5 May, 1927.]

3973. But the House of Commons was not informed.-May I on that point of the House of Commons be allowed to make this quite clear. An honourable Member, I think it was Captain Wedgwood Benn, dissatisfied with the reply which he received from the Secretary of State on the subject, asked leave to move the adjournment of the House in order to consider the Parliamentary propriety of this transaction. If you remember, the Speaker intervened personally, and said he himself would look into the question. He afterwards asked the Secretary of State to furnish him with a note on the subject. We drew up a memorandum in communication with the Treasury, and sent it to the Speaker on the 12th July of last year. The Speaker acknowledged it, and we have heard nothing more; from which we have taken it for granted that he was satisfied there had been no Parliamentary impropriety.

Chairman.

3974. Would it be the case on that point, Sir John, and I think probably you know, that he would take the view that this was merely a Treasury practice in writing off a debt? Would that be the basis, do you think, of no further action on his part? I think so. (Mr. Phillips.) Yes, I think that is So. (Sir John Shuckburgh.) May I read a very brief paragraph of this memorandum which we sent to the Speaker?" In the opinion of the Treasury and the Colonial Office no Parliamentary authority is required for the action taken in promising to remit the debt. For many years past the Treasury has exercised the constitutional power of writing off in whole or in part without Parliamentary authority debts due to His Majesty's Government whether from foreign powers or from individuals."

Sir Robert Hamilton.

the

3975. Was not this in a little different position to the ordinary debt? The

[Continued.

actual property was handed over here?— Not at the time.

So

3976. But that was the basis of the transaction. We handed over this property which was valued, and then we agreed to forego the payment of the sum? -But may I put this point. What you call "this property " consisted of irrigation works, roads, bridges, posts and telegraphs, and that kind of thing. long as we were in military occupation of Iraq we were the Government and naturally ran these things; when we ceased to be in military occupation and the Iraq Government was set up in our place, they became the Government. The posts and telegraphs obviously passed from the outgoing Government to the incoming Government. They could hardly have done anything else.

3977. But they could pass for a consideration? They passed for a consideration, which was subsequently remitted. My point is that the passing of them was an absolutely natural and inevitable transaction. Nothing else could have been done in the circumstances. You could hardly have set up an Iraq Government, and kept a British telegraph office to run the telegraphs.

Chairman.

You

3978. May I try to trace the matter a little further. I gather, Mr Phillips, that you take the view that this does not fall within the Treasury rule about the £10,000 limit, or gifts of an exceptional character. It is outside that. This is, as I understand the argument, a Treasury transaction waiving the right, as many of us regard it, of the taxpayers in this country in this property. call it something in the nature of a war debt, and simply let a part of it go. But is it not the case with war debts that you present a statement to the House giving the details? Has any statement of that kind been presented in this case? (Sir John Shuckburgh.) There is one in preparation, but no statement has been presented.

3979. Is it not perfectly true to say, on this evidence, you have here had an alienation of property, whatever the circumstances may be, and Parliament has not been consulted in any shape or form, and to this day has not been informed?It has been informed by Question and

Answer in the House.

3980. But why should a Member on the floor of the House have to dig up a

5 May, 1927.]

[Continued.

by the Account.

matter of this kind, which, as we understand it round this table, should be reported under one or other of these heads to the House as affecting property belonging to the taxpayers of this country? What is the reply to that?-J think in writing to the Speaker we did mention the fact on the last page of our memorandum that we were preparing White Paper a on various changes in Iraq. This is what we said: "It is intended to lay before Parliament a White Paper on various changes in Iraq, which will result from the recent Treaty with Turkey, as soon as the details of that new arrangement have been settled. It is proposed to mention incidentally in the White Paper, among the other arrangements made, that the debt in respect of transferred assets ' has been written off with the approval of the Treasury." That has not yet been done.

3981. Nor does that seem to help us very much this afternoon. After all, if a thing like this is given away, or if there is a waiver or anything like that, is not the practice of the Treasury and cthers to present a statement to Parliament as nearly as possible to the date of the transaction? If this is put forward on the basis of a war debt settlement, papers dealing with war debts have followed almost immediately after settlement. Here all this time has passed, and no paper of any description has been presented. This paper with all these other details might not emerge for a very long time, by which date any review on our part is perfectly useless.-Perhaps it is rather out of my province to say what is or is not correct Parliamentary procedure. As I say, it was contemplated that we should lay a White Paper, and a draft of the White Paper has actually been under discussion with the Treasury, but there was some difference of opinion about the exact form of it, and what was to be put in it. (Mr. Phillips.) I understood it was the intention to issue it when the Middle Eastern Services Vote was under discussion. (Sir John Shuckburgh.) I do not remember that point being taken.

3982. My view is that it is perhaps more a matter for the Treasury, Mr. Phillips. When is Parliament to be officially informed of this transaction? That is the narrow point before us?(Mr. Phillips.) It certainly is informed.

note in the Appropriation

Sir Robert Hamilton.

3983. Is that the ordinary way in which Parliament is informed ?-It is to be remembered that this is a relatively small transaction in comparison with the other transactions in Iraq which in fact effect a saving of something over £1,000,000 a year. It was proposed to deal with them together in a single paper. That, to the best of my knowledge, is the reason why the White Paper has not up to the present been issued.

3984. Is there no standing rule or practice under which information such as this is given in some shape or form to the House? It would be correct to say that it is unusual for a White Paper not to be laid. The reason I have explained.

3985. The usual practice is to lay a White Paper?-I have explained it is a relatively small item in comparison with the big transactions involving big

interests.

Chairman.

3986. Can you add anything, Sir Malcolm? You have heard the questions and answers, and I think you know exactly what would be in the minds of the Committee regarding this information. (Sir Malcolm Ramsay.) I would not suggest for a moment that this was making a gift within the meaning of the Treasury minute, nor that it was an agreement which it was improper for the Treasury to make without the previous concurrence of the House of Commons; but I should certainly have expected that the transaction, though as Mr. Phillips suggests it is not very large relatively, would have been brought to the notice of Parliament in some formal way, following the analogy of the arrangement by which gifts of more than £10,000 are brought specifically to the notice of the House. There may perhaps be reasons of high policy which rendered any public statement inconvenient, but no one has suggested that so far this afternoon. (Sir John Shuckburgh.) It is rather news to me- -I am in ignorance on these matters -that a perfectly full and specific reply to a question in the House does not amount to informing the House.

Mr. Ellis.] The whole point is that it ought not to have been necessary to ask a question.

Chairman.

3989. Sir Otto, you are here to reply for a large number of accounts covered by the Treasury?-(Sir Otto Niemeyer.) Yes.

3990. There is one preliminary point that I have to put to you. Various Members of the Committee have asked whether we might have a more complete picture in the Appropriation Accounts of the total outlay under different heads. I think it was suggested on one occasion that a note might be added to the accounts to give that complete picture.

I promised to put that suggestion to you to-day, Sir Otto, as representing the Treasury, for an expression of your opinion to the Committee.-Of course, I should like to give the Committee any information which they think is useful to them. As the Committee know, some years ago it used to be the habit to include in the volume of the Appropriation Accounts, though not in each Vote, a statement called the "Total Costs Statement," which showed for each Department not only the Vote proper, but such parts of other Votes, whatever they might be, stationery or rates, and so

on, as appertained to that Department. That was the regular practice. Some years ago we found that the collection of those figures-many of which the Committee will observe can only be got when the Appropriation Account of the particular Department (say of the Stationery Office) has been settled and there has been a dissection of the account subsequently in order to get the particular figures for each Department-involved a considerable delay in presenting the Appropriation Accounts to the Committee. It was therefore arranged, I think on the suggestion of the Comptroller and Auditor General, that this paper, "Public Departments: Gross and Net Cost," instead of being included in the volume of Appropriation Accounts, should be presented separately, and that is now the practice.

That is

we

the reason why these figures do not appear in the volume of Appropriation Accounts. As I said just now, the collection of these figures from all parts of the world, and their dissection, does take a certain amount of time. For that reason this separate paper arrives before your Committee rather later than the volume of Appropriation Accounts. That, I am afraid, is unavoidable. The only suggestion I have to make, which might perhaps meet the convenience of the Committee, is this. I think could undertake to supply the Committee at the time when they have the Appropriation Accounts with the proof of this paper. That would be a proof which would probably contain ninetenths of what is in the paper, but might not be complete on every point. As it is not complete, we cannot present it to the House of Commons as such, but we can supply the Committee with a proof which I think would give the Committee, particularly as regards the Civil Votes, the information desired. Then subsequently, of course, the paper will appear in formal shape. That will enable you to have the paper before you at the time when the Appropriation Accounts are also before you. I should be willing to try if that is possible; I think it would be possible.

Major Salmon.

3991. If I may say so, that would be an excellent proposition.-(Sir Malcolm Ramsay.) It would occasion us no difficulty at all. We dropped this return

out of the volume of accounts, as Sir

[Continued

Otto has said, because we found it meant at any rate a fortnight or three weeks delay in getting the volume of accounts to the press; and at that time I was being continually pressed, very rightly, by the Public Accounts Committee, to get the volume of accounts out earlier. So I chose the lesser of the two evils, and asked the Treasury to present this particular paper as a separate return.

Chairman.

in

3992. May I ask, Sir Otto, this question? This paper which is now supplied to us is dated May, 1927. By what date would the proof you mention be available, as compared with the volume of Appropriation Accounts? (Sir Otto Niemeyer.) The volume of Appropriation Accounts is usually presented to you early in April, I think. (Sir Malcolm Ramsay.) No, the volume of Civil Appropriation Accounts is presented February. The War Office and Navy accounts come later. (Sir Otto Niemeyer.) I do not think we could have this paper complete before April, or possibly May; but I think we could give you what I call a proof-which would be complete except for one or two figures -in February, practically at the same time as the Committee receives the bound volume of Appropriation Accounts.

3993. That is the point I wanted to bring out. In fact there would then be before Members of the Committee, along with the volume of Appropriation Accounts, a statement which afforded them the complete picture which they seek? It is just conceivable there might be one particular Vote where we had not the figures for one item; but in ninetynine cases out of a hundred the information would be there.

Mr. Ellis.

3994. You might wish to make a reservation to yourselves as to any possible correction ?—Yes.

3995. Obviously if you give an incomplete picture, even though there is only one comma wrong, there might be other questions which you might wish to revise? -There might, but I do not think there would. There may be perhaps half-adozen questions outstanding, but all the rest would be right. That is the kind of thing that would be presented to the Committee.

3996. Taking the item of Northern Ireland on page 12 of this paper, the only thing you have down in the paper on that item is Grants-in-Aid. What I think Members wanted to see when checking an account was to see the total expenditure of the particular Department? In that particular case you will see that the total expenditure and the Grants-in-Aid is the same with the exception of £1, which is the cost of audit.

3997. Does that include the total cost? -Yes. That Vote is the Grants-in-Aid of certain expenditure on Northern Ireland. That is to say, we pay a subscription of that amount to the Northern Ireland Government.

3998. Where does the total expenditure on Northern Ireland appear?-The total expenditure on Northern Ireland is a matter for the Northern Ireland Government, not for us.

3999. Take the expenditure made by the Office of Works?-1 see what you mean. That expenditure is not related to these Grants-in-Aid at all. That is expenditure on initial buildings.

4000. I realise that. But I think what the Committee were anxious to know when they checked any particular account, was the total expenditure either shown in that particular account or in a note at the foot saying the expenditure was exceeded by such-and-such amount in another Vote?-It is not in another Vote.

Major Salmon.

an

If you

4001. May I put it another way? Let us take any branch you like. like, let us keep to Northern Ireland. Supposing for argument's sake the Office of Works are providing either land or buildings, it is important that we should see the particulars in order that we should know that the figures we have before us do actually comprise all the debits that can be made against Northern Ireland?—I quite agree, but I think one has to distinguish various things. We have, of course, certain Imperial Departments which function in Northern Ireland. Take the payment of war pensions, for instance; that is not a Northern Ireland charge at all; it is an Imperial charge; and that appears on the Pensions Vote which you have got before you. We have this grant-in-aid, which has now ceased, but which in this particular year

existed, and which

[Continued.

was a subsidy, to Northern Ireland. That is complete in itself. We have got it there. Further, there are under the original Act of 1920 certain payments to Northern Ireland from the Consolidated Fund, not from Votes at all, in respect of the building of the new Parliament House. You would get that in the Consolidated Fund Account. It is not really germane to this particular Vote in connection with the Grants-in-Aid to Northern Ireland.

Sir Fredric Wise.

4002. Would it not be possible to have some sort of note on the Vote referring to the previous Vote in regard to these buildings? If you look at the Appropriation Accounts, page 273, you will see that those deal with the Northern Ireland Services. But there is an extra expenditure besides what is shown there. Would it not be possible to have some explanation put at the foot of the page referring either to a previous page, or in some way indicating that there is a greater expenditure than the actual amount stated on this page?-I think it is a question of classification. It would, of course, be perfectly possible to put in a footnote anything that is considered germane. If you look at the Estimate for this particular Vote of £1,200,000, you will see that that was a final contribution towards the expenses of Special Constabulary in Northern Ireland. I am not sure whether it would be right to add a note to say that for quite other purposes Northern Ireland was receiving other money. You will not get from that a view of the total financial relations between ourselves and Northern Ireland. That is a very complicated subject, I am afraid; and although it would be perfectly possible of course, to put a note in the Estimate; I am not quite sure whether it would right to put in a note when the two grants are given for entirely different purposes. The whole idea of the ordinary note in the Estimate is that you want to know the cost, say, of the Department of Agriculture.

be very

4003. That is right. We want to know the total cost?-You want to know the total cost of the Department of Agricul ture. This Estimate was to give you the total cost of the assistance we gave to the expenditure by Northern Ireland on Special Constables. Is it right to add to that other assistance, not arising out