Extension of Borrowing Powers of Certain Statutory Corporations

Part of Orders of the Day — Statutory Corporations (Financial Provisions) Bill – in the House of Commons at 12:00 am on 21st January 1974.

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Photo of Mr John Golding Mr John Golding , Newcastle-under-Lyme 12:00 am, 21st January 1974

The preceding contribution was important although it failed to take into account very many issues that the clause presents. The issue has been tackled so far, particularly by my hon. Friend the Member for Heywood and Royton (Mr. Joel Barnett), from the standpoint of its financial implications for the economy.

The Government can be accused over the last couple of years of using the nationalised industries as a method of backdoor borrowing from other countries. In this respect, of course, the arguments that have been presented are very important. It would have been more straightforward of the Government to have stated clearly and loudly what was being borrowed abroad by the nationalised industries.

The hon. Member for Hornchurch (Mr. Loveridge) asked for a statement of account. This has appeared. I asked the Minister to list the borrowings by the nationalised industries and others from international sources over the last two or three years. If the hon. Member cares to look it up, a full answer will be given to him.

I cannot see how, with the present reported massive balance of payments deficit, we can do anything else than borrow from abroad. Having got into the terrible mess that we are now in, if we are to avoid massive unemployment and a substantial reduction in the standard of living of our working people, I cannot see how we shall ever be able to do it without borrowing from abroad. It is then for the financial wizards to consider methods by which this borrowing should be done. It may well be that it would be better for it to be done through the Treasury—although, because of arguments which are adduced at present, I wonder whether that is so. But whatever method is used, we have to accept that the present Government will go heavily into debt because of the balance of payments crisis which they themselves have created. That debt can be only international debt, and this is something we shall have to face.

The development of the crisis has put into perspective our arguments on this Bill on Second Reading and in Committee. This borrowing has to be done—and this is where I differ from my hon. Friend the Member for Heywood and Royton (Mr. Joel Barnett)—taking into account not only the interest of the economy but also the interests of the nationalised industries. My hon. Friend's contribution showed that he is, albeit a shadow Minster, very much a Treasury man. His arguments concentrate on issues of monetary management rather than on whether they take into account the interests of the nationalised industries.

We have not so far in this discussion mentioned Clause 4(1)(b) which says that the bodies corporate set out in the first column of Schedule 2 will be able to borrow money in sterling from the Commission of the European Communities and from the European Investment Bank. I should like the Minister to say something about the reason for this provision and why we should go to the Commission and to the European Investment Bank for loans in sterling. We see from Schedule 2 that the provision applies to the transport industry, the Railways Board, the Electricity Council, the British Gas Corporation, the Post Office, the British Airports Authority, the British Overseas Airways Corporation, the Civil Aviation Authority, the British Steel Corporation, the Covent Garden Market Authority and the Maplin Development Authority.

The answer must lie in the fact that there must be a European concern for the development of a European infrastructure—a feeling that it is important for the development of Europe that transport, the steel industry, the energy industry and the telecommunications industry should be developed. I believe this to be a fundamental reason why the European Investment Bank should wish to lend money to develop projects essential to the infrastructure. I do not want the Government to deny the nationalised industries the right to go to those European bodies for funds. It could be one of the benefits of the Community that it opened up a fresh source of capital for our nationalised industries.

Our people see the very many disadvantages of belonging to the Community, and it would be very desirable if they were to see some tangible proof that membership of the Community was leading in some way to industrial development. That is why I say that Clause 4(1)(b) is very important and one about which the Minister should tell us. I should like to know what money has been borrowed already in sterling from the Commission and how much, if any, from this European Investment Bank.

I put my name to the amendment because I thought that it was the wish of my hon. Friends to probe the intentions of the Government in this connection. I said just now that I thought that my hon. Friend the Member for Heywood and Royton had spoken with a shadow Treasury brief. I speak as one who is interested in the welfare of the nationalised industries and, however much my hon. Friend may smile, I consider it very important to speak in their favour.