§ 4.16 p.m.
§ LORD BESWICK
My Lords, I beg to move the Second Reading of the Miscellaneous Financial Provisions Bill. This Bill has been carefully considered in another place, and your Lordships may think that there is not a great deal more that I can add to what is already known. Of course, if there are any particular questions I shall be glad to do what I can to answer them, either on this Second Reading or, as might be even more convenient, at the later Committee stage.
There are three clauses to the Bill. Clause I increases the maximum capital available to the Civil Contingencies Fund from £75 million to £125 million. Clause 2 makes provision for payments to the Governments of Northern Ireland and the Isle of Man out of revenues accruing to the United Kingdom Government under licences granted by the Minister for the exploration and the exploitation of oil resources in the United Kingdom's portion of the Continental Shelf. Clause 3 makes provision for the Industrial Reorganisation Corporation to borrow on the Eurocurrency market. It does not extend in total the borrowing powers of the Corporation, but it does make available to them facilities already enjoyed by certain other public corporations. It is held by Her Majesty's Government to be in the interests both of the I.R.C. and of the economy generally that these borrowing powers should be available. With that brief explanation of this very brief Bill, and with my repeated offer to try to answer questions either now or later, I hope your Lordships will now agree to this Second Reading. I beg to move.
§ Moved, That the Bill be now read 2ª.—(Lord Beswick.)44
§ 4.18 p.m.
§ LORD BROOKE OF CUMNOR
My Lords, this is the first occasion in your Lordships' House on which I have ventured to intervene on a Treasury subject. My only justification for doing so is that, in the capacity of Financial Secretary to the Treasury, I was responsible for introducing and piloting through another place the 1955 Bill that became the Act which is amended by Clause 1, the principal clause, of this Bill. My Bill was more miscellaneous and more comprehensive than this one, for it covered five wholly unrelated items, whereas this Bill covers only three. I say it was more comprehensive because, so far as I know, that Act for which I was responsible has survived unamended for 13 years. If my experience was any guide, a Miscellaneous Financial Provisions Bill gets into the legislative programme only when the Government of the day are not quite ready with more important Bills, and have Parliamentary time to fill up. No doubt this was why the Chief Secretary to the Treasury had the good luck to be able to introduce this Bill in another place a few weeks ago.
Following the probing undertaken in another place, I have no further questions to ask on Clauses 2 and 3, but I should like to dwell for a moment on Clause 1, which I think the noble Lord, Lord Beswick, will agree is the most important clause. The Civil Contingencies Fund enables the Government to produce money quickly for, broadly, two purposes: first, to meet unforseeable situations, such as grave flooding; and, secondly, to meet unforeseen situations, such as having under-estimated the expenditure likely to be incurred during the financial year on a particular service.
So far as I am aware, no one questions the need for adequate provision to meet the former, the unforseeable, situation; but it would make a mockery of Parliamentary control of finance if there were no effective limit to the amount available to the Government to meet situations that might have been foreseen but were not foreseen. I think, therefore, that I was acting on sound principle when in 1955 I was instrumental in reducing the top limit of the Civil Contingencies Fund from the rather extraordinary figure of £126½ million to £75 million, the amount at which it remains at the present time. 45 I recollect that the Party opposite then criticised me for not reducing the limit to much below £75 million. Now that they are in power they are proposing to restore the limit, broadly, to the higher figure front which we in 1955 reduced it. Now that I am in Opposition I am not proposing to ridicule their proposal of £125 million—which just shows the difference between responsible Opposition and irresponsible Opposition.
I think, however, that the Government should explain more clearly why they believe £125 million is the right figure now. Frankly, I was not able to follow the explanation given by the Chief Secretary in another place. We should all, I am sure. agree that with the altered value of money it is not unreasonable to suggest that some other maximum limit than £75 million should be fixed low. But what should that figure be? The Chief Secretary said in another place on November 8:In 1955 the Fund was fixed at £75 million. In 1963 we adopted as a regular procedure a further batch of Supplementary Estimates, and it is now right to consider what should be a comparable figure, having regard to the circumstance r. not only of 1955 but also of 1963. Hawing regard to the size of the expenditure and to the additional hatch of Supplementary Estimates, the figure would be about £140 million, but I want to err, as usual, on the cautious side, and I am suggesting a figure of £125 million, which I hope will be acceptable to the House."—[OFFICIAL REPORT, Commons, col. 1225]My Lords, I appreciate how the Chief Secretary reduced the theoretical figure of £140 million to an actual figure of £125 million, but I am unable to follow his arithmetic in deriving £140 million from £75 million. We all know that the size of Government expenditure has increased. The other consideration that he mentioned was the additional batch of Supplementary Estimates, now four a year instead of three a year. But having additional Supplementary Estimates each year surely lessens rather than increases the need for money in the Civil Contingencies Fund. Knowing the Treasury as I do, I have no doubt at all that this £140 million was reached by an accurate process of mathematical thought. I am merely suggesting that before this Bill leaves Parliamentary scrutiny, the mathematics of it should be explained. Possibly the noble Lord would prefer to do so on the Committee stage.
46 I know that that justification for the very existence of such a fund as the Civil Contingencies Fund has been called in question in the past. I accept, as all Governments have accepted, that it is desirable, indeed necessary, that a fund of this sort should exist. If noble Lords care to look at the accounts of the Civil Contingency Fund which are published each year they will see that in 1966–67 the sums advanced from the Fund ranged from an amount of some £12,798,000 to the Transport Boards down to an ex gratia payment of £436 to a voter injured at a polling station and on to an item described as "equipage expenses incurred by" my noble and learned friend, Lord Dilhorne. Equipage, according to the dictionary, meansa carriage with or without horses and the attendant servants".As my noble and learned friend received only £54, I doubt whether he was able to obtain the attendant servants, or even the horses, or even a carriage.
§ VISCOUNT DILHORNE
My Lords, the noble Lord can rest assured that I have never been able to secure a horse that could carry me at anything like that figure.
§ LORD BROOKE OF CUMNOR
My Lords, I appreciate that. I cannot help thinking that the term "equipage" must have been related to one of the alternative meanings of the word. I quoted it only to show how wide is the variety of circumstances for which a Civil Contingencies Fund is desirable. I would assure the noble Lord, Lord Beswick, that I have no desire to delay the passage of this Bill to the Statute Book.
§ 4.27 p.m.
§ LORD BESWICK
My Lords, I was a little surprised when the noble Lord started to tell us that this was his first intervention in a discussion on Treasury matters. It was not until later that I realised that what I had in mind were his very frequent interventions in another place. Then, when lie went on to say that he was going to deal with Clause 1, I had all the more reason to realise that his training in these matters came from when he was in a House which had rather more responsibility than do we for Supply matters. I had anticipated that I might have questions on Clause 3, 47 as I know there is a good deal of interest in the Euro-dollar and Eurocurrency; but I had not dreamt that I should be asked about Clause 1. However I will do my best to answer what the noble Lord has asked me about the case for the increase which is proposed and whether it will be enough.
The noble Lord gave us some uses of the Fund. Probably the most important nowadays is as a fund from which advances are drawn in anticipation of Parliament's willingness to pass Supplementary Estimates. It has to do this on a gross basis because savings on one Vote are not available to make up deficiencies on another, as the noble Lord, Lord Brooke, will know. Obviously, there is no way of telling in advance what will be required outside the scope of the Estimates that are submitted. But the potential call must clearly be related to the size of those Estimates. In the current year, Estimates totalled £8,700 million, rather more than three times as much as the proportion in 1955–56. On a simple arithmetical basis, that would require a Fund of the order of £225 million.
The introduction of Winter Supply as a regular basis in 1963–64 has taken pressure off the Fund in two ways. First, the cash it provides some six weeks or so earlier than the end of the March Consolidated Fund Act enables advances already made from the Fund to be repaid and the money turned over again if required. Secondly, it enables the Government to finance from Votes new expenditures which will arise in the last six weeks of the financial year, provided that these can be foreseen in the previous October, when the Winter Supplementary Estimates are prepared. It is difficult to quantify precisely the effect of these two factors, but when the present £75 million limit was fixed about 20 per cent. was used before the last quarter began, leaving some 80 per cent. for that quarter. On a similar basis now, a fund of £125 million may be expected to leave £100 million for the last quarter; but this now has only to last until the fund is replenished by repayments following the February Consolidated Fund Act. If, therefore, the calls on the Fund divide conveniently enough on either side of 48 that Act, a £125 million fund with Winter Supply may be said to be equivalent to £225 million without it. At best, therefore, the figure which we are now suggesting should be about right and comparable with the 1955 figure for which the noble Lord himself was responsible. I hope that goes some way to fill in the gaps in the noble Lord's knowledge and that we may now pass the Second Reading of this Bill.
§ On Question, Bill read 2ª, and committed to a Committee of the Whole House.