On this Motion, there is no party division of opinion. It is one of those rare occasions where I hope that we can present what is perhaps a genuine concensus view without being charged with selling the past in some way. We are of one mind on these matters.

The Select Committee has been described as a watch-dog. We are regarded as having some kind of function to report to the House on matters of vital interest which cannot be discussed within our normal programme on the Floor of the House. We are not alone in that respect. My hon. Friend referred to the system in the United States of America If this matter were looked at ideologically, it might be said that, of all the highly developed civilised countries, America is regarded as a typical citadel of capitalism, as distinct from this country, which has a very mixed economy in which public enterprise and private enterprise operate side by side.

It must be remembered that hon. Members who serve on the Committee are volunteers. We are not press-ganged into service. We have many other duties, and we are not very happy about being charged with a function if we are not allowed to operate in the way that we should. According to the Motion, it appears that we are not to be allowed to inquire into any operations of the Bank of England except its mechanics as they affect the ordinary day-to-day bookkeeping and administration. One journalist has described it rather caustically as "looking after the doorkeeper's uniform." I am not interested in that sort of activity. I do not want to see the Committee sitting solemnly for months on end and bringing all kinds of important and highly-paid people before it to give evidence about such triviata. I want the Committee to be able to report to the House on such matters as the relationships between the Government and the Bank. I want the Committee to be able to learn how accountability is made to Parliament through the aegis of the Government by the Bank. I want the Committee to discover which of the two rules of the House—the Government or the Bank.

Those in Government circles who disagree with us may define these as matters of policy. I disagree. We cannot function unless we are able to discover the motions which are gone through to make an institution like the Bank answerable to this House. At the moment, we do not know. It is one of the higher mysteries.

Recently, we experienced a very painful setback in the shape of devaluation. Much to our sorrow and regret, no one knows publicly what happened at the time of devaluation, except that, through the operation of some force majeure, devaluation became inevitable. It would be good to know more about it. It would be good if some information were made available to us, for example, about the period of time that the Bank of England kept its doors open for business after the devaluation announcement. One is advised from quite responsible quarters that there was a period during which a great eflux of finance that should have remained here left the country under the pressure of devaluation.

I disagree that these are matters of policy. They are matters about which the Committee should be able to report, on the basis of inside knowledge of what is taking place. I repeat, we are not a collection of novices who fail to understand the need for the greatest discretion in matters concerning private arrangements with bank customers. We do not want to know about them. We want to know how the machinery works and how Government decisions are put into practical application once they have been through the financial institution. These critical questions condition a great deal of the commercial and economic activity of this country, but nobody really knows what they are.

I understand, although I could not cite references—and if I were hauled before another Select Committee to produce witnesses I could not do so—that there is a deep feeling among well-informed people on these matters that, unfortunate though the difference may be between the Committee and the Government about its functions—and that they should be more closely defined in the Motion goes without saying—the opposition may not be coming from the Bank of England. I say that with great reserve. There is a feeling that the real opposition is from the old soldiers in the Treasury who just do not want transferred to this House the power which has previously been their prerogative. I think that ought to be said, and I hope that I have said it without malice and without offence to anybody concerned. Civil servants have the protection of this House, which is a good thing, but I sometimes want protection from civil servants.

I have sat in other capacities and examined very high top-level civil servants. I hope that I have done it with courtesy and with some sense of proportion considering to whom I was talking and what information I was trying to elicit by my questions. At the same time, I think that it is wrong for a senior Committee of this House to be placed in the invidious position of being at the receiving end of decisions about which we know so little. That is as high as I would put it tonight.

I hope that my right hon. Friend does not think that we are necessarily directing our fire at him. We are directing our fire at the Government collectively. As a Committee we have a collective responsibility for the affairs of the Select Committee on Nationalised Industries. I have always thought it a good democratic principle, if I was on a Committee, to share collective responsibility for it. Indeed, the Government must share collective responsibility for the rather unfortunate and obtuse attitude that they have taken on these matters. I do not want to be offensive. We had a lot of offensive talk yesterday in which I took part. Afterwards I felt that perhaps I had spoken a bit too strongly about things. I want to put the matter in a different idiom tonight. I want to persuade the Government to put away childish things and to grow up and be a little more mature about these matters.

The Chief Secretary will have his opportunity later. I hope that he disagrees with me, but I hope that he will agree I am putting a collective view, not a party view. I have tried religiously to avoid the sort of ideological and dialectic argument sometimes flung about the Chamber. This is a key matter for us. We are in the dark about our financial institutions. We in Great Britain are more in the dark than people in the United States of America, as has been rightly said. We ought to know more about them. We are not in a position to demand to know more, but we are in the strong position that, having been constituted a Committee with, I hope, the confidence of this House on all sides, we ought not to be put into the position, as my hon. Friend the Member for Poplar said, of being a set of stooges who will merely be regarded as some kind of veneer for saying that an investigation is going on in the public interest into all these matters when nothing of any account is being investigated. This is the kind of situation that I want to avoid.

Mr. Michael Foot (Ebbw Vale)

My hon. Friend says we are not in a position to demand. Is it not the case that if this House of Commons tonight were to demand by our vote that we should have what my hon. Friend the Member for Poplar (Mr. Mikardo) is asking for so politely, we would get it?

Mr. Price

That is quite true. But, as my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) knows, the mechanics of this House do not work like that. I say this with great trepidation because, in a previous incarnation, I served for seven years in the Whips' Office—and it took me another seven years to live that down. I was the most humane Whip who ever served in that office. I left with regret in a way, but it creates an aura behind it that needs a bit of living down as the years go on. My hon. Friend the Member for Ebbw Vale is right that if the House reinforced our hand and strengthened our position vis-à-vis the Government, we should be very grateful. I do not know how discipline runs sometimes, but if anyone wants to discipline me about a matter like this they are welcome to try.

I am not hoisting the Jolly Roger or anything like that. To me this is a matter of deep principle and public interest, more important than the administrative convenience of civil servants, whoever they may be. Civil servants are answerable to the Government and the Government are answerable to the House. I have said many times—and I hope that I do not bore anyone by saying it again—that all Governments, whatever colour they may be—whether they are red, white, blue or pink in the spectrum of politics—tend to gather to themselves more and more power and to hive off from the majority of back bench Members any effective check on those powers. These Select Committees have been set up for the purpose of creating some kind of check on the Executive. Whether it is of my own political persuasion or that of hon. Gentlemen opposite in another context, it does not make a scrap of difference, because I know from my experience of life that any Civil Service institution based on the bureaucratic Administration will always abuse its powers if there are not sufficient checks on it from below. I do not want to get polemical, but it is a sound argument. Therefore, I will sit down and wait to see if I get a sensible answer.

7.57 p.m.

Mr. John Boyd-Carpenter (Kingston-upon-Thames)

Perhaps particularly because I was a member of the Government responsible for setting up the Select Committee on Nationalised Industries, I think it is an awful pity that a situation has been allowed to develop in which this very valuable Committee has not yet been set up for this Session. The Leader of the House knows, because he has had representations on behalf of Select Committees generally, that those of us who serve on these Select Committees attach the greatest importance to their being set up very early in the Session. Otherwise valuable time is lost.

Another regrettable aspect of this unhappy affair is that the Government seem to be drifting into a position of showing a certain lack of confidence in the ability of a Select Committee of this House to handle properly and appropriately difficult and delicate matters. That certainly would turn this very much into a House of Commons matter going far beyond the immediate problem of the particular Select Committee that we are discussing. Perhaps I might be allowed, without impertinence, because I have seen a certain amount of its work, to say that my experience is that it has done a remarkably good job, particularly under its present Chairman.

I think that most hon. Members will accept two general propositions. The first is that the onus of proof must be on anyone who seeks to limit the sphere of a Select Committee of this House. I am not saying that certain matters ought not to be excluded. All the same, I think that the onus of proof is on those who would exclude them. It must be so as a general proposition. I rely particularly on the most eloquent speeches on this point of the Secretary of State for Social Services that, on the whole, it is important to strengthen the supervision of this House over the Administration, and Select Committees undoutedly do a great deal. Therefore, I will not suggest—I see that the Chief Secretary is taking a note—that the onus of proof, which he may be able to discharge, lies on him.

Secondly, anybody who is likely to be exposed to this examination kicks like a steer at that prospect. I remember the nationalised industries did so very much when the Government of which I was a member set up this Committee. They said that the most terrible things would happen if a Select Committee were established. From my experience of the Public Accounts Committee—and I see present one or two hon. Members who will recall it—I know that when that Committee was considering a recommendation, which the Government, to their credit, subsequently accepted, to extend our sphere to cover the universities, the response from the universities was not one of unqualified enthusiasm.

We therefore start from the basis that the bodies which, on the proposal of the Select Committee, would be brought within its purview can be expected to react against it, but it is the duty, first of Ministers, and secondly of the House, to weigh those objections and see whether they are really valid.

I have the greatest respect for the Chief Secretary, and no doubt he will produce a considerably better argument than the Leader of the House did for the proposed exclusion. To be honest, the objections made by the Leader of the House do not stand up to examination for a moment. He said, first, that B.P. and the aircraft companies concerned should not be exposed to this examination because they lived in a competitive world. As the hon. Member for Poplar (Mr. Mikardo) said, the best-known of our nationalised industries in the competitive world, the air corporations, have to fight for their lives in competition, and yet it has not been thought necessary to exclude them.

Last Session the P.A.C. examined the trading accounts of a projection of the Atomic Energy Authority, which had been deliberately set up so that it should operate in a competitive world. It therefore does not begin to make sense to say that the mere fact that a body has to operate in competition should exclude it from examination by a Select Committee.

It means, of course, that that Select Committee must be particularly careful, I suggest, very often not to sit in public when such matters are being taken, and that it must give great respect to requests that particular passages from the evidence which would commercially damage the concern should not be published. But this is what the P.A.C. has been doing for years. I should not be so conceited as to suggest that what we were able to do the Committee on the Nationalised Industries cannot do equally well, and has not been doing equally well for rather fewer but still quite a number of years, and this argument about living in a competitive medium and being unable, therefore, to be subjected to examination by a Select Committee does not stand up to examination.

The other position is that of the Bank of England. The Chief Secretary would be surprised if his predecessor did not accept that there were special aspects of the Bank of England, but here again perhaps I might take first the argument of the Leader of the House. It was, I thought, a very unimpressive one. The right hon. Gentleman said that because the Bank of England was more under the control of the Treasury than a nationalised industry is of its sponsoring Minister, that was an argument against examination. It seems to me that the argument goes the other way. Other Select Committees of this House, for example the Estimates Committee and the P.A.C, spend a great deal of time examining the affairs of Departments of State. The fact that a nationalised industry might be described as closely related to the Government machine seems to strengthen rather than to weaken the argument for subjecting it to examination by the appropriate Select Committee.

I understood from the hon. Member for Poplar that the objection had been made that as the Governor of the Bank of England was a civil servant he could not be examined. I hesitate to accept that description of the Governor. I believe—and I hope that the Chief Secretary will agree with me on this—that his value to the Government will be very much diminished if he is so regarded. His independence includes the right to make speeches. Some hon. Gentlemen opposite may not like them, but one aspect of his value is that he is not a civil servant. He has some independent standing—[Interruption.] The suggestion was made that because the Governor of the Bank of England was a civil servant he should not be examined. I am saying that he is not a civil servant. If the House accepts that view, the argument of the Leader of the House collapses.

Alternatively, if the right hon. Gentleman is right and the Governor of the Bank of England is a civil servant, then surely it is a most extraordinary doctrine that that should exclude him from examination. I do not want to overemphasise the P.A.C, but we spend most of our working hours examining civil servants, as my colleagues on that Committee know. Therefore, on either view, whether the right hon. Gentleman is right or wrong, this is an extremely weak argument against putting the Bank of England within the terms of reference.

I must accept—and here, perhaps, 1 part company from the hon. Member for Poplar—that there are special aspects of the Bank which probably should not be disclosed even to a Select Committee of this House. But it is surely possible to deal with that problem other than by the very wide exclusion proposed in the Motion. There could be a convention, or an understanding, such as has grown up in many aspects of our parliamentary life, that certain matters are not pressed. Alternatively, if the Government were doubtful in the earlier years, let them, instead of sending the Governor as a civil servant, send the Chancellor or a Treasury Minister. Treasury Ministers can do anything. They can stand up and say nothing. This is an essential condition of their survival, and I suggest that some of that skill—and the present Chief Secretary has it in supreme degree, something to which his predecessors could never hope to aspire—could be used in this respect. Do not have terms of reference which exclude discussion of these matters, but in the earlier years send a Treasury Minister along and rely on his stonewalling powers. Surely that is a more sensible way to deal with this.

I agree with what my hon. and gallant Friend the Member for South Fylde (Colonel Lancaster) said about confidentiality. From time to time all Select Committees of this House deal with matters affecting national security or commercial security. They deal with them by accepting that there may be sidelining, and that if a serious case is made for evidence not being published, it should not be. In my Committee we have established a relationship with Whitehall which enable Whitehall to tell us in confidence what it would be unfortunate to publish, and it never is published. I have no reason to doubt that the Nationalised Industries Committee, which is a very well-established Committee, is capable of doing this. For all I know, it has established this relationship with the nationalised industries. I think that the right hon. Gentleman ought to show more confidence than he did in the capacity of hon. Members serving on Select Committees to treat these matters with care and discretion.

This really becomes quite an important House of Commons matter. It raises the question whether we should exclude from a Select Committee's consideration matters which it wants to consider, unless one can show an overwhelming case to the contrary. So far, that case has not been established. I shall listen to what the Chief Secretary has to say, and if he does not satisfy me that there is an overwhelming case for exclusion I shall feel bound, if a Division is called, to go into the Lobby with the hon. Member for Poplar.

8.9 p.m.

Mr. James Dickens (Lewisham, West)

I think that my hon. Friend the Member for Poplar (Mr. Mikardo) made a comprehensive, indeed an unanswerable, case for greater public accountability to the House on the part of a variety of both publicly-owned industries or enterprises and those which are partly owned. I want to confine myself, not to the great issues of principle about which I agree with my hon. Friend, and with the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter)—and I shall vote accordingly—but to the rôle of the Bank of England. This is the nub of the matter. There are also important issues of principle involved here.

The House will recall that in 1946 the Bank was nationalised by the Attlee Labour Government. Unlike every other enterprise nationalised by that Government, this House on not one occasion in the intervening 23 years has found time to debate the Annual Report and Accounts of that Bank. There has been virtually no public accountability at all, so far as I can gather, over the Bank's many activities. It is wholly desirable that there should be.

If one looks at the recent past in this country, one can see that the formulation of economic policy has frequently stemmed from precisely the sort of examination of the Bank of England which is here excluded by the terms of the Government Motion on the Order Paper. In 1930 Mr. Philip Snowdon, the then Chancellor of the Exchequer, set up the Macmillan Committee to consider financial matters. The Committee called before them the late Lord Norman on some five specific occasions. The evidence that he gave to that Committee, in response to intensive probing from Lord Keynes and Mr. Ernest Bevin was a major factor in the '30s in influencing Lord Keynes before he brought out The General Theory in 1936. There is no doubt at all that the answers given by Montague Norman on that occasion to Lord Keynes, the fact he told Lord Keynes he had not the slightest idea of what the effect of changes in Bank Rate would be on the level of unemployment, were a decisive factor in the formulation of employment policy in the 1930s, and subsequently.

That Committee also discovered from the Governor of the Bank some of the extremely amateurish reasons given for the catastrophic decision of April, 1925, to return to the gold bullion standard and all the repercussions that flowed from that late 1920s and early 1930s. Thus I should find the very first item that the Government want to exclude—the formulation and execution of monetary and financial policy—totally unacceptable.

In the post-war world we have had the examination in the 1950s by the Radcliffe Committee of certain functions of the Bank of England in the City of London and its rôle in foreign exchange markets. That also brought out a lot of useful information.

What then could the Select Committee on Nationalised Industries concern themselves with today in this respect? Amongst other things, we could have from the Bank of England some of the ideas which led the Bank in the early 1950s to convince the Conservative Government of that time to adopt full convertibility of sterling—a decision which has had the most profound repercussions on the development of the British economy in the 1960s. It should lead to an examination of what has happened since 1964 vis-à-vis the Bank of England and the City of London on the one hand and the Treasury and this Government on the other. I make no personal criticism of Sir Leslie O'Brien. I have not been one of those in the past who has personally attacked the present Governor of the Bank of England. He is not a Montague Norman-type figure but a man who has risen from the ranks in the Bank.

But if it is argued, as apparently it might be, that the Governor of the Bank of England is simply another Permanent Secretary—one of a number of Permanent Secretaries advising the Chancellor—this will certainly mean instructions will have to be given to Sir Leslie forthwith to cease making public pronouncements on important matters of public policy. I would regard this as a very great pity. Life would not be quite the same for me without Sir Leslie O'Brien and his speeches, especially his pronouncements on a Friday evening—normally at London Airport setting out for a weekend conference of bankers in Basle—remarks which have been somewhat unfortunate in the recent past. Whatever criticisms one may have of Sir Leslie O'Brien and his public speeches, they are as of nothing compared to the criticisms which will develop in years to come of the attitude taken by Lord Cromer, when he was Governor of the Bank of England, towards the Labour Government between 1964 and 1966.

I have said before and I say again that I regard Lord Cromer's conduct during that period as being nothing short of a public scandal. I want that scandal revealed. I do not want to have to rely upon the researches, however diligent, of Mr. Henry Brandon in the Sunday Times to show me that Lord Cromer brought undue pressure to bear upon this Government during those two years when they had a small parliamentary majority, to change their financial policy abroad and social policy at home. To my great and bitter regret Lord Cromer substantially won the argument.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

Could I make it entirely clear to the Chief Secretary that members of the Select Committee do not want to inquire into Lord Cromer's political opinions or the opinions of Sir Leslie O'Brien. That is not the sort of inquiry we want to carry out.

Mr. Dickens

Be that as it may, I express my own views as a Member of this House on the sort of functions I would like to see the Committee carry out, certainly so far as policy-making function are concerned.

On the wider aspects of policy formulation, perhaps I shall be less controversial if I say this: that I should want to know how the Bank does formulate economic and financial advice to this Government. What resources do they draw upon? Are they expert or are they, as many of us suspect, somewhat amateurish? Some of us take the view—indeed it was the view of the present Secretary of State for Economic Affairs writing a little over three years ago—that the advice given to the Government then and the advice given to Governments since the war on economic matters had been disastrously bad advice. If this is so, we have to look at the economic intelligence behind the Bank of England in terms of the advice, the way in which it was formulated and the way in which it is presented to the Government.

What consultations are there, for example, between Sir Leslie O'Brien on the one hand and Mr. Fred Catherwood. the Director General of the National Economic Development Council, on the other? What account is taken by the Bank of the effect of their advice on, for example, the rate of investment in the economy, on the level of unemployment in the economy, and so forth? These are all perfectly proper matters for this House to concern itself with.

On the second matter that the Government think the Select Committee should not examine, namely the administration of exchange control, I believe that here again we are fully entitled to know how the Exchange Control Acts are being administered by the Bank of England; how effective they are in doing so. How successful have they been in recent years in closing up the tax-free havens in the Bahamas, in the Virgin Islands or in the Channel Islands, with the resultant outflow of private capital abroad from this country? These are all perfectly proper matters for this House and the Select Committee to be concerned with.

The third aspect of the provisions laid down in the Motion concerns the Bank's activities as a banker to other banks and private customers. It is well known in this House that I am strongly critical of the Government's present economic strategy. However, in recent weeks there has grown up a position of some delicacy, one might say of acute controversy, between the Bank of England on the one hand and the central clearing banks on the other, on how the central clearing banks are going to carry out the Chancellor's instruction to the Bank of England to ensure that Banks restrict advances. Are we to assume that, under these circumstances, the Bank would wish to issue a policy directive to the Central Banks, as it is empowered to do? What is the relationship in this respect between the Bank and the clearing banks? I repeat, these matters are all perfectly proper matters for us to consider.

Many of us have suspicions about the rôle of the Bank of England not only in the City of London but in the advice which it has tendered to this and other Governments. These suspicions are historically well-founded. Moreover, when the history of the 1960s comes to be written, I do not believe that the Bank will come well out of it. When we review these matters, as I hope we shall, either as a House or through the agency of a Select Committee, either in this Session or in succeeding Sessions, I believe that we shall uncover much information which will surprise us.

One newspaper suggested this morning that perhaps a more fitting way of examining this problem would be to set up, through the Confederation of British Industries, a committee to report to the Government on the work of the City and the Bank. I reject that view. There are certainly occasions when the Bank and the City as a whole should be accountable to Parliament and the nation for their activities. A Select Committee may not be the best way of approaching the matter. I think that perhaps a better way would be through a "Little Neddy" for the City of London and its functions in the world economy.

However, whatever course of action we take, we must recognise that, increasingly, in this Session and in the years ahead, Parliament will inevitably become involved in the supervision not only of the functions of the Bank but of all the functions of finance in the economy and of bringing to public account and attention the detrimental functions—so far as Britain is concerned—which these institutions have performed in the world economy in recent years.

8.23 p.m.

Sir Henry d'Avigdor-Goldsmid (Walsall, North)

The speech of the hon. Member for Lewisham, West (Mr. Dickens) had this in common with all those which preceded it—that he was, I understood, in favour of the Amendment. But it had little else in common with them, because all others who have spoken have had experience of Select Committee work, which, I believe, has, up to now, been denied the hon. Gentleman. One of the features of Select Committee work is that there must be a measure of confidence between the Committee and its witnesses and the idea that a witness facing a Select Committee is facing a "hanging jury" will not advance the Committee's inquiry. Thus, whatever fame lies in store for the hon. Gentleman, I hope that he will get into the arena direct and there no doubt be able to find some glory.

However, on a Committee of inquiry, I do not think that his fervour would lead to the sort of results which he has in mind and which many people would like to see. One of the interesting things about this debate is that we are having a debate on the nationalised industries at which hon. Members have been present. We have had the speech of the hon. Member for Lewisham, West and that of the hon. Member for Ebbw Vale (Mr. Michael Foot) who, assiduous though he is in his attendance, has not, I think, honoured us with his presence at previous Select Committee debates.

It is a good many years since we had a Select Committee debate. The fact is that the work of a Select Committee is really more honoured in volume form than it is in speech. The volumes which we produce are monuments of erudition, and it is only appropriate that credit should go not only to the Members of the Committees but also to the clerks who look after them and play such an important part in these matters and in the production of volumes of such undoubted importance. I would instance the Select Committee's Report on the Post Office, which the Government announced that they were taking into account in their plans to convert the Post Office to a corporation. Probably many of the ideas of that Report have been incorporated in the Post Office Bill. On the Committee, we can feel that our efforts not only get polite recognition on the Floor, but sometimes achieve an approach to the Statute Book.

Ever since the hon. Member for Poplar (Mr. Mikardo) has been Chairman of the Select Committee, he has had one special objective in mind, what he calls "lunchtime directives", which cover the relation between the Minister and the nationalised industry in question. He has been at considerable pains—I think rightly—to emphasise that extra-statutory directives, if given, should be drawn attention to. This is, basically, what this debate is about.

In examining the bones of contention, I find that the only real issue is the Bank of England. I am absolutely amazed at the Government's attitude with regard to B.P., the Select Committee's Report having said, in paragraph 71: The inclusion of B.P. in the Order of reference seems therefore a logical consequence of the Government's retention of the power of veto … But in making this recommendation they have it in mind, that if the power of veto continues never to be exercised by the Government, this fact will obviously give B.P. a very low priority in Your Committee's selection of matters to be considered by them. So when the Government do not intervene, the Committee has nothing to say. This shows that the words "Select Committee" cause a thrill of horror to go through all these distinguished gentlemen who run these great industries. My right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) referred to chairmen of other nationalised industries "kicking like steers in a rodeo".

The opposition to the Committee's recommendation at the moment is fictitious and based on nerves. On the lunchtime directives, I am struck by the fact that, over the years, relations between the House and the Bank of England have changed very much. After all, it is only 11 years since we had a tribunal of inquiry into the so-called Bank Rate leak. Hon. Members will recall that the result of that inquiry was the discovery by the Tribunal that everyone concerned had acted honourably, honestly and in good faith. Subsequently, the Prime Minister produced another good result from the inquiry when, referring to the lady who is now the wife of my hon. Friend the Member for Horsham (Mr. Hordern), he said: Our main difficulty … was to protect … the Central Office employee from possible victimisation. He added: … the fear of victimisation was a very real one."—[OFFICIAL REPORT, 3rd February, 1958; Vol. 581, c. 838.] Thus he protected an 18-year-old employee of the Conservative Central Office from victimisation. It also had the result that while the fixing of the Bank Rate had been done by the Bank of England it is now done by the Chancellor of the Exchequer. That Tribunal was responsible. Clearly, the activities of the Bank of England and the Treasury are hard to separate. When the Treasury puts out this great defence of the Bank of England, as it is doing in the terms of the Motion, I interpret it as being a defence of the Treasury itself.

Almost exactly 30 years ago something happened in Europe which proved to me that a change in the relationship between the Bank of England and the Government was necessary. It happened in March, 1939, as Hitler and the Germans moved into Prague and as the Czech State, as it was, came to an end. Shortly after that event the Bank of England, without any noise, transferred to the German Government the gold reserves that it was holding for the then Czech Government. There has since, to my knowledge, been no suggestion that those reserves should be given back to the Czechs. Hon. Members will also remember that as a result of that transfer a fund was established in this country to compensate the Czechs. One person who did not benefit from it was the noble Lord, Lord Boothby, but that is another matter.

We are in a totally different position now. Only the other day we had an open discussion about Baltic gold. I do not wish to argue which way the decision should have gone. A decision in that matter was taken by Parliament in public discussion, and that is the important fact. The disposal of Czech gold to Germany at a time when war was imminent—indeed, we were virtually at war with the Germans—was never a subject of public discussion in the House in those days. There have, therefore, been some improvements.

We do not need to pursue that matter before us on ideological grounds. It is clear why this limitation on the Select Committee's powers to look into the affairs of the Bank of England exists. If B.P. becomes a low priority to the Committee, then, as far as I am concerned, the Bank of England should have a nil priority in its consideration. Perhaps that is the object of the Government tabling the Motion. I do not think that any hon. Member, including the hon. Member for Poplar, would wish us to spend our time discussing the Bank of England within the terms of the Motion.

In view of what the Select Committee has recommended and the feelings of hon. Members on both sides who have spoken—I draw particular attention to the remarks of the hon. Member for West-houghton (Mr. J. T. Price), who has had many long years in the Whips' Office and is a loyal supporter of the Government—hon. Members should reflect that, as even hon. Members like the hon. Member for Westhoughton are prepared to defy the party Whip and vote for what is obvious equity, other hon. Members may feel it right to do the same. I have great pleasure in being associated with the Amendment.

8.34 p.m.

Mr. Edwin Brooks (Bebington)

It has been said on many occasions that our parliamentary system is a compendium of illogicalities and anomalies but that it works. It could be fairly said that the first half of that statement might apply to the speech of the Leader of the House. A procession of speakers since my right hon. Friend spoke has borne testimony to the fact that we have had from the Government the thinnest possible case that could be deployed to justify their action in this matter.

Many hon. Members have already spoken at some length, and I do not wish to recapitulate their arguments, about the sheer illogicality of excluding Beagle, where the Government will have a 100 per cent. interest, while having for many years been able without any difficulty to investigate the affairs of B.E.A. It is quite indefensible that in a matter like this—the same applies to Shorts where nearly 70 per cent. of the capital is owned by the Government—we should have an attempt made to block the perfectly legitimate demands of a Select Committee that it should have the right to see just what the Government are doing with the controlling interest they have acquired in our name.

There is another minor illogicality, but an indefensible one, in the action the Government ask the House to support this evening. Reference has been made, but I think a word or two more should be said about it, to the extraordinary position of the Horserace Totalisator Board. So far as one can tell from paragraphs 112–115 of the Special Report from the Select Committee, no objections at all were made—certainly not of any substance—to the proposal that this Board should have its affairs investigated. It is said that The Treasury indicated in evidence that Ministers had no strong views on whether or not the Board should be included … and the Home Office … confirmed in a letter that there was no objection to the Board's inclusion. That is splendid, but apparently at some stage subsequently, perhaps because the Select Committee took the lack of objection by Ministers seriously, we find that this Board is to be excluded from investigation. It may seem a small matter, but it seems to expose the Government once again to a perfectly legitimate charge that the right hand does not know what the left is doing. The Committee at that time said that it welcomed the co-operative attitude of the Home Office. Now I suppose we should exclude that sentence. Why did the Committee welcome that co-operative attitude? It said The Board's accounts are in fact published and laid before the House, but as they are not audited by the Comptroller and Auditor General, they may be regarded as outside the traditional field of the Committee of Public Accounts. I should have thought that a fair supposition, but whether or not the Public Accounts Committee will have the opportunity to investigate the Board's affairs, which is in itself a serious matter—the Comptroller and Auditor General does not have any control over the activity—the Report says: The Board appears to have a statutory monopoly and a substantial income arising from it, as well as a large number of customers among the general public who are entitled to be satisfied—so far as a Parliamentary Committee can satisfy them—that the Board's affairs are managed in accordance with the general interest. We must ask the Government just what is happening. We have here a Board which has been set up with considerable powers and, we understand, a considerable income. I should have thought it essential that the principle of parliamentary accountability should be maintained in dealings of this sort.

Even if I did not think so, apparently the Home Office thought there was no objection and apparently the Treasury said that the Ministers had no objection. From where has the objection come? On the single query alone we are entitled to say to the Government that we shall not support them in the Lobby this evening. If they know what they are doing they will take this matter back and think about it a lot more carefully, because many of us are beginning to wonder just what was meant in 1945 when we on this side of the House said, among other things—I must stray to party matters—

Mr. Peart

I hope my hon. Friend heard me when I made the statement about the Totalisator Board and said that there was no objection to it being examined and that it could be added for investigation.

Mr. Brooks

I am grateful to my right hon. Friend for elucidating that, but hon. Members came to the House today fully assuming that the Motion, which has been on the Order Paper for many long weeks, meant something and there is no reference whatever to the Totalisator Board in this Motion. The inference must be that this was excluded as a result of policy. I wish not to flog this argument but simply to state the facts.

The argument about the Totalisator Board is not the essence of the case. The basic argument has fallen into two related sections: accountability, and the Bank. This is why a moment ago I began to refer back to 1945. In a moment I shall go back to 1937. The first argument has been on the principle of parliamentary accountability. This is the essential point. It is one on which we as a Parliament cannot compromise. We cannot compromise on this point because, as the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) made clear, the onus of proof must be accepted by those who seek to exclude Parliament from such consideration.

In 1945 it was said—it was long overdue—that the Bank of England was such a powerful body that it should have itself subjected to public ownership. In those days we used to use a rather old-fashioned word—nationalisation—but it meant the same thing. The principle presumably was that the public had a right to own and control this great manipulative instrument of financial control. If it did not mean that, why did we bother to nationalise it at all? [An HON. MEMBER: "That is a good question."] It is. So far we have not had a good answer. This is where the argument about public accountability—that is, the general argument—becomes focused upon the particular instance.

The Motion states—I hope that this part has not been amended—that a list of activities of the Bank of England is to be excluded. As my hon. Friend the Member for Poplar (Mr. Mikardo) said, it is difficult to see what is left. Amongst those which are to be excluded are: activities, as agents of the Treasury, in managing the Exchange Equalisation Account and administering Exchange Control". This made me a little curious, because as a member of the Public Accounts Committee I have the opportunity, which I have not so far taken, to examine the Exchange Equalisation Account. It is a highly secret document. It is a document which can be examined only under conditions of extreme care—this is understandable and proper—but the document is available for inspection. It is also available for detailed scrutiny by the Committee as such.

On checking, I found that it was last examined in 1962. It is only a very brief account in the published Minutes of the Public Accounts Committee, for reasons which will become apparent in a few moments. Three questions and answers were published. The first two were purely formal, welcoming the Treasury. Then came this third question by the Chairman of the Committee: We do not every year take the Exchange Equalisation Account in the course of our enquiries but I think it is usual when the Public Accounts Committee does examine this Account, that the Treasury should introduce it with a short explanatory statement of how it works. If you are ready to make one, I think it would be helpful to the Committee? Then follows a series of asterisks and these words:

(remaining evidence not printed).

But, of course, the discussion went on. There was an exhaustiive analysis of the Exchange Equalisation Account, this highly secret document, this document which has been described as a shock-absorber to cushion all the vicissitudes to which the currency exchanges are subjected.

How should I know that this was a searching scrutiny? I was not there, and it is impossible to read the account. There is one good reason for my knowing. The Chairman who put that question was the present Prime Minister. I assume that the present Prime Minister would have carried out, as he did in those cases where the report gives full details of his interrogation, a searching examination of this highly secret document. But no one in the House knows what went on. Presumably the members of the Committee exercised discretion in the way they handled that highly confidential and secret information.

It is a little odd now to say to one Committee of the House, "Your members apparently are not to be trusted in their examination of certain aspects of the Exchange Equalisation Account, although other Committees have been doing the same thing for many years". But for how many years?

This is where the research gets a little more interesting. It did not follow automatically that the Public Accounts Committee was handed the Exchange Equalisation Account on a platter, that it had it offered to it. The Account was set up in 1932, when the Government of the day refused adamantly to let the Committee look at it or to let the House in any way have access to the information. One can understand that. It was a new development in a situation of great financial uncertainty, which is not a situation that we are unfamiliar with today. For five years the Government said adamantly that they were not prepared to have the Committee look at the document. They said that it was too confidential and that it was far too dangerous to let Members of Parliament look at it.

Eventually Parliament, being Parliament, decided that the Government could not get away with it any longer, and so on 28th June, 1937, the members of the Public Accounts Committee put down an Early Day Motion. Apparently in those days Early Day Motions had much more effect than they have today because, by an extraordinary coincidence, that very same day, within hours, the Government accepted the argument. Sir John Simon, then Chancellor of the Exchequer, made a speech in the House beginning at 3.46 p.m. that I can recommend to all hon. Members. I was very tempted to read the whole of it, but time forbids and the patience of the Chair would not enable me to go through it. Probably my right hon. Friend read the speech before he came here tonight, because I felt that whole extracts had been lifted bodily from the earlier sections, where Sir John reiterated the earlier, time-hallowed arguments.

But my right hon. Friend should read on and see the second part of Sir John Simon's speech, because there he said magnanimously that the time had come when sense should prevail and the Public Accounts Committee should, at long last, have the opportunity of looking at the Exchange Equalisation Account. He added some very nice things about the Committee. He said: I think the time has come when the Public Accounts Committee, a most responsible Committee which has to be appointed every Session, and which guards these matters in the interests of us all, might reasonably desire an opportunity of examining, after a suitable interval,"— a period of several months— the state of the Account itself, together with the amount of its surplus or deficit. He later said: We in the House of Commons naturally place great confidence in the Public Accounts Committee. It is a most important Committee of the House, and one of its duties is to report, if it finds on examination of the public accounts anything irregular. Therefore, while stipulating that the information shall be given confidentially, I should be prepared to agree that that would not alter their right, if they found any point in the statement put before them "— this is the Exchange Equalisation Account, a highly secret document— which they consider to be irregular and for that reason calling for special mention, to make a report on it to the House of Commons."—[OFFICIAL REPORT, 28th June, 1937; Vol. 325, c. 1662–1664.]

The Public Accounts Committee enjoyed that right as recently as the occasion I mentioned a moment ago. Presumably—I have no means of knowing—the Committee decided, having investigated something which must have aroused its curiosity or concern, that there was no point in pursuing the matter further. If it had wished to do so, it could have come to the House.

I have dwelt at some length upon this historical anecdote because it is highly relevant to what we are debating, which is the very thing mentioned in the Motion. I do not know whether there would be problems of overlap between the Public Accounts Committee and the Select Committee on Nationalised Industries. However, that is not the argument with which we are presented, because there are many other things that the Select Committee on Nationalised Industries is excluded from considering, and therefore there must be an underlying, different reason to that of overlap.

The reason is the ancient reason why it took us about 600 out of 700 years' parliamentary history to have democracy at all in this country. It is the fear of those who govern, who think that they have some God-given right to govern, and to be immune to the criticism and surveillance of us, the people.

I believe that on this issue the Government must think again. If tonight they do not, they will do so sooner or later. This is going to happen, it has to happen, and I only wish that it were going to happen tonight.

8.50 p.m.

Mr. David Crouch (Canterbury)

For two consecutive days the House has given consideration to the problems of Select Committees. The House, as we all know from its history, has its ups and downs and the quality of the debate tonight has been very high. It has been the House concerned about its future, about its reform, about its function; it has been Members of Parliament concerned about meaning to be representatives of the people, acting in the mid-twentieth century amidst the complexity of government and recognising the very important tasks which we have to perform. Many of those tasks have to be performed outside this Chamber.

I am glad that the hon. Member for Bebington (Mr. Brooks) took us back to 1937, quoting a very relevant case in support of the argument, put so well, lucidly and forcibly, but so fairly, by the hon. Member for Poplar (Mr. Mikardo). I did not begrudge the hon. Member for Poplar one minute of his long exposition of the problem facing the House and the Government.

As I have said, I was glad that the hon. Member for Bebington reminded us of a precedent of over 30 years ago. I agree with him that the House may reach the wrong decision tonight because of the force of the Whips, but I also agree with him that it will change its decision and recognise its mistake a few years from now.

Perhaps the strength of our debate has been because we have in the main been speaking as members of Select Committees, aware of an even heavier responsibility when we sit in Committee, aware of our responsibility to be impartial, to be cautious and confidential and to be wise.

At the moment, there is not a member of the Treasury team on the Government Front Bench. I do not criticise the Chief Secretary to the Treasury for not being here, since he has been present throughout most of the debate. We were also visited for a short time by the Chancellor of the Exchequer himself, whom I was glad to see here. It is no criticism when I point out that they are not here now.

I want to acknowledge that they have been here and have been making a considerable interest in what we have to say—as is only right—but I must add that I have been watching their faces. How solemn and how grim they have looked! The right hon. Gentleman the Leader of the House never looks solemn and grim but his two colleagues have presented tonight an entirely different look. It is the look I have seen, and I am sure that every chairman of every nationalised industry has seen, when dealing with the Treasury, because it is the Treasury which really rules the nationalised industries and it is the Treasury which I believe really rules the reform of this House.

It is this House which has to push the Treasury into reform, which has to find the money to give us sufficient facilities to carry out our functions in Select Committees. I am here recalling the words of the right hon. Gentleman the Secretary of State for the Social Services, the former Leader of the House, who said in Select Committee that we would have to find such funds and would have to persuade the Treasury.

It is the Treasury which is the slowest to move forward on the whole question of reform, and I can well understand the Treasury feeling reluctant over the last six or seven months when we have been pressing for the Bank of England to be included in the list of Government bodies which we as a Committee feel we have a right to investigate. But this slowness to move has come from the Treasury itself, and I hope that the presence of the Chancellor and of the Chief Secretary during the debate will at least encourage them to go forward and recognise the mood in the Chamber tonight and the mood in the speeches which have been made.

What I have to say is concerned purely with reform. One member of the Government Front Bench who has always excited my interest on this question of reform is the Secretary of State for Social Services, particularly when he was Leader of the House. While I could not agree with all of his experiments, I was always prepared to try them. While I felt that morning sittings would prove a failure, I was prepared to go on with the idea. I was one of a few hon. Members on my side prepared to give a trial to sending the Finance Bill upstairs. I believe in giving things a trial.

I have often been encouraged when listening to debates in this Chamber, or at meetings with the right hon. Gentleman, when he has talked about reform. The most important thing he felt about reform during his tenure as a reformer in the Cabinet was the need for the reform and strengthening of the Select Committees and the establishment of the new specialist Committees. He encouraged me to believe that at this time in our history, when Parliament must show that it can succeed as a parliamentary democracy, the place where it can succeed, apart from in this great debating Chamber, is in investigating committees which investigate events before they happen.

We are discussing reform and the revitalisation of the work of the House of Commons. The former Leader of the House used to speak of the Select and Specialist Committees as providing a continuous check on the power of the Executive. The Select Committees should grow into the hidden strength of the House of Commons.

I am concerned that for six months there has been delay in setting up the Select Committee on Nationalised Industries. I accept the apologies given by the right hon. Gentleman at the beginning of his speech. I know his difficulties. He ran into an impasse, conditioned not really by himself, because I believe that he wants to carry on the reforms of his predecessor. That impasse was between the ideals of our Committee, inspired by his predecessor; and led by the hon. Member for Poplar, on the one hand, and the Treasury, on the other, which had dug its toes in absolutely.

Mr. Peart

The decision to reform our procedure, and, linked with it, the decision to set up two new Select Committees was a decision of the Government. I pay tribute to my predecessor. It is my wish that we should continue with these experiments. This evening I have announced that I wish to set up another Committee, because the experiment is not yet over. Inevitably there will be a time when Parliament and the Government will have to make a final decision about the future of Select Committees.

Mr. Crouch

The right hon. Gentleman will always have my support when he stands up, as he has done, and speaks of moving forward and reforming. He will not have my support, however, unless, in addition to standing up at that Box, he stands up in Cabinet and meetings with his colleagues and leads them forward in reforming the functions of this House.

One of the most impressive witnesses to give evidence during the last sitting of the Select Committee was the predecessor of the Leader of the House. He came into the Committee after two all-night sittings a very tired man, but he was not tired when we woke him up to answer our questions, as can be seen from his replies. I should like to quote from Vol. 2 of the Minutes of Evidence taken before the Select Committee on 12th July, 1967, when the predecessor of the Leader of the House said this: This is why I have been so keen on Committees like your own meeting in public with the Press present so that in a sense what you are doing is hot news, and people feel this. There is a great difference between discussing things when they are hot and discussing things when they are cold. This evidence is already cold, as the hon. Member for Poplar has said. There are many more passages I should like to quote from that evidence, but it is too late. I think that the House senses from what I have said that the predecessor of the Leader of the House wanted to revitalise Specialist and Select Committees and to give then strength. He asked for continuous change; he spoke of Parliament reasserting itself, and of more effective Parliamentary control.

I am often asked by constituents and members of the public what I think is happening to Parliament. I am not depressed about the criticisms made of the function of Members of Parliament. My answer is always that Parliament will go forward with its reforms and has strength in its new Committees. The future of Parliament and of the service which it provides as a check on the Executive is in making stronger the Select Committees. My criticism of the Government is that they have stopped in their tracks—

Mr. Michael Foot

It is an extension.

Mr. Crouch

It is not only an extension; it is an emasculating extension, whatever that is. The Government have stopped in their tracks, I cannot support them tonight and I will go into the Lobby against them.

9.3 p.m.

Mr. Michael McGuire (Ince)

I have listened with interest to the good humoured speech of my hon. Friend the Member for Poplar (Mr. Mikardo) and of my hon. Friend the Member for Bebington (Mr. Brooks), who pointed out the magical effect of the Early Day Motion as long ago as 1932 in bringing the then Chancellor to the House to make a statement that one of the barriers that had been placed by the Treasury in front of the Public Accounts Committee would be removed. He said, in so many words, "We know that you are grown up men and women and you will act accordingly."

The limitations in the terms of reference we are debating tonight, imply that there will be first-class and second-class members of Select Committees. The Public Accounts Committee has had the power which we seek since 1932, and it has never been withdrawn. My right hon. Friend the Prime Minister looked into the matter when he was Chairman of the Committee in 1962. Bound up with the Bank's activities in managing the Exchange Equalisation Account and administering Exchange Control there must be its responsibilities for the management of the gilt-edged, money and foreign exchange markets. I cannot see how it can be suggested that one does not include the other. If the Public Accounts Committee has the power to investigate those functions and we are denied it, it is tantamount to saying that we are not responsible enough and, therefore, are second-class Select Committee members.

The hon. Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) said that, in reality, we are engaged upon a debate on the nationalised industries. I would put it rather differently. We are debating the lack of any considered reply from the Government to the Select Committee's Report of September last on the need to include in the terms of reference of the Select Committee the seven bodies which it felt should fall within its purview. The only response has been this Motion setting out the proposed terms of reference. If we had had a considered reply in the form of a statement by the Leader of the House, it could have been debated and, presumably, we would not have had these restrictive terms of reference. That is why I suggest that what we are debating tonight is the lack of a considered reply to our Report.

My hon. Friend the Member for West-houghton (Mr. J. T. Price) said that hon. Members are not drafted to serve on Select Committees. Soundings are made. When they were made to me, I was enthusiastic, because I regarded membership of a Select Committee as being something more than membership of our ordinary committees. It occurred to me that membership of this Select Committee would enable me to draw on my industrial background, which would be useful when the Committee inquired into such matters as fuel policy, the Coal Board, and possibly the nationalised industries generally. I suppose that the members of the Select Committee are intended to represent the broad knowledge and varying experience of hon. Members.

As I say, I was enthusiastic when I was first appointed to serve on the Committee. However, as time went on, one's enthusiasm was somewhat dampened, even though one was able to contribute to its proceedings and learn something from them. The stage has now been reached when the Select Committee reports, and the Government act upon it at their leisure by giving hon. Members a debate on the Report. Apart from that, very little is done about it. I suspect that the Government regard Select Committees as performing a useful function in that hon. Members are able, to use one of the cant words of the day, to "participate". The fact remains that nothing much flows from a Select Committee's Report.

The Sub-Committee on which I served debated the policy of the Gas Council and the way in which it was going forward with its plans. The House has not yet had an opportunity to debate our Report, though there are a number of points in it which are extremely relevant.

The Public Accounts Committee does not seem to have any limitation, except that of any Committee, namely, prudence in exercising judgment on matters of vital importance or security or whatever it may be. We have exercised prudent judgment, as I think has every other Committee. But if the Public Accounts Committee has power to do what is being denied to us, the House should reject the Motion out of hand. If it comes to the question whether we shall vote in favour of the Motion, as a loyal supporter of the Government it is not easy for me to say that I will reject what, after all, is the Government's policy, but I will, quite unashamedly, reject it.

I think that the best thing to do is to withdraw the Motion and to bring it back next week in the form asked for by hon. Members who have spoken. If we defeat it—and it is quite possible—we shall simply be in a vacuum. We shall have no Select Committee because we have refused the terms of reference and the Committee will not be set up until an even longer period has gone by. To use a homely phrase, I think that my right hon. Friend is carrying the can. I do not know for whom, but I have a suspicion that it is probably for the Treasury and the Bank combined. I think that the Motion should be withdrawn and the terms of reference revised.

We have been delayed three months. In the last two years the Committe has been set up three months after other Committees. It means that it has to examine matters in a short period of time. Therefore, I do not think that it can do justice to the subjects that it is supposed to investigate. I do not see why the Committee should be set up so late—much later than the ordinary run of Committees. We could get under way very quickly after the Queen's Speech, but we have been hampered and restricted.

All hon. Members who have spoken have explained their objections. I support those objections. I have outlined the power of examination that is given to one Committee, which will presumably be denied to this Committee. Unless the terms of reference in the Motion are withdrawn and drafted in a sensible manner, I will oppose it.

9.13 p.m.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

I can put the mind of the hon. Member for Ince (Mr. McGuire) at rest on one point. The proposition before the House would be to vote on the Amendment first. If the Amendment is carried, we can then vote the Committee into existence. Therefore, if we succeed in the Lobbies tonight, there will be no further delay such as the hon. Gentleman fears.

It is pleasant when the House is what I call anti-consensus; that is, when the two major parties are battering away at the two Front Benches. It always seems to produce by far the best and most interesting debates. Students of politics might ponder the fact that the consensus under fire produces a real live debate which is often more impressive than the organised orthodox party debates across the Floor of the House.

I should like to say something about the three industrial companies, B.P., Beagle and Short Bros. I do not think that the Leader of the House put forward the right argument for excluding them. The right hon. Gentleman suggested that because they are in a competitive situation—and all of them are—it would be wrong to go into their affairs. Practically all the nationalised industries are in a competitive situation. We are used to handling delicate commercial matters in such a way that they are not used against the industries. Therefore, the right hon. Gentleman has totally failed to produce an argument for excluding these three companies.

Clearly there is a limit to the industrial companies that the Select Committee can examine. I believe that there are 200,000 to 300,000 industrial companies in the country. I cross swords here with the right hon. Gentleman's predecessor who suggested that the Select Committee should examine all private industries at one time or another in future.

I believe that the market is the correct test for private industry—whether its shares go up or down, whether it can borrow more money, whether it goes bankrupt or is taken over, and so on. This is the accountability for private industry, and therefore my test as to whether an industry should be examined by a Select Committee is simply whether it is controlled by the market or by the Government. There is no doubt that Short Brothers and Beagle Aircraft are controlled by the Government. They are wholly-owned and controlled by them. B.P., on the other hand, seems to be nearer a private industry than a nationalised one. I am not thinking of its 49 per cent. as opposed to 51 per cent. I am not making that point. I am saying merely that it has a share quotation, it raises new capital in the market, and it behaves in every respect like Shell, Esso, or any other private oil company. On that basis, the Leader of the House could make a good case for examining B.P., but it would not apply to the other two companies.

Dealing with the question of the Bank of England, it seems to me that the Leader of the House has insufficient trust in members of the Committee, and the point which I have just made about industry bears this out. The right hon. Gentleman feels that we cannot be trusted to keep to ourselves confidential information which we might get about B.P., or Short Brothers, or Beagle Aircraft. It is because of this that he thinks that we should not be allowed to consider them. This is a slightly derogatory attitude to take, that members of the Select Committee cannot be trusted to deal with these matters in this way. I believe that this is the motive behind the whole of the Government's attitude over the Bank and the other institutions which they want to exclude. They do not believe that we can be trusted.

I think that we have developed a very good way of deciding what is policy and what is administration. It is curious, but if one asks a witness a question of policy, one's colleagues begin to bridle very quickly, particularly if it is a political matter. It is surprising how very few political questions are asked of witnesses, and how we are able to concentrate almost entirely on administration. I think that where we have got into difficulties over the Bank is that Ministers have simply given up the job of trying to sort out how much of the Bank's activities are policy and how much of them are administration. I agree that this is a difficult matter. We have to do the job for the Government.

The value of the Select Committee's investigation into the Bank would be that we would be able, rather shakily and not very exactly, to determine those areas which were administration and those which were policy. I believe that this is the service which the Select Committee has done for the nationalised industries it has investigated. It has forced the Government to consider what part of their dealings with other nationalised industries have been policy and what part have been administration, and we now have a healthily developing move towards public directives if the industries are to do something which is not commercial, payment for carrying out social services, and the identifying of the exact thing which each of these industries is to do.

The effect of an investigation into even such a highly delicate thing as the Bank of England would be to force the Government to begin to think about what they are trying to make the Bank do, and we would force them to use mechanisms which could be discussed and investigated to see whether they were effective. Sir William Armstrong, when talking to the Committee about the Bank's function in managing the gilt-edged market, said: … the way it is managed in the market is the business of the Bank and we cannot interfere with it. He said that one has to give the man on the spot a general indication of one's policy and leave him to manage the market. This is exactly right, but what we say is that the means by which this general indication of the policy is given is the crux of the inquiry. The policy is a matter for the Government. If I may repeat the slight criticism I made of the hon. Gentleman the Member for Lewisham, West (Mr. Dickens), he was trying to dictate what the policy should have been. If we tried, as a Select Committee, to decide how to run the Exchange Equalisation Accounts or the interest policy, or something like this, we would get into the most appalling trouble. I accept that immediately. What we are trying to do is to decide how the Bank is divided up into its various parts; how communication is established with each part and how the accountability of each part can be improved. This is something which could be undertaken without any risk at all.

I must end by underlining what has been said by the hon. Member for Poplar (Mr. Mikardo). The witness from the Treasury said that the Bank had seven main functions; four were as an agency for the Government and three were independent of the Government. If I may read them out, then we can check each against the exclusions which have been named. The issue of notes is the only one which is not excluded. The management of the National Debt is specifically excluded; the management of the Exchange Equalisation Account is specifically excluded; the administration of exchange control is specifically excluded; the central bank and banker to the banks of this country is specifically excluded; commercial bank to a very small number of customers is specifically excluded, and banker to the central Government is specifically excluded. So that on all the major subjects we are excluded and the only one which is open to investigation is the question of the issue of notes. I cannot understand how a full-scale and meaningful inquiry can take place with those restrictions.

The House has made it extremely clear it believes that these terms of reference are not wide enough. There has not been one speech supporting the point of view of the Government and the supporting position which the right hon. Gentleman has taken. Other central banks round the world are scrutinised. The Radcliffe Report itself dragged all these out into the open. Why the members of the Radcliffe Committee are worthy of being trusted in a way we are not in this House I do not understand, especially when I see several people who were on that Committee have since come into severe disfavour with the present Administration.

I am quite certain that the attitude of the Leader of the House is wrong. If he were to trust the Committee he could exclude areas, perhaps even bigger areas than he might imagine, without the slightest difficulty where he had a genuine case that it was a delicate matter. If, on the other hand, he insists on not trusting the Committee, in leaving it so narrow that no investigation is worth supporting, he will find this agitation will gain against him. As the hon. Member for Bebington (Mr. Brooks) has said, he will find it extremely difficult to evade having to climb down from the position he has taken, which is really rather short-sighted.

9.24 p.m.

Mr. Brian Parkyn (Bedford)

I warmly support the Amendment put down by my hon. Friend the Member for Poplar (Mr. Mikardo) and also the hon. and gallant Member for South Fylde (Colonel Lancaster). In taking part briefly in this extremely interesting debate, I would say I was delighted when my right hon. Friend the then Leader of the House pushed for the setting up of the specialist Committees two years ago. I was even more delighted when I found myself appointed to the Select Committee on Science and Technology, which in many ways is unique because it genuinely is a Select Committee covering one area of activity, science and technology, but going interdepartmentally and with a great deal of freedom.

This debate is concerned not alone with the question of the Bank of England, about which I know nothing. I believe, with my hon. Friend the Member for Poplar, that this is a matter of what Parliament is all about, of democracy and of the taxpayers who sent us her to look after their interests, which is, in the final analysis, why we are here. It is a question of ensuring final accountability on the money which the taxpayers give the Government. A Select Committee, and particularly a specialist Committee, is more than just a body to ensure the accountability of the Executive. The hon. Member for Canterbury (Mr. Crouch) touched on the other important aspect, that it is a Committee which should take part in the process while things are still warm and policy is developing within the Government.

I have the honour to chair a small, quick inquiry, which is still going on in the Select Committee on Science and Technology in connection with carbon fibres. We shall come out with a report quickly, because things are moving. It is a question not just of getting Government accountability to Parliament, but also of enabling the right decisions to be made. The question is whether the whole concept of a Select Committee on Nationalised Industries should not be reconsidered and whether we might not have a Specialist Committee concerned with finance and one concerned with power and energy policy rather than taking the various constituent power industries.

We should take a much more basic look, now that we have started specialist Committees, at whether we need a Public Accounts Committee of the type that we have now. A great deal of what it can do, and has done effectively, could be done by the Executive and need not involve Parliament. Perhaps we could consider the kind of Specialist Committees and accountability and involvement of Members of Parliament that is needed. It is very hard work, and we must feel that it is justified.

If we want full accountability, we must allow M.P.s to be free to decide their area of operation. We have been involved many times—I see the Chairman present—on the Select Committee on Science and Technology in matters concerning national security and commercial sensitivity. On the whole, we have been discreet and responsible, as all hon. Members must be, but it must be for hon. Members to decide. If the Amendment is carried, the Government, the Executive, the Treasury and the Bank of England will be satisfied with the honourable intentions and the discretion of hon. Members in carrying out their responsibilities for their nation.

9.30 p.m.

Mr. J. Bruce-Gardyne (South Angus)

It is with some trepidation that I enter into the debate because I am the first hon. Member to speak from this side of the House who is not, and has never been, a member of the Select Committee. Perhaps it is not a bad thing that my hon. Friends who are members of the Committee should receive a word of support from outside their ranks. I agree entirely with what they have said.

My excuse for intervening is that I believe that the decision which we shall take tonight will be of considerably greater importance by implication than might appear from the subject matter of the debate. I will explain why, but first I must comment on the question of including B.P. within the Committee's terms of reference.

The hon. Member for Poplar (Mr. Mikardo) said that he could see no reason, if B.E.A. was to be included—after all, he pointed out, B.E.A. was in a competitive position—why B.P., which was also in a competitive position, should be excluded. There is a vital distinction between the two to which my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) pointed. In the case of B.E.A. there is only one shareholder, Her Majesty's Government. In the other case, however, there is a vast mass of private shareholders who are the effective owners of the company.

The main argument against including B.P. is of doubtful validity, and since it has a certain relationship to the major matter under discussion—namely, the Bank of England—I wish to draw attention to it. The main argument against including B.P. seems to be that B.P. might be embarrassed in many of its overseas markets and areas of production by emphasis being laid on the fact that it is Government-controlled. In this context, what the Committee has proposed is highly significant, for we read in paragraph 70: Your Committee would see advantage … in their having the power to discover … the extent to which the limited powers of the Government over the Company have been or could be used, and to inform the House accordingly. If the Committee had the power to do this, I believe that it would establish clearly the really minimal, almost non-extant, amount of Government interference in the control and operation of the company. Far from this being to the disadvantage of B.P. internationally, it might be to its advantage.

The lesson I draw from this—and this is where the matter becomes relevant to the main subject under discussion, to which I shall come—is that on many occasions an atmosphere of secrecy and exclusion from the investigations of the Committee: diminish rather than enhance confidence. There is a great deal in the old French saying that to know all is to understand all, and I urge the Leader of the House to pay more attention to this aspect.

The main argument tonight concerns the extent to which the remit of the Select Committee should empower it to investigate the workings of the Bank of England. It is here that we are possibly dealing with what could be a turning point in the whole development of the system of specialist Committees. It is for this reason that the outcome of this debate and the result of the Division may have a much wider significance. If we accept the Motion without amendment we shall, in effect, be saying that the movement towards the development of specialist Committees is to be conclusively reversed.

We have inevitably heard a certain amount about watchdogs, and various analogies have naturally been drawn. This seems a good test case, for if we are to allow the Select Committee on nationalised industries to have its field of investigation circumscribed in the way proposed by the Government, we shall be saying that watchdogs are permitted provided they have no teeth.

On the other hand, if we accept these Amendments which, as several hon. Members have pointed out, were most temperately proposed and supported by the hon. Member for Poplar and my hon. and gallant Friend the Member for South Fylde (Col. Lancaster), I hope we shall be setting a very important precedent for the future. I have always believed that the coping-stone of the edifice of Specialist Committees which have been developed on a very small scale in the last year or two would be a Specialist Committee with responsibility for scrutinising the management of the nation's economy. We are a long way from that.

I accept and recognise, as we all must, that we have to move by small steps. We cannot hope to get the full extent of what some of us would like to see by way of proper scrutiny of the actions of the Government in one bound, but, if we accepted the Amendments we should be taking a vitally important step forward. In doing so we should recognise a process of progression which could eventually end with the establishment of a Specialist Committee charged with the duty of scrutinising the Government's control of the national economy.

We have obviously got to move gradually, particularly in a matter which hon. Members recognise is in many respects a delicate one. I need not read paragraph 49 on page 14 of the special report because my hon. and gallant Friend has read it. It seems absolutely clear that what the Select Committee proposes is very modest, cautious and reasoned. The objections advanced by the Leader of the House are twofold. The first amounted, although he did not put it this way, to the argument that we could not be sure that the Select Committee could be trusted to behave with proper discretion. Most hon. Members who have spoken from either side of the House have disposed of that argument. Many have pointed out that the whole record of the Select Committee disposes of that argument.

The second objection advanced by the Leader of the House could be fairly summarised by saying that we cannot split the operations of the Bank of England from the operations of the Treasury. I recognise that we cannot make exact parallels between the Select Committee on Nationalised Industries examining the affairs of the Bank of England and the Federal Reserve Board going before Congress. This was clearly set out in answer to question No. 19 in the evidence in an answer by Sir William Armstrong to my hon. Friend the Member for Barkston Ash (Mr. Alison). Sir William Armstrong pointed out that while: it is perfectly true that the Governor is not a civil servant and has had by custom a position which he has felt able to use for making public statements. However, that is quite a different thing from the position of the Chairman of the Federal Reserve Board and the Federal Reserve Board itself which will settle its own affairs whatever the view of the President. We have to accept that there is a distinction here, and to that extent the activities of the Bank and the Treasury are much more closely intertwined and interdependent.

By saying that he had the authority of the Chancellor of the Exchequer for saying that it would be possible to arrange for the Governor and the Chancellor to appear before the Committee together, the Leader of the House destroyed his case for rejecting these Amendments.

My hon. Friend the Member for Cirencester and Tewkesbury said that this is one of those occasions when the argument is across the Floor of the House and that consequently we have a much better debate. This is an argument between the back benches and the Front Benches. I hasten to exonerate my hon. Friend the Member for Barkston Ash. There is a large measure of common ground between the two sets of back benches. I hope that we shall go into the Lobby and secure the passage of these Amendments. If we do so, we shall advance a long way.

9.41 p.m.

Mr. Frank Hooley (Sheffield, Heeley)

I go a long way with the hon. Member for South Angus (Mr. Bruce-Gardyne), particularly on the issue of the reform of our procedure and the powers of Parliament. It is, perhaps, an unhappy coincidence that this is the second time this Session that there has been a quarrel between the Treasury Bench and the back benches on both sides on the issue of the competence of a Specialist Committee. There was serious dissent on the issue of the prolongation of the life of the Select Committee on Agriculture. Many of us believe that a similar issue arises on the Amendment.

Mr. Peart

I tried to explain earlier, as I have explained on many occasions, that the Select Committee on Agriculture was set up as an experiment. The idea was that we would make more experiments. I have announced one tonight.

Mr. Hooley

My right hon. Friend has made that point before. There was a powerful feeling in the House that the Government were interfering arbitrarily and unnecessarily in what the Select Committee on Agriculture wished to do, though I do not challenge that it was an experimental Committee. There is a similar feeling tonight that the Government are retreating from a position which was adopted primarily by my right hon. Friend the present Secretary of State for Social Services who, when he launched this programme, I am sure expected it to develop and expand and not encounter this kind of hesitation in an attempt by the Government to circumscribe the powers of a Select Committee.

Traditionally the techniques used by the House to control the Executive have been those of obstruction and delay. These techniques undoubtedly have certain effects and, possibly, certain merits. I have always believed that the most important technique which the House should adopt is that of investigation, because, with the complexity of modern government, the techniques of destruction and delay alone are far too clumsy and imperfect to enable the House to exercise any sensible control over what the Government are doing. It is essential that there should be instruments such as Select and Specialist Committees—for example, the Select Committee on Nationalised Industries—which are competent and designed to investigate the Government's activities in considerable detail. I would go much further than the House has gone so far. I should like to see the House armed with a coherent and powerful system of Committees to investigate the whole of Government activities. But we are quite a long way from that yet.

Much reference has been made tonight to the work of the Public Accounts Committee. As a fairly new but, I hope, tolerably conscientious member of the Committee, I support what has been said about its powers and effectiveness. One thing that stands out about the Committee is its robust independence. Over the past three years it has investigated many matters of great confidentiality and great commercial significance, particularly, for example, in the aero-space industry.

I am sure that the House would have regarded it as an absolute outrage if the Government had one day said, "We find it highly inconvenient that the aero-space industry should be subjected to this kind of detailed investigation. We propose to stop you looking at the development of Concorde, we shall not have you investigating the purchase of Phantom aircraft, or talking about the Beagle Bassett and things of that kind. You will kindly stay out of that". The House would not have tolerated that for a moment. Yet in effect the force of the restrictions the Government now seek to place on investigations of the affairs of the Bank of England would be parallel to that kind of proposition. They are saying ab initio, "You are not to look at this, this and this in relation to the affairs of the Bank of England, and we shall impose arbitrary limits which we, the Government, have selected on the matters you may investigate". It is completely contrary to the spirit and purpose of Select Committees, and certainly entirely contrary to the spirit and purpose of the reforms introduced by my right hon. Friend the present Secretary of State for Social Services, to accept such limitations.

Various practical arguments have been advanced as to why these limitations are necessary in the case of the Bank of England. They range from confidentiality and commercial secrecy to problems of State affairs, such as the undesirability of scrutiny of the Exchange Equalisation Account. But not one of those arguments will stand up to examination in the light of the long-established practice of the House in relation to existing Select Committees, such as Public Accounts and Science and Technology, and a good deal of the work which the Committee on Nationalised Industries has already done.

I should like to say a brief word on the Bank of England, but it will be brief because I claim no expertise here. I understand that a central part of the Government's argument is that the Bank of England is a special case, that it is a rare and peculiar animal which is not a Department of Government and not a public corporation, but which hovers somewhere in mid-air between the two and has similarities with the one and the other and peculiarities of its own. I should have thought that that was a good argument for investigating it. So far from being a reason why we should be excluded from looking at its activities, it is a very good reason why the House should begin to take a close, careful and, of course, responsible interest in what the Bank does, what it purports to do and perhaps even what it might do in addition to its existing powers.

Great play has been made with the position of the Governor. To my mind, Sir Leslie O'Brien is a distinguished and shrewd public servant, and perfectly capable of looking after himself, even before so magisterial an inquisitor as my hon. Friend the Member for Poplar (Mr. Mikardo). It is no compliment to him to suggest that he must be protected in some way by the Treasury from questioning by hon. Members and from giving evidence to them.

It has been hinted that somehow an inclusion of this kind would derogate from the Governor's position vis-à-vis his opposite numbers in other countries with whom he has to meet to discuss essential banking matters. But it has been demonstrated that other men in similar positions in other advanced industrial countries have to face the same kind of questioning and accept the same responsibilities vis-à-vis their legislatures.

Mr. Tarn Dalyell (West Lothian)

In which countries do the governors of the central banks have to face public questioning on their relations with other central banks?

Mr. Hooley

I was not referring necessarily to public questioning. It is not necessarily part of the argument that the questioning would be public. I am fairly certain that there are comparable situations where the governors of the central bank institutions of industrial countries are required to give accounts to their Parliaments of the work of those institutions. It does not follow that this matter would necessarily have to be in public.

It is well known that the international civil servants of the International Monetary Fund have authority to come here and make detailed inquiries into the state of our finances and the management of our monetary affairs and to discuss with the Chancellor, and, no doubt, the Governor of the Bank of England and other senior officials, how we are managing our fiscal affairs. I have no quarrel with that. I welcome it as an advance in international co-operation. I see nothing sinister in it.

But it is an astounding proposition that these gentlemen should be allowed to scrutinise the most intimate details of our national housekeeping but, that when a few Members of Parliament would like a somewhat similar privilege the House is told that it is an outrageous demand and that the Government of the day will have none of it. That is a proposition which I will not tolerate for one moment and I propose to go into the Lobby tonight against it.

9.52 p.m.

Mr. Michael Alison (Barkston Ash)

In contributing to the debate, I find myself cast in the rather unnerving rôle of a Parliamentary hybrid. In one incarnation I sit dutifully and admiringly at the feet of the hon. Member for Poplar (Mr. Mikardo) in his capacity as chairman of the Select Committee on Nationalised Industries, of which I am a loyal and conscientious member and attender. In another incarnation, which I am now manifesting in speaking from the Opposition Front Bench, I find myself, in however junior a capacity, as a spokesman of that Shadow Executive which, in terms of the Executive as such, has come in for such scathing denunciation and which has been painted in such stark contrast with the rôle of the ordinary back benchers.

Mr. Russell Kerr (Feltham)

Let the hon. Gentleman throw his second cap away.

Mr. Alison

I hope that the hon. Member for Poplar and my hon. and gallant Friend the Member for South Fylde (Colonel Lancaster) will not think that I am entering into any sort of dubious compromise or am attempting to go over to the enemy if I try to find some common ground between the two sides of this dispute, the House of Commons as such and the Executive. I believe that there is some common ground and, for this reason, I shall tend rather to concentrate on the Bank of England and follow the lead given by my hon. and gallant Friend rather than go into the more philosophical area which the hon. Member for Poplar delineated in the wide-ranging contrasts which he drew between the needs and aspirations of Parliament as such and the Executive.

We have to bear in mind that the Select Committee recommended in its Report that the Orders of Reference should be widened to include the Bank of England.

To do them justice, the Government have brought forward a Motion including the Bank of England within the terms of reference of the Select Committee. It may not have come very graciously, but at least it has come, and this is common ground on which we should try to build. I have listened carefully to what the hon. Member for Poplar has said tonight, and I read his article in the Guardian carefully. Perhaps I can hope to carry him and some of his hon. Friends with me in what I have to say. Speaking as a backbencher, and I am very much a backbencher, I confess that my heart beat when he sounded so clarion a call in support of the championship of Parliament. What hon. Member of this House, what back-bencher, would not instinctively react to such a clarion call? Having sounded no uncertain note on that trumpet, may I express the hope that he will not press forward too vigorously into the Lobby.

I say this for two reasons. First, the right hon. Gentleman the Secretary of State for Social Services was right in saying, as he did in that memorable debate of December 1966, that in a straight clash between the Executive, backed as it is, by the great party Caucasus, and the back-bencher isolated as such as the individual elected representative, when the crunch comes the Executive at the present stage of our democratic evolution, with its organised and controlled political parties, will unfailingly win. I would regret to see the hon. Member and all that he is expressing brought to possible defeat in the Lobby on that score.

There is a second and more subtle reason why I would urge this cause upon the hon. Member. In putting this forward, I would remind him of what I consider to be the crucial words spoken by the right hon. Gentleman the former Leader of the House in that basic debate on 14th December, 1966, when he said: Some people talk as though it were still possible to make a sharp distinction between policy and administration and to lay down that Select Committees and Specialist Committees should deal only with the matter and be excluded from consideration of the former. I ask the House to mark these next words well: But even a superficial study of the work of the Committee on Nationalised Industries, for example, will reveal that this distinction between policy and administration is often very blurred, and that it is the blurring which enables the Committee to do its most valuable work."—[OFFICIAL REPORT, 14th December, 1966; Vol. 738, c. 485] I hope that the hon. Member and his supporters on both sides of the House will ponder this concept of the blurring. What the Government are offering us is half a loaf. My experience of the Select Committee on Nationalised Industries, particularly under the chairmanship of the hon. Member for Poplar, is that the Committee is able to extract a great deal of bread out of half a loaf—

Mr. Russell Kerr

Only the crumbs.

Mr. Alison

Even if it was only crumbs, the hon. Member for Poplar can make a meal out of crumbs cast from the Executive table into his lap as Chairman of that Committee. I recall the contribution which the Select Committee, under his chairmanship, made in the scrutiny of Ministerial control of nationalised industries—the Report which has been issued and not yet commented on by the Government. This we all regret.

The hon. Member will recall that in going into the rationale which lies behind the selection of a rate of return for the nationalised industries, the rate of return which should be applied in calculating the D.C.F.—

It being Ten o'clock, the debate stood adjourned.

Ordered, That the Proceedings on the Motion relating to Nationalised Industries may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Peart.]

Question again proposed, That the Amendment be made.

Mr. Alison

I was reminding the hon. Member that, in considering the crucial question of the rate of return which should be applied to the D.C.F. calculation of the consequential pricing policy based upon long-range marginal forecasts, which was given an exhaustive examination by the Select Committee, he was going to the very heart of Ministerial policy on the conduct of one of the largest areas of economic activity in the country, and his Committee has made recommendations which are presumably being seriously weighed.

In what I think the hon. Member would, in terms of the Bank of England, have described as sacrosanct areas, these high matters of policy, rates of return and pricing policy, the hon. Member and members of his Committee, like, for example, the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), ride with the sovereign freedom of kings in then-own kingdom, and nobody gainsays them. It was precisely that sort of practice which was manifested in the Select Committee I referred to and to which I am sure the right hon. Member for Coventry, East (Mr. Crossman) was referring when he said that this sort of blurring between policy and administration is what makes the rôle of the Committee so valuable. This is the proper pattern for developing the power and prestige of Parliament.

Mr. Mikardo

I am most grateful to the hon. Gentleman for the kind things he is saying, but I am trying hard to interpret the road which he is trying to get us to follow. What he is really saying is that a Select Committee and an astute Chairman can always fiddle the terms of reference and if we were to accept these terms of reference it would be very difficult for Government witnesses to wriggle out of any questioning. I think that is probably true, but I do not think that is a procedure which is conducive to the dignity and decency of the House, and I for one will not engage in it.

Mr. Alison

I am sorry that the hon. Member for Poplar should again have been so stark in his attempt to clarify what is perhaps properly and decently left blurred. I genuinely feel that a case can be argued for saying that for each specific investigation which a Select Committee makes there is built, brick by brick, a case history of precedent for the scope of an examination, and it is surely by these means that historically the English Common Law by analogy has evolved. Should not this be the means by which the scope of the Select Committees on Nationalised Industries should evolve? It might be adopting Fabian tactics, but I do not think that would be any less a commendation for it in thinking of it in its widest terms. We will not get power and prestige for the Select Committees by frontal assault in the way which the hon. Member for Poplar may seek to persuade the House to adopt tonight.

Nevertheless, having sounded the trumpet note, if we continue to build brick by brick upon a precedent for each examination made, we shall be opening an area of Parliamentary prestige and power which the hon. Member has already substantially increased by the highly responsible and highly commended examination which has been done before. I appreciate, and can understand, that the attractiveness of this line of argument, if it has any attractiveness, to the House and to the hon. Member must depend entirely in the last analysis in the case of the Bank of England on how much bread the Government are offering us tonight in this half-loaf Motion which they have put before us. One must admit that one's first reaction is that it cannot be as little as the bald terms of reference at first sight suggest.

Looking at them for the first time, as I did, one got the impression that the Government had gone to the Radcliffe Report, turned up that passage where the scope and work of the Bank of England is given a very comprehensive definition and had then simply transposed that definition to the Order Paper to define what should be excluded from the examination of the Select Committee.

One cannot believe that that is the Government's intention, otherwise they would be so insulting the intelligence and wasting the time of the House of Commons—if they meant the terms of reference to be taken at face value—that they would be guilty of doing far graver damage to the House than any of the alleged misdemeanours of my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro). To come before the House and seriously to mean that the terms of reference should be taken at face value cannot be the full purpose and intention of the Government.

Therefore, we are entitled to expect from the Chief Secretary some sort of gloss upon these terms. However, I must warn him that the gloss which the leader of the House imparted to the terms of reference in his introductory, helpful and obviously forthcoming speech defining the scope and aim of the Select Committee's activities to be to examine the relationship between the Treasury and the Bank of England is not quite enough. We expect more from the Chief Secretary on the point.

Perhaps I might be allowed briefly to say what I believe is the general approach of my right hon. and hon. Friends to these terms of reference, on the assumption that a gloss will be added to them. First, I am sure that all right hon. and hon. Members on this side of the House are convinced that the Select Committee on Nationalised Industries wants to be and means to be constructive and helpful to the Government and the Bank of England in the scrutiny which it is allowed to conduct in however limited a way. I hope that the Chief Secretary will give the Select Committee credit for setting out to be constructive and helpful.

I shall try to give immediate tangible evidence of this approach by saying that, speaking for myself, I appreciate any reasons for the Government's hesitancy in bringing forward explicit and open-ended terms of reference for an examination of the Bank of England. It will not need an hon. Member of super intelligence to perceive that at present, and for the past few months if not years, the Governor of the Bank has had a considerable burden of anxiety, duty and obligation to bear which few of us would envy. Prima facie, it must be a heavy burden to be faced with the prospect of organising the attendance of witnesses and the presentation of evidence to the Select Committee, in addition to all the other duties and travelling that he has to undertake. That may be gainsaid, but I think (hat any declaration by the Select Committee that it means to be constructive and helpful must take this into account and show that members of the Select Committee feel that this must be a difficulty for the Government.

At the same time, I hope that the Leader of the House and the Chief Secretary will have recognised that the Select Committee is perfectly capable of being fully aware of those difficult areas of sensitivity such as the confidence factor which enters into the attitudes of foreign holders of sterling or investors in the gilt-edged market. We are aware of the sensitivity underlying those areas and, either by sidelining or any other means appropriate, it is possible to steer clear of any real difficulties which the Bank may face in giving evidence to the Select Committee.

Secondly, I hope that in giving his interpretation of these terms of reference, the Chief Secretary will draw a distinction between what the hon. Member for Poplar in his Guardian article called the business or that part of the business of the Bank of England which is hidden behind a veil of carefully guarded hush-hush and the really enormous volume of open information which can be openly arrived at by any serious student in or outside the House of the procedures of the Bank of England.

In hoping that the Chief Secretary will cast some light upon the scope that the Select Committee will have over the area of open information openly arrived at, perhaps I might highlight three particular areas which the terms of reference touch on. First, I hope that the Chief Secretary recalls that there was, on the subject of the Bank of England's day-to-day management of the money market, an extremely full and revealing article in the Bank of England Quarterly Bulletin of June 1963.

Secondly, there was an extremely comprehensive article on the management of the gilt-edged market in the Quarterly Bulletin of June 1966. Indeed, for serious students, it is one of quite fascinating revelation. The ex-Chancellor of the Exchequer said that he inspired it. I am not certain whether he wrote it.

The Secretary of State for the Home Department (Mr. James Callaghan)

No.

Mr. Alison

It is certainly an extremely revealing and interesting article.

Thirdly, on the Exchange Equalisation Account, we have only to look at the Bank of England Quarterly Bulletin for September 1968 to find an extremely valuable historical and practical study of how the Exchange Equalisation Account operates. I need hardly add that all these subjects were touched on in great detail and depth in the Radcliffe Report, which again is openly available to all Members to scrutinise.

I hope that the Chief Secretary, in noting what I have said about these three areas and the extent to which there is a lot of open information about them already available, will note two other things. First, the articles that I have described in the Bank of England Quarterly Bulletins have laid bare what I might describe as the mechanics, the nuts and bolts, the engineering of the way that the Bank of England operates. It is rather like one of those semi-dismantled motor vehicles used for teaching driving and maintenance on in the Army. It is not fit to drive, but it can be looked at in careful detail to see how the bits and pieces fit together.

Secondly, I hope that the Chief Secretary appreciates that, in the terms of the articles to which I have referred, it is open to any Member of the House of Commons, presumably like any member of the public, immediately to enter into personal correspondence with the Governor of the Bank of England, or one of his subordinates, asking specific questions of detail and on points of information about the sort of material discussed in these articles. It would hardly be rational or politic to suggest that it would be impossible for a formal Select Committee to do the same kind of exercise of investigation, discussion, examination and scrutiny of the material already open to the public when this can be done by members of the public individually and privately. Surely all these matters, which have been openly laid bare in specialist articles at least, should be within the scope of the terms of reference of the Select Committee and should be given that gloss of interpretation by the Chief Secretary. I hope that he will be able to do that.

I will elaborate briefly on the three aspects of the Bank of England's mechanics upon which I have touched. First, on the money market article to which I have referred in the Bank of England Quarterly Bulletin of June, 1963, I hope that the Chief Secretary will agree that it would be reasonable for the Select Committee on Nationalised Industries to carry out a discussion or examination with the Governor of the Bank, or any Treasury official, of whether there is any means of increasing the efficiency of the money market.

One obvious point to discuss is the value or necessity of that unique feature of the London money market, namely, the discount houses. The monetary authorities in America operate satisfactorily without one. I hope the Chief Secretary will agree that this is the sort of question which the Committee should go into. No matter or question of the ends of monetary policy is concerned, but simply the efficiency of the means which are adduced to carry forward that policy. So much for the money market.

The June, 1966 article in the Bank of England Quarterly Bulletin gave us a straightforward and perfectly explicit definition of the policy of the Bank, or rather of the Government, in the gilt-edged market. It said: … the dominant long-term consideration in debt management … is rather to ensure so far as possible that suitable finance for the Exchequer is available, and will continue to be available in the future, so that there need be no excessive recourse to short-term borrowing from the banks on Treasury bills and accompanying increase in money supply. That is an open and fair definition of the objective of the Bank, and of the Government, in operating the gilt-edged market, and I hope the Chief Secretary will agree that it would be fair for the Select Committee to inquire into the extent to which, for example, the local authority bond market may, or may not, interfere with, detract from, or complicate this objective. This is a question of detail of the mechanics of the structure, and its efficiency, which should surely be within the scope of the Select Committee's remit. I am sure the right hon. Gentleman will agree that on the basis of the terms of reference as spelt out that would, prima facie, be excluded. That can hardly be the right hon. Gentleman's purpose.

Mr. Crouch

I recognise the difficulties confronting my hon. Friend, but I am not following him completely. I am not quite clear what he is asking the House to accept. Is my hon. Friend asking the Chief Secretary to accept at least two parts of the Amendment, or is he asking him merely to gloss over what is already in the Motion?

Mr. Alison

I hope that my hon. Friend will accept the term "impart a gloss" in the rather more technical sense, namely, in the sense of giving a fuller and more rational interpretation of greater scope for examination than the terms of reference, baldly spelt out, could possible mean. I should be prepared to accept that the Government were taking a helpful and constructive step in the right direction towards helping Parliament by going so far as to respond to the Committee's invitation to let the Bank come before it, but I hope that the terms of reference will receive a gloss. I cannot believe that they can be so negative or exclusive as they at first sight seem to be, but we shall see.

Finally, on the question of the Exchange Equalisation Account, again the right hon. Gentleman will be aware that the article of December, 1968, was extremely interesting in showing the historical evolution of the Account, and particularly in showing—though perhaps this is not appreciated by everybody, but the Bank of England has illuminated us on this—how it originally came into existence at a time when, for better or for worse, England had a floating exchange rate. It was introduced to prevent an undue appreciation of sterling at a time when foreign currency was coming here to seek a currency haven.

The fact that the Exchequer Equalisation Account is still in use, but presumably for precisely the opposite purpose, namely, in a period of fixed exchange rates to prevent an undue diminution of the rate of exchange of sterling, must, prima facie, bring into question the possibility that this is not the most efficient instrument for attaining the objectives of Government policy, whatever they may be. We shall not look into them, but we should be entitled to examine the efficiency of the instrument as such. So much has been laid bare by the Bank of England Quarterly Bulletin that it must be open no hon. Members to press for further information.

Mr. R. B. Cant (Stoke-on-Trent, Central)

Does not the hon. Gentleman think it a remarkable coincidence that the Exchequer Equalisation Account was accumulating gold more rapidly at a time when its operations were cloaked in complete secrecy in the 'thirties?

Mr. Alison

The hon. Gentleman is referring to the pre-war period. I think that circumstances were very different then. The hon. Gentleman has asked a question which I should like to deflect to one of the Treasury Ministers, or perhaps to the Governor himself, if we can persuade them to come before the Select Committee.

I conclude by hoping the Chief Secretary will recognise and acknowledge that the Select Committee proposes to take a constructive and responsible approach towards the examination of the Bank of England which, at face value at any rate, the Government are going to allow us to conduct. I hope the Chief Secretary will be able to reassure us that the power to carry out an examination of the Bank of England will at least include further investigation into some of the published material about its activities which have come from official sources.

I hope that the Chief Secretary will appreciate, even if the rather narrow interpretation of the Leader of the House—namely, the examination of the relationship between the Treasury and the Bank of England—is always to be followed, that this will nevertheless involve an examination of some of the nuts, bolts and mechanism of the Bank of England in the ways and in the areas I have referred to. We look to him now—I tried to give him a halfway response to the gesture he made us—to give us an assurance that we are going to get more than half a loaf, something to really dig our teeth into.

10.21 p.m.

The Chief Secretary to the Treasury (Mr. John Diamond)

I recognise that the hon. Member for Barkston Ash (Mr. Alison) has made my task somewhat easier in the sense that I can understand some of the difficulties he is feeling, both speaking from where he is speaking and as a member of the Committee. I want to make it clear that I am proposing to say what I had intended to say, which is very much in line with what he is inviting me to say.

I have listened to every speech with one exception. It has been a long but most interesting debate. It is one which I propose to answer not as a well-briefed Treasury Minister but as somebody who has been a back-bench Member of Parliament for a great number of years, has served on a Select Committee for a number of years and has a respect for this House, for its Select Committees and for the capacity of individual Members of Parliament to perform a worthwhile job. They carve out a portion of their very busy lives in doing so and in serving their fellow Members. I would speak from my experience rather than from pieces of paper.

I start in a difficulty. I recognise as an old hand that this is one of the occasions when there is a natural affinity between all hon. Members of the House, with one minor exception. There is a natural affinity between all hon. Members on all sides of the House, with the exception of the Government Front Bench. This is an occasion when hon. Members feel it is appropriate to share a little more fully with the Government some executive, probing and examining functions; that their natural enemy in this case is the Government, who are withholding that ability and restricting the capacity of hon. Members to extend their usefulness. It has been obvious from all the speeches that this has been a natural, underlying motivation. I understand that very well. I hope, nevertheless, to demonstrate to all those who have spoken and those who have not participated in the debate that there is not a sufficient difference between the movers of the Amendment and the Government to justify a Division. I do not say that for the reason that the hon. Gentleman suggested, cautiously and in a manner befitting an hon. Member speaking from the Front Bench that it is unwise for back-benchers to rush into the Division Lobby lest they be defeated by the Government machine. I have listened to all the speeches; my anxieties are quite the other way round. I say it because I think I know how all hon. Gentlemen feel. I can understand and satisfy their reasonable wishes.

The first question with which I must deal is the general one: Do the Government trust hon. Members when they are gathered together in their Select Committees and carrying out their functions? The answer is, "Yes", and, if a monument is sought, I ask hon. Members to look around, to consider the P.A.C. I will not embarrass the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) by referring, as I did recently, to the value of his work and that of his Committee, except to say that he will know that there are certain areas of Government activity which are examined by the P.A.C. and not even examined by the House, that they are confidential in the extreme, and that that has never been a reason for the Government to withhold any information which he, his Committee or his officers have asked for in that regard. I hope that I am right. I will give way gladly if the right hon. Gentleman wishes to correct me.

Mr. Boyd-Carpenter

I wish to say only that I wholly agree with the right hon. Gentleman. During my tenure as Chairman of the P.A.C, the Government have treated us with complete confidence, and I hope that we have justified it.

Mr. Diamond

I am grateful. I would make only one comment about the dates—that this has been only during the period of this Government. I am making not a party point but only a historical observation, that the present Government have been in power during the whole of the time that the right hon. Gentleman has said that the Government has not withheld information of a most confidential kind from him or his Committee.

I ask the House and hon. Members to dismiss from their minds utterly and completely—because there is not a syllable of foundation for it and we shall make no progress if we approach one another with suspicion—any idea that in proposing the words which we have put on the Order Paper the Government are suspicious towards Select Committees and the way they do their business. We have not, and we can demonstrate it in a way which should appeal to the House more than any other: to wit, we are answerable to the House of Commons in all things, and in one thing we are answerable, and accepted as being answerable, alone to the P.A.C. and its members.

I therefore hope that we can proceed from this point on the basis that we are moving into new territory and that we want to do so with wisdom and with some caution, but not in any sense with suspicion. I hope, therefore, that my hon. Friend the Member for Poplar (Mr. Mikardo), the hon. and gallant Member for South Fylde (Colonel Lancaster) and all the members of the Committee will not feel in any degree that any limitations apparent in the words are limitations which have regard to our sense of lack of confidence in the way that members of this Committee or any other Select Committee behave.

Having said that, I must add that my belief is not only in Members of Parliament who are members of Select Committees but in Members of Parliament as such. Many Members of Parliament have spoken today. Some of them have taken the view that the scope of inquiry, for example with regard to the Bank of England, should be entirely different to what other hon. Members have considered. Several have said, "I hope the Chief Secretary will not think that what any particular hon. Member has said is what we want, because we do not."

All that I am saying, therefore, is that, although there is not the slightest question of lack of trust or confidence, there must be some indication of what the responsibilities of the inquiring members of the Committee are. Otherwise there will be disagreement as between members of the Committee about their function. If I were to describe their function, first as the hon. and gallant Member for South Fylde has laid it down and, secondly, as my hon. Friend the Member for Lewisham, West (Mr. Dickens)—

Mr. Russell Kerr

Who is not a member of the Committee.

Mr. Diamond

I do not know if a new proposal is being put forward; that there are certain hon. Members who should be permanently excluded from membership of this Committee or any other Select Committee. It is not a proposition to which I would assent.

Mr. Russell Kerr

Nor would I.

Mr. Diamond

I do not distinguish in this way between hon. Members. My respect is for hon. Members, all hon. Members.

It is necessary for a Government who are inviting hon. Members to do a serious job of work to indicate the nature of that job. I have, therefore, dealt fully with the question of trust and confidentiality.

There is one thing which is as bad as if not worse than not trusting an hon. Member, and that is giving him a worthless task to do. That is deceiving him and wasting his time. No hon. Member who has the kind of experience which I have of the way in which hon. Members are pressed almost beyond endurance to cope with their many responsibilities would ever ask an hon. Member to undertake a task which was not worthwhile. To do so would be deceit on the part of the Government, and the Government are not proposing to do that.

Thus, both in terms of trust and confidentiality, and a belief that hon. Members should be invited to do a worthwhile and not a worthless job, I hope that I shall carry the whole House with me when I have explained what the words with which we are concerned are intended to mean.

The first question I must answer is the one put by the right hon. Member for Kingston-upon-Thames, who said that the onus of proof rested on those who would seek to limit the work of Committees. I refer to this question because it was put shortly and well. It has been the assumption behind many speeches that we are limiting the work of Committees. It is an assumption which does not bear looking at. Any hon. Member who glances at the Notice Paper will see that we are, for the first time in the history of the Select Committee on Nationalised Industries, proposing a major extension of its responsibilities.

The right hon. Member for Kingston-upon-Thames said that he had been a Member of the Government who had appointed this Select Committee. But he did not give it the power, either in 1955 or at any time between 1955 and 1964, to examine the Bank of England in any respect. We are proposing that it should undertake that task, if it is willing and good enough to do so. We are extending in a major way the responsibilities of this Committee.

Mr. Boyd-Carpenter

The right hon. Gentleman says with truth that he is extending these powers. Will he address himself to the fact that he is restricting the powers to a lower level and scope than the Committee has asked. It is on that matter that the onus of proof lies with him.

Mr. Diamond

I will, of course, come to that point. The right hon. Gentleman will agree that one must first deal with a matter in principle and perhaps then come to its detail.

The first principle I wish to establish is that the assumption behind many speeches—that we are limiting the powers of a Select Committee—is entirely wrong. What we are doing is proposing, for the first time in the history of this Committee—and it has been going for 12 years—a major and wide extension of its responsibilities.

The next question is whether we are proposing as large an extension of its responsibilities as some hon. Members would wish. I say "some hon. Members" because we are not proposing an extension as great as certain other hon. Members would wish. We are not proposing an extension to the degree that my hon. Friend the Member for Lewisham, West would wish because he would wish it to examine the formulation of policy.

Mr. Dickens

Precisely.

Mr. Diamond

My hon. Friend has been good enough to help me by saying "Precisely". He and every hon. Member knows, particularly those who have served on these Committees, that this is the major distinction which in practically every Select Committee is denied in the examination by members of that Committee because they realise that this is the area for which Ministers are responsible to the House and they must come to the Box to answer for their responsibilities. On a whole field they are connected with monetary and fiscal policy and matters for which the Bank of England offers advice to Ministers. The Chancellor of the Exchequer is the one who wants to, and should, come here and answer for the policy and the way in which it is being carried out. It is his responsibility to do so and not that of anyone else on any Committee whose work is committed to paper rather than being discussed in the House openly. It is not anyone else's responsibility to do that.

Mr. Michael Foot

Hear, hear.

Mr. Diamond

I know that I carry my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) with me in everything I am saying because it is broadly what he said on an earlier occasion and he is always consistent in his view.

Mr. Hooley

Would not my right hon. Friend agree that in one important incident recently the Committee on Public Accounts has pursued investigations in relation to Government contracts with industries which led to certain inescapable conclusions about policy?

Mr. Diamond

I agree that there were examinations and that they led to certain inescapable conclusions about what ought to be done. Some of us thought that should have been done before, but they led to those conclusions. My hon. Friend and I are talking about the same thing. That does not affect the argument in the slightest.

It is perfectly clear that we are inviting the Committee for the first time to extend its responsibilities in a major and meaningful way. The question is: Are we going as far as all the members of the Committee would wish and as all hon. Members would wish? I have already indicated that some hon. Members would wish us to go beyond what we think is right and what a large number of hon. Members would think right. Therefore, I cannot hope to carry every hon. Member with me on that point.

Mr. Dickens

Would not my right hon. Friend appreciate that there is a distinction between examining formulation of policy in any contemporary sense with a review of how policies have been arrived at and the resources behind the Bank both in the past and currently for advising the Government on the development of economic policy now? That is the case I was arguing.

Mr. Diamond

I agree that there is a difference. It is very slight and I do not know what words would be used which would indicate that the House of Commons would be anxious for one of these Committees to examine policies up to a particular date and not beyond that date.

I want to deal with the words on the Order Paper against the background of the attitude of the Government, which I have described, and see whether there is a real difference between those members of the Select Committee on Nationalised Industries who have spoken as to the kind of work they think that the Committee ought to undertake and who have interpreted those words in a very restrictive way and what the Government are anxious and willing that the Select Committee on Nationalised Industries should do. First, certain things have been added and they are new. The Post Office, the Independent Television Authority, Cable and Wireless and the Bank of England, with certain limitations—all that is new. It is additional and has not been done before. [HON. MEMBERS: "The Post Office?"] I should have said, the Post Office in its new garments. What has not been included—this has caused some hon. Members some anxiety—is some individual quasi-private sector companies. The most easily defended exclusion is that of B.P. Two or three hon. Members have said that they think that B.P. should be excluded. We think that it should be excluded, because it functions as a private sector company. It is known that that is so. To include it in the terms of reference for examination by a Select Committee would confuse that issue and would embarrass the company. That is our honest belief. That is shared by a large number of hon. Members. The Select Committee itself has said that it does not regard this as very important. The words are these: … if the power of veto continues never to be exercised by the Government, this fact will obviously give B.P. a very low priority in Your Committee's selection of matters to be considered by them I therefore hope I can say that there is not much between us on the B.P. question and that it is not unwise that B.P. should be excluded.

Then I was asked why we have excluded a company such as Beagle, which is completely different from B.P., where the Government have only a minority interest in the shares, and which is wholly owned and which carries on admittedly in the private sector; but other wholly-owned nationalised interests carry on in the private sector. There is a real distinction to be drawn between Beagle and B.E.A., but it is not on that distinction particularly that I invite the House to agree that Beagle should be excluded—I go on to say, and I say with care, certainly for the time being.

Beagle is a fairly new organisation, newly acquired by the Government, not in any policy of nationalisation but as part of the Government's policy of maintaining that section of the aircraft industry which would otherwise have died and of maintaining employment which would otherwise have discontinued. Beagle is carrying out its function as a private company entirely in the private sector. I want it to have all the compulsions of private sector enterprise and competition brought to bear, and I want it to have no excuses whatsoever for coming to the Government for undue aid.

I do not think that it would be consistent with what we want from that company, certainly in its early stages, to invite it to explain its attitude, its policies, the way it is carrying them out, to a Select Committee with the knowledge —this is the important point—that every decision it made in its management next week, the following week, and the week after that, after it had given evidence, might be subject to the same cross-examination, inquiry and justification that it had already undergone. This is a very valid differentiation. [Interruption.] It was not carried out in terms of a major policy of nationalisation. I have explained exactly how it happened. In those circumstances I think it is right to continue the exclusion of Beagle, at all events for the time being; and I hope that the House will help me and will help the company in carrying out its functions in the most competitive way for the time being.

Mr. Ridley

Does not the right hon. Gentleman realise that all those considerations could be borne in mind by the Select Committee and that the Committee considers carefully when it is an opportune moment to inquire into an industry? This is the point that hon. Members have tried to make. The Government must trust the Select Committee to make the right decision in a matter like this.

Mr. Diamond

Of course I realise that it is the sort of thing that the Committee would take into account. But does not the hon. Gentleman realise that the people who read what goes on on the Order Paper and in Resolutions of the House are not only Members of Parliament? We have to deal with the public as a whole. We have to think of the impact on other men and their attitudes. I hope that the House will, therefore, support us in excluding this company, at all events for the time being.

Mr. Brooks

I am grateful to my right hon. Friend. He has been most generous in giving way. This is a very important point. He had said repeatedly "for the time being". But Beagle may well be a precedent for other companies which will be injected with public money. What criteria are the Government going to apply upon which it will be thought appropriate for the Select Committee to inquire?

Mr. Diamond

I hope that hon. Friend will allow me to go on to speak of the Bank of England and give my general conclusions, when I will, of course, come to that issue.

I come now to the Bank of England, which, as many hon. Members have said is the crux of the argument. Here in particular I want to engage the attention of the hon. and gallant Member for South Fylde, because he asked his questions in a very different way from those which have been asked by others. What he said was not that the words could not bear any interpretation other than that the Government were inviting the Committee to do a wholly worthless task. He said, "What do these words mean?" The hon. Member for Barkston Ash speaking for the Opposition, again asked me to interpret the words.

I have already indicated that it would be deceit on the part of the Government to invite the Select Committee to carry out an all-party task which was wholly worthless, and therefore this must mean that I interpret the words as giving it a worthwhile task to do, and a meaningful task.

The hon. and gallant Gentleman asked whether, if his Committee would entirely agree that it did not expect to be told details about policy, that it was not concerned with policy and that there were certain recognised areas of confidentiality which it would not seek to inquire into itself, it could inquire not how the policy was arrived at, but, the policy having been arrived at, how the machinery worked. He asked, "Do these words mean that the Select Committee could inquire into how the machinery works?" The answer is, "Yes". Do the words mean that the Committee could inquire into the efficiency of the machine? The answer is, "Yes". It is no use any hon. Member saying "No", because if the Committee undertakes its task and starts work, it will find that this is the way in which its inquiry can be conducted meaningfully, if it so wishes.

The witnesses called before the Committee will be only too glad to help it in this very large field of the machine and its efficiency and—here I come to the questions which the hon. Member for Barkston Ash asked me—the efficiency of related matters so far as the Bank's rôle is concerned—not so far as the Bank's rôle is not concerned, because it is an inquiry about the Bank of England not of the world as a whole. So far as the functions of inquiring into the Bank and its efficiency are concerned, and how that efficiency is or is not enhanced by the surrounding circumstances and facts which have to be taken into account, the Committee will be free to inquire.

I am inviting the Committee to be good enough to see that I have at least half satisfied it that we do not approach this matter with lack of trust of hon. Members functioning as a Committee. I invite it to see that, for the first time in 12 or 13 years, we are asking the Committee to extend its responsibility very considerably. I am inviting the Committee to accept that we are asking it to inquire not into policy, not into those acts which are inextricably involved in policy, which is a difficult and delicate area for the Bank, but to inquire into the efficiency, the working of the machine, and the efficiency of related matters in the Bank's rôle.

I am saying that the Committee can invite to appear before it the Chancellor of the Exchequer, who has said that he will be glad to give evidence on the relationship between the Bank and the Treasury—and I remind the Committee that it is the Chancellor who answers to this House on questions of policy on which the Bank advises him.

I think that I have indicated a number of ways in which the Committee can carry out a useful function. Of course, the Governor of the Bank of England will be called before the Committee and will explain these matters to it.

It will be a very useful function. I hope it will do this, because there is a lot of misunderstanding which ought to be cleared up, and that is one of the functions of a Select Committee. I am inviting the House to say that one knows from long experience that this House makes progress in slow but sure steps. To some this may appear a slowish step, but to me it appears a very sure step, and I invite the House to accept the extension of the responsibilities as I have honestly described them, meaning to say to the House that if it turns out differently from what I have said hon. Members will have a perfect right to come back and complain and ask for the matter to be put right. In those circumstances, I am broadly answering the hon. Member for South Fylde. I do not want to stick to the words because I have not got them in front of me, but I am answering with the simple reply: "yes."

Colonel Lancaster

Would the right hon. Gentleman be prepared to say that we are entitled to find and to inquire into the powers of the Bank of England in relation to joint stock banks; what its relationships are with the merchant banks, what its relationships are with I.M.F.? These are essential matters.

Mr. Diamond

As to the relationship of the Bank with the Treasury, I have already said "yes". As to the relationship of the Bank and the joint stock banks, "yes." That means what the relationship is and not what the Bank says to Mr. X on a particular day about a particular matter. That is a different issue. As to the relationship with the I.M.F., "no," because there is no such relationship—[Interruption.] Let me remove the ignorance from hon. Members' minds. The relationship is through the Government and not direct from the Bank. I hear the former Chancellor, my right hon. Friend the Home Secretary, confirming what I am saying, and he has had years of it.

Mr. Crouch

I return to the right hon. Gentleman's explanation of the meaning of the words. He was making what I thought to be a considerable concession, but I must ask him to help me over this confusion. He spoke about letting the Select Committee look into the efficiency and working of the Bank of England. Yet we are told in the Motion that we cannot look into the activities in the formulation and execution of monetary and financial policy. What is the difference?

Mr. Diamond

I know the hon. Gentleman has anxieties because of the words on the Order Paper—[Laughter.] It is reasonable. The whole debate has been conducted on that basis of what the words meant and what will happen in practice. On the basis of what I am saying will be allowed to happen if the Select Committee wishes to undertake its examination on that basis. I hope that the House will be good enough to give it a chance. Progress is made in slow, steady and sure steps; and this step is a very sure one. I hope that the House will not feel it necessary to divide.

There are certain elements of confidentiality in the Amendment which we could not possibly accept, and I am sure that it was not intended that they should be accepted. For example, paragraph (iii) deals with: activities as a banker to other banks and private customers. That confidentiality, which must exist, is excluded by the Amendment. Paragraph (ii) mentions: activities, as agents of the Treasury …". This would merely be duplicating the work done by the Public Accounts Committee, and, therefore, it must be excluded from the Amendment—

Mr. Boyd-Carpenter rose—

Mr. Diamond

I have given way many times; let me finish.

Mr. Speaker

Order. Unless the Minister gives way, the right hon. Gentleman must sit down.

Mr. Diamond

I will gladly give way if I may finish the sentence. That is all I am saying, but there is so much noise going on. It is getting very late, and I hope that this will be the last intervention. I am saying that these are some of the reasons why, if it were thought fit to pursue the Amendment, we could not possibly accept it. I hope that the House will be good enough to say that there is a case for an extension of the powers which should work reasonably well and give it a chance.

Mr. Boyd-Carpenter

The right hon. Gentleman said that the objection to bringing in the Exchange Equalisation Account was the possibility of duplication of the work of the Public Accounts Committee. Is he aware that there is a very substantial overlap over the whole area of the nationalised industries between the two Committees, and that this gives rise to no difficulty whatever, thanks to ordinary commonsense liaison between the hon. Member for Poplar (Mr. Mikardo) and myself?

Mr. Diamond

The fact that there is an overlap is no justification for adding to the overlap.

Question put, That the Amendment be made:—

Main Question put and agreed to.

Resolved, That a Select Committee be appointed to examine the Reports and Accounts of the Nationalised Industries established by Statute whose controlling Boards are appointed by Ministers of the Crown and whose annual receipts are not wholly or mainly derived from moneys provided by Parliament or advanced from the Exchequer; and of the Post Office, the Independent Television Authority and

The House divided: Ayes 61, Noes 101. Cable and Wireless Ltd.; and to examine such activities of the Bank of England as are not—

1. (i) activities in the formulation and execution of monetary and financial policy, including responsibilities for the management of the gilt-edged, money and foreign exchange markets;
2. (ii) activities, as agents of the Treasury, in managing the Exchange Equalisation Account and administering Exchange Control; or
3. (iii) activities as a banker to other banks and private customers.

Division No. 63.]	AYES	[10.57 p.m.
Ashton, Joe (Bassetlaw)	Galpern, Sir Myer	Page, John (Harrow, W.)
Atkinson, Norman (Tottenham)	Gregory, Arnold	Pardoe, John
Biffen, John	Grimond, Rt. Hn. J.	Park, Trevor
Blackburn, F.	Heffer, Eric S.	Parker, John (Dagenham)
Blenkinsop, Arthur	Henig, Stanley	Parkyn, Brian (Bedford)
Boardman, Tom (Leicester, S. W.)	Hooley, Frank	Perry, George H. (Nottingham, S.)
Booth, Albert	Hooson, Emlyn	Price, Thomas (Westhoughton)
Boyd-Carpenter, Rt. Hn. John	Hughes, Emrys (Ayrshire, S.)	Ridley, Hn. Nicholas
Brooks, Edwin	Kelley, Richard	Rowlands, E.
Bruce-Gardyne, J.	Kerr, Mrs. Anne (R'ter & Chatham)	Russell, Sir Ronald
Buchanan-Smith, Alick (Angus, N&M)	Kirk, Peter	Sharples, Richard
Clegg, Walter	Lancaster, Col. C. G.	Steel, David (Roxburgh)
Conlan, Bernard	Lee, John (Reading)	Tinn, James
Crouch, David	Lewis, Ron (Carlisle)	Wainwright, Richard (Colne Valley)
Cullen, Mrs. Alice	Luard, Evan	Watkins, David (Consett)
Davidson, James (Aberdeenshire, W.)	Lubbock, Eric	Whitaker, Ben
Dickens, James	McGuire, Michael	Younger, Hn. George
Driberg, Tom	Mackenzie, Alasdair (Rote&Crom'ty)
Evans, Fred (Caerphilly)	Mapp, Charles	TELLERS FOR THE AYES:
Evans, Gwynfor (C'marthen)	Mikardo, Ian	Mr. Russell Kerr and
Faulds, Andrew	Molloy, William	Sir H. d'Avigdor-Goldsmid.
Foot, Michael (Ebbw Vale)	Orme, Stanley

NOES
Archer, Peter	Howarth, Robert (Bolton, E.)	Oswald, Thomas
Bishop, E. S.	Howie, W.	Owen, Dr. David (Plymouth, S'tn)
Bray, Dr. Jeremy	Hoy, James	Peart, Rt. Hn. Fred
Buchan, Norman	Huckfield, Leslie	Pentland, Norman
Buchanan, Richard (G'gow, Sp'burn)	Hughes, Roy (Newport)	Perry, Ernest G, (Battersea, S.)
Callaghan, Rt. Hn. James	Hunter, Adam	Price, William (Rugby)
Cant, R. B.	Hynd, John	Probert, Arthur
Carmichael, Nell	Jenkins, Rt. Hn. Roy (Stechford)	Rees, Merlyn
Chapman, Donald	Johnson, James (K'ston-on-Hulf, W.)	Reynolds, Rt. Hn. G. W.
Coleman, Donald	Jones, Dan (Burnley)	Rhodes, Geoffrey
Crossman, Rt. Hn. Richard	Kerr, Dr. David (W'worth, Central)	Robertson, John (Paisley)
Dalyell, Tam	Lawson, George	Robinson, Rt. Hn. Kenneth (St. P'c'as)
Davidson, Arthur (Accrington)	Lever, Harold (Cheetham)	Rodgers, William (Stockton)
Davies, G. Elfed (Rhondda, E.)	Lomas, Kenneth	Ross, Rt. Hn. William
Davies, Harold (Leek)	Loughlin, Charles	Silkin, Rt. Hn. John (Deptford)
Davies, Ifor (Cower)	Lyons, Edward (Bradford, E.)	Silverman, Julius
Dempsey, James	McBride, Neil	Small, William
Diamond, Rt. Hn. John	McCann, John	Spriggs, Leslie
Dunnett, Jack	MacDermot, Niall	Steele, Thomas (Dunbartonshire, W.)
Eadie, Alex	Macdonald, A. H.	Summerskill, Hn. Dr. Shirley
Edwards, William (Merloneth)	McKay, Mrs. Margaret	Taverne, Dick
Evans, loan L. (Birm'h'm, Yardley)	Mahon, Peter (Preston, S.)	Thornton, Ernest
Finch, Harold	Mallalieu, J. P. W.(Huddersfietd, E.)	Varley, Eric G.
Foley, Maurice	Manuel, Archie	Watkins, Tudor (Brecon & Radnor)
Ford, Ben	Marks, Kenneth	Weitzman, David
Forrester, John	Miller, Dr. M. S.	Wells, William (Walsall, N.)
Fowler, Gerry	Milne, Edward (Blyth)	Whitlock, William
Freeson, Reginald	Morgan, Elystan (Cardiganshire)	Wilkins, W. A.
Gray, Dr. Hugh (Yarmouth)	Morris, Alfred (Wythenshawe)	Williams, Clifford (Abertillery)
Greenwood, Rt. Hn. Anthony	Morris, Charles R. (Openshaw)	Wilson, William (Coventry, S.)
Grey, Charles (Durham)	Noel-Baker, Rt. Hn. Philip (Derby, S.)	Woodburn, Rt. Hn. A.
Hamling, William	Oakes, Gordon
Hannan, William	Ogden, Eric	TELLERS FOR THE NOES:
Harper, Joseph	O'Malley, Brian	Mr. J. D. Concannon and
Herbison, Rt. Hn. Margaret		Mr. Alan Fitch.

Select Committee to consist of Eighteen Members:

Mr. Michael Alison, Mr. David Crouch, Sir Henry d'Avigdor Goldsmid, Mr. John Forrester, Mr. Norman Haseldine, Mr. John Horner, Mr. Roy Hughes, Sir Donald Kaberry, Mr. Richard Kelley, Mr. Russell Kerr, Colonel Lancaster, Mr. Ron Lewis, Mr. Michael McGuire, Mr. Ian Mikardo, Mr. J. T. Price, Mr. Nicholas Ridley, and Mr. David Watkins:

Power to send for persons, papers and records, to adjourn from place to place, and to report from time to time:

Power to report from time to time the Minutes of Evidence taken before them:

Power to appoint persons with specialist knowledge for the purpose of particular inquiries either to supply information which is not readily available or to elucidate matters of complexity within the Committee's order of reference:

Five to be the Quorum:

Power to appoint Sub-Committees and to refer to such Sub-Committees any of the matters referred to the Committee:

Every such Sub-Committee to have power to send for persons, papers and records; to report to the Committee from time to time; and to adjourn from place to place:

Three to be the Quorum of every such Sub-Committee:

Committee to have power to record from time to time any Minutes of Evidence taken before such Sub-Committees.—[Mr. Peart.]