§ 5.20 p.m.
§ Order of the Day for the Second Reading read.
My Lords, this is a financial Bill with five separate unrelated proposals in it. Clause 1 sets out a new permanent limit to the Civil Contingencies Fund. At present the permanent capital of that fund is £1. million and it is supplemented by £125 million of drawing power on the Consolidated Fund, which is renewed every year in the Expiry Laws Continuance Act. Instead of this annual Bill supplementing the permanent capital, we now propose that there should be permanent drawing powers of £.73. million, with a, power to reduce hat amount at any time by Treasury order. The peak of drawing powers, £250 million, was reached in 1946; it was reduced to £125 million in 1950, and the decline to £73. million to-day marks the decline in Government trading. We still have the agricultural guarantees to deal with, and the uncertainty of their cost still makes it necessary to have this sum available for the Civil Contingencies Fund. Of course, nothing can be charged to this Fund permanently; an Estimate and a Vote must be provided in due course. That is the first subject. Clause 2 enables the Treasury to lend money out of the Consolidated Fund to the Minister of Agriculture, to lend to the Potato Marketing Board. In the past the Ministry itself traded in potatoes and the fund came out of their trading Vote. The Potato Marketing Board are not traders in the same sense, but they must have money to make advances to growers and to buy surpluses where required to do so. It is considered better practice that this working capital should be loaned to them, and that any losses they make should be carried on a Vote, rather than that the total of advances of working capital should be carried on a Vote itself. The £30 million involved is considered enough to provide working capital to the Board in a year of great unfavourableness to the Board.
862 Subject number 3, in Clause 3, is to increase from £15 million to £30 million the amount that may be advanced from the Consolidated Fund to finance the Northern Ireland Government Loans Fund, out of which are made advances to local authorities in Northern Ireland for capital projects such as housing, and so on. It is generally accepted that the rate of interest on these advances in Northern Ireland should be the same as in corresponding cases in Great Britain. It happens that the Government of Northern Ireland cannot at present borrow at rates which would enable them to make advances at such a parity. We therefore propose to extend to Northern Ireland the benefit of money from the Consolidated Fund to the extent of a further £15 million, and we hope that this sum, plus their local resources, will carry their local loans fund for another four years. Then we come to Clause 4, which winds up the Road Fund and provides that all moneys formerly paid out of the Road Fund shall, in future, be paid directly out of money voted by Parliament. Not since April 1, 1937, have certain specific revenues been hypothecated to the Road Fund. This clause really formalises what has long been the working practice.
Clause 5 deals with the arrangements at the Bank of England and the National Debt Office for dealing with unclaimed Government stocks and dividends. We seek powers to introduce modern and simpler methods which will save labour. The actual proposals are somewhat technical, and I do not propose to outline them to your Lordships unless I am asked. I can assure your Lordships that the procedure for making claims is precisely the same as at present, and that claims established by bona fide holders will never be refused, however old they may be. These new arrangements will not apply to stock held on the Dublin Register of the Bank of Ireland. Those are five entirely unrelated and, I hope, uncontroversial subjects, and I trust that your Lordships will give this Bill a Second Reading. I beg to move.
§ Moved, That the Bill be now read 2a.—(Lord Hawke.)
§ 5.25 p.m.
§ LORD LUCAS OF CERLWORTH
My Lords, I rise only to comment on one of these clauses and to ask Her Majesty's 863 Government one question. The noble Lord has read the last rites and, I suppose, has given a decent burial to the poor wretched corpse known as the Road Fund, which has been kicked about the mortuary, as the noble Lord has said, since 1937. I have often heard it stated as a fact that the dead turn in their graves. I do not know whether that is so, but if they do, I feel certain that the dead body of the originator of the Road Fund in 1909, one Lloyd George, has turned over this afternoon. I am not going to resurrect the past, because no useful purpose would be served. Every successive Government in this country, of every political colour, must bear a share of the blame. I am not going to add up how many thousands of millions of pounds have been collected from the road users of this country to provide roads for British traffic to travel upon, but I will say this quite definitely: that I should think every Government, when they see the state of the roads in this country to-day, must hang their heads in shame, because we have now reached a stage of paying £475 million per annum into the General Exchequer. As I have said, no useful purpose is served by bringing up that matter to-day, but I want to ask the noble Lord this question. The Road Fund is now dead, so that the cost of all extensions of our roads, and also of their maintenance and upkeep, will be dependent on a yearly grant from the Exchequer.
Is the noble Lord referring to the Vote by Parliament to Her Majesty's Government for those purposes?
§ LORD LUCAS OF CHILWORTH
Yes; and it comes at the whim of the Treasury. The noble Lord might not like my language, but I am nearer the truth—in other words, what we spend on the roads in this country is decided by the Chancellor of the Exchequer, who has been able to pull the wool over the eyes of Parliament all these years. And I have not the slightest doubt that succeeding Chancellors of the Exchequer, of whatever Party, will proceed to do precisely the same.
I want to ask the noble Lord this question. How is the £147 million project, which was brought in with such a flourish of trumpets by the present Minister of 864 Transport—that at last we had a road plan—to be financed, if it is to be subjected to a yearly dole from the Chancellor of the Exchequer? What guarantee can the noble Lord give on behalf of Her Majesty's Government that the present road scheme will not go the same way as all the other road schemes: Chamberlain had one; Barnes had one, and now Boyd-Carpenter has one. The first two have gone at the whim of a Chancellor. What guarantee has the country that next year or the year after, at the first sign of an east wind—because we shall have east winds; we have had them in the past, and we shall have them in the future—the first thing to be sacrificed will not be the roads of this country? What guarantee will the noble Lord give me? What plans have the Government made to safeguard that position? I have heard a good deal about taking the authority for roads out of the hands of the Ministry of Transport, putting it into a national road authority and raising the money by public loan to get it out of the clutches of the Chancellor of the Exchequer. I have never been a greater supporter of those schemes. In fact, I have been a critic, because I could not conceive of any scheme that would prevent an impecunious Chancellor of the Exchequer from getting his clutches on the money. But I am becoming more converted to the idea that we must take the construction of the nation's roads out of the hands of the Ministry of Transport and have a national road authority. I do not know whether we should be jumping out of the frying pan into the fire; but the frying pan is hot, and the fire could not be much hotter.
I am not going to develop this subject this afternoon, because I do not expect an answer from the noble Lord, but I shall return to it next week when the noble Earl, Lord Howe, has a comprehensive Motion on the Order Paper to bring up the whole question of roads in this country. I always like to be fair to the Government. I have tried to give them notice of my questions, but I have never yet succeeded in getting an answer. However, "Hope springs eternal in the human breast," and I am now giving them a week to find an answer to my question: what assurances can they give this country that the present road expansion scheme will not go the same way as all the others—because there is not a Road Fund or some 865 guarantee that the money will be forthcoming? That is the only point I have to make. I am not going into this matter in detail, though other noble Lords might like to do so. I am only saying that we must all regret the years that the locusts have eaten, and I hope that the Government will be able to find some better method of financing the roads in the future.
§ 5.33 p.m.
§ LORD DERWENT
My Lords, I disagree with only one word said by the noble Lord, Lord Lucas of Chilworth, and that was when he said that it serves no useful purpose going into the past. Next week I, too, hope to speak on the Motion of my noble friend Lord Howe, also on the question of financing road construction. If your Lordships will bear with me for a few minutes, I should like to point out how the methods of Government finance of road construction in times past have failed in every case except one. That one case is the Road Fund which, as your Lordships know, has been unconscious for eighteen years and which we are now finally to be asked to knock on the head and then bury.
This Road Fund was produced by Mr. Lloyd George in 1909, when Chancellor of the Exchequer He took the long-sighted view that the internal combustion engine had arrived, would increase, and would need special roads. He also took the view that as the expense of dealing with these special roads would help a special part of the community, he would put a special tax or special taxes on that special part of the community. This is what he said in his Budget:The brunt of the expense must be borne by motorists, and to do them justice they are willing, and even anxious, to subscribe handsomely towards such a purpose, so long as a guarantee is given in the method and control of the expenditure that the funds so raised will not merely be devoted exclusively to the improvement of the roads, but that they will be well and wisely spent for that end.…Those words could be said to-day. Road users are quite prepared to be taxed specially, as long as the tax raised provides them with the roads they need. In that same Budget debate, Mr. Austen Chamberlain, as he then was, leading the Conservative Opposition, said this:If it—the new petrol tax—is going to the support of the roads, we think it a very fair proposition; if it is intended to take it for the general revenue we shall oppose it.866 So the leaders of both the main Parties at that time in the House of Commons felt that it was a fund to be raised by special taxation, levied on a special section of the population, and to be used for special purposes—the very far-sighted Road Fund.
All went well until 1926, when Mr. Winston Churchill, as he then was, was Chancellor of the Exchequer. Sir Winston has been widely blamed, and quite wrongly, for being responsible for the break-up of the Road Fund. If Sir Winston's policy at that time had been carried on up to now, we should have had adequate roads. What was happening at that time was this. Road taxes were averaging £18 million a year. We were spending on roads £18 million a year. But Sir Winston saw that with the increase of motor vehicles, more taxation would be coming in than could be spent in any one year, so that the taxation raised would always be ahead of what could be spent. Therefore he took the view that it was quite proper to allot to the Road Fund two-thirds of that taxation, the remaining one-third going to general revenue.
§ LORD CALVERLEY
I do not like interrupting the noble Lord, but could he tell the House the actual words of the Chancellor of the Exchequer?
§ LORD CALVERLEY
Will the noble Lord give way while I tell him? He said: "I have got to raid some hen roost, and I am going to take what I need from the Road Fund." Every politician since has been either a robber or a burglar.
§ LORD DERWENT
What he went on to say—I am paraphrasing—was that if the Road Fund was established on that basis, there would in the future be adequate funds to provide the roads that were essential for the increasing amount of road vehicles. He forgot, I think, that he was not going to be Chancellor of the Exchequer for ever, because ten years later, in 1936, Mr. Neville Chamberlain, w ho knew perfectly well that this Fund had been raised for a special purpose, 867 levied on a special class of the community, and was a special Fund distinct from other funds, not only took £5- million which was standing at that time to the credit of the Fund, but also said that in future no taxation would go into that Fund and that any money that was needed would be voted year by year by Parliament.
§ LORD DERWENT
From that day to this, there have never been sufficient funds, not only for new construction, but for keeping the roads in order. At that time, in 1936, certain members of the Party of the noble Lords opposite opposed this move very strongly. Of the members of the Labour Party who spoke on that occasion, I think the one who summed up the situation best was Mr. Chuter Ede, who said:How could five-year programmes be submitted when road authorities were dependent on an annual statement in the Budget? Would there be any guarantee in the future that long-term programmes would be carried out?That is the position of road finance today. I am quite certain that noble Lords opposite, or rather members of the Party of noble Lords opposite, when they came to power were still of the same opinion. But what has defeated them is the method of finance by annual budgeting. That has made it impossible to provide adequate funds in advance for what is a commercial construction.
In February of this year a slight improvement in road construction was announced, an increase of funds: but what did we have? How can a Chancellor of the Exchequer say what he is going to have in advance? He said that he hoped—using that word which everyone connected with roads dreads, "hope"—that during the next four years he would be able to authorise £147 million expenditure, but of course that was not what he was going to spend in the next four years. He hoped (again "hoped") that he would be spending in the next four years OM million. He does not know; he cannot know. The money is not yet there for him. What does this hoping to authorise £147 million expenditure and hoping to spend £97- million amount to? If in the four years before the war the same work had been carried out at to-day's 868 cost, it would have cost £180 million—more than the Minister hopes to authorise now and almost twice as much as he expects to spend. We have argued this subject time and again but it is quite impossible to provide funds for long-term financing of road construction by annual budgeting. Your Lordships to-day are going to be asked to kill and bury the Road Fund, the only form of Government financing we have seen in this country which has held out any hope whatsoever of getting adequate roads. Surely, before your Lordships agree to that, we are entitled to ask Her Majesty's Government to tell us what form of financing they are going to use. The present form of financing has failed in the past, is failing to-day and will most certainly fail in the future.
§ 5.43 p.m.
My Lords, noble Lords have delved back into the past. My noble friend behind me has sought comfort in the financial policy of the late Mr. Lloyd George, but I also can draw lessons from the past. The lesson that I draw from the past is how right the Treasury are in their great prejudice against ever having specific revenues earmarked against specific expenditure. How well the debate to-day shows the great difficulties in which one lands oneself if one does! The noble Lord, Lord Lucas of Chilworth, has asked me certain specific questions, one of which is. I think, relevant to the Bill which we are discussing: that is, how money will be produced for the financing of the roads if the Road Fund is abolished. The answer, simply, at the moment is that the Road Fund has become a species of banking account into which the Ministry's Vote is paid and out of which the Ministry pays for roads. By abolishing the Road Fund we are merely reducing the number of banking accounts operated by the Ministry. It will not make the slightest difference to the amount of money provided, how the money is provided or when the money is provided. I feel sure that the wider questions will be dealt with in our debate on roads next week; I am afraid that it would be quite impossible for me to attempt to answer them on a small financial Bill to-day.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.