HC Deb 08 February 1973 vol 850 cc819-31

Queen's Recommendation having been signified

Motion made, and Question proposed, That, for the purposes of any Act of the present Session to provide for the reclamation from the sea of certain land for the purpose of the establishment of an airport and a seaport in south-east Essex, it is expedient to authorize—

  1. (a) the issue out of the National Loans Fund of any sums necessary to enable the Secretary of State to make loans to the Authority established by that Act;
  2. (b) the issue out of the Consolidated Fund of any sums required for fulfilling any guarantee given by the Treasury in respect of sums borrowed by the Authority; and
  3. (c) the payment of any sums into the Consolidated Fund or the National Loans Fund.—[Mr. Eldon Griffiths.]

11.26 p.m.

Sir Brandon Rhys Williams (Kensington, South)

It would not be right to detain the House for long, but the Money Resolution on a Bill which is likely to result in such large expenditure is a matter of importance and it is appropriate that it should be debated even if briefly.

Before I begin I should like to declare a personal interest, in that I am an owner of land in Glamorgan. I also believe that the Severnside airport project ought to be seriously studied. It has relevance, particularly in view of the welcome remarks of my hon. Friend about the Severnside project, to the Maplin development.

In winding up the debate for the Opposition the right hon. Member for Sheffield, Park (Mr. Mulley) drew attention to the wide terms of the Money Resolution, and I sympathise very much with him in the view that on a matter of this kind it is inappropriate that the House should be given so little guidance about the total commitment that it is making in supporting the project. Authority is being given to issue out of the National Loans Fund and the Consolidated Fund "any sums required"; and from Clause 10(8) it seems that the Secretary of State has carte blanche to decide about the funding of the scheme without further reference to this House.

There is a general feeling in the country, and it is my view, too, that the House of Commons is gradually losing control of public expenditure. It is my view and, I think, that of many right hon. and hon. Members that a Money Resolution of this importance, with no apparent upper limit on total expenditure, is an attack on the status of this House. It used to be a commonplace of constitutional theory that the House of Commons achieved—not without bitter struggles—a degree of supremacy over the executive because it came to control the supply of funds. We shall be disgracing our traditions if we allow this power to slip gradually out of our hands.

In the United States, the American constitution, which is an offshoot of the British constitution of the eighteenth century, makes it abundantly clear that the elected representatives of the people have the responsibility to control the executive through the control of the supply of funds. In Europe, too, it is generally hoped that democratic feeling will find expression through the growth of the authority of the European Parliament over the expenditure of the central European agencies. Yet here at Westminster we apparently are prepared to consider enormous expenditure on this controversial project in a virtually empty House.

I have asked my hon. Friend, and I should like to ask him specifically now, for two assurances—first, that if there is any significant increase beyond present cost estimates for the Maplin project itself or the supporting schemes such as the new town, the roads or the port, Parliament will not merely be informed but will be asked to give its approval before the money is committed; and, secondly, that it will not be argued that regional airport schemes such as Liverpool, Severnside or any other should be deferred or scrapped because of any rise beyond present estimates in the cost of Maplin and its associated projects.

11.30 p.m.

Mr. Roger Moate (Faversham)

I endorse to a certain extent the sentiments expressed by my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams). I was under the impression that the Bill limited the total amount initially to £250 million. If that is not so, perhaps my hon. Friend the Under-Secretary will make it clear.

We are authorising massive expenditure, and on Second Reading my right hon. Friend the Secretary of State gave us figures. It would be helpful if as soon as possible those figures could be set out in much greater detail in a much more comprehensive form, analysing all the costs plus the so far unknown costs, particularly the costs of compensation for the demolition of houses in relation to the construction of the motorway and also in connection with access routes and the massive new city project which is to accompany this project. As soon as possible we should be fully advised of the scale of the whole enterprise.

I draw attention to one figure. Perhaps my hon. Friend will confirm whether I am right in making these comparisons. They emphasise my fears about escalating costs in terms of public works projects. I refer to the reclamation costs which are to be paid for under this initial £250 million. The Roskill Report suggested that the reclamation costs would be £70 million. That was in 1971. By 1972 the Department's own selection of sites document suggested that the costs would be £110 million. The latest figures I have been given suggest total reclamation costs of £175 million. In other words, since Roskill the estimate has increased by over £100 million. The increase is of such a scale that I suggest that Roskill would have damned Foulness totally if he had had such figures at his fingertips at that time. Have estimates increased by 250 per cent. in two years alone?

Another figure that was given was the cost of clearing munitions from the sands. Initially the cost taken by Roskill was £1 million. The latest figure given by the Government is £4 million. That is an increase of 400 per cent.

Faced with increases like that so early in the project the House is right to be concerned about whether it is being given proper powers of scrutiny and control over the whole project when many of the other items of expenditure will be much greater than the reclamation costs and initial clearance costs.

11.33 p.m.

Mr. J. Bruce-Gardyne (South Angus)

I agree with my hon. Friends the Members for Kensington, South (Sir B. Rhys Williams) and for Faversham (Mr. Moate) that such is the nature of the Money Resolution that we cannot let it go by on the nod. It is, as my hon. Friend the Member for Kensington, South pointed out, very widely drawn. It must be considered against the background of the discussion we had yesterday on the present condition of public expenditure abroad. During yesterday's debate a number of us expressed considerable concern about the prospects for the growth of public expenditure in the years ahead. There is a certain irony in the fact that we are tonight, only 24 hours later, discussing a Money Resolution, with such sweeping implications for public expenditure as this one.

Yesterday my hon. Friend the Chief Secretary made these peculiarly apposite remarks: Do not we constantly face the dilemma, as indeed does every democratic community, between, on the one hand, the desire, expressed daily in a thousand different ways, for spending more on projects and programmes close to the hearts of their supporters—and, on the other hand, the need to ensure that the totality remains at acceptable levels? No one can be more conscious than those who hold my office of the perennial schizophrenia of those who always want more spending in particular, but more economy in general."—[OFFICIAL REPORT, 7th February 1973; Vol. 850, cc. 473–74.] I do not suppose that I was alone in feeling an element of schizophrenia tonight. I think that my hon. Friend's remarks were directed at our back benches. But there are occasions on which they could equally well be directed to my right hon. and hon. Friends on the Front Bench.

Mr. Anthony Crosland (Grimsby)

How did the hon. Gentleman vote tonight?

Mr. Bruce-Gardyne

The vote tonight, as the right hon. Gentleman knows quite well, was on the desirability or otherwise of proceedings with the construction of a third London airport. We are not now discussing that. What I am seeking to elucidate from my hon. Friend is a clearer and more precise explanation of what funds he expects to be committed under the Money Resolution, and in particular when and how. The House needs this information. These are questions of phasing and demand effect which arise directly from the Money Resolution rather than from the Bill.

We were given this afternoon by my right hon. and learned Friend the total figure for expenditures up to 1980. It is the earlier period of expenditures that we should be immediately concerned with, because it is the background of the basic PESC exercise covering the period up to 1978 and 1977, which preoccupied us yesterday and which should preoccupy us on the resolution tonight.

The figure my right hon. and learned Friend gave for the totality of expenditures up to 1980, on the best estimates now available, was £440 million. I am sure that my hon. Friend the Under-Secretary will not take it amiss if I tell him that if in the event by 1980 we find that the expenditure has been the equivalent at then current prices of £440 million at today's values I shall be mighty surprised. I am prepared to make a substantial bet with him—he can put his own figures upon it—that that figure will be exceeded, I hope not by a factor of two or 10, but certainly by a large amount.

The demand effects of this expenditure are not to be sneered at. Related to this is the demand effect of the location where the expenditures will take place. My hon. Friend will have noticed the letter in The Times today from Mr. Foster, in which he said, among other things: The expenditure on Maplin will be almost entirely on construction, whether it is building approach motorways or reclaiming land from the sea. The construction industry is now fully stretched, especially in the south-east. Maplin will have an inflationary effect on the construction industry. It will put a strain on Phase II and III policies to restrain building costs. That makes an assumption that the burden of building costs will fall heavily in the earlier part of the period up to 1980. Can my hon. Friend give us any indication as to whether that is so?

It has for long been a Treasury dogma, whether well-founded or not, that the demand effect of a given scale of expenditure must be balanced according to the region in which the expenditure takes place. In other words, if the expenditure occurs in a region where resources are under-used the demand effect is far less than it is if it occurs in an area where resources are already very fully stretched. This expenditure will occur almost entirely in an area where resources are very fully stretched. We must accept that the demand effect is of a factor of one-to-one with the actual expenditure as it occurs.

In the light of this widely-drawn Money Resolution we have a necessity to ask my hon. Friend to shed more light than is shed by Clause 10 of the Bill on the precise manner in which the expenditure provided for in Clause 10 will be financed.

Many hon. Members will have seen the letter sent by Professor Walters to The Times on 30th January in which he said: If we assume that some £500 million is to be spent in the last seven years of the decade, then this implies an annual spending of roughly £70 million. This will therefore increase the deficit and so the borrowing requirements of the public sector by £70 million per annum. It is difficult to see that the Maplin decision as such will induce government to raise taxes or to sell more gilt-edged to the private sector. The alternative is to increase the money supply to finance Maplin. On recent historical experience this is by far the most likely outcome. On my calculations this will add about 0.6 per cent. directly to the long-term rate of inflation of the United Kingdom in the second half of the 1970s and early 1980s. I guess that that might be a somewhat crude presentation of the way in which the expenditure will take place and the inflationary impact it might be expected to have.

We need from the Under-Secretary of State before we approve the resolution some clearer detail than we have had in the Bill, and particularly on Clause 10 about the phasing of the finance required to carry through the programme outlined in the Bill. Ideally, we want an assurance that the overwhelming bulk of expenditure will occur after the years 1976–77—in other words, in view of the evidence that public expenditure is already fully committed, if not overcommitted, up to the end of the current PESC exercise and that we should not add further to it.

In view of the record of the Department over many years in erring on the side of caution in its forecast—or perhaps I should say on the side of optimism—of the public expenditure programme, I hope that my hon. Friend will be able to tell us something about the techniques which will be used to monitor the sort of expenditure that we are authorising in the Money Resolution to ensure that it is not exceeded, and, preferably, is restrained—though I suspect that is too much to ask.

11.44 p.m.

The Under-Secretary of State for the Environment (Mr. Eldon Griffiths)

I say at once to the House that my right hon. Friend and I are determined to see that there will be the most effective monitoring of expenditure on this programme. I willingly give that assurance to my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) because I understand his anxieties and those of other hon. Members about public expenditure. We are determined to see that the financial disciplines and cost accounting are carried out as effectively as we can achieve them and that, wherever possible, we make known to the House what is going on.

The main cost provided for in the Bill under the financial resolution is for the reclamation of land. It is shown in the financial effects as a sum of £175 million at 1972 prices. My hon. Friend the Member for Faversham (Mr. Moate) asked why the figure was larger than that put forward by Roskill. The answer is simple. The reclamation area that we are discussing is 18,000-plus acres. Roskill was talking about some 10,000 acres. Secondly, the Roskill figures were at constant 1968 prices and, regrettably, due to inflation, 1972 prices have had to be updated since by about 25 per cent. It will be a matter for argument between the two sides of the House why that happened. But it has happened. It is only prudent to cost it in.

Our figures also include an allowance for the payment of royalties to the Crown Estate Commissioners for materials which will be dredged from the sea bed to help with the build-up of the land for the airport. The figure of £175 million at 1972 prices covers the whole of the reclamation works. The first stage of the development, for two runways, is to be made ready by 1980, and we estimate that this will cost £140 million. That was the figure given for stage one of the project by my right hon. and learned Friend today. That will provide for the reclamation not of the whole 18,000 acres but in the first phase for approximately 14,000 acres—some 6,500 for the airport, some 2,500 for the sea port and the balance for the related commercial and other development.

The balance of the money between the £140 million mentioned by my right hon. and learned Friend and the £175 million mentioned in the financial note is concerned with the second stage of reclamation beyond the provision for the first two runways.

I remind the House of the undertaking given by my right hon. and learned Friend. There will be a thorough-going review after the first phase is completed for the first two runways before the Maplin Development Authority is authorised to go ahead with the second stage. I am confident that there will be ample opportunity at that point for the House to discuss the matter in great detail.

Mr. Moate

Is my hon. Friend in a position to comment on the reference in the site document dated April 1972 to a figure of £107 million?

Mr. Griffiths

I cannot comment without examining the point to which my hon. Friend has referred. I shall look at it and write to him.

I turn to the £200 million figure included in the Money Resolution. It is only fair to explain why the £175 million is shown in the financial estimate and the £200 million in Clause 10. The difference is simple. The £175 million is purely for reclamation—stages one and two. But the Maplin Development Authority is bound to have additional expenses. It has first to purchase the reclamation site. It must buy from the Ministry of Defence and from any private rights the land-based facilities, the sands and the foreshore. Secondly, it must pay for the technical and feasibility studies which will be required. A very large hydraulic model is now being made ready so that a proper study can be made of the possible erosion effects of reclamation on the coastal area. Thirdly, the Maplin Development Authority will need to pay compensation to private persons and interests—this is a matter which the Select Committee will examine, and no doubt the Standing Committee afterwards—for the impact on the cockle fishers and others. The Development Authority will need money to pay compensation where it is appropriate. This is covered in detail in Clause 18. I believe that it has been right to leave some headroom for inflation, although, with the success of the Government's counter-inflation policy, I am sure that we are not going to have to make the same allowances in future years as we have had to make since 1968.

My hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) asked two specific questions. He was very courteous in sending me a note beforehand. First, he asked, if there was any significant increase beyond the present cost estimates for the project, whether Parliament will not only be informed but asked to give its approval before any money is committed. We are dealing tonight with sums of money for the explicit purposes of the Maplin Development Authority. I can give my hon. Friend the assurance that, in the event of there being any substantial increase—which I do not expect—in the expenditure of the authority, the answer is, yes, there will be opportunity not merely for Parliament to be informed but to be asked to give its approval before the money is committed.

Secondly, my hon. Friend asked that it should not be argued that regional airport schemes, such as those at Liverpool and on Severnside, should be scrapped because of any substantial rise in the costs of Maplin. It is not possible to give that assurance because what may or may not happen on Severnside or at Liverpool or anywhere else is a matter of national policy. It would have to be considered in the light of many other factors. I cannot give that assurance but I can give my hon. Friend the assurance that, as my right hon. and learned Friend made clear, we shall be looking at the whole question of regional airport schemes on their merits, and if they are viable and make sense I have no doubt that they will be proceeded with on their merits.

Mr. Frederick Mulley (Sheffield, Park)

The Minister for Aerospace changed the whole of the civil aviation policy that successive Governments have followed since the White Paper of 1961 when he responded, during the Second Reading debate, to an interjection. I would have thought that a major change of that sort would have justified at least a couple of sentences in its own right, because since 1961 it has been clear that no Government money has been forthcoming for any airports outside the BAA airports which are the London airports and two Scottish airports.

Is it now to be the case that Government money is to be forthcoming for Severnside or any other regional development? If the hon. Gentleman cannot answer that tonight, will he get the Minister for Aerospace to make a statement, because whether and how much money is to be made available for such projects is very germane when we are considering the total amount of money which the estimates are going to require for Maplin itself?

Mr. Griffiths

The right hon. Gentleman will want to be fair to my hon. Friend the Minister for Aerospace. My hon. Friend said that he would cause the whole question of possible airport developments on Severnside or elsewhere—Liverpool was also mentioned—to be looked at, and he had the agreement of the Chairman of the CAA to do that. But I think the right hon. Gentleman is wrong to suggest that my hon. Friend said that particular sums of Government money would be going in that direction. This is a matter which requires to be examined, as he said.

Mr. Mulley

Not particular sums, but whether any Government money can be made available. That is the point.

Mr. Griffiths

When the right hon. Gentleman studies my hon. Friend's speech in HANSARD, he will see that my hon. Friend did not make any commitment either in general or in particular about Government expenditure. He only undertook to have the matter examined objectively with a view to establishing whether viable, sensible schemes could be arrived at in these areas.

My hon. Friend the Member for South Angus was concerned essentially about the impact of this large-scale public expenditure on our national accounts. I think that what he, with a number of other hon. Friends, wants above all else is to feel that the project is under control and that this House will from time to time be able to examine the expenditure pattern and to make judgments upon it. I can give him reassurance. Clause 12(1) requires the Maplin Development Authority … carrying out proposals involving substantial outlay to act on lines settled from time to time with the approval of the Secretary of State My right hon. Friend has the power to require the development authority to frame and carry out proposals on lines which he would approve. If my hon. Friend looks at Clause 12(5) he will see the explicit power that: the Secretary of State may, with the approval of the Treasury and after consultation with the Authority, direct the Authority to pay to the Secretary of State the whole or part of any sums for the time being standing to the credit of any reserves If he looks further he will see, in Clause 15, arrangements for the Authority to keep proper accounts. My hon. Friend the Member for Kensington, South will be interested to see at the end of that clause a requirement that each year the Secretary of State shall get from the Authority a full statement of its accounts. He has to send this to the Comptroller and Auditor General not later than the end of November and the Comptroller must examine, certify and report on the account and lay copies of it and his report on it before Parliament.

Mr. Bruce-Gardyne

Can my hon. Friend, now or later, give some indication about the phasing of this expenditure? It is particularly important that we do not commit to much of the expenditure in the period up to 1976–77, when we already know that we are overcommitted.

Mr. Griffiths

I appreciate the point. I cannot give a firm assurance because the main job is to get on with things, reclaim the land and make sure that the airport is ready when needed. The use of funds will depend on the technical arrangments, building and construction. It is no more than an educated guess but I would say that it is unlikely that a very large spend would be built up before 1974–75, rising beyond that in the period from about 1976–78. It will be at its highest then, I imagine. This is covered in Clause 10. It is a point which the Standing Committee will wish to examine.

Sir B. Rhys Williams

I thank my hon. Friend for his helpful statement but I am still in doubt about one matter and that is what power Parliament may have to exercise control over the supporting of schemes for projects such as new towns, roads and so on.

Mr. Griffiths

My hon. Friend will excuse me if I point out that such things are not included in the Bill. I give an assurance about the new town that it is the intention of my right hon. Friend to designate it under new town legislation. The normal planning procedures, public inquiries and so on, will arise. The same broad principle applies to the roads and railways. There is no difference in what is happening at Maplin from what would happen if we were to build elsewhere. The principle of parliamentary accountability remains.

12 midnight.

Mr. Frederick Mulley (Sheffield, Park)

One of the most unsatisfactory parts of the Bill is the open-ended Money Resolution. We sought to persuade the House to take this into consideration before deciding to give the Bill a Second Reading. I am bound to say to hon. Members on the Government benches who have criticised the financial implications that it is no use voting for Second Reading and giving the Government a blank cheque and coming along later and complaining. Equally, it is not much use having a debate and complaining about public expenditure one day and then allowing this Bill to go through without even the investigation and consideration that a Private Bill Committee would give.

Although the Minister has mentioned a number of figures, there is not one figure on the Order Paper. In the Money Resolution we are authorising any sums necessary out of the National Loans Fund and the issue of any sums required out of the Consolidated Fund. It is an open-ended Money Resolution. As I see it, the Goverment are also asking for powers for the Treasury to write off any of those sums in the future if it so desires.

It is an extremely wide Money Resolution. I shall not seek to divide the House against it. Hon. Members who voted for the Second Reading must face the consequences later, when I have no doubt that recriminations as to the slice of public expenditure this project will take will come week after week and month after month in the years to come. What those who supported the Second Reading have done is to pre-empt, not only for the present Government but for successive Governments for 15 or 20 years, a very large sum indeed for a particular part of the country for a particular purpose, when there is at least a very substantial body of opinion—to put it no higher—that thinks that this is a very unwise use of scarce resources.

Question put and agreed to.

Resolved, That, for the purposes of any Act of the present Session to provide for the reclamation from the sea of certain land for the purpose of the establishment of an airport and a seaport in south-east Essex, it is expedient to authorise—

  1. (a) the issue out of the National Loans Fund of any sums necessary to enable the Secretary of State to make loans to the Authority established by that Act;
  2. (b) the issue out of the Consolidated Fund of any sums required for fulfilling any guarantee given by the Treasury in respect of sums borrowed by the Authority; and
  3. (c) the payment of any sums into the Consolidated Fund or the National Loans Fund.