POWER OF THE CORPORATION AND THE PUBLICLY-OWNED COMPANIES TO BORROW MONEY IN FOREIGN CURRENCY

HC Deb 09 July 1969 vol 786 cc1491-537

Mr. Ridley

I beg to move Amendment No. 28, in page 5, line 30, leave out: 'with the consent of the Minister'.

Mr. Speaker

I suggest that with this Amendment we take the following Amendments:

No. 29, in page 5, line 31, leave out 'he' and insert 'the Minister'.

No. 30, in line 32, after 'Treasury', insert: 'by order (made by statutory instrument)'.

Mr. Ridley

The effect of these Amendments is to oblige the Minister to obtain Parliamentary approval for each tranche of foreign borrowing in which the Corporation indulges and to secure that this consent is to be obtained by means of a negative Order so that the House can, if it thinks fit, pray against it. There are a number of reasons why the House should keep close control on foreign borrowing by the Corporation.

It is curious that the Government have decided to write into each industry's Statute the power to borrow abroad. It would have been much more sensible if the Government had introduced a blanket provision enabling all the nationalised industries to do this: then the question could have been debated on its merits with Treasury Ministries and we should not have had to inject these highly complicated economic subjects into what is otherwise an industrial Bill dealing with one industry.

The economic situation is so deplorable and is changing so rapidly that the House would do well to keep the tightest control over this aspect of Government economic policy.

I thought that the more as I read and reread the Minister's speech in Committee. At one point he said: Before a nationalised industry can borrow abroad it must explain its proposals and it has to obtain specific consent before it can borrow. The check is really made there."—[OFFICIAL REPORT. Standing Committee A. 26th June, 1969; c. 366.] The check should be made here in the House. The right hon. Gentleman recognises that there is need to keep control and a close check on this borrowing, but in the typical way of this Government he abrogates to himself and the Government the job of keeping a check and leaves the House of Commons out of it. The Amendment would bring the House back into it.

The dangers are great. There will be a major upheaval of currency parities in the near future. It is now being openly said that there will be a revaluation of all the major currencies at some time this autumn. A point which has already been made but which cannot be made too often is that the House would be unwise to give consent to a borrowing in currencies which are clearly likely to be up-valued. If any currency is obviously likely to be up-valued, it is the German currency, the currency in which the Government have seen fit to do the first two borrowings for the other two industries.

This is a matter to which the House would probably object, if Orders were laid asking for permission for the Steel Corporation to borrow D-marks, since it is clear that within a few months we stand a good chance of losing a substantial proportion of the capital value of those D.-marks.

My hon. Friend the Member for Yeovil (Mr. Peyton) put down a sensible Amendment—which I am sad to note is not selected—which would put upon the Steel Corporation the duty only to borrow on such terms that the value of the sterling was guaranteed. This would have been a useful provision in the Bill, but, since we are not to debate it, the House ought at least to have a chance to scrutinise the currencies which it is proposed to borrow at any time.

I join issue with the Minister on something else which he said in Committee. Reading from his carefully prepared Treasury brief, he tried to make out that borrowing abroad by nationalised industries in order to spend here in England was not an increase of the money supply. He said: The central Government will be borrowing more from the banks in respect of the Exchequer Equalisation Account but less in respect of the needs of the National Loans Fund. Money supplied remains unchanged by the shift in the source of finance."—[OFFICIAL REPORT, Standing Committee A, 26th June 1969; c. 359.] I do not know who put that brief into his hands. My information from economists who understand every ramification of the money supply argument is that that is not right. Provided that the money is borrowed abroad and is invested in this country—I agree that investing it abroad would invalidate the point—it is a definite increase in the money supply because the borrowings to match the Exchequer Equalisation Account do not come from increased taxation or increased borrowings from the public; they have always traditionally come by an increase in Treasury Bills, which is net inflation. Undoubtedly, if money is borrowed abroad and spent in this country either as capital or as income, that is a net addition to the money supply.

The Chancellor of the Exchequer, strictly under the tutelage of Mr. Milton Friedman and puppet on that string that he is, has no alternative under the Letter of Intent but to increase taxation in order to mop up the extra money supply which is created by the foreign borrowing. So we can safely say that for every £1 million which the Steel Corporation borrows abroad we can look forward to an extra £1 million on taxation at some stage. Before we part with the Clause, that ought to be made abundantly clear. It is a pretty depressing prospect, because whatever happens, whether we borrow abroad or at home, it will mean an increase in taxation. This is one of the more substantial reasons against the extension of the public sector, which seems to be one of the Government's main objectives.

The borrowing abroad by the nationalised industries amounts to an increase in the Government's indebtedness in the world. There can be no doubt about this. The borrowings are backed by Treasury guarantee, and the Minister admitted this when he said: In any case a Treasury guarantee is a better form of security, since it involves a pledge in the name of the Government …"—[OFFICIAL REPORT, Standing Committee A, 26th June, 1969; c. 360.] So he has given a Treasury guarantee that all these loans will be underwritten by the Government. We are already at the I.M.F. a fourth-tranche borrower, along with several banana republics. We are at the limit of our credit. I can see that it is a clever and convenient way around the limits imposed to send the nationalised industries, disguised as commercial concerns, to try to scrape up a few more millions in the lush money markets of Germany. That is the only place the right hon. Gentleman will get any. But it seems to me a fairly irresponsible policy. It is pawning the steel mills to foreigners so that the Government may obtain a little more tick to last out the week.

Although that may be necessary, due to the parlous state to which the Government have brought the economy, I still believe that it would be better to admit that that is what they are doing, and to say, "Every penny we can get helps, and if we can sell some of the assets of the steel mills abroad, we shall do so."

Mr. Speaker

Order. We are not discussing Clause 7, but three Amendments to it. The hon. Gentleman should link what he is saying with the three Amendments.

Mr. Ridley

Certainly, Mr. Speaker. I was merely making the point that, for these reasons, it would be desirable if the House commented specifically on each slice of borrowing which is proposed.

The Press has commented unfavourably on our lack of alacrity to criticise the Government over the whole provision. The Financial Times said: The heavy over-spending Britain has been indulging in since the present Government took over—last year's current account deficit was even larger than that 'inherited' from the Conservatives in 1964—has been financed largely by incurring massive debts with the International Monetary Fund and foreign central banks and selling off investments. Such rake's progress behaviour is not going to be made any more virtuous by being passed off as borrowing by State enterprises to finance development programmes. Those are pretty harsh words. They are not mine but those of a financial commentator.

We feel that before recourse is had to this last desperate resort, the House should be presented with a cut-and-dried scheme, showing the amount of money, the rate of interest, the duration of the loan, and any other conditions attached to it. It could be laid before the House in the form of an Order which could be prayed against if the House did not consider that it was the right time and right way to borrow money.

The Minister tried to write the whole matter off as if only small amounts of money, peanuts, are to be borrowed. I think that he said that he would not have thought that the I.M.F. would have the slightest interest in these small borrowings. The expression he used was that they would be only piddling in size. But a bad policy is not made any better by carrying it out on a piddling scale. If they are only to be piddling in size, it is not worth bothering the House to have the Clause in the Bill. I should be happy if the Minister said that at another stage he would take out the Clause. If that will not inconvenience him much because the amount of money is piddling, let us do without it. But if it is here for a substantial purpose—and we have already borrowed about £38 million abroad through other nationalised industries—the House should have its say on whether or not it approves the borrowings.

After all, the House is ultimately in control of finance. It is the House which votes supply to the Government and, through the Budget mechanism, votes domestic borrowing to the Government as well. Therefore, if the House is not to be allowed to comment on borrowing from abroad, it is deprived of one of its main weapons of control of the economic policies of the Government.

I would not say that there are not times and circumstances when it might conceivably be right to borrow abroad, but let us take each of these borrowings on their merits. Let us wait until they come and, as each opportunity for borrowing abroad arises, have each specific proposal laid before us in the form of an Order so that the House can debate it and, if it thinks fit, approve it. Without that weapon of Parliamentary control, my right hon. and hon. Friends would be unhappy to see this Clause go through.

10.30 p.m.

Mr. Peyton

I am glad to support the Amendment so ably moved by my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley). I hope he will not take it as anything other than a compliment to him if I touch again on some of the arguments he has adduced so powerfully.

What the Government are asking here is that nationalised industries should be allowed to tout round Europe and collect in little bits what the Government's credit does not allow them to collect in total. It is a disreputable and scruffy exercise. It is being suggested that the Corporation is looking for loans and credit in Europe already and that it has not as yet been wholly successful. If the Parliamentary Secretary, from the knowledge that must lie in his Department, assures us that that is untrue and that as yet the Corporation has not ventured into the Continental capital markets, I should be happy to accept his assurance.

It seems to me, however, that if the Corporation is already applying itself to this hunting ground in Europe, it has been rather jumping the gun. It would have been better if it had waited for the Bill to go through. It always seems odd that the Government should be so willing to allow these proud champions of Socialism, the nationalised industries, to see what crumbs are available in capital markets abroad when it would somehow be an offence against their chastity if they were to borrow at home.

It is evidently so important that a publicly-owned industry should not have the integrity of its equity besmirched by any element of private ownership that the Government prefer it to go overseas rather than make any offer to such facilities as remain available at home.

I echo the views of my hon. Friend about a reappraisal of currency parities. I do not like to use rude words like "devaluation", but it seems a bit odd that nationalised industries should be set loose to borrow from foreign countries in currencies which may be revalued upwards and thereby expose them to a fairly heavy and gratuitous penalty when it comes to repayment.

Another consideration is the present credit squeeze. The Opposition have always complained that the nationalised industries are largely excused from the pains and burdens which are piled one upon another on the shoulders of privately-owned industries. Nationalised industries are allowed to go scot free of many of the imposts and burdens which are reserved for private industries.

Today we have another example. In circumstances in which it is exceedingly difficult for private enterprise companies to borrow money in this country, the nationalised industries are allowed to take such advantage as they may of the lingering residual elements of something which might be called the credit still appertaining to what is known as the British Government in overseas capital markets. I hope that it will not be thought rude to the British Steel Corporation if I say that some private concerns may find this fairly fierce in view of the heavy pressure and contribution to the intensification of the credit squeeze by the Corporation—

Mr. Eddie Griffiths

; On a point of order. The hon. Member has not been speaking to the Amendment for the last 10 minutes.

Mr. Deputy Speaker (Mr. Harry Gourlay)

Perhaps the hon. Member will leave that matter to the Chair. The hon. Member for Yeovil (Mr. Peyton) has been bordering on getting out of order, but I have listened very carefully and so far he has not done so.

Mr. Peyton

While I am naturally grateful—

Mr. James Tinn (Cleveland)

On a point of order. May I seek your guidance, Mr. Deputy Speaker? The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) gave his various reasons why power should not be given to the Corporation to borrow abroad and much of his speech was concerned with what he called the economic mismanagement by the Government. The hon. Member for Yeovil (Mr. Peyton) is arguing the general principle. How far will the debate be allowed to broaden before it is regarded as a "Clause stand part" debate?

Mr. Deputy Speaker

The Chair does not rule hypothetically. The hon. Member may leave it to the Chair to see that hon. Members remain in order.

Mr. Peyton

I gladly conform to your very fair Ruling, Mr. Gourlay. I only wish that I could congratulate you on the pair of guides who have been wished upon you and have made your difficult task even harder.

The Amendments would provide that, to permit any foreign borrowing, the Treasury would have to come to the House for an Order, and the House would be enabled to supervise this matter and to bear in mind the sort of material points with which we have dealt. I had hoped that my purpose would be clear to hon. Members opposite from a cursory reading of the Notice Paper, and I am sorry if I have caused you any embarrassment, Mr. Gourlay, through the unnecessary advice which they have given you.

If it were possible to supervise such overseas borrowing, the House could keep a check on, or seek an explanation of, the extent to which the Corporation enjoyed the best of both worlds, namely, playing a marked part in intensifying the credit squeeze upon private industry while doing all it could to relieve itself of pressure by borrowing overseas.

My hon. Friend, in a graphic but not unheard-of phrase, said that we were taking the example of various "banana republics" I do not want anything I say to be taken as meaning any disrespect to any of those personally engaged in the immensely difficult task of running and managing, which includes financing, the nationalised industries. But it is very regrettable that, when this country's credit stands as low as it does, for reasons which it would be painful and out of order to enumerate, the Government should arm yet another creature with the powers to go dragging through the coverts of Europe, to get some resources which the credit of its masters, the British Government, and this wretched lot of Ministers cannot command.

10.45 p.m.

Mr. Peter Hordern (Horsham)

I support these Amendments because this country has borrowed enough at home and more than enough abroad. Our total indebtedness abroad now amounts to over £6,000 million. The difference between this sum and the sum which the last Socialist Government borrowed just after the war is that the latter could be repaid in about the year 2000. This sum of about £6,000 million has to be repaid within the next seven years. This is a monumental strain upon the country. It is far beyond the capacity of this Government to achieve. We should think very carefully before allowing the Government any further powers to borrow abroad.

The reason why they are seeking power to borrow abroad is that they have no longer power to borrow at home. The Government could not sell or persuade British investors to buy Government debts and securities. This has been proved day after day—

Mr. Eddie Griffiths

What about private business? Is not that getting money from abroad?

Mr. Hordern

I was referring to Government borrowing at home. I was saying that the Government cannot borrow at home, in great contradistinction to private firms, in that, however difficult it has been made for them by this Government, people have been prepared to subscribe money to private industry, whereas nobody has been prepared to subscribe money for the Government. If one looks at the ability of the Government to manage their debt properly—

Mr. Deputy Speaker

Order. We are not debating the Clause. The hon. Member must not argue the reason for the Clause. The hon. Member must adduce arguments why we should delete certain words or insert other words. In developing his argument he must not argue the principles of indebtedness.

Mr. Hordern

I am grateful to you, Mr. Deputy Speaker, because you have taken the words practically out of my mouth. I was asking that the power to borrow abroad should be in the control of the House. We have already done far too much borrowing abroad. At least the powers given to the should be given to the House.

There is a further effect of borrowing abroad. Not only are the Government incapable of borrowing at home; we recognise why foreign countries want to lend us their money. Germany, for example, has a strong reserves position and she is only too anxious to lend us money. Why? Because she foresees a possible change in the level of exchange rates. The Government have landed us in a disgracefully dangerous position. We are having to repay £6,000 million in seven years—

Mr. Deputy Speaker

Order. The hon. Member is getting wide of the Amendment. The Amendment that he is referring to is Amendment No. 30, and his argument is much wider than the Amendment under discussion permits.

Mr. Hordern

Perhaps I was being a little provocative. I was pointing out that it is essential that the Government should ask the House for authority to borrow whenever they wish to do so. The Government must not be so deceived by the ease with which they can borrow abroad. They must recognise that it is not just a question of the rate of interest but that other countries are only too happy to lend us the money.

I turn to another aspect of the matter which was mentioned in Committee by the Minister himself—the important effect, if such borrowing is carried out, on domestic credit expansion—the money supply. This point was discussed somewhat shortly in Committee but the Minister referred to it in the absence of the Financial Secretary, who was indisposed. I am sorry that neither he nor the Chief Secretary is here to help the House tonight. These matters are somewhat complex. Perhaps we could get a clearer explanation from those Ministers than from others who are perhaps not quite so well versed in these affairs.

In any case, what we should like to know—certainly, what I should like to know—is what the right hon. Gentleman thinks is going to be the effect on the Exchange Equalisation Account, because it is quite clear—

Mr. Deputy Speaker

I am afraid the hon. Member is very wide of the Amendment. Perhaps he would address his remarks more specifically to the Amendment.

Mr. Hordern

I am very sorry. I was of course trying to do so. I was referring, as narrowly as I could, to the question of the power of this House to decide whether this foreign borrowing should be done or not, and I was merely mentioning the disadvantage if we allow this power to be given to the Government and to the Steel Corporation to borrow money abroad, without having some sort of check upon them, and the dangers of doing so.

The primary danger, of course, is the increase in the level of the money supply, because the effect of the increase in the Exchange Equalisation Account is that to the extent that they receive foreign pounds they have to issue Treasury bills which act as the basis of the banking system, and to that extent the level of the money supply is increased, and to that extent the Government have, either by taxation or by further genuine borrowing, if they can, to meet that situation. That is another reason why this House should have the power, if it wishes, to allow or disallow the Government's power to borrow abroad.

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

rose—

Mr. Deputy-Speaker

Order. I do not think the hon. Member should tempt the hon. Member for Horsham (Mr. Hordern), because even though he is just within the bounds of order, I am having great difficulty in relating his remarks to the specific Amendment. One must, in arguing for this Amendment, state the reasons why the Government should not have this power, but without going into the principles in too much detail.

Mr. Ridley

On a point of order. We did not hear the point which the hon. Member for Stoke-on-Trent, Central (Mr. Cant) was going to make. He may have been going to tempt my hon. Friend hack into the paths of order. May we hear the point he was going to make before he is ruled out of order?

Mr. Deputy Speaker

If the hon. Member for Horsham (Mr. Hordern) gives way.

Mr. Hordern

I think I must.

Mr. Cant

Before the hon. Member reaches the Amendment may I ask him if he would resolve a paradox? If an import surplus leading to loss of reserves—

Mr. Deputy Speaker

Order. I was rather afraid the hon. Member might tempt the hon. Member for Horsham (Mr. Hordern) out of order.

Mr. Peyton

On a point of order. If I may say so with the greatest respect, a totally unwarranted attempt—I am sure, an unsuccessful attempt—is being made by hon. Members opposite to brainwash the Chair into suggesting that my hon. Friend—

Mr. Deputy Speaker

Order. The Chair cannot accept any reflection upon the Chair either from one hon. Member or another.

Mr. Peyton

rose—

Mr. Deputy Speaker

Order. It would be most unfortunate if there were any suggestion that the Chair was being influenced by either side of the House.

Mr. Peyton

Further to that point of order. I am so sorry. If I said anything which could even remotely be held to be disrespectful to the Chair I withdraw it unreservedly, but, in fact, I said that an attempt, which I was sure was totally unsuccessful, was being made by hon. Members opposite to brainwash the Chair, and I said it was unsuccessful and I meant it was unsuccessful. The point I wished to put to you very strongly, Mr. Deputy Speaker, is that here we are dealing with a very major borrowing powers Bill, with a skeleton Report stage, and my hon. Friend the Member for Horsham (Mr. Hordern), very reasonably, is putting the point that here a novel power is being given to a nationalised industry to borrow overseas. He was suggesting, as this Amendment suggests, that the Government, before that power is evercised, should be obliged to come to the House for approval. The background arguments which my hon. Friend is putting forward are very germane and, with the greatest respect, I think that he has not been so wide of the mark as hon. Gentlemen opposite have suggested

Mr. Deputy Speaker

I appreciate the point of order raised by the hon. Gentleman. Some arguments which have been adduced are germane to the Amendments. The difficulty the Chair has is in deciding how wide the arguments should range, and on occasions I have had to pull up the hon. Gentleman for going too wide.

Mr. Hordern

The Amendments with which we are concerned are necessarily technical, because the process of borrowing abroad is technical, You and I, Mr. Deputy Speaker, understand, but hon. Gentlemen opposite, with the possible exception of the hon. Member for Stoke-on-Trent, Central (Mr. Cant), have difficulty in understanding these abstruse matters, so it is not surprising that they think I am out of order. You and I, Mr. Deputy Speaker, know very well that I am absolutely in order.

A further reason for looking carefully at these powers for borrowing abroad is the present interest rate. In 1963, interest payable abroad stood at £444 million. In five years that amount has risen by a further £330 million, so that the annual interest charge overseas is well over £800 million, and that is an astonishing sum. We must look carefully before we allow any expansion of that debt. The size of the debt and the rate of interest are continually increasing.

This leads me to the further point that one should consider the level of interest rates and their possible trend. With the development in the United States and with the increase in the level of the Federal Reserve rate and the Euro-dollar rate, it is most unlikely that this country will be able to stay altogether outside that trend of increasing interest rates. The likelihood, therefore, is that this indebtedness and the interest rates abroad will continue to increase.

There are some local authorities which already have power to borrow abroad but find it difficult to do so because of inability to pay the high interest rates. Suppose local authorities take to borrowing overseas? It will not be a question of a few tens of millions of £s but of hundreds of millions of £s, which will be a very serious matter.

The House must say quite clearly that this is enough; we have had enough of this borrowing and we want to have the powers provided by the Amendment to check the power of the nationalised industries to borrow abroad.

11.0 p.m.

Mr. John H. Osborn (Sheffield, Hallam)

I moved an Amendment in Committee on this matter, and we discussed whether or not, when the British Steel Corporation wishes to borrow money overseas, it should come to the House of Commons. The need for it to do so increases as the amount of money borrowed overseas by the British Steel Corporation or other nationalised industries increases.

We elucidated some information in Committee. It was argued—this is column 358—that borrowing abroad by the nationalised industries increased the supply of money and injected money into the public sector. He also referred to the procedure adopted by the Treasury.

Reference has also been made to the Minister's account of what happens when a nationalised industry borrows abroad. It thereby increases the country's longer-term in and is offset by a reduction n our shorter-term liabilities. This depends on the amount of money so far borrowed abroad by the nationalised industries.

I believe the figure has been described as peanuts or a piddling sum, but it was estimated at £40 million, as one can see from column 367 of the proceedings in Standing Committee. This is small in relation to the interest which has to be paid.

The point that concerns us is whether or not the British Steel Corporation should report to the House on these matters. We know that the United Steel Company obtained a dollar loan, but this was not a loan, of course, to the British Steel Corporation. This matter was referred to in Standing Committee.

We reminded the Minister in Committee that much of our present difficulties are due to the fact that if the B.S.C. wants money it must go to the Treasury for it or abroad. Yesterday, in reply to Questions the Chancellor of the Exchequer said that there had been a considerable increase in the amount of investment in this country by overseas industries. If the B.S.C. had not been nationalised and had needed equity capital to expand, it could have gone to the market at home or to overseas markets. It is now by the very act of nationalisation being denied that source of funds.

One constricting effect of nationalisation is that this great industry must borrow subject to a Treasury guarantee. Every penny borrowed abroad is subject to Treasury guarantee and increases our international indebtedness. The Minister replied in great detail on this matter in Committee. At a time when we are suffering from a credit squeeze and when we as a nation must go cap in hand for every penny we require, it is necessary to support the Amendment.

Mr. Michael Alison (Barkston Ash)

I wish to address my remarks to Amendment No. 30 which seeks, after the word "Treasury", to insert the words "by order (made by statutory instrument)". Between those two phrases lies the whole vast dimension of the conflict between Treasury orthodoxy, as we have seen it elaborated and demonstrated over the last three or four years, and Parliamentary responsibility as we here in the House of Commons understand it. The Amendment attempts to make Treasury orthodoxy, or lack of it, accountable to Parliament.

It has been dramatically demonstrated in the last three or four months, if not for slightly longer, that there is an urgent need for the principal Ministers of the Treasury to come to the House in order to justify important departures in Treasury economic thinking or in Government policy. These departures are made plain to organisations abroad but often they are not made sufficiently plain to the electorate and to Parliament here at home.

Germane to the whole concept of making Treasury Ministers come to Parliament on matters affecting foreign borrowing was the fact that in the House on 25th June the Chancellor of the Exchequer felt it necessary to explain the significance of the commitments we were undertaking in respect of obligations entered into by the country to the I.M.F.

The speech of the Chancellor of the Exchequer, in effect, joined the Treasury to Parliament in this important connection. The right hon. Gentleman introduced an important new concept in the matter of foreign borrowing and its effect or lack of effect upon our internal affairs. He called this new concept d.c.e., or domestic credit expansion, and he justified its introduction by a rather striking paradox, to which I think the hon. Member for Stoke-on-Trent, Central (Mr. Cant) was about to draw our attention. It was that a balance of payments deficit is in itself obviously rather unsatisfactory, but paradoxically the way in which we examine it, analyse it and present it, makes it show up in the money supply aspect as a rather beneficial result, namely, a drop in the money supply. We all know the reason for this.

The Minister of Power should appreciate that the Chancellor's argument in justifying Treasury policy in its money supply context operates in the obverse direction if there is a balance of payments surplus. I hope I carry the hon. Member for Stoke-on-Trent, Central with me—

Mr. Deputy Speaker (Mr. Harry Gourlay)

Order. The hon. Gentleman is in order in making incidental references to Treasury policy in saying why he supports the Amendment, but he must not argue the case in too much detail, which is what he is doing at the moment. We are not discussing Treasury policy on this Amendment.

Mr. Alison

The Treasury is deliberately introduced into the Amendment in respect, I take it, of the necessity for the Treasury to come to the House to justify its policy, because we feel that the House should have an opportunity to consider some of these matters—

Mr. Deputy Speaker

Not to justify policy, but to justify reasons for new borrowing powers, which is slightly different.

Mr. Alison

Then I will pursue the argument more along those lines.

One of the unavoidable corollaries of what the Chancellor of the Exchequer told us on 25th June is this. When a nationalised industry borrows abroad, the sum involved represents an inflow of foreign currency. When that happens, there is to that extent an increase in the money supply, since the purchase of all foreign currency coming into the United Kingdom has to be financed by the Government through the Exchange Equalisation Account. When the British Steel Corporation borrows abroad and receives foreign currency, that necessarily has to be sold to the Exchange Equalisation Account, and the Exchange Equalisation Account has to hand over sterling to the British Steel Corporation. As a result of losing that sterling, the Exchange Equalisation Account has to let its stock of Treasury Bills run off, and the Account in turn has to ask the Government to top up its supply of sterling. In turn, the Government have to go to the money market to recoup their own losses to the Account. All this results in a real increase in the money supply, and it always happens when there is an inflow of foreign exchange.

The Government are casually taking steps to organise matters so that we should suffer an increase in the money supply at a time when we are in deficit in our balance of payments. They are making for an artificial inflow of foreign currency, and increasing the money supply at precisely the wrong moment.

Mr. Ridley

Is my hon. Friend aware that the Minister was at pains to argue in a contrary sense in Committee, reading from the Treasury brief? Does that not alarm my hon. Friend even more?

Mr. Alison

It alarmed me when I heard the quote from the Treasury brief, which was the argument that the Corporation, to the extent that it borrowed abroad, pro tanto, would borrow less from the Government; but the Corporation does not borrow only from the Government. It borrows also from the banks and from the public on its own stocks. So that is not a satisfactory answer to the problem we are raising, which is that to the extent that the Corporation reduces its bank overdraft, on which it pays an extremely high percentage, and brings in foreign currency, on which it pays a lower rate of interest but raises the money supply, it does two things to the detriment of the economy at the same time—

Mr. Deputy Speaker

Order. I am afraid that the hon. Gentleman is still arguing the point rather too specifically.

Mr. Alison

I take your point, Mr. Deputy Speaker, but it is very difficult unless one is fully au fait with some of the complexities of the argument, to avoid doing so when in the Notice Paper we have the word "Treasury" used in the sense of a synomym for "Government," and references to Parliament. But I certainly take the point, and in any case I was drawing to a conclusion.

There is a double fault in what the Government propose if they do not give Parliament an opportunity to debate in the way I am modestly trying to debate now. They are making the double fault of simultaneously increasing the money supply by an inflow of foreign currency and generating expenditure by the Corporation in the United Kingdom with no offsetting savings in the United Kingdom, because the savings have been made by foreigners supplying us with foreign currency. Two double-barrelled simultaneous injections of inflation should be something which the Treasury should justify by an Order laid before Parlia- ment which could be examined by hon. Members such as, on this side, my hon. Friend the Member for Horsham (Mr. Hordern) and, on the other side, the hon. Gentleman the Member for Stoke-on-Trent, Central (Mr. Cant), who are interested in these matters.

I beg the Minister not to make the mistake that the Chancellor of the Exchequer has made in thinking that he can carry on dealing with foreign creditors and dealers without coming to the House. The Chancellor got himself into very hot water by dealing with the I.M.F. without consulting Parliament. Let the Minister make provision for the Treasury Ministers to justify this kind of borrowing to the House.

Mr. Edward M. Taylor (Glasgow, Cathcart)

These are three very important Amendments, because they are concerned with checks on overseas borrowing. On a separate issue in Committee we raised this question, and the Minister gave an answer which, while it may have satisfied him, showed that we were talking on different wave lengths. He said: The checks on the extent of the limited borrowing overseas are the Treasury and myself."—[OFFICIAL REPORT, Standing Committee A, 26th June 1969; c. 366.] I do not think that our experience of the management of the economy in recent years has been such that I or any other reasonable person would regard a check by the Treasury and the Minister as being in itself adequate to ensure that everything went well in the economy. In these Amendments we have tried to provide an additional check by saying that the Corporation, through the Minister, must come to this House of Commons to ask permission to borrow abroad.

I have a number of reasons for thinking that this check is important, and one of the most important is that at present those organisations, financial or otherwise, which are thinking of borrowing abroad look only to the places where there are opportunities to do so, and this at the present time means Germany—

Mr. John Mendelson (Penistone)

They all have the same briefs.

11.15 p.m.

Mr. Taylor

I assure the hon. Member that if he goes through the debates he will see that, rather than speaking from briefs, some of us have tried to think seriously about these matters. It is an absolute tragedy for the country that when we discuss these important matters there is only a handful of Lobby fodder opposite who cannot understand the seriousness of the issues involved. [Interruption.]

Mr. Peyton

On a point of order, Mr. Deputy Speaker. You have rightly shown that you wish to keep the discussion in order and to get proceedings on the Bill advanced as quickly as may be. I cannot believe that it is helpful to you in your difficult task to have a series of noisy and rude interruptions, which may be characteristic of the hon. Member for Penistone (Mr. John Mendelson), who remains seated throughout the debate. I do not see how that can help you or the House to get the Bill through as quickly as desirable. I very much hope that my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor), who was making a perfectly reasonable point, will have your protection from the violations of a rather hooligan nature of the hon. Member for Penistone, who succeeds in amusing no one but himself.

Mr. Mendelson

Further to that point of order—

Mr. Deputy Speaker

Order. The Chair endeavours to protect hon. Members on both sides of the House impartially.

Mr. John Mendelson

All that I was doing was seeking to commiserate with the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) in that he came in late to the debate and his brief was therefore rather stale.

Mr. Taylor

The hon. Member for Penistone is being unduly provocative for I certainly have no brief on this matter. Most hon. Members who sat in the Committee tried to make sense of this Bill, which has very dangerous implications. Out of courtesy to some of my hon. Friends who did not have the advantage of being on the Committee, we wish to say something on Report. The Minister knows how important this is. He has listened very carefully to this discussion.

As the hon. Member for Sheffield Brightside (Mr. Eddie Griffiths) suggested, one important reason why we should have this check on borrowing abroad by the British Steel Corporation is that we should look where the money can be borrowed. Where the money is clearly available is in countries within the E.E.C. At the present time it would be unwise if we were seen to be in a position of pawning our assets to nations of the E.E.C. while entry to the Community is being considered. I and some other hon. Members have strong reservations on this issue. It would be extremely regrettable if at such a time we were to put ourselves into the difficult position without Parliamentary control of being in such great indebtedness to countries of the European Economic Community.

The second reason why we should have a control and check on borrowing abroad is not any constitutional issue but because experience has shown that this Government are just too good at it. Unfortunately we have not with us the Financial Secretary to the Treasury or any Treasury Minister. I do not want to be disrespectful to them. They are very able and have shown brilliance in going to almost any foreign capital to get a loan. Unfortunately, as a nation we may have to pay for that in years to come, but they have shown enormous ability, despite our difficult position, to tout round the capitals of the world to get foreign loans. This is a tribute to their ingenuity and competence, but we do not want unreasonably to add to the burden of future generations. There is already an exodus because of our economic problems and high taxation. It would be unreasonable to indulge in more and more foreign borrowing. Precisely because the Government have been too successful in it there should be some Parliamentary check.

The third reason why there should be a check on borrowing abroad by the nationalised industries is that, unfortunately, the nationalised industries have shown an ability to eat up capital with an almost insatiable appetite. Is it generally realised that the nationalised industries, since Labour came to power, have been writing off capital at more than £1 million a day?

Mr. Eddie Griffiths

On a point of order—

Mr. Deputy Speaker (Mr. Harry Gourtay)

Order. I was about to interrupt the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) and say that, in referring to the general indebtedness of nationalised industries, he is somewhat wide of the Amendment.

Mr. Taylor

I have no wish to get out of order, so I will leave the point, except to say that, in view of this insatiable appetite, there should be control at home and abroad, particularly abroad.

Another important reason why there should be control on foreign borrowing is that, if the Minister has to seek the approval of the House to foreign borrowings, he will have at the same time to say why he wants to borrow money abroad. We should have such control on what could be an unreasonable appetite for empire building on the part of some sections of the Corporation about which we have heard and read. In view of what has happened in Britain, it would be bad if we were to allow the Corporation without restraint to indulge in a campaign of investing in activities abroad when in many cases it has enough difficulty in controlling the problems of the home industry. The House should have the opportunity of discussing any proposition for investing in steel works or, indeed, in ore supplies abroad.

I do not under-estimate the potential for investment in the steel industry abroad. There is the fantastic example of Australian ore supplies: in 1966 exports were only 230,000 tons; last year they leaped to 9 million tons. The Amendment seeks to ensure that before the Corporation invests abroad the approval of the House should be sought. If it was just a piddling amount, as the Minister said, there would be no need for such strict control, but what guarantee is that there it will be a piddling amount? The Bill extends the borrowing limit to £650 million. I do not suggest that the Corporation has any specific proposals for investing £100 million or £200 million abroad, but the borrowing power is in the Bill. It is possible under this Clause that all the money or a substantial part of it could be borrowed abroad. It is precisely because of that that we want to restrain this power.

Mr. Eddie Griffiths

Will the hon. Gentleman decide whether he is talking about borrowing abroad or investing abroad? For the past five minutes, he has been talking about overseas investment.

Mr. Taylor

That is an important point which serves to illustrate what I mean. If the Steel Corporation proposed to the Government that it should borrow abroad £20 million, £30 million or £40 million, I should want to know whether the money was to be used for investment in our own industry or for investment abroad. The hon. Gentleman has raised a valid point. He should think about it a little. We know that he has the ability to think about these things, and I hope that he will.

Will the Government be borrowing abroad through the Steel Corporation simply to dodge the difficulties in home borrowing or will they be doing it for investment abroad? Every time the Steel Corporation says that it wants to borrow abroad, I shall want to know on behalf of my constituents—I am sure that the hon. Member for Brightside would want to know, too—whether the intention is to expand our home steel industry or merely to dodge the difficulties of credit supply in Britain. Only yesterday, we learned how even the poor old National Savings Movement finds its withdrawals exceeding deposits by £2 million a day. In these circumstances, the House should have an opportunity to discuss the matter and see what is happening.

The Minister gave quite a thorough reply in Committee, but he did not deal with this point. How would he have an opportunity of seeing what the foreign-borrowed money would be used for—for home consumption or for investment abroad?

We are aware of the fantastic potential abroad, and we are aware also of our own potential at home, but we want to know what the money would be used for. It would be wrong and against the character of all that the Minister said in Committee if this power were exercised merely as a dodge to increase our foreign indebtedness, not as a natural financial transaction of the Steel Corporation.

The currencies borrowed would be those likely to increase in value. Not even the hon. Member for Brightside would suggest that the Steel Corporation would consider borrowing money from India, Indonesia, Ghana, the Yemen or countries like that. Far from borrowing from countries whose currencies are not stable, it would think of borrowing from countries with stable currencies. This gives add point to the need for the Amendment. There must be a check and control.

If we do not adopt the Amendment, we may be giving preferential treatment to the nationalised industries over the private sector. If a private industry wants to extend its credit today, either by foreign borrowings or by home borrowings, it is subject to the discipline of difficult credit restrictions. There is a danger that if we provide these two open channels for the nationalised industries without the check of Parliament to ensure fair play there will be a very unjust and unfair situation.

11.30 p.m.

Surely, when about half of our productive resources seem to be under the control of the Government, we have a special responsibility to ensure fair play and that no special privileges are given to the public sector as opposed to the private setor. Many of us feel that the dice are heavily loaded in favour of the public sector and that the burdens on the private sector are increasing all the time. [Interruption.] I know that hon. Members opposite do not like this. The hon. Member for Penistone (Mr. Mendelson) is conducting himself disgracefully, as he usually Joes. He makes no positive contribution to our discussions. On the contrary, he tries to be disruptive and gives the impression that he is not following the debate, otherwise he would realise how serious and important a matter this was.

In the Amendment we try to ensure fair play. The Government have nothing to lose by accepting it. If they had a proposal for borrowing the piddling sum which the Minister suggested he would be interested in or a substantial sum, all that they would have to do would be to argue the case in the House. They will find that when the national interest is concerned we rise above party politics.

Mr. Edwin Wainwright (Dearne Valley)

Would the hon. Gentleman agree that this industry requires an injection of capital to make it more viable and more competitive with steel industries overseas? If so, from where does he suggest the capital should come?

Mr. Taylor

I should love to deal with that point. If the hon. Gentleman had been a little more talkative in Committee, we could have gone into it firmly. We on this side dealt with these points thoroughly, and the Government found themselves in considerable difficulty in answering them.

We do not want to add to the special privileges in the public sector. It is only fair and reasonable that the Government should justify foreign borrowings.

Mr. Tinn

The hon. Gentleman argues that the Amendment would provide a safeguard against preferential treatment being given to the public sector by requiring the Minister to come to the House before authorising a loan. If the hon. Gentleman believes so strongly in equality of treatment as between the public and private sectors, I am puzzled why he did not feel called upon to urge that the Minister of Technology should require approval before giving assistance to Upper Clyde Shipbuilders.

Mr. Deputy Speaker

Order. We might get out of order if we pursued that.

Mr. Taylor

The hon. Member for Cleveland (Mr. Tinn) made an unworthy and irrelevant interjection. Any nationalised or private industry involved in borrowing money abroad should be subject to the same disciplines. I make no exceptions. I try to be consistent.

All that we are trying to do is to effect something which hon. Members opposite obviously feel is of no concern, and that is Parliamentary control of foreign borrowing. We have seen from some of their actions recently that they hold our democratic system and all it is based on in utter contempt. They have shown that today. In this Amendment we are simply seeking to ensure fair play and to introduce the restraint of Parliament. This is important. When the time came, the Government would find that, when the national interest and the steel industry were concerned, we on these benches rise above party politics and discuss matters fairly and reasonably. At present we have only the check of the Treasury and the Minister. That is not enough. Therefore, we should accept the Amendment.

Mr. Eldon Griffiths

I am glad to follow what was, at this late hour, a distinguished speech by my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor). What a contrast it was with the outpourings of the hon. Member for Penistone (Mr. John Mendelson). I never know whether it is worse to hear him from his seat or on his feet. Neither is a pleasant experience.

Mr. John Mendelson

We have not heard the hon. Gentleman at his best. In the steel nationalisation Committee he never sat down without having spoken for 48 minutes.

Mr. Griffiths

Two minutes from my hon. Friend is worth two hours from the hon. Gentleman.

This debate, which I have listened to with great interest, has been about accountability, the accountability of the Government to Parliament. Throughout our discussions this evening it has been obvious that the Minister of Power regards it as somehow inconvenient that he should have to account for his actions to the House. Here he goes again, setting off with his companion, the Chairman of the nationalised Steel Corporation, with their begging bowl, tramping around Europe, picking up a few guilders here, a few francs there and possibly a mark or two on the side, and he expects that he should do this without coming here and accounting for his humiliating activities.

I feel a need for him to tell us what he is up to, because this country and his Government are now under the surveillance of our international bailiffs, the International Monetary Fund. I wonder whether the purpose of this borrowing power is not in practice to pull the wool over the eyes of the I.M.F., to pretend that the Government are keeping down the creation of new borrowings in this country while bringing them in at the back door.

It is very important, when the Government have committed us to the International Monetary Fund to the extent that they have, that the House should make sure that they do not once again slip away from the obligations they have taken on. The obligations the Government have laid on this country, unfortunately, become the responsibility of the House and not solely of the Government. The House has a very keen interest in seeing, if we can, that they live up to them. Therefore, we must have accoun- tability. What I am asking for first is virtually a letter of intent, from the Government to the House, in respect of their proposed foreign borrowings. We are entitled to that letter of intent, and to keep the Government up to it. What we want to know is how much they will borrow, where, and on what terms. All we are told in the Bill is that the Corporation can take on these new liabilities with the consent of the Treasury and the Minister. Their consent is no comfort to us.

I now come to the details of the Amendments. My hon. Friends seek to eliminate the words with the consent of the Minister. That is a very good idea, because if Lord Melchett and his Board seek to obtain funds abroad—and I see a good deal in favour of that—they should borrow on their own responsibility, as commercial judges of what is appropriate. They should not have to obtain the Minister's consent. I am sure that it is right to blot out those words.

We also seek to insert the words … by order (made by Statutory Instrument) after the word "Treasury". That is the heart of the Amendments. It would impose on the Government the accountability of which I have spoken. In seeking greater accountability by the Government to Parliament, I am not opposing the principle of what they seek to do here. I could hardly do that because, in 1965, on a Bill relating to the borrowing powers of the National Coal Board, my right hon. Friend the Member for Sutton Cold-field (Mr. Geoffrey Lloyd) and I moved an Amendment to give the Board power to go to the international capital markets in order to acquire this kind of new money. We argued strongly and eloquently for the Amendment but the then Minister of Power turned it down. The debate is to be found in HANSARD for 2nd December, 1965. There are three or four columns of eloquent argument in favour of nationalised corporations being allowed to go abroad for money, although under much stricter conditions than the right hon. Gentleman proposes here.

Now the Government have changed their minds and want this power. Thus it would be wrong for me, having proposed such a course in the past, to object to the principle now. I see advantages in tapping new capital markets—we have not enough of our own—and advantages in using such assets as the nationalised industries have to borrow against. That is sensible. We should also be encouraging foreign capital to come here. If foreigners believe that it is a good investment in British steel, let them make it, but they will be taking a much greater risk than I should be inclined to take.

My hon. Friend the Member for Cathcart referred to the Common Market. He and I do not necessarily share the same views about that, but I can see some advantages in British steel moving into the European Community.

Mr. John Mendelson

Out of order.

Mr. Eldon Griffiths

So, in seeking greater accountability to Parliament—

Mr. Alison

On a point of order, Mr. Deputy Speaker. Is it in order for the hon. Member for Penistone (Mr. John Mendelson) to shout "Out of order" when my hon. Friend the Member for Bury St. Edmunds (Mr. Eldon Griffiths) is in order? Is it not out of order to shout from a sitting position "Out of order" when my hon. Friend is in order?

Mr. Deputy Speaker (Mr. Harry Gourlay)

It is not desirable for any hon. Member to interrupt from a sitting position.

Mr. John Mendelson

Further to that point of order, Mr. Deputy Speaker. It is about time that hon. Members who discuss with other hon. Members their respective attitudes to the Common Market were told that they are completely out of order in doing so on this Amendment.

Mr. Deputy Speaker

It is not for the hon. Member for Penistone (Mr. John Mendelson) to instruct the Chair. The Chair listens very carefully and it is sometimes in order for hon. Members to make incidental references. Immediately an hon. Member does more than that, the Chair will call him to order.

Mr. Peyton

Further to that point of order, Mr. Deputy Speaker. I understand the very natural temptation of the Chair to listen to what is going on on this side with a great deal more attention because it is so much more attractive and interesting, but if every now and again you could strengthen your resolve to the disagreeable extent of digesting the interjections which issue from the mouth of the hon. Member for Penistone (Mr. John Mendelson), we should be grateful because we know that this would be followed by a stern rebuke.

Mr. Deputy Speaker

It may be that interjections are more audible in the hon. Gentleman's part of the House than they are to the Chair.

Mr. Tinn

Further to that point of order, Mr. Deputy Speaker. It is difficult to understand how it appears to be in order for hon. Members opposite to advise the Chair and not for me and my hon. Friends to do so.

11.45 p.m.

Mr. Deputy Speaker

The Chair is not accepting advice from either side of the House.

Mr. John Mendelson

rose

Mr. Deputy Speaker

Order. When Mr. Deputy Speaker is on his feet, hon. Members must remain seated. The Chair is quite competent to give Rulings and has done so.

Mr. Mendelson

On a point of order. Nobody is making any statements about what the Chair should do or should not do. But every hon. Member has a perfect right to suggest in a debate that the Opposition are engaged in deliberate time-wasting repetition of a tedious character. The hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) said seven times that he wanted control by Parliament. It was tedious repetition and we on this side of the House are as entitled as hon. Members opposite to point this out to the Chair.

Mr. Deputy Speaker

It is within the competence of any hon. Member to raise a point of order, but it is for the Chair to rule, and the Chair has not so far ruled.

Mr. Eldon Griffiths

I am most grateful, Mr. Deputy Speaker, for your protection against a Parliamentary pest.

I was saying that while I cannot object in principle to what the Government seek to do here, it is important that Parliament should be told regularly and closely what they are up to, for reasons which I did not have the opportunity to put before the hon. Member for Penistone began lecturing.

Over recent years, there has been a particularly instructive experience in West Germany on this very point. The German Länder have had the power to go to the international capital market to borrow, and they have done so, because of their special independence and autonomy within the German State, in very large sums. One of the results of this was that there came into being a near financial crisis in, of all places, the rich Federal Republic, and it arose in large measure because it was unable at the centre to control the very large borrowings of the individual Länder.

The experience of the German Parliament is important here. It became increasingly apparent throughout the later years of the 1950s and the early 1960s that the lack of accountability to the Federal Government for the extensive borrowings of the German Länder was creating severe financial difficulties, and that is why I want to urge—

Mr. John Mendelson

On a point of order. I submit to you, Mr. Deputy Speaker, that relations in a federal constitution in Germany are wholly irrelevant to the Amendment and I ask you to rule references to them out of order.

Mr. Ridley

Further to that point of order. We on this side of the House are getting a little tired of having the time of the House wasted and your admirable chairmanship challenged, Mr. Deputy Speaker, on occasion after an occasion by the hon. Member for Penistone (Mr. John Mendelson). Will you please protect my hon. Friends, who are trying to make constructive speeches, from the ravages of the hon. Member, who has done nothing but come here and try to interrupt the progress of orderly debate?

Mr. Deputy Speaker

It is perfectly competent of any hon. Member to raise a point of order. My reply to the hon. Member for Penistone is that up to this point I have not seen fit to rule the hon. Member for Bury St. Edmunds (Mr. Eldon Griffiths) out of order.

Mr. Eldon Griffiths

I am most grateful to you again, Mr. Deputy Speaker, for your protection against a Parliamentary pest.

My analogy is fair. This was the practical experience of the German Government and the German Parliament in finding that the lack of accountability to the central Exchequer and to their legislature for the extensive foreign borrowings by the German Länder—they could easily have been nationalised corporations—placed the German State in great difficulty. We should beware of something similar happening in this country. That is a practical experience—

Mr. Eddie Griffiths

When the hon. Member reads his speech in HANSARD tomorrow, he will find, I think, that, in the early part, he was quite happy with Lord Melchett borrowing abroad without asking the Minister's permission. In the second part, however, he has been talking about accountability, which leads me to believe that he does not know what he is talking about.

Mr. Eldon Griffiths

The hon. Member, who takes a keen interest in this subject, must have misheard me. I support the Amendment because the Steel Corporation should not require the Minister's consent to make arrangements for loans. I accept, of course, that, when these arrangements have been made, the terms and sources and amounts should be reported in detail to the House. I hope that the hon. Member will understand the distinction between making commercial arrangements for loans and actually getting Parliament's approval to bring them into effect. It is plain that he did not understand that distinction, however—

Mr. Eddie Griffiths

But how can the Minister bring such arrangements to Parliament, when the chairman of the nationalised industry does not have to ask his permission to borrow abroad?

Mr. Eldon Griffiths

I did not say that the Chairman of the Steel Corporation should be able to borrow abroad without consent. I said that it was right that he should be able to get in touch with the bankers of Europe, and "tee up" the arrangement and then go to the Minister, and that the Minister should then ask the House if we agree. That is a perfectly normal distinction to anyone with commercial experience.

The further reason why it is crucially important that the Minister should have to bring Statutory Instruments here for discussion is that we should know from which countries these sums are to be borrowed. I may even catch the attention of the hon. Member for Penistone (Mr. John Mendelson) here, because it is hon. Members on his side of the House more than any others who are particular about which nations they trade with. For example, the hon. Member chooses his partners on moral grounds. He thinks that it is all right to trade with Cuba but not with Spain, with Communist China and Soviet Russia but not with Greece and South Africa. He is entitled to his point of view, although it is damaging to the country—

Mr. Deputy Speaker (Mr. Harry Gourlay)

Order. I think that the hon. Gentleman is now getting rather wide in his submission in support of the Amendment. Perhaps he would come a little more specifically to the Amendment, without ranging over the principles.

Mr. Eldon Griffiths

I was giving an example of the importance of Parliament being able to discuss the sources of the money which it will be possible for the Corporation to borrow. I was illustrating by my analogy that hon. Members opposite, more than anyone else, want to pick and choose those countries with whom they are prepared to do business. They could not do that without the Amendment, because then arrangements could be made without regular consultation of Parliament. You will agree, I think. Mr. Gourlay, that this is a proper point to advance in support of the Amendment.

The third reason in support of it is the danger of incurring debts abroad which the nation as a whole cannot afford. The Government have already over-borrowed abroad. They have taken us beyond our short-term capacity to repay. They should not be allowed to take on any more debt without having to justify to the House every guilder, franc or mark they want to borrow. It is not good enough for the Minister to indicate throughout our debate that he finds this all something of a tedious bore. I am sorry that he should find it so. He should realise that his powers—if he has any—arise from this House and nowhere else. He must account to the House at every stage for his use of these powers.

My hon. Friends have already raised the question of the danger of shifting exchange rates, which might leave us in a position where we had to repay moneys borrowed at much steeper exchange gradients than those at which we borrowed. My hon. Friend spoke of the possibility of the revaluation of the German mark this autumn. The Government have already increased our external debts in hard currency by about 12 per cent., due to devaluation alone. It is not good enough for the Corporation to be enabled to take on new debts against a shifting background of incompetent economic policies that might land us in still further devaluation, and therefore to load upon the suffering British taxpayer yet more liabilities that Parliament will not have had a chance to discuss in advance. I am strongly in favour of the Amendments. I hope that the Government will accept them. They have nothing to lose by that.

Do you not find it strange, Mr. Deputy Speaker, that the Government should impose upon ordinary citizens a £50 travel allowance which they may spend in foreign currencies abroad while, at the same time, the Corporation will be able to borrow any sums it likes?

Mr. Deputy Speaker (Mr. Harry Gourlay)

Order. The Chair does not find such matters strange. The Chair has no opinion in such matters.

Mr. Griffiths

I am glad that you have answered my question, Mr. Deputy-Speaker. I can now only state rather than ask: I find the contrast between holding down the ordinary citizen to £50 in foreign exchange and the permission for the Corporation to borrow large sums without having to justify such borrowing to Parliament nauseating in the extreme and the hallmark of Socialist Government.

Mr. Freeson

I am sure that the hon. Member feels all the better for having got that off his chest. I am in some difficulty in seeking to reply to the debate, on two grounds. First, if I were to seek to reply to most of the points that have been raised I should be soon out of order, and would probably remain out of order for most of my speech. However, there is another more pointed difficulty—

Mr. Peyton

On a point of order. It is surely a little odd that on top of all the interventions we have had, of a very irrelevant kind, from back benchers opposite, a junior Minister should rise to his feet at this hour of the night and challenge not only the whole of the Opposition but the Chair with the allegation that the whole debate is out of order and therefore that he has an excuse for not answering it.

Mr. Deputy Speaker

I did not take that meaning from the Minister's remarks. It may be that the Minister intended to go much wider in reply to the points raised than I would have allowed.

Mr. Freeson

That was the sole point of my observation, Mr. Deputy Speaker. My other difficulty is that the simple answer to most of the words spoken about the need for accountability either to the Government or to Parliament on the part of the Corporation is that the Opposition themselves—although obviously not aware of it—have not proposed any parliamentary control over borrowing by the Corporation in foreign currency, as I shall seek to show.

12 midnight.

I would congratulate the hon. Member for Bury St. Edmunds (Mr. Eldon Griffiths) on one point at least. So far as I can recall, during this long debate he was the only Member to refer to the particular Amendment before us, and to which the other two are related, when he referred to Amendment No. 28. This Amendment, if it were accepted, would remove from the Bill the need for the Corporation to get the Minister's consent to borrow in foreign currency. It seems to me to be a reduction in accountability, not an increase in it.

However, since most of the remarks which were made did not relate to that Amendment I will turn to the one which did give rise to most discussion, and that was Amendment 30.

Sir J. Eden

Since the hon. Gentleman appears to think he has demolished Amendment No. 28 in the way he suggests, I would ask him just to clarify the observations he has just made. If the words "with the consent of the Minister" were to be deleted—and that Amendment has to be taken in conjunction with the other, subsequent, Amendments—the subsection amended by the three Amendments would read: The Corporation may, from such person and on such terms as the Minister may, with the approval of the Treasury by order … specify, borrow, in a currency other than sterling.… This would allow the Corporation still to borrow in currencies other than sterling, but these words, supplanting the words "with the consent of the Minister", would mean the Minister would come before this House to seek the approval of this House.

Mr. Freeson

I was coming to that further Amendment, if I may be allowed to continue the reply. I was about to answer precisely the point raised. The Amendment would delete any requirement on the part of the Corporation to seek the Minister's consent. There is in that Amendment, by itself, at least a relaxation—

Sir J. Eden

rose

Mr. Freeson

I am going to link this point with the one which has just been made, if I may complete a paragraph of my speech.

Sir J. Eden

The only point I was trying to emphasise was, that the hon. Gentleman was picking on one Amendment and taking it separately. He cannot fairly do that. All three Amendments are interdependent, and the two that follow are consequential on the first.

Mr. Freeson

That is exactly the point I was just making. If the hon. Member will be a little patient I was just about to point out that the Amendments would not increase Parliamentary control at all. First, the first Amendment would delete the requirement to seek the consent of the Minister, so to that extent, by the first Amendment, there would be a relaxation of control.

I would ask the hon. Member to listen carefully to what I am saying. I would point out to hon. Gentlemen opposite that on Amendment No. 30, which they have argued would establish parliamentary control, they are wrong. The mere fact that something has to be done by Statutory Instrument does not mean that it has to be laid before Parliament, let alone debated. To give Parliament the opportunity to debate an instrument would require a statement in the Bill that it is subject to the affirmative or negative Resolution procedure. Without that there is no Parliamentary control.

The only effect of the Amendment as it stands on the Notice Paper now, I must point out to hon. Gentlemen opposite who have supported it, would be that the Minister would be required to publish a Statutory Instrument by means of H.M.S.O. This would be to impose a duty on the Minister to have printed a specification made by him of the terms and sources of any foreign borrowing by the Corporation.

The power to specify has by its very nature to be kept flexible. The Corporation and the lenders would be in negotiation up to the moment when the terms are settled: final settlement may even be by telephone. The Minister and the Treasury must be able to act speedily without the time-consuming procedural difficulty of the publication of the Order, as the Amendment requires.

What hon. Gentleman are seeking to do would not be achieved by the Amendment. For the purposes of Parliamentary debate there must be the requirement in the Bill for an affirmative or negative Resolution of the House; without that there can be no Parliamentary debate.

Mr. Ridley

The hon. Gentleman may not have heard of the negative Resolution procedure; he has not been in the House for very long. He might have paid the Opposition the compliment of realising that we had made this subject to the negative and not the affirmative Resolution procedure, which is where his form of words comes in.

Mr. Freeson

The hon. Gentleman is wrong. There is no reference in the Amendment either to negative or affirmative Resolution procedure.

Mr. Ridley

There is.

Mr. Freeson

I had the courtesy to listen to the hon. Gentleman without interrupting. I am seeking to make a valid point, as did the Opposition. The Amendment would require only the pub- lication of an Order and not debate by the House.

There were complaints from the hon. Members for Yeovil (Mr. Peyton) and Sheffield, Brightside (Mr. Eddie Griffith) that, although the Bill allowed borrowing in foreign currency by the B.S.C., it did not allow borrowing on the home market. The Conservative Government, in 1956, decided that nationalised industries should no longer borrow by stock issues in this country. This was done because such issues, in the view of the then Government, complicated the management of the money market. I do not know how many hon. Gentleman were members or supporters of the Government in 1956, but it ill behoves them now to criticise on this score when they did away with the power which they would now like to establish for the B.S.C.

Several hon. Members, in particular the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn), referred to the effect of this power on foreign exchange, credit and the money supply. I will resist the temptation to refer to my notes on this, as I cannot add to the full statement made by my right hon. Friend, which is reported at column 358 of the Committee proceedings of 26th June, 1969. This is a full statement of the position on the basis of consultation with the Treasury.

Mr. Alison

One of the most cogent points put forward by the Minister in Committee was that the difficulty anticipated by some of my hon. Friends would not arise because the transfer of Steel Corporation borrowing abroad would produce a countervailing drop in borrowing from the British Government at home. The hon. Gentleman has not taken in the point that provision is made in subsection 7(2)(a) for the B.S.C. to borrow from people other than the British Government, particularly the banks. If there is a switch from the British private banking sector to borrowing overseas, it will produce different results from that which was suggested by the hon. Gentleman. May we have a full answer?

Mr. Freeson

If I were to give a full answer, it would mean repeating the whole of the answers given on the matter in Committee. I must content myself tonight by saying that in so far as borrowing requirements in B.S.C. are taken by these other means, by foreign banking or partly from the banks, to some extent borrowing requirements from Government sources will be reduced. The overall requirements of the industry will remain the same. This does not decide the size of its capital investment programme. It decides the overall programme, and if the components vary it does not affect the total.

Mr. Alison

The hon. Gentleman has not quite got the point. If the B.S.C. are not relieving the British Government of any of the burden of borrowing, then the inflow of foreign exchange puts a direct and net additional burden on the Chancellor of the Exchequer. He has to finance the purchase of the foreign exchange by the exchange equalisation account, so that there is a net increase in the burden.

Mr. Freeson

The advice we have received from the Treasury is contrary to what the hon. Gentleman has said. [HON. MEMBERS: "That is wrong.") If I had to choose between the advice received from the Treasury and what the Opposition Front Bench are saying, I would choose the former rather than the latter.

Mr. Paul Dean (Somerset, North)

The explanation given in Committee was that when a nationalised industry borrows abroad it surrenders foreign currency required to operate the Exchange Equalisation Account. The point we seek to make is that the Exchequer equalisation account operates only through the medium of the Treasury bill. To that extent it does not have a countervailing effect on the Government's total borrowing requirement, because the Government can borrow through other means outside the Treasury bill market. We are concerned with the difficulties of the Treasury bill in the expansion of money supply. This point has not been covered by the hon. Gentleman, nor was it covered in the Treasury brief in Committee.

Mr. Freeson

I do not think I can go further than what was said in Committee and what I have said this evening. I do not think the hon. Gentleman has made any additional point on top of what was dealt with in Committee.

I turn to deal with the final point, the general issue of the desirability of borrowing abroad. There are two main purposes for which the Corporation and its companies might wish to borrow in foreign currency. The first is that such borrowing might be desirable in the light of specific projects—this matter was touched upon by one or two hon. Members—or some specific investment. Secondly, regardless of any particular projects, the Corporation and the companies may find it desirable to raise money abroad. An obvious reason might be that funds are cheaper.

12.15 a.m.

I was asked what would be the position if a foreign currency were to be revalued. It is impossible to write a matter of this kind into legislation. It must be a matter of judgment for the Corporation and its financial advisers, and consent remains subject to Ministerial and Treasury control, so that a good deal of expertise will be available in deciding on the soundness or otherwise of borrowing in any foreign currency. It is impossible to cater for such a situation in legislation.

The obvious reason why there would be such borrowing would be if funds were cheaper in the currency which the Corporation wanted to borrow. The Government cannot see any reason why the Corporation and the companies should be restricted in borrowing in foreign currency for the first purpose, and nor can we see any reason why there should be any restriction on the second.

My right hon. Friend the Financial Secretary announced in the House recently that the Government are prepared to encourage foreign borrowing in appropriate circumstances by offering special arrangements to relieve the industries of the exchange uncertainties associated with such borrowings. It is important to bear in mind that we are not taking powers which will enable us to require or force the Corporation to borrow abroad. Any initiative will come from the Corporation and will be considered by the Government.

Mr. Eldon Griffiths

Would the hon. Gentleman consent to the Corporation borrowing from South Africa, for example? Speaking for myself, I hope that there would be no hesitation in consenting to borrowings from South Africa, but I wonder what the Minister's hon. Friends would say.

Mr. Freeson

I suggest that the hon. Gentleman saves his discussions of the politics or policies vis-à-vis South Africa for a more appropriate occasion. But when an application is submitted, from whatever source, it will be considered.

Mr. Eddie Griffiths

Will my hon. Friend confirm something that he said earlier, because my hon. Friends and I were amazed by it? He suggested that the Amendments which have been dealt with under this heading have been just to dot the i's and cross the t's in terms of Ministerial control of the Corporation, and have nothing to do with Parliamentary accountability.

Right hon. and hon. Gentlemen opposite are always very critical when they suspect that someone has not done his homework. For once, they appear to have slipped up badly with these Amendments. Is my hon. Friend saying that the past two hours of pious indignation about information and Parliamentary accountability has been a lot of claptrap?

Mr. Freeson

In reply to my hon. Friend's mini-speech, all that I can say is that it goes somewhat further. Not only would there be no additional Parliamentary control by reason of the second Amendment, but, taking them together, we should reduce Ministerial control and end up in a far worse position.

Mr. Ridley

The Parliamentary Secretary is the Opposition's best secret weapon. He succeeded in putting his foot in it throughout the Committee stage, and he has done it again tonight. He suggested, first, that the whole debate was out of order, which was a reflection on you, Mr. Deputy Speaker. Then he went on to make out that the Amendments meant something which they do not. If he had taken the trouble to study the effect of the three Amendments taken together, he would have found that they do not remove the power of the Minister to control foreign borrowings, but simply give him power to lay Orders before consenting to them.

Again, the hon. Gentleman will find, if he does just a little bit more thorough searching, that the principal Act is riddled with references to the power of the Minister to do things by Order. He will have Section 28 at his finger tips, so I quote from it: The Minister may by order provide for the termination of liabilities …". There is no mention whatever of either the negative or the affirmative Resolution procedure in that Section. So, with a little more experience, he will learn that it is quite common in legislation to allow the Minister to have power to do things by Order.

The hon. Member for Sheffield, Bright-side (Mr. Eddie Griffiths), who has been a little bumptious tonight, is also a newcomer to our debates and has not, I think, studied the full implications of making Statutory Instruments. The little interruption he made in his hon. Friend's speech was, perhaps, unwise, because it was not right. So I suggest to him, also, that he learns a little more before making such remarks.

The Parliamentary Secretary went on to argue that borrowing abroad was not inflationary of the money supply. My hon. Friends the Members for Horsham (Mr. Hordern) and Barkston Ash (Mr. Alison) put him right there. That, if I may say so, was the fourth point on which he was plumb wrong. He was forced back to argue that the Treasury had given him a brief, and that he preferred to believe the Treasury brief rather than my hon. Friends.

May I ask the Parliamentary Secretary whether he could have been in his right mind when he spoke those words? That any one should ever believe a brief of this Treasury any more after what we have been through, is straining credulity too far. In this case, the hon. Gentleman was wrong again. If he likes to check with the experts on the academic theory of money supply, he will find that my hon. Friend the Member for Barkston Ash was right, and that he and the Treasury were wrong.

The hon. Gentleman tells us that in the appropriate circumstances he will welcome borrowing by the nationalised industries, but he does not tell us what the appropriate circumstances are. If I may say so, he has made his usual sort of reply to a debate, and it is the sort of reply that he does not deserve to get away with. If he has a case to make he must make it. He must not try to find little drafting faults in a group of Amendments, but make the substantive point. In this case, his drafting points were more real than imaginary, but what he failed to do was to answer the substantive point made by my hon.

Friends. He should be ashamed of his performance, and should regard himself as extremely lucky that we intend to let him get away without pressing the Amendment to a Division, as it deserves to be pressed.

Amendment negatived.

Mr. J. H. Osborn

I beg to move Amendment No. 31, in page 5, line 34, after Minister ', add— Provided that such borrowings not in sterling may be utilised only against expenditure incurred by the Corporation outside the United Kingdom of Great Britain and Northern Ireland. We have had a long debate on the borrowing powers of the nationalised industries, and particularly borrowing from overseas. It is rather difficult to summarise the debate we have had on the Clause so far, but I want to try to bring out one or two aspects and then relate them specifically to the Amendment.

It has been agreed that it is desirable in normal conditions that the nationalised industries should be able to borrow overseas, but we have found that under the credit squeeze and our increasing indebtedness this needs to be looked at. We have discussed the merits and demerits of Ministerial and Parliamentary control, and we have discussed the consequences on the realities we now have to face because of the increase in the national indebtedness. The Amendment would add a proviso to the consent of the Minister which is referred to in the Clause.

I have mentioned that overseas borrowing is desirable, and we have talked about Ministerial control. What I am certain will be the reality we will face is that overseas borrowing will be increasingly difficult. We have already discussed the difference between overseas borrowing and overseas investment. In Committee, I moved two Amendments which related to both aspects of the problem. The question now is how the Corporation should deploy its assets, how many in this country and how many overseas. How can we make more money available to the Corporation? How is it possible to provide increasing funds from overseas without having to go through the paraphernalia of Parliamentary control, Ministerial control and Treasury control and increasing our foreign indebtedness? [Laughter.] The hon. Member for Penistone (Mr. John Mendelson) is chortling again. I hope that he will listen to me.

Mr. John Mendelson

The hon. Member is going through the same rubbish that he went through on the previous Amendment. His only aim is to do a disservice to the industry.

Mr. Osborn

The hon. Member made a typical attack which makes it impossible to get on with the Bill.

Mr. Mendelson

Do not attack the Corporation.

Mr. Osborn

The hon. Member has completely misunderstood my hon. Friends and me. We are concerned that the Corporation should be successful and provide employment for the people, including those in the Sheffield area in which the hon. Member is interested.

Mr. Mendelson

The hon. Member is not.

Mr. Osborn

I must appeal for your protection, Mr. Deputy Speaker. The hon. Member is accusing me of attacking the Steel Corporation.

Mr. Mendelson

Hear, hear.

Mr. Osborn

I am trying to provide the means to help the Corporation when this country is in the most ghastly economic mess of all time, partly due to the nationalisation of steel.

Mr. Mendelson

Nonsense.

Mr. Osborn

If the hon. Member would read what I said in Committee—I could go over the ground again for his benefit—we would make more reasonable progress. It is utterly wrong to impute to my hon. Friends or to me a desire to attack the Corporation. It is at present in a mess, not necessarily of its own making, but as a result of political decisions taken in the last few years.

This Amendment would help to resolve some of the problems which the Corporation faces. [Interruption.] The hon. Member for Penistone makes a series of chortles and attacks. Now the hon. Member for Dearne Valley (Mr. Edwin Wainwright) wishes to interrupt. Perhaps he will back me up, for he was a member of the Committee.

Mr. Edwin Wainwright

The hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) makes me go to sleep. Does he say that the steel industry is in a mess because of nationalisation? Is it not true that for years the industry has been behind competitors abroad? The hon. Member must be aware that the production by a man in the British industry is 90 tons a year while in Germany it is 120 tons and—

Mr. Deputy Speaker (Mr. Harry Gourlay)

Order. Interruptions must be brief.

Mr. Wainwright

I was finishing, Mr. Deputy Speaker.

In America, it is 180 tons and in Japan 200 tons. Is that due to nationalisation or private enterprise?

12.30 a.m.

Mr. Osborn

We have had a diversion. We have now been on Report for four and a half hours. Obviously, hon. Members are a little weary.

I raised in Committee the question of what amount of overseas assets we can offset against borrowing from overseas. The annual report gives a figure of slightly less than £20 million. The Minister did not answer the question, because he pointed out that the Corporation have very few overseas assets, that they belonged to the companies. Tonight, we are interested to learn the real value at current prices of the assets of the Corporation when the implications of the Bill have materialised and the assets have been transferred to the Corporation.

Can we offset the value of those assets against sums borrowed overseas so that we do not have to go through the paraphernalia of having Parliamentary and other types of control? The purpose of the Amendment is to suggest that we should look at the Corporation's future expansion. In due time it will be necessary to weigh the merits of expanding home steel melting, steel rolling, blast furnaces, the deeper ports to take the larger cargo ships, as against expanding overseas.

The Clyde has been mentioned as a possible expansion point at home. Then there are South Wales and the North-East Coast. Does the Minister want to say anything about the merits of expansion in this country against the possibility of expanding overseas? This is something which he and Lord Melchett will have to consider in detail. If ex- pansion overseas is proved to be economically desirable for the reasons which we advanced in Committee, would it not be better to use funds from overseas for that expansion?

Mr. Speaker, before you arrived I apologised to the House for the diversion into which I was drawn. The Amendment, which was meant to be constructive and which I hope that the Minister will consider sympathetically following our discussion in Committee, has led to the suggestion that I am attacking the Corporation. The Corporation has much to consider in the future and will obviously have to consider deploying assets overseas. That Amendment would be a useful Amendment to the Corporation.

Sir J. Eden

My hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn) is well known for his interest in and knowledge of the steel industry. He was right not to be led astray by the thoroughly unpleasant, typically demagogic, vulgar, wholly unwarranted, and personally abusive intervention of the hon. Member for Penistone (Mr. John Mendelson).

Mr. John Mendelson

I said—I put it on record, and I repeat—that the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) and all Tory speakers this evening have been vilifying the Corporation by saying that it will go around Europe—

Sir J. Eden

rose

Mr. Mendelson

—trying to pick up a few D-marks and francs. They are doing a disservice to the Corporation—

Sir J. Eden

Mr. Speaker—

Mr. Speaker

Order. When an hon. Gentleman allows another hon. Gentleman to intervene, he must allow him to complete his intervention.

Mr. Mendelson

I was saying, and I am putting it on record, that the hon. Member for Hallam and the other Tory Members who have spoken have been vilifying the Corporation by saying that under the procedure proposed in the Bill it will go around Europe trying to pick up a few dirty D-marks in a few capitals, and he was doing a disservice to the Corporation.

Mr. Speaker

Order. Interventions must be brief.

Sir J. Eden

Now, Mr. Speaker, you have had an opportunity of hearing what an unpleasant fellow the hon. Member for Penistone is. I am sure that you now recognise how great was the temptation put upon my hon. Friend the Member for Hallam.

Mr. Speaker

Order. No hon. Member must ever pray Mr. Speaker in aid.

Sir J. Eden

All of us who have worked on Standing Committees with my hon. Friend know the extent to which he supports the industry and the backing which he has given to the activities of British steel, whether in the public or the private sector. As he said, the purpose of this Amendment is to further that end.

The Amendment is very much in line with observations made in the Corporation's own report, "Finance for Steel", in the section on overseas development on page 12. I shall quote one sentence. After dealing with all the various ways in which it might seek to invest money abroad, the Corporation said: If the Corporation is empowered to borrow abroad, the financing of ventures of this nature would be facilitated. My hon. Friend seeks to take it one stage further by requiring that the powers of the Corporation to borrow abroad in money other than sterling should be exercised only against expenditure incurred by the Corporation overseas. The Corporation will probably incur considerable expenditure overseas. This is not the moment to go into the various ways in which it will wish to develop overseas, but the Minister knows of many of the plans which it has for overseas development. The Amendment is worthy of full consideration and sympathetic support.

Mr. Mason

On the previous Amendment, we had a debate lasting more than two hours on much the same matter, and I shall not weary the House by going through the problems of indebtedness, the flow of money supply and the rest. What the hon. Member for Hallam (Mr. J. H. Osborn) and his hon. Friend the Member for Bournemouth, West (Sir J. Eden) say is that it is all right for the British Steel Corporation to borrow abroad, but it must be spent abroad.

The Corporation may want to borrow to assist it to strengthen its position over- seas. The Corporation is an international industrial organization, not like the domestic nationalised industries of gas and electricity. Because of the many subsidiaries related to the companies which it has taken over, after the companies are absorbed and the Corporation is entirely responsible, the assets of the companies abroad will be in its hands. As hon. Members know, they are worth about £20 million.

There are several companies abroad, and it may be necessary for the Corporation to borrow abroad with a view to helping and strengthening those subsidiaries. It may wish to borrow abroad to protect the long-term supplies of ore. Again, it would be borrowing abroad and spending abroad. It may be necessary for the Corporation to borrow abroad in establishing a consortium with overseas firms. The Corporation is an international industry in international competition.

Unlike other nationalised industries which may have power to borrow abroad, it is likely that the Corporation may use more of its overseas borrowings for overseas purposes.

Mr. J. H. Osborn

Would the Minister recognise that borrowing abroad for overseas investments need not involve the Treasury in having to supply guarantees, as is the case for borrowing abroad at present, and it is a good way to short-circuit the difficulties which would normally result from borrowing abroad for capital expenditure at home, thus increasing our international indebtedness? Would the right hon. Gentleman touch on that aspect?

Mr. Mason

I gather that it is far better that there should be the Treasury guarantee.

The hon. Gentleman asked about the real value of the Corporation's assets. He knows what is entered in the book and what the companies' total assets are which are going to the Corporation. But I do not think we can go much further. The Corporation has shown the value in its accounts in the usual accounting form. We have no better figure.

I can appreciate fully the purport of the Amendment: if there is to be borrowing by the Corporation abroad, it should be spent abroad. I should have thought that in many instances when it borrowed abroad it would need that money for purposes abroad. I should not like to apply this restraint on the Corporation when it may want to borrow abroad. I should not like to stop it using that facility for home purposes as well.

Mr. J. H. Osborn

The Minister has dealt with the Amendment with sympathy. I hope that he will consider some of the points which I raised. It is not our wish to press the Amendment at this hour. We put it forward in order to get some appreciation of the Minister's intentions. I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Bill to be read the Third time this day.