HC Deb 25 May 1976 vol 912 cc387-93

9.13 p.m.

Mr. Ian Gow (Eastbourne)

I beg to Move, That leave be given to bring in a Bill to ensure effective parliamentary control of Government borrowing. There is widespread concern inside and outside Parliament about the extent to which the Executive is no longer subject to effective parliamentary control. Nowhere is this dangerous trend more obvious, and nowhere more welcomed by the Government, than in the Treasury.

Section 12 of the National Loans Act 1968 provides that the Government may borrow any money that they require in such manner and on such terms and conditions as the Treasury think fit and without the approval of this House. Subsection (3) goes on to state in the clearest terms: For the avoidance of doubt it is hereby declared that the power to raise money under this section extends to raising money either within or outside the United Kingdom and either in sterling or any other currency or medium or exchange, whether national or international. Effective parliamentary control over the Treasury, with its star-studded cast of faceless double firsts—and with Lord Kaldor, as special adviser to the Chancellor of the Exchequer—is desirable at all times. But the case for the House to have control over Government borrowing has never been stronger than it is today.

Between 31st March 1966 and 31st March 1976 the total public sector debt rose from £38,000 million to £70,000 million. In those 10 years, therefore, public sector debt virtually doubled—an increase of £32,000 million in that decade. In the 10 preceding years, from 1956 to 1966, by contrast, public sector debt had risen by only £6,000 million. The figure for interest on the public sector debt increased from £1,592 million in 196667 to an estimated £6,200 million in the current year.

Even if that estimate turns out to be right—and all the signs are that the figure is too modest—the amount of interest on Government debt will have almost quadrupled in 10 years, while the amount of the debt itself has nearly doubled. The Chancellor of the Exchequer told the House during his Budget Statement on 6th April that he was proposing this year to borrow £12,000 million.

Mr. Giles Shaw (Pudsey)

Too much.

Mr. Gow

My hon. Friend may well say "Too much". That is £1,000 million a month, £250 million a week, £35 million a day, £1⅓ million an hour, £22,831 a minute, and £381 a second. That is what the Government are borrowing, and all this without so much as an affirmative resolution from the House.

If this Bill were to become law, the Government would have to come back to the House for authority to borrow for each tranche of £500 million, in the same way that parliamentary approval is required for the borrowing by the nationalised industries, or for money for the National Enterprise Board.

In his rather discreditable letter to the Chairman of the International Monetary Fund on 18th December last, the Chancellor of the Exchequer wrote as follows: An essential element of the Government's economic strategy will be a continuing and substantial reduction in the public sector borrowing requirement. Alas, events have falsified those brave words. On the contrary, even since December of last year the Government have been proposing to borrow even more.

In his ministerial broadcast on the same day that he was appointed Prime Minister, on 5th April the Prime Minister, speaking as First Lord of the Treasury as well as Prime Minister, said: We are still not earning the standard of living we are enjoying. We are only keeping up the standards by borrowing, and this cannot go on indefinitely. The tragedy is that, despite the promises of the Chancellor of the Exchequer and of the Prime Minister, the borrowing goes on—and it goes on without the consent of Parliament.

This escalating burden of Government debt is the prime cause of the continuing decline in the exernal value of our currency. No amount of talk by the Chancellor of the Exchequer about an economic miracle, no so-called deal between the Government and the unions, no anodyne statements from the TUC-Labour Party Liaison Committee, will result in a revival of foreign confidence in sterling. An essential prerequisite of that revival is a dramatic reduction in Government expenditure, a return to a balanced Budget and an end to living on tick.

This Bill has a twin purpose. It is to re-asssert the supremacy of the House of Commons over borrowing by the Treasury, and it is an attempt to halt the disastrous slide towards national bankruptcy which borrowing on this scale inevitably involves.

9.20 p.m.

Mr. Ron Thomas (Bristol, North West)

I rise to oppose the Bill. The speech of the hon. Member for Eastbourne (Mr. Gow) reminded me very much of the speeches of either Pitt or Gladstone—on reflection, pre-Gladstone—and it would have been relevant in the age in which, we understand, they used to count up the ends of the candles before the Chancellor went home in the evening.

The terms of the words on the Order Paper talking about "effective parliamentary control" are really a cloak to attack the level of the public sector borrowing requirement and, behind that, I suspect, to attack the level of public expenditure. That is what the Bill is all about, so let us be quite clear. Indeed, the hon. Member spent most of his time talking about the PSBR. He suggested that the level of the PSBR was responsible for the recent speculation against sterling. Yet a number of our competitor countries have a similar level of PSBR as a proportion of their national income and they are not subject to such speculation against their currencies. I suggest that hon. Members should check the currencies of the United States, West Germany and one or two other countries.

Secondly, there was no mention of the fact that a considerable proportion of public expenditure goes on capital investment in the publicly owned industries. Almost half of the gross domestic capital formation is in the public sector. When Imperial Chemical Industries decides that it wants to borrow £200 million for new capital investment, Opposition Members all cheer. However, if we borrow £200 million, or whatever, to meet the capital investment requirements of the publicly owned industries, they say that that is all wrong.

Furthermore, the hon. Gentleman did not mention the indefensible capitalist system in which we live, in which we are paying out between £3,000 million and £4,000 million to keep 1½ million people unemployed. That is a very important chunk of the PSBR. When the hon. Gentleman spoke of the PSBR he forgot to mention, of course, the interest on it. That argument has also been used by the Opposition Front Bench. But we know that a great deal of the interest payable on the PSBR comes back in taxation of one kind or another—and some of us think that it should be a lot more.

The Bill, therefore, is an attack on the PSBR and on public expenditure. What Opposition Members want to do is to cut back public expenditure, to increase unemployment, and to cut the social wage—we know that that is about the only thing that unites the Tory Party on these occasions—but of course, they want to spend more on defence.

Labour Members oppose the Bill.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business):—

The House divided: Ayes 172, Noes. 191.

Division No. 154.] AYES [9.24 p.m.
Adley, Robert Hayhoe, Barney Pattie, Geoffrey
Aitken, Jonathan Heseltine, Michael Penhaligon, David
Arnold, Tom Hicks, Robert Peyton, Rt Hon John
Atkins, Rt Hon H. (Spelthorne) Holland, Philip Pink, R. Bonner
Bain, Mrs Margaret Hooson, Emlyn Price, David (Eastleigh)
Beith, A. J. Howell, David (Guildford) Pym, Rt Hon Francis
Bennett, Dr Reginald (Fareham) Howells, Geraint (Cardigan) Raison, Timothy
Benyon, W. Hunt, David (Wirral) Reid, George
Berry, Hon Anthony Hunt, John Renton, Tim (Mid-Sussex)
Biffen, John Hutchison, Michael Clark Ridsdale, Julian
Biggs-Davison, John James, David Rippon, Rt Hon Geoffrey
Boscawen, Hon Robert Johnson Smith, G. (E Grinstead) Roberts, Michael (Cardiff NW)
Boyson, Or Rhodes (Brent) Jopling, Michael Roberts, Wyn (Conway)
Bradford, Rev Robert Joseph, Rt Hon Sir Keith Ross, Stephen (Isle of Wight)
Brotherton, Michael Kilfedder, James Ross, William (Londonderry)
Bryan, Sir Paul King, Evelyn (South Dorset) Rossi, Hugh (Hornsey)
Buchanan-Smith, Alick King, Tom (Bridgwater) Scott, Nicholas
Bulmer, Esmond Kitson, Sir Timothy Shaw, Giles (Pudsey)
Butler, Adam (Bosworth) Latham, Michael (Melton) Shepherd, Colin
Carlisle, Mark Lawrence, Ivan Silvester, Fred
Carson, John Lawson, Nigel Sims, Roger
Chalker, Mrs Lynda Le Marchant, Spencer Sinclair, Sir George
Churchill, W. S. Lester, Jim (Beeston) Skeet, T. H. H.
Clark, Alan (Plymouth, Sutton) Lewis, Kenneth (Rutland) Smith, Cyril (Rochdale)
Cooke, Robert (Bristol W) Lloyd, Ian Smith, Dudley (Warwick)
Cope, John MacCormick, Iain Speed, Keith
Cormack, Patrick McCusker, H. Spence, John
Corrie, John Macfarlane, Neil Spicer, Michael (S Worcester)
Crawford, Douglas MacGregor, John Sproat, Iain
Dean, Paul (N Somerset) McNair-Wilson, M. (Newbury) Stainton, Keith
du Cann, Rt Hon Edward Marshall, Michael (Arundel) Stan brook, Ivor
Dunlop, John Marten, Neil Steel, David (Roxburgh)
Edwards, Nicholas (Pembroke) Maude, Angus Steen, Anthony (Wavertree)
Elliott, Sir William Mawby, Ray Stewart, Donald (Western Isles)
Emery, Peter Meyer, Sir Anthony Stradling Thomas, J.
Evans, Gwynfor (Carmarthen) Miller, Hal (Bromsgrove) Tapsell, Peter
Eyre, Reginald Mills, Peter Taylor, Teddy (Cathcart)
Fairgrieve, Russell Miscampbell, Norman Tebbit, Norman
Farr, John Mitchell, David (Basingstoke) Thatcher, Rt Hon Margaret
Fell, Anthony Molyneaux, James Thomas, Dafydd (Merioneth)
Fookes, Miss Janet Monro, Hector Thomas, Rt Hon P. (Hendon S)
Forman, Nigel Montgomery, Fergus Thompson, George
Fowler, Norman (Sutton C'f'd) Moore, John (Croydon C) Trotter, Neville
Fox, Marcus Morgan, Geraint van Straubenzee, W. R.
Freud, Clement Morgan-Giles, Rear-Admiral Walder, David (Clitheroe)
Fry, Peter Morris, Michael (Northampton S) Wall, Patrick
Gardiner, George (Reigate) Morrison, Charles (Devizes) Warren, Kenneth
Gardner, Edward (S Fylde) Morrison, Hon Peter (Chester) Watt, Hamish
Gilmour, Sir John (East Fife) Mudd, David Weatherill, Bernard
Godber, Rt Hon Joseph Neave, Airey Welsh, Andrew
Goodhew, Victor Nelson, Anthony Wigley, Dafydd
Gorst, John Neubert, Michael Wilson, Gordon (Dundee E)
Gower, Sir Raymond (Barry) Newton, Tony Young, Sir G. (Ealing, Acton)
Grant, Anthony (Harrow C) Nott, John Younger, Hon George
Gray, Hamish Onslow, Cranley
Grimond, Rt Hon J. Page, Rt Hon R. Graham (Crosby) TELLERS FOR THE AYES:
Grylls, Michael Paisley, Rev Ian Mr. Ian Gow and
Hall, Sir John Pardoe, John Mr.Nicholas Ridley
Harvie Anderson, Rt Hon Miss Parkinson, Cecil
Abse, Leo Bottomley, Rt Hon Arthur Conlan, Bernard
Armstrong, Ernest Boyden, James (Bish Auck) Cook, Robin F. (Edin C)
Ashton, Joe Bradley, Tom Cronin, John
Atkins, Ronald (Preston N) Brown, Hugh D. (Provan) Crosland, Rt Hon Anthony
Atkinson, Norman Brown, Robert C. (Newcastle W) Cryer, Bob
Barnett, Guy (Greenwich) Buchan, Norman Cunningham, Dr J. (Whiteh)
Barnett, Rt Hon Joel (Heywood) Callaghan, Rt Hon J. (Cardiff SE) Davies, Bryan (Enfield N)
Bates, Alf Campbell, Ian Davies, Ifor (Gower)
Benn, Rt Hon Anthony Wedgwood Carmichael, Neil Davis, Clinton (Hackney C)
Bennett, Andrew (Stockport N) Cartwright, John Deakins, Eric
Bidwell, Sydney Clemitson, Ivor Dempsey, James
Blenkinsop, Arthur Cocks, Michael (Bristol S) Doig, Peter
Boardman, H. Cohen, Stanley Dormand, J. D.
Booth, Rt Hon Albert Coleman, Donald Douglas-Mann, Bruce
Duffy, A. E. P. Jones, Dan (Burnley) Rodgers, George (Chorley)
Edge, Geoff Kerr, Russell Rooker, J. W.
Ellis, John (Brigg & Scun) Kilroy-Silk, Robert Roper, John
Ennals, David Lambie, David Rose, Paul B.
Evans, Fred (Caerphilly) Lamborn, Harry Ross, Rt Hon W. (Kilmarnock)
Evans, Ioan (Aberdare) Lamond, James Rowlands, Ted
Ewing Harry (Stirling) Lewis, Ron (Carlisle) Sandelson, Neville
Faulds, Andrew Litterick, Tom Selby, Harry
Fernyhough, Rt Hon E. Loyden, Eddie Sheldon, Robert (Ashton-u-Lyne)
Fitch, Alan (Wigan) Luard, Evan Shore, Rt Hon Peter
Flannery, Martin Lyons, Edward (Bradford W) Short, Mrs Renée (Wolv NE)
Fletcher, Raymond (Ilkeston) Mabon, Dr J. Dickson Silkin, Rt Hon S. C. (Dulwich)
Fletcher, Ted (Darlington) McCartney, Hugh Skinner, Dennis
Foot, Rt Hon Michael McElhone, Frank Small, William
Fowler, Gerald (The Wrekin) MacFarquhar, Roderick Smith, John (N Lanarkshire)
Freeson, Reginald McGuire, Michael (Ince) Snape, Peter
Garrett, John (Norwich S) Mackenzie, Gregor Spriggs, Leslie
George, Bruce Mackintosh, John P. Stallard, A. W.
Ginsburg, David Maclennan, Robert Stoddart, David
Golding, John McMillan, Tom (Glasgow C) Stott, Roger
Gould, Bryan McNamara, Kevin Strang, Gavin
Gourlay, Harry Madden, Max Summerskill, Hon Dr Shirley
Marshall, Jim (Leicester S) Taylor, Mrs Ann (Bolton W)
Graham, Ted Maynard, Miss Joan Thomas, Jeffrey (Abertillery)
Grant, George (Morpeth) Mikardo, Ian Thomas, Ron (Bristol NW)
Grant, John (Islington C) Moonman, Eric Tierney, Sydney
Grocott, Bruce Moyle, Roland Tinn, James
Hamilton, James (Bothwell) Mulley, Rt Hon Frederick Tomney, Frank
Hardy, Peter Murray, Rt Hon Ronald King Urwin, T. W.
Harper, Joseph Newens, Stanley Varley, Rt Hon Eric G.
Harrison, Walter (Wakefield) Noble, Mike Wainwright, Edwin (Dearne V)
Hart, Rt Hon Judith Oakes, Gordon Walden, Brian (B'ham, L'dyw'd)
Hatton, Frank O'Halloran, Michael Walker, Harold (Doncaster)
Heffer, Eric S. Orbach, Maurice Walker, Terry (Kingswood)
Hooley, Frank Ovenden, John Weetch, Ken
Howell, Rt Hon Denis Owen, Dr David Weitzman, David
Hoyle, Doug (Nelson) Padley, Walter Wellbeloved, James
Huckfield, Les Palmer, Arthur White, Frank R. (Bury)
Hughes, Rt Hon C. (Anglesey) Park, George Whitlock, William
Hughes, Robert (Aberdeen N) Parker, John Willey, Rt Hon Frederick
Hunter, Adam Pavitt, Laurie Williams, Alan (Swansea W)
Irvine, Rt Hon Sir A. (Edge Hill) Peart, Rt Hon Fred Williams, Alan Lee (Hornch'ch)
Irving, Rt Hon S. (Dartford) Pendry, Tom Wilson, Alexander (Hamilton)
Jackson, Colin (Brighouse) Perry, Ernest Wilson, William (Coventry SE)
Jackson, Miss Margaret (Lincoln) Price, William (Rugby) Wise, Mrs Audrey
Janner, Greville Richardson, Miss Jo Woof, Robert
Jay, Rt Hon Douglas Roberts, Albert (Normanton) Wrigglesworth, Ian
Jenkins, Hugh (Putney) Roberts, Gwilvm (Cannock) Young, David (Bolton E)
John, Brynmor Robertson, John (Paisley) TELLERS FOR THE NOES:
Johnson, James (Hull West) Robinson, Geoffrey Mr. Dennis Canavan and Mr. Stan Thorne.
Jones, Barry (East Flint) Roderick, Caerwyn

Question accordingly negatived.