HC Deb 11 November 1969 vol 791 cc184-96
The Prime Minister (Mr. Harold Wilson)

With permisson, Mr. Speaker, I should like, in view of recent public comment about the Civil List, to make a statement.

As the House is aware, shortly after the Queen's accession Parliament fixed the annual amount of the Consolidated Fund grant to the Civil List, in Section 2 of the Civil List Act, 1952, as £475,000.

It was recognised that the value of this provision would, in real terms, be eroded by cost increases over the years ahead. The provision made by Parliament following the Report of the Select Committee presided over by the then Chancellor now the noble Lord, Lord Butler, therefore included a substantial margin, which would mean that in the early years a reserve could be built up and invested, to provide a fund from which any deficits which emerged could be met for a substantial period ahead.

Section 9 and the relevant Schedule of the 1952 Act provided that this supplementary provision should run at a rate of£95,000. Of this, up to £25,000 a year was to be available for provisions by the Sovereign for members of the Royal Family for whom Parliament had not specifically provided. The balance of not less than £70,000 was to provide a surplus for investment to provide for deficits which were expected to accrue later in the reign.

Parliament rejected an amendment by the then Opposition that the adequacy of the Civil List should be kept under review, by a reconsideration every 10 years. Nevertheless, the matter has been kept closely under review.

In the event, from 1952 to 1961 the Civil List as a whole, including the Class V Supplementary Provision, showed a surplus, though with wages and other costs steadily rising in the late 1950s and early 1960s, the saving was very small in the last two years up to 1961. From 1962 onwards deficits were incurred, small at first but increasing steadily each year. Last year it became clear not only that the annual grant, including the Supplementary Provision, was falling far short of the total costs for which it had been provided, but that the substantial reserve which had been built up from 1952 to 1961 was being reduced year by year. Last year it was estimated that the reserve would be exhausted and the Civil List would, therefore, move into deficit by the end of 1970.

Accordingly, detailed discussions took place between Treasury officials and the Queen's advisers, as a result of which the Government informed the Queen's advisers that a new Select Committee would be appointed at the beginning of the next Parliament. There is no need for earlier action.

The House, however, might like to be made aware of two facts. In the first place, there has been over recent years a progressive transfer of expenditure previously carried by the Royal Household out of the Civil List to funds provided by Departmental Votes. This began during the previous reign and, on the Select Committee's recommendation—that is, the Select Committee of 1952—approved by the House, this process was continued in 1952, when the remuneration of industrial staff engaged on the maintenance of the Royal Palaces was taken into the Vote of the Ministry of Works.

Since that time the process has been carried further. For example, over the past 10 years or so the cost to the Civil List of expenditure on royal tours overseas and the cost of rail travel on royal functions in this country have been reimbursed out of Departmental Votes. In addition, Departmental Votes are carrying, to a figure of around £40,000 a year, certain expenses in relation to State entertainment, for example, during State visits, which, in previous reigns, would have been borne on the Civil List.

The second fact I would mention is that during the past six years there have been two investigations of the organisation of the Royal Household, one by the Organisations and Methods Division of the Treasury, and the second by an industrialist specially commissioned by the Queen's advisers. As a result, a number of improvements designed to save costs have been adopted.

I hope that the House will accept that in this important—and I do not need to stress, delicate—matter, the Government have proceeded, in full discussion with the Queen's advisers, on a basis capable of dealing with the problem which is developing, and of dealing with it in time, having regard both to increasing costs and to a proper regard for restraint in public expenditure.

Mr. Heath

I am sure that the House is glad that the Prime Minister has taken this opportunity of putting the facts on record. This matter, which he rightly describes as delicate, is a House of Commons matter and, although right hon. and hon. Members on both sides have their own opinions, it has customarily not been a matter for party dispute.

The Prime Minister has stated that the Civil List will be in deficit by the end of 1970 and that he had told the Queen's advisers that a Select Committee could be set up in the new Parliament which, if this Parliament ran its full length, could be in the spring of 1971; in other words, after he himself has stated that the Civil List would be running into deficit.

Is not it a fact that because of the time which has elapsed since the consultations must have been held between the Treasury and the Queen's advisers, this matter has now become one of widespread discussion in this country and outside—[HON. MEMBERS: "Oh."] That surely cannot be denied.

As we on this side of the House would support any action which the Prime Minister proposes to take in view of these changed circumstances, would not it now be right to move that a Select Committee should be set up to review this matter? It would then be for the Government of the day to recommend to the House what action should be taken in the light of the review. No one could be expected to commit himself before a Select Committee has examined the matter. It has already been made clear that this side of the House will support the Prime Minister and his colleagues if they move to set up a Select Committee in the light of the existing circumstances.

The Prime Minister

I thank the right hon. Gentleman for what he said at the opening of his question. I thought it right, in view of the wide degree of public discussion, that this matter should be the subject of a statement in the House which, as the right hon. Gentleman says, carries the full responsibility for these difficult matters.

The right hon. Gentleman mentioned the end of 1970, by which time, as I said in my statement, the reserve will have been exhausted and the situation will have moved into deficit. I obviously cannot speculate about the question mark in the right hon. Gentleman's mind here, but, if any delay were caused, for example, by the time required for legislation, and so on, the Government, in their discussions with the Queen's advisers, have taken all the necessary steps to ensure that the matter is covered until the legislation is available in the House. So there is no problem there.

Arrangements have been made to cover any Civil List deficit arising after the Civil List reserve is exhausted. If that is the position—and I am not going to forecast dates—this will be done from funds available to Her Majesty from sources other than public funds.

The right hon. Gentleman referred to the appointment of a Select Committee now, and also to the new situation. There is, in fact, no new situation. The position is exactly as it was when it was discussed with Her Majesty's advisers a year ago. The figures are developing exactly as was forecast at that time, and the view then tendered by the Government still holds. The fact that there is a great deal of public discussion at this time is not in any sense the responsibility of the House or of Her Majesty's Government. It is natural, right and proper that there should be great public interest in these matters, both in the Press and in public discussion, but nothing has happened to alter our view that the situation will not become urgent until about the end of next year, and that is when action should be taken.

Mr. Thorpe

Although the House as a whole has the responsibility for any amendment or decision in respect of these matters, does not the Prime Minister agree that, in the initial stages of discussion, it is very much better that thediscussions take place in the forum of a Select Committee? We now know that since 1952 the Civil List has been augmented on an ad hoc basis by transferring various matters to Departmental Votes. Since the country is extremely interested in this matter and it is Parliament which has to act, will not the Prime Minister consider the advisability of setting up a Select Committee? If the Government wish to defer action on its recommendations, as, for example, was the case with the remuneration of Members of Parliament dealt with by the Lawrence Committee, he could perhaps also take that into account.

The Prime Minister

I am not sure of the analogy drawn by the right hon. Gentleman; there are many differences between the two situations. I am not sure that the analogy in which a Commission was set up by one Parliament and acted on in another proved to be a very happy one at the end of the day. I think the right hon. Gentleman will agree—and as I have said there is no immediate urgency—that Parliament will always attach more importance to the recommendations of a Select Committee appointed from among its own Members than to those of a Select Committee appointed during a previous Parliament.

Most of the facts which I have stated were publicly announced. For example, the transfer to public funds of expenses which were previously borne on the Civil List. No doubt when the right hon. Gentleman goes through the sub-heads of the Votes he will find in each case when it was transferred. I do not think that a Select Committee at this stage would add anything to public discussion or public knowledge. The right thing to do is to have a Select Committee when the fund is exhausted, so that the House may take whatever action is recommended by the Select Committee.

Mr. William Hamilton

Does my right hon. Friend recall that he and the Government have been under considerable pressure from the Opposition to keep public expenditure down, and on that account the course which he has recommended to the House this afternoon should command universal support on both sides of the House? Could he say whether he or the Government were consulted, or even informed, about the remarks made on American television on this matter? Is it usual for a pay claim to be made by a shop steward in the United States?

The Prime Minister

Without commenting on my hon. Friend's choice of language, it will be within the knowledge of the House that Her Majesty's Government are not responsible for tendering advice except to Her Majesty the Queen, and for this we take full responsibility.

In the particular case which I think my hon. Friend has in mind, if I have identified it correctly, there was, in any case, no public statement in the sense of a speech. It was an answer to a question on television—[An HON. MEMBER: "A loaded question."]—arising from a certain degree of, on the whole, inaccurate Press speculation in this country. Even the most experienced of us who appear on television programmes sometimes find ourselves a little incommoded by an unexpected question, not least when it is a rather silly question.

Mr. C. Pannell

In view of the manner in which this matter has been raised, and its source, would it not be better, as the Prime Minister suggests, to leave it until after the next election? Should we not bear in mind that any future Select Committee could never have the narrow terms of reference of the last Select Committee, and also the fact that there have been increases from other sources open to Her Majesty, including the Duchy of Lancaster? All these matters will have to be considered when we consider the future of the Royal House, remembering the children who are coming into it and other considerations.

The Prime Minister

My right hon. Friend is absolutely right. What is inquired into must be a matter for the Select Committee. It would not be intended that the Select Committee should be unduly restricted in its terms of reference. There is no reason why it should be restricted.

One of the points my right hon. Friend mentioned—he was not right to select one without others—was the Duchy of Lancaster, the revenues from which have increased substantially, as have revenues from the Duchy of Cornwall. On the other hand, the gains to the Revenue by the surrender of Crown Land revenues were very considerable indeed, on a very much bigger scale than my right hon. Friend is talking about. He will have noted the arrangements made about the surrender of 50 per cent. of Duchy of Cornwall net revenues from next Friday.

Mr. Boyd-Carpenter

Is it not a fact that the 1952 arrangements involved the surrender into the Exchequer of a substantial part of the hereditary revenues of the Crown? Can the Prime Minister say up to the latest date at what annual rate these are now running?

The Prime Minister

I have the figures. I do not think that it would be helpful for me to select particular items. It would be better for the Select Committee as a whole, when it is set up, to study all the figures and to give the House its general view on the matter.

It is, in fact, 17 years since the decisions were taken. Most of the surrendered revenues have very greatly increased in value to the State, so, on the other hand, have the revenues accruing to the Privy Purse increased, and so, also, has the public provision of Departmental Votes for Royal Household expenditure increased. It will be better when the time comes—and it is not right at this moment—for the Select Committee to look at all these matters and to give the House its considered view.

Mr. English

During the course of discussions mentioned by the Prime Minister, was any assurance made about the benefit derived by Her Majesty in her exemption from taxation? If so, was any estimate made of the increase in that benefit since 1952?

The Prime Minister

All relevant questions were taken into account in the discussion between Treasury officials and the Queen's advisers.

Mr. St. John-Stevas

Is not the Prime Minister's statement that a Select Committee will be appointed in the next Parliament a constitutional nullity, since no Parliament can bind its successor and no Prime Minister can bind either himself or any possible successor? Surely all the Prime Minister is saying is that he does not intend to take any action.

The Prime Minister

That is a rather extraordinary view to be expressed by such a great constitutional expert as the hon. Gentleman, who has published volume after volume on Bagehot. But the position is, as I have stated, that in the next Parliament—and this applies to what naturally we expect to be the Government, and I can certainly commit myself to that, or it would apply equally if there were a change of Government—there will be a Motion in the House for a Select Committee. I think that I am on good ground for saying that.

Mr. Shinwell

Would it not be better, in view of my right hon. Friend's considered statement of the facts and the at any rate partial acquiescence in them by the right hon. Gentleman the Leader of the Opposition, and in the interests of all parties involved, since this is a delicate matter, to postpone further discussion until the appropriate moment?

The Prime Minister

There is something in that, but there has been a very great degree of public discussion outside. Those outside who are concerned about the matter have the right to feel that we in this House, in these exchanges between us, should express various points of view which have been raised in public discussion and in the Press. It may be that what has been said in different parts of the House will help to inform that public discussion.

My right hon. Friend referred—I am sorry that I did not say this in answer to the hon. Member for Chelmsford (Mr. St. John-Stevas)—to what was said by the right hon. Gentleman the Leader of the Opposition, and also by the Leader of the Liberal Party. I would be on good ground for taking what they have said this afternoon as indicating that there was no constitutional impropriety or anything misleading in what I said about what is likely to happen in the next Parliament.

I agree with my right hon. Friend that these matters are very complex. It is always possible, by stressing one element in the Civil List or in the revenues or the rest, to get a wrong perspective of the problem as a whole.

Sir A. V. Harvey

Is the Prime Minister aware that what he has said is not convincing? Is he further aware that a great many people outside the House will take the view that we should look at this matter sympathetically? Why should it be left for 18 months when it is urgent? It is for Parliament to get on with the job. Has the Prime Minister a soul?

The Prime Minister

I am sorry that the hon. Gentleman, who is usually quite balanced and objective in these matters, has formed that conclusion from what 1 said. What I was trying to tell the House was that the matter was not urgent in the sense that there are still funds in the reserve appropriated by Parliament and paid out of Consolidated Fund from 1952 onwards. It is, therefore, not urgent at this time.

I hope that the hon. Gentleman did not feel that anything I said, either in my recital of the facts or in my account of the conclusion of the discussions, in any way fails to reflect what he calls a sympathetic attitude or an appreciation of the problem that has to be solved. It is a complex problem which, at the right time, should be solved on the basis of thorough inquiry by a Select Committee.

Mr. George Brown

Is my right hon. Friend aware that I could not disagree more with what the hon. Member for Macclesfield (Sir A. V. Harvey) has said, but is he also aware that this is a problem which will not go away? The matter having been started, people will argue about it. The right moment is the moment when people start arguing. Would it not be sensible, therefore, to set up the Select Committee now?

Hon. Members


Mr. Speaker

Order. Noise does not answer a question.

Mr. George Brown

I am quite used to noise. It has never hitherto disturbed me.

Is my right hon. Friend not aware that, if a serious problem is to be taken out of politics, the right thing to do is to establish a Committee to look into it and discuss it? Is not the right moment now—[HON. MEMBERS: "No."]—so that people can then discuss its conclusions?

The Prime Minister

I am sorry at any time to disagree with my right hon. Friend—and, of course, he knows that this is very rare—but I cannot accept the view that because there is noise or a big argument about a subject that means that it should be taken out of its proper time; and a proper time has been worked out after very careful discussions and examinations.

It is certainly true, to use my right hon. Friend's words, that the problem will not go away. That was the whole basis of what I was saying. It is a problem which has been increasing since 1962, at which point the current account, if I may use that phrase, of the Household accounts passed from surplus into deficit. It was clear that this would be an increasing deficit up to the point where the reserve was exhausted. It is because the problem will not go away, and because we can identify very closely indeed the date at which the reserve is exhausted, that I have indicated the timetable for dealing with it.

Sir G. Nabarro

Is the Prime Minister aware of an Early Day Motion that was put on the Order Paper last night, supported by many hon. Members on this side and myself, calling for a Select Committee to be set up at once? How does the Prime Minister reconcile his statement that the position today is the same as it was 12 months ago, to use the words that he employed, with the fact that, for example, all taxation has been changed, including selective employment tax, that all Royal Household costs have risen enormously—

Mr. Speaker

Order. The hon. Gentleman must put a question. He cannot debate the issue.

Sir G. Nabarro

—and that none of these matters may be fully investigated without a full inquiry which only a Select Committee can undertake? Will he reconsider setting up a Select Committee at a very early date in this Parliament?

The Prime Minister

I was aware of the Motion on the Order Paper, because, despite the printing difficulties from which the House is suffering, there seem to be no printing difficulties with the Press, which, with unusual perceptivity, seems to have discovered what the hon. Gentleman and his hon. Friends were up to concerning this perfectly proper Motion which, I understand, was tabled last night.

The hon. Gentleman mentioned that a certain view was taken a year ago and has not changed. This is justifiable, because, when the Select Committee reports, the hon. Gentleman must and will be able to address himself to all the facts; not just those which he has selected for discussion.

There have been changes in taxation, making relatively little difference, may I say, to the Household accounts, compared with a year ago. But at the same time there have been substantial changes in the earning power on revenue account of various aspects of the Household revenue. I suggest that it is better to wait until all these matters can be looked at together. There is a great deal of work to be done before the Select Committee is set up, and this work will continue, because it will be necessary to assemble all the facts and figures for the Select Committee at the relevant time.

Mr. Maudling

The Prime Minister has not answered the point raised by my hon. Friend the Member for Macclesfield (Sir A. V. Harvey) or the right hon. Member for Belper (Mr. George Brown). The Prime Minister has said on several occasions that this matter is not yet urgent. What he has not explained is why it is wise to wait until it becomes urgent. The right hon. Gentleman has said that a great deal of work needs to be done. Surely the sooner the work is done the more likely it is that the solution will be a good one.

The Prime Minister

When I said that a certain amount of work has to be done, I meant that it has to be done before the Select Committee is set up, and this work is continuing.

I find it difficult to follow the right hon. Gentleman's argument about taking action before it becomes urgent. When he was Chancellor, although the could have forecast almost to the month when this problem would become urgent, I think that it was right not to take action. I think that the right hon. Gentleman was wrong to resist the Amendment moved by this side of the House following the suggestion by Lord Attlee that these matters should be subject to a regular 10-year review. Since the account passed into deficit in 1962, Lord Attlee showed very considerable powers of prediction in knowing that that was the right year to suggest. Because there is adequate time for dealing with this matter, it is not necessary to deal with it by a Select Committee now.

Mr. Hynd

Although the Prime Minister says that no special situation has arisen, is he aware that in the country generally there will be an impression, which I share, that the Government have been drummed into making this statement today because of the irresponsible remarks made in America, to which reference has been made—

Mr. Speaker

Order. It is not in order to criticise a member of the Royal Family, except by a Motion on the Order Paper.

The Prime Minister

Perhaps I might reply to that part of the question which was in order. I should very much regret any thought that we had been pressured at all. The great interest which has been taken in public discussion, in the Press, on television, radio and all the rest, is no justification for changing the decision that the Government took a year ago and discussed at that time with the Queen's advisers.

On the other hand, to go back to the first point made by the right hon. Gentleman the Leader of the Opposition, how- ever this public discussion started, because it is going on it was right that a statement should be made in this House and all relevant facts made available to those concerned with the public discussion.