PUBLIC ACCOUNTS COMMITTEE

HC Deb 26 July 1905 vol 150 cc420-59

SIR A. HAYTER (Walsall)

called attention to the four Reports of the Public Accounts Committee; and moved, "That the said Reports be now taken into consideration." He said that all the members of the Committee rejoiced that the Prime Minister, mainly owing to the exertions of the hon. Member for King's Lynn, had given them this opportunity of bringing their Reports before the House. He could assure the House, although their Reports were not seen, that the labours of the Committee had not been without fruit, because the Treasury were bound to take their recommendations into consideration, and not only to call to account any Department implicated, but also to send to the Committee a Paper showing the answer made by the Department. The first recommendation the Committee made this year was that the grants not exceeding £500, placed at the disposal of general officers commanding for unforeseen charges, should be applied solely to that purpose and not applied, as it appeared they had been, to supplement ordinary Votes and especially the Vote for works. The Treasury had issued regulations under which these grants were to be spent, and had warned general officers commanding that the grants would be withdrawn unless the conditions under which they were made were observed. Another recommendation of the Committee was that before any moneys were issued for the purposes of expenditure under the Military Works Acts, 1897 and 1903, an estimate should be submitted to the Treasury of the expenditure under any head for which it was proposed to issue money, together with a statement of the period within which it was proposed to expend the money. This question arose on the expenditure of £2,300,000 on barracks in South Africa, of which the Committee found that no accurate and detailed estimate had been provided and approved by the Treasury.

The House would be rather surprised to hear that the representatives of the Foreign Office did not see any necessity for all the sums which were entrusted to diplomatic and Consular officers abroad being brought into the general account and submitted to the audit of the Comptroller and Auditor-General. The items of this kind included large sums advanced by His Majesty's Minister at Peking from public money in his hands in anticipation of payments from the Chinese indemnity; fines levied for the murder of two missionaries; an indemnity paid in respect of the levy of illegal likin duties; and the balance of certain tonnage duties refunded by the Brazilian Government. The representa- tive of the Foreign Office said that these sums had been paid into the hands of diplomatic and Consular officers abroad, and that the Committee had nothing to do with them. It was quite enough, he contended, for him to obtain from these officers a certificate that they had received the money. The Committee took a totally different view of the matter, and recommended that all such payments should be entered in the Foreign Office accounts, and rendered to the Comptroller and Auditor-General for his review and audit.

THE CHANCELLOR OF THE EX CHEQUER (Mr. AUSTEN CHAMBERLAIN, Worcestershire, E.)

said he understood that what the right hon. Baronet laid stress on was that these sums ought to be audited by the Comptroller and Auditor-General, and that if they were so audited he did not lay stress on the particular form of the accounts.

SIR A. HAYTER

said that was so. If the money was accounted for, that was enough for the House. The Committee entirely agreed with the view that it was advisable to amalgamate the packet, telegraph, and postal services. The Committee believed that the result would be a considerable saving both of Parliamentary and Departmental time. As to refunds to contractors in connection with the war, the Committee felt that these questions ought to be examined only by a judicial Committee. He rejoiced that they were being submitted to the Commission presided over by Mr. Justice Farwell. The Committee recommended that sums of £1,671 refunded to Mr. Stepney, £21,232 refunded to Mr. Meyer, £739 refunded to Messrs. Wilson & Worthington, and £1,542 refunded to Messrs. Wilson & Son, Cape Town, making a total of £25,185, should be removed from the account 1903–4 and charged to suspense account pending further investigation. The whole question could be gone into after the decision of the Commissioners. In the Navy accounts the Committee found that £160,000 had been paid for the refit of ships, and that these ships had within eighteen months been condemned as unfit for use for the Navy. It was stated that the refits had not added much to the value of the ships because they were not sold for commercial purposes, and fetched little more than the price of old iron. The Committee had put on record the statement that they could not too strongly condemn so extravagant a policy. He begged to move.

MR. GIBSON BOWLES (Lynn Regis)

said in rising to second the Motion he thought he might congratulate the House in having, for the first time, an opportunity of considering the most important Reports of its Committee on Public Accounts. If, as had been so kindly suggested by the Chairman of that Committee, it was due to his (Mr. Bowles') instrumentality, it might, perhaps, be counted to him as one good deed to set against the many evil with which he was credited. The full control of this House over expenditure was much more modern than many people thought. Under the Tudors and Plantagenet Sovereigns, although the House was jealous of granting money to the Crown, when it was granted they took no further notice of the matter. In the time of Charles II. an attempt was made to apply the simple idea of appropriating to specific purposes. But it was the time of William and Mary—1689 that an appropriation clause was first inserted in an Act of Parliament. Yet strangely enough, although the House did thenceforward appropriate its grants to particular purposes, it was something like 140 years before it took any steps to see that the appropriation had been carried out. No general accounts indeed of public expenditure were then presented to the House at all. And when in 1802 a general account was first presented, it was the Finance Accounts, which were not accounts of expenditure, but only of imprests or sums advanced to the Departments. Appropriation accounts there were none, nor was it until 1831 that an Act required the Navy to furnish an annual appropriation account of actual expenditure. The example of the Navy was followed by other Departments, and in 1857 a most powerful Committee, under Sir G. C. Lewis, then Chancellor of the Exchequer, recommended the ex- tension of the system, and that appropriation accounts from all Departments should be annually presented to the House. It further recommended that these accounts should annually be submitted to the revision of the House of Commons. That was the first idea of the Public Accounts Committee in 1857, and accordingly that Committee was established in 1862, and remained to this day.

Accounts, as the House knew, were very dull things, and nobody ever cared to tackle them until they were compelled. The Public Accounts Committee was accordingly accounted dull. It was as it were the plain sister of the House, and it was at the mature age of forty-three that she was, so to speak, for the first time to presented at Court by her chaperons. This was the first time that the report of the Public Accounts Committee had been brought under the notice of the House with Mr. Speaker in the Chair. Yet when the Committee was appointed in 1862, that was not the completion of the work. That did not come till 1866, when that great Act, the Exchequer and Audit Act, was passed, which he had always regarded as the Magna Charta of our financial system, whereby the Comptroller and Auditor-General was appointed and his powers defined, and whereby the action of the Public Accounts Committee was secured and its procedure regularised. That Act still remained as the true charter of our financial system, although it had been impaired in many ways. The subsequent errors thus made and the serious infractions of principle involved in successive partial repeals of its clauses and the consequent vicious interceptions of revenue on its way to the Exchequer, could all be remedied by reverting to the principles and enactments of that Act.

He thought he was not exaggerating when he said that the Public Accounts Committee was the greatest present active force of Parliamentary control; the most powerful and effectual existing instrument for securing economy in public expenditure and the due administration of public funds. It was, perhaps, the only effectual instrument—more effectual even than the House itself, and that for several reasons. In the first place, it had the priceless advantage of having at its command the work done by the Comptroller and Auditor-Greneral, an officer of that House appointed to examine, on behalf of that House, the appropriation accounts, whose salary was charged on the Consolidated Fund, and who was irremovable except upon Addresses from both Houses of Parliament. He was not alone an Auditor, he was also the inheritor of the authority of the Comptroller of Exchequer Receipts and Issues who in 1841 refused to Peel, in 1852 to Lord Derby, and in 1854 to Mr. Gladstone, the issue of large sums of money which the Ministry of the day, with the approbation of the Treasury, demanded. So great, indeed, was his power that not one penny could issue to-day from the national account in the Bank of England without his order nor a penny be spent without being justified to him and to the Public Accounts Committee as duly vouched and duly sanctioned by the appropriation of the House. The Comptroller and Auditor-General did most invaluable service both to this House and to the country, which only those who read through the voluminous Appropriation Accounts could judge at its true value. He examined all the accounts of the Empire, a most enormous task, as the House would readily understand, which he performed with the aid of skilled officers; he called attention to irregularities which came under his notice. Although it was true that the Public Accounts Committee had sometimes detected for itself irregularities to which, he had not called attention, still it remained true that the major part of the work of the Public Accounts Committee was founded on his Reports. He found the fox, and the Committee ran it to earth.

The Committee's functions were large indeed. They extended, in his belief, and according to its own unchanged practice, not alone to the formal regularity of the expenditure, but also to its wisdom, faithfulness, and economy. It actually did on the completed account that which the House sought to do on the estimated account. It had advantages which the House had not. It had before it the actual officials concerned in the transactions—the accounting officers, numbering some seventy, each of whom was responsible for the expenditure of his own department, a responsibility which was not immune from attack, but which must be strictly maintained if the Comptroller and the Public Accounts Committee were to do their work. The Public Accounts Committee examined these officers, and occasionally cross-examined them. It required them to produce any papers it needed; it could sand for any person whatever, and, if need be, could administer an oath to him. He looked forward to the time when the Committee would Send for the First Lord of the Treasury to speak, for once, the truth, the whole truth and nothing bat the truth. Moreover, in the Public Accounts Committee there was no guillotine, and no portion of the expenditure could be withdrawn from its full review and criticism, as the Estimates could be, and were, withdrawn from discussion in the House.

One other point he might be permitted to add. Although the Committed was composed of members of both Parties, with a preponderance of one in favour of the Party in power, he had never in the whole of his experience seen a subject treated in a partisan spirit, and certainly he had never Seen a division of a Party character during the whole tine he had served on the Committee. It did its work in a spirit of faithfulness. Nothing was too large or too small for it. Like the elephant's trunk, it could pick up a pin or tear down an official lord of the bureaucratic forest. Its range was as extensive as its powers. When Parliament had made its grants a stream of British guineas flowed to the uttermost ends of the earth. The Committee followed every guinea and saw that the money was properly applied, and, if not, that the officials were called to account. When it was remembered that the work extended over the expenditure of the whole British Empire it would be recognised that that was no small labour. That labour was embodied it Reports to this House such as the four which had been presented that day. Such Reports should not be buried in obscurity. They were of great interest and extreme importance. They were of greater importance now, when so much more public attention was given to national expenditure than ever before. He rejoiced that an opportunity had been given for the first time when the Reports of the Public Accounts Committee could be considered by the House.

The Committee was appointed at a much too late period of the session, but, in addition to that, the work had not been less, but rather greater than usual. Last week it sat every day, and the inevitable result had been, to his great regret, that it had not been physically possible to distribute all the evidence taken in time for this debate. He trusted that the Government would in future take the eminently wise step of appointing the Committee at the earliest period of the session in order that its Reports might be in the hands of Members some time before the debate which he confidently anticipated must henceforth be annual, and which he as confidently predicted would become one of the most fruitful and important of any conducted in that House. Three hours was a short time for this House to give to the discussion of the whole accounts of the British Empire; but it was the most they could get on this occasion, and he, personally, was grateful for it.

It was impossible to deal with all the various subjects embraced in these Reports, and even with those which would most interest the House it would be inadvisable on this occasion to deal. Nevertheless, he wished to call attention to one or two points of the greatest importance and of the highest moment. The Committee expressed opinions on various important matters which would be found in its Reports, from the condemnation of the expenditure of £8 6s. 8d. for printing a staff ride to the expenditure of £494,000 by the Admiralty without having signed a contract, which, in its opinion, were entitled to the serious consideration of the House. The Chancellor of the Exchequer paid that that expenditure was expended by Parliamentary authority, but he respectfully differed from him. So much as to its opinions. As to its absolute recommendations they were few, not more than six in all. To two of them he would respectfully call the attention of the House as of the very greatest importance. In the first placer the Committee recommended that four sums, amounting to £25,185, should be removed from the accounts of 1903–4 and charged to a suspense account. That amounted to a provisional disallowance of those four sums as charges against the Votes of the year. He was; not going into detail about what were called the war store scandals, or the finance of the war in South Africa, of which the items making up the £25,185-referred to were off-shoots. There were no doubt very great losses to the public during and after that war caused by faulty contracts, by the failure of the system adopted by the War Office to secure due accountability, by frauds and robberies and by the unfortunate dual system of sales and repurchases—Very often from sales to, and purchases from, the same man, initiated by Lord Kitchener, and carried on by Sir Neville Lyttelton. There was a general breakdown in many important particulars, not alone of the War Office-system established for the very purpose of dealing with the difficulties always attending war, but also of the new devices for this particular war. Such was the breakdown that during the war accountability largely disappeared and accounting ceased. It was not too much to say that throughout the war, as regarded an appreciable amount of expenditure, it was impossible to say how the money went; what, if anything, was got for it, or who was responsible for its outlay. Strictly speaking, of the expenditure on the war there was no proper and complete account at all to be obtained.

As an illustration of the completeness and sufficiency of the system of which the Public Accounts Committee was the crown and summit, he would point out that the irregularities connected with the stores in South Africa were one and all detected by the Comptroller-General-The information regarding them was. published in his Reports before it occurred to anybody either to ask a Question or to appoint a Committee or a Commission and had there been no Butler Committee and no Royal Commission, the House would probably have had before it now the final decision, on all these matters at any rate, as to the £25,000, of the Public Accounts Committee. Had that taken place, one of two things must have occurred; Either the Department must have recovered the- items from the officer responsible for the expenditure, or His Majesty's Government must have come to the House for another Vote, upon which the whole question of responsibility would have been raised. As to the dual contract system, he felt there was not much at present proper to be said, although a good deal might be thought by the members of the Public Accounts Committee. This, however, he might say, that the system of dual contracts was mainly due to the fact that when in June, 1902, Colonel Armstrong, the financial adviser of the general on the spot, left, Sir Neville Lyttelton intimated that he did not require any financial adviser, and it was the consequent absence of an official of that kind which rendered possible the disastrous system of dual contract.

One other matter touching South Africa called for a word. The Imperial Yeomanry Committee was entrusted with £1,262,000 to spend. It appeared last year, and was reported to the House, that for more than a third, or £460,000, no details or vouchers were produced. It was now authoritatively alleged that vouchers did exist, though they had not been called for. He was very glad if they did exist, but he deemed it necessary to say that they had not been produced to the Comptroller and Auditor - General or to the Public Accounts Committee. The other recommendation he wished to refer to was that which had reference to accounting officers, and which arose out of a suggested Army Order—an Order which, if it had been carried through, would have tended to the complete destruction of the financial control of that House. He could not be blind to the fact that new professors and advocates had arisen of a most dangerous militarism, and that there seemed to be an idea seeking root in this country that the Army and the Navy should escape from the control of the civil power. He earnestly warned the House, and, if his voice could as far reach, he would warn the country against allowing any counten- ance to be given to so fatal a motion. This was a civil country with a civil people engaged in civil avocations, and it was for the defence of that people in those avocations, against foreign or domestic violence—and for that alone—that either Army or Navy existed. They must be instruments of the supreme civil power, never its masters. They must be subordinate above, all, in finance. If once they allowed either the soldier or the sailor to escape from civilian control in the most essential matter of finance, that moment they had not only destroyed the control of Parliament, but had seriously endangered the liberties of the country. That there had been an attempt to escape from that control was, he feared, undoubted. That the attempt had succeeded in India seemed to him but too likely, and its probable results would there be only too dangerous. But here, thanks as he humbly conceived, to the Public Accounts Committee, any such attempt, if intended, had failed. The recommendation of the Public Accounts Committee, it carried out, as carried out it must be, would suffice to check that idea. He confidentially commended these Reports, which were the result of great labour and faithful service to the House. He should always remember with pride that, as a member of the Public Accounts Committee for ten years, he had been privileged to take a part in what he believed to be some of the most effectual service that could be rendered to the State.

Motion made, and Question proposed, "That the four Reports of the Public Accounts Committee be now taken into consideration."—(Sir A. Hayter.)

SIR WALTER FOSTER (Derbyshire, Ilkeston)

said that he sincerely trusted that the hon. Gentleman would long continue his services in investigating the financial affairs of this country. He congratuated the hon. Gentleman on the manner in which the Public Accounts Committee did their work in helping economy in administration; and on his success in securing a part of a day for the discussion of the Reports of the Public Accounts Committee. Since then great scandals as to waste of money had been reported. Those exposures had electrified the public conscience and had resulted from increased scrutiny and activity on the part of the Public Accounts Committee. When they were considering the subject upstairs, in the Select Committee on public expenditure in 1903, they found that the Public Accounts Committee was the most efficient instrument Parliament had for discovering the waste of money. That Committee had also sought by other means to increase the survey and general investigation of public expenditure; they had advised a careful analysis of the Estimates before they were voted. Whilst he congratulated the House in having that opportunity of discussing in a short sitting accounts pregnant with information, he would suggest that in future years they should have a larger and longer opportunity of discussion. The recommendation of the Public Expenditure Committee was that a whole day should be given to consider the Reports of the Public Accounts Committee, and he was sorry that earlier in the session a day was not granted for a critical discussion of that great subject. If Parliament was to maintain and retain that control over public money which it ought to have, it was necessary that every Member of the House should be interested in the investigation and consideration of the national Estimates. After all, they were there mainly as the guardians of the public purse. First of all, they guarded the liberties of the nation, if they could (and it was somewhat difficult in the present day), and next their duty was to consider public expenditure and to guard the interests of their constituents.

They had to thank the Public Accounts Committee for having done good work, but if they were going to continue the work over an increased area they would have to have another Committee formed on very much the same lines. He would like the recommendation of the Public Expenditure Committee considered at some future time, viz., that certain sections of the public accounts should be submitted to an Estimates Committee sitting upstairs who would study and report on the Estimates before the money was voted. There was no possibility, especially under the new rules, of their doing their duty in that House in the criticism of public expenditure. The way in which the Estimates came before them and the way in which discussions were carried on under the new rules made it impossible that close and minute scrutiny should be given over the whole expenditure. In a few days they would have millions voted under the closure and which had never been discussed at all. They ought to have some body to study and analyse every Vote and every item; in fact, he was sure they ought to have another Committee, called the Estimates Committee, which would take year by year, as suggested, he believed, by the hon. Member for King's Lynn in the first instance, sections of the Estimates, dissect them in the most careful manner, and report once a year on a section of public expenditure. Then in the course of three or four years the whole area of their public expenditure might be analysed and investigated and Reports placed before the House. When some such system was adopted, they would get rid of scandals which had disgraced the Government in recent years, and they would have more economical and efficient expenditure of public money.

MR. DUKE (Plymouth)

said he did not think anybody who read the Reports of the Public Accounts Committee could fail to see that that Committee was doing all that was at present done toward discharging a primary duty on the part of the House. They were there to control public expenditure and regulate the purse strings, but owing to the rudimentary mode in which public expenditure was controlled money was voted almost in entire ignorance. Although he admired the work done by the Public Accounts Committee, he sympathised with the suggestion made by the hon. Baronet opposite with regard to what had been said in a tone of unwonted congratulation by the hon. Member for King's Lynn. At present they began to check expenditure when it was too late to save money, and the House totally neglected its power to save either £500,000 or Is. 6d. at the time when saving could be effected. He sincerely trusted that what had been said by the hon. Member for King's Lynn would bear some fruit. It could not be satisfactory that the expenditure of the country should go on as though we lived in China or Russia, and as though, because a sentry was posted or a department or a store was opened at a certain point two hundred years ago, there was almost gospel sanction for the continuance of the expenditure. The House, for the want of such a Committee as had been suggested, did not get at the root of the expenditure. He was sure there were many unofficial Members who were pressed both by their own feelings and by their constituents to try and find out, for instance, why so small an Army as ours costs so vast a sum. It was not because of its numbers, and it was said to be not because of its efficiency. The cost was altogether out of proportion, but during the five years he had been in the House he had never been able to find any Member, official or unofficial, who could guide him to any point on which, expenditure could be saved. It could not be done unless some Committee were warranted to take the Estimates item by item and recommend to the House, if necessary over the heads of permanent Departments, what the expenditure should be.

He was told that great saving in the current Navy Estimates had been effected because some person of common sense suggested that if he were permitted to take the expenditure £10,000 by £10,000 and call before him those who vouched for the necessity of it he would be able at any rate to find out with regard to sums of £10,000 whether each of them was required. It seemed an elementary proceeding. He was satisfied it took place and that there was a saving. It might not be a permanent saving, because abuses revived, but there was at present an immediate saving of £3,500,000 on the Navy. One of the representatives of the Army regarded that as an amazing saving, but would he tell the House that economy was not effected by that means. If any right hon. Gentleman on the Front Bench told the House that the economy was not effected by that means, he should be very much surprised, because at the present moment he had excellent reasons for believing that that was the precise means. He might be misinformed, but, if it were a method which had not occurred to anybody, he ventured to think it was a thing which might very well be suggested. It might be that the great expenditure with which the record of the Conservative Party would for years be associated had been absolutely necessary, but he was not at all sure that their constituents were satisfied that it had been. If some such method as had been suggested by the hon. Baronet opposite were adopted and applied both to the Army and Navy, they would at any rate have the satisfaction of knowing that the vast sums spent were necessarily spent, if they did not have the satisfaction of reducing them by considerable amounts.

MR. GODDARD (Ipswich)

said he should like to say a few words upon this, the first occasion upon which the Reports of the Committee had be-n under discussion by the House. He congratulated the hon. Member for King's Lynn on having so persistency stood out for an opportunity of discussing that phase of national expenditure. The Chairman of the Public Accounts Committee had already laid before the House the recommendations of the Committee, and the hon. Member for King's Lynn had gone at some length into a very interesting statement of the history of the Committee. He rather preferred to take a different line, and he should like to say a few words as to his impression after eight years experience on the Committee with regard to its work in connection with the expenditure of the country.

The debate offered an opportunity, and perhaps would inspire a curiosity, to look into the appropriation accounts. Probably outside the official members of the Government and the members of the Public Accounts Committee there were very few Members who ever took the trouble to read the appropriation accounts, for the very-simple and sensible reason that they regarded the expenditure as having been made and done with. But, because of that want of exploration into those accounts, hon. Members lost a great deal of information which did not appear in the Estimates. A considerable amount of enlightenment might be given them if they would only take the trouble of reading the appropriation accounts and the Report of the Controller and Auditor-General upon them. He would give an illustration. I here was an excess of £20,068 in the Vote for salaries of the military department, and it was stated to be due mainly to an increase of staff, including an extra staff, approved by the beads of the War Office and the Treasury, for a history of the South African War. He did not know whether it was officially known by the Members of the House that they were spending a considerable amount of money on the preparation of a history of the South African War. It did not appear in the Estimates, hut the real fact was that they were paying £6,000 a year for three years for that purpose. He did not wish to criticise the account. It might be worth the expenditure for military purposes and it might be an exceedingly useful document, but from the Estimates it was impossible to gather that the expenditure was going on. He had no doubt it was covered by some salaries, but it was not specifically named. The point he wished to illustrate was the loss of control over expenditure by the House of Commons. He did not think there was a more responsible duty attaching to the Members of the House of Commons than to watch the expenditure of the country. It was one of the prime reasons for which they were sent to the House of Commons, and any attempt to deprive them of that power of control was very serious and ought to be critically examined.

His impression after eight years on the Public Accounts Committee was that the control of the House of Commons over public expenditure was a diminishing quality. He thought that loss was mainly due to three reasons. There was first of all the new closure rule, which limited discussion. Secondly, he thought he was justified in saying that there was a growing practice of sanctioning expenditure simply by means of the Treasury. And, thirdly, there was the loose and inadequate way in which Estimates were drawn up and laid before Parliament, resulting very often in money being voted for one purpose and being used altogether for another purpose without any Parliamentary consideration, and in expenditure upon particular services exceeding the Estimates granted by the House, in many cases by upwards of 100 per cent. With regard to the new closure rule, he might perhaps remind the House that only last year no less a sum than £31,224,231 was voted without any examination of the Estimates. He did not think that could be held to be conducive to good Estimates. If the Departments thought there was a laxity in considering them, and that they might go through Parliament without a word being said, it was not conducive to care in drawing them up. He did not wish to cast any reflection upon the Treasury, for he did not suppose it was any worse than it would be under any other Government, and he quite understood that it was an exceedingly difficult thing to resist the pressure that was put upon it from various Departments to increase the amount of expenditure, but he did think, and he thought he should be able to prove, that the Treasury might be firmer in withholding sanction from some of the expenditure. It was a very rare thing to find the Treasury absolutely withholding sanction. He thought there was only one case which came under the notice of the Public Accounts Committee that year. It was in connection with the expenditure in the Chatham Dockyard. There was a token Vote of £50,000, and the Department exceeded it by £20,000. The Treasury did in that case refuse to give its sanction to the amount. It was, however, very rare indeed for the Treasury to do that.

The method of getting expenditure which had not been sanctioned or even considered by Parliament was growing, and it was most dangerous. He would like to give one or two illustrations. The net result of the Navy transactions for the year 1903–4 was that on the total expenditure of £37,000,000 odd there was an excess of £97,951. Of course that did not represent the fluctuations on the amounts of the various Votes. The Admiralty as late as 14th March, 1904, made a forecast showing expenditure and Estimates fairly equal but in the final balance the net excessive expenditure on Votes 2. and 11., which on 14th March had been estimated to amount to £22,800 and £39,500 respectively, had grown to £70,931 and £87,000. These two amounts practically accounted for the whole of the net excess. In the ordinary course of events, the Department ought to have come to Parliament for a Supplementary Estimate to warrant that expenditure. That would have given the House an opportunity of discussing it and would have restored the control of the House of Commons over such expenditure. But that was not the way in which it was done. The Treasury very properly refused to allow the application of certain surpluses upon certain Votes to be used for making up deficiencies on other Votes without reference to Parliament but in effect it worked out in another way. The Treasury did not prevent the Admiralty from making use of excesses of receipts upon appropriations-in-aid to other purposes. There was an excess upon appropriations-in-aid of £115,000 or £116,000. In the ordinary course that amount would have been immediately transferred to the Exchequer as extra receipts, and Supplementary Estimates would have been asked for excess expenditure. He thought the Treasury ought to have insisted upon that course being followed and not to have allowed the excess of receipts upon appropriations-in-aid to have been used to make up deficiencies. The result, of course, was that a balance in hand was shown. It would therefore be seen that £97,000 had been absolutely withdrawn from the control of Parliament.

He would only give one other illustration. Formerly all items of works undertaken by the War Office and the Admiralty and estimated to cost £1,000 and more were shown separately in the Estimates. In 1902–3, when a great many irregularities crept into their conduct of national finance, there was an alteration with regard to the Army, and no details were given of works which did not cost more than £2,000. In 1903–4 that alteration was extended to the Admiralty. There they had an extension of power to Departments to spend money on works the particulars of which were not known out side the Department at all. It was a clear case of loss of control by the House of Commons. No doubt it was done with the sanction of the Treasury and was in perfect order according to the rules of Parliament, but Parliament had lost control over that money. All items under those heads which would not amount to more than £2,000 could be started without giving any particulars of them in the Estimates, and there would be no vote upon them. That was what he meant by loss of Parliamentary control. Already the War Office and the Admiralty escaped much of the control given to other Departments, and he thought it was a great pity to have given them power which lessened that control. He had another illustration which showed how the same thing crept into other Departments besides the Army and Navy.

Another instance he might gives if time permitted, was in regard to the Revenue buildings in which a sum of £185,000 was used without proper Estimates being submitted. The loose and inadequate Estimates placed before Parliament were one reason for the loss of Parliamentary control. As an illustration of this, he pointed out that in the Army Votes there were seven services for which Estimates were passed, but no expenditure made, which meant that the money voted could be used for other purposes not sanctioned by Parliament; there were twenty items on which the expenditure was less than the Estimates, four items in which the expenditure had exceeded the Estimates, and three items of expenditure for which no provision had been made in the Estimates, but for which expenditure had been incurred by Treasury sanction. There was an illustration from the Admiralty. The Admiralty had estimated in 1903–4 that the expenditure, on the Osborne Royal Naval College would be £40,000. On April 27th, 1903, the Admiralty wrote to the Treasury stating that the total cost at Osborne would be £65,000, an I sanction was asked for this expenditure from savings under other heads. It was always necessary to show that savings had been made under other heads, otherwise the Treasury would not give their sanction, and that was probably a reason why excessive Estimates were often submitted. The Admiralty also asked for authority to go on with other works, such as bungalows for the cadets, costing £22,200; so that the original Estimate rose from £40,000 to £87,200. On July 30th, 1903, the Admiralty again wrote to the Treasury in respect of an hospital for infectious diseases, the site of which had had to be changed, necessitating an expenditure of £5,500 instead of £3,500. The total Estimate for Osborne thus rose from £40,000 to £92,700. But that was not the end of the story. On March 12th, 1904, the Admiralty wrote again to the Treasury stating that the Estimates would be largely exceeded. In 1903–4 the total expenditure was estimated at £94,000, and the sum finally named as the total Estimate for this work was £160,000. The Treasury entered a feeble kind of protest against this method of presenting Estimates, but under pressure it gave way and consented to the expenditure. Parliament thus found that it was pledged to an expenditure of £160,000 when only £40,000 had been asked for a short time before. Such cases, he thought, showed how Parliament lost grip over expenditure, and how, in consequence, the national expenditure enormously increased.

The Supplementary Estimates were also growing. In 1903 Supplementary Estimates for £4,500,000 were asked for. This expenditure had already been incurred and, as the major portion of the money had been spent, Parliament found it to be impossible to refuse the grant. The money included the price of the two Chilian war vessels, though Parliament was never asked about the purchase. It was a perfect farce to ask Parliament to vote money which had already been expended. Facts like these showed that Parliament had lost control over the expenditure of the country, and, in these days of swollen Estimates from which the poorest of the community were suffering, it behoved hon. Members to examine the question of Parliamentary control in finance closely for themselves with the object of preventing waste and extravagance.

SIR EDGAR VINCENT (Exeter)

said he yieldel to no man in his hostility to Supplementary Estimates; they were totally subversive of good finance, but he believed he was correct in saying that-the Supplementary Estimates this year were far lower than they had been in previous years. He regarded that as a hopeful sign of financial administration. The advocates of economy and supporters-of a more stringent system of finance-had had several reasons for congratulation in the course of the present session—first, because they had achieved a notable triumph in the abolition of the system of Works Bills, for he took it that the declaration of the Government applied to the Works Bills generally and not merely to the naval works; secondly, because they had a distinct improvement in the form of the financial statement presenting on Budget night, from which the entire expenditure could now be clearly-observed; and lastly, in having secured that night for the first time a discussion on the Reports of the Public Accounts Committee. The result of that discussion must be largely to increase the sense of the House and of the country as to the importance of the services of the Public-Accounts Committee and also to increase its authority and prestige. The allotment of a day for the discussion of the Reports of the Public Accounts Committee was one of the recommendations of the National Expenditure-Committee. He congratulated the Government upon having adopted that recommendation, and urged them not to stop in. the path of progress, but, having learnt the value of the services rendered by a Select Committee in regard to accounts, to extend the system and set up, Select Committee to examine the Estimates.

The control of expenditure was far more efficient applied before the event than after. If the expenditure had already been made it was simply a question of establishing past responsibility, and there was no opportunity for saving the money of the country. He-was convinced that the utility of examination before the event was as ten to one compared with examination after. It had been argued against the establishment of a Committee such as had been suggested, that it would diminish the control of this House, but they had from the Prime Minister a very important statement of opinion, that discussion in Committee of Supply did not aid the cause of financial economy. Everyone knew that to be true. It was absolutely impossible for private Members to gain any useful purpose by discussing with the Minister of the Crown Estimates regarding which he alone had information given him by permanent officials. Unless private Members could examine the Votes in detail and obtain information regarding them by examining the permanent officials of the various Departments, their criticism was almost always void of effect and of no real service to the country. He did not think it could be seriously contended that the establishment of such a Committee would relieve the Treasury of responsibility or destroy the authority of the Treasury over the spending Departments. He did not share the view that the Treasury had lost power and authority during recent years. The permanent officials had never been more zealous or more capable than at the present time, but the amount of good that they could do in the way of financial control depended largely upon the amount of support given them in the Cabinet by the Chancellor of the Exchequer, and the amount of authority exercised by the Chancellor of the Exchequer in the Cabinet depended largely upon the amount of support he received in that House. The House could only give support if it had knowledge.

MR. SPEAKER

intimated that the hon. Member was going outside the Motion before the House.

SIR EDGAR VINCENT

said he would conclude by expressing his personal view of the great value to the cause of public economy of the services rendered by the members of the Public Accounts Committee as evidenced by the admirable Reports which were now submitted to the House.

MR. CHURCHILL (Oldham)

said the present debate was a pleasant interlude amidst the hard political times through which they were passing, and had yet to pass. Upon many points a very general agreement had been expressed. All were convinced that the present system of: financial control was lax and ineffectual, and that no proper scrutiny of the Estimates or control of finance was exercised. They were also agreed as to the unique value of the Reports of the Public Accounts Committee, which, for the first time, they had an opportunity afforded them of discussing. In that matter the Prime Minister had treated the House with some considerations which Members ought not to omit to recognise Then, too, all were bound to recognise the great services rendered to the cause of public finance by the hon. Member for King's Lynn, who, in days when private Members had little opportunity of doing useful work, was one of the few Members who had been able to make his influence felt from an unofficial position upon the course of public affairs.

He desired to submit one or two considerations suggested by the functions of the Public Accounts Committee and bearing on the question of financial control. Financial control divided 1itself into two separate spheres—the examination of Estimates and the audit of accounts. The Public Accounts Committee dealt extremely well with the audit of accounts, but it did not touch the examination of Estimates. The examination before that Committee was so formidable a one that nobody would care to submit himself to it unless he were as sure as he could be of the statement he had to present, and that audit of Accounts was effective and real because they had accurate knowledge based on expert opinion and there was an entire absence of partisanship. Moreover, they were guided by the Comptroller and Auditor-General, who was independent of any political Party, and they could call before them Departmental officers who, as the Blue-bookshowed, gave excellent, clear, and definite answers to the questions addressed to them. The contrast between the examination of the accounts for the purposes of audit and the examination of the Estimates before the House of Commons was deplorable. On the one hand, there was knowledge, absence of partisanship, expert evidence, and the submission of high officials to cross-examination? On the other hand, what did they see in Committee of Supply? He admitted the value of Supply days as occasions for raising grievances and discussing questions of policy, but so far as any systematic and scientific examination of the expenditure of the country was concerned, they were a series of farces from beginning to end. That must be so from the size and variety of the Estimates presented and the enormous field covered by them. No human being not possessed of expert information or access to official documents could possibly bring any effective criticism—expect by accident—to bear upon the details of expenditure in Committee of Supply. It was absurd to suggest that a system under which 670 Members, dominated by partisanship and Party feeling, strolled in and out on Supply days, and voted without having heard the debates, involved any definite, methodical, and scientific examination of the expenditure of the country, He submitted that the recommendations of the purely non-partisan Committee which was appointed some three years ago ought to have been acted upon, or, at any rate, publicly considered before now.

Public expenditure divided itself into three aspects. There was the policy of expenditure, the merit of expenditure, and the audit of expenditure. To illustrate what he meant, let the House suppose there arose a question of the improvement of the scientific training of the Royal Army Medical Corps. Whether it should be done would be a question of policy; whether the end should be secured by building special hospitals or by placing the men in London hospitals, would be the merit of the expenditure; and whether the money voted had been honestly and properly expended would belong to the sphere of audit. Questions of policy were for the Cabinet and the House of Commons, and the question of audit was adequately dealt with by the Public accounts Committee, the Treasury, and the Comptroller and Auditor-General. But between these two there was a lacuna or middle ground, which, for want of a better term, he called the merit of expenditure, and upon that no control adequately or effectively operated at the present time. What they had heard of the work of the Public Accounts Committee ought to encourage them to apply to the sphere of merit the same kind of efficient examination that they applied to the sphere of audit. They ought to set up an Estimates Committee, which should conduct the examination of the Estimates by the same scientific methods as the audit of accounts was now conducted by the Public Account Committee. He earnestly hoped that work would be undertaken in the future No one would suggest that an Estimates Committee, any more than the Public Accounts Committee, should have any executive function; they would have power to reduce or increase a Vote; all that they would have power to do would be to find out the truth and place it before the House of Commons. He suggested that if an Estimates Committee were set up its comments on each Estimate should be printed on a blue slip and attached to the Estimate when it was laid before the House. They would then be able to debate the Estimates in the House with knowledge, be able to award praise and blame where it was deserved, and the present slip-shod and haphazard system would pass away. He looked forward to a reformed Parliament which would be disembarrassed, by devolution, of the mass of detail with which their progress was now largely choked, and in such a Parliament these two Committees would be an indispensable feature.

THE SECRETARY OF STATE FOR WAR (Mr. ARNOLD - FORSTER, Belfast, N.)

, on behalf of the Government, associated himself with all that had been said as to the valuable work done in the Public Accounts Committee. The present was an interesting occasion, as it was the first on which the work of the Committee had been submitted to the House. He had been struck, in reading the four Reports of the Committee, with the admirable quality of impartiality therein displayed, and it was because of that quality that they had been received with the respect they merited in that House. He hoped that the practice, now initiated, would in no wise alter the character of those Reports; it was conceivable, he hoped it was not probable, that by bringing the Reports into the arena of the House of Commons they might to a certain extent lose that admirable quality of impartiality. The hon. Member for King's Lynn had mentioned that, in the Committee, Party divisions were practically unknown, and that the questions were discussed purely on their merits. In that House there was sometimes a danger of matters that were national and not Party matters being somewhat dimmed by the differences which existed between the two great Parties, but he hoped that the fine tradition embodied in these Reports might continue unimpaired.

His hon. friend the Member for Exeter, the hon. Member for Oldham, and other hon. Members had expressed the desire that what was now being done in connection with audit might be extended to Estimates. That was a very large question. His own belief was that no Party in that House would readily adopt the system which found favour in France, and that they would never have a Budget Committee, the approval of which would be a necessary condition precedent to the presentation of Estimates to that House. He did not believe, as a matter of practice, that any Party in that House would relieve Ministers from their responsibility in submitting the Estimates to Parliament. Whether it might be possible to adopt the suggestion of the hon. Member for Ilkeston, and for the Public Accounts Committee to carry out an extended review of the different branches or the public accounts so that in the course of a few years the whole area might be covered, was another matter. It would be in pursuance of -the aim of the hon. Member for Oldham, and the obvious corollary would be that they should pass over detailed matters not recommended for discussion by the Public Accounts Committee.

He was not sure that some of the illustrations used to enforce the arguments of hon. Members that evening had been quite happy. With nearly all that had been said on matters of principle they found themselves in agreement, but he could not allow one or two of the illustrations used to pass without comment. For instance, the large economies in tin expenditure of the Navy were not due, except in a minute degree, to the examination referred to by the hon. Member for Plymouth, but to a large act of policy affecting the whole establishment of the Navy and the character of the sea-going I Fleet which was not the outcome of that detailed criticism. If the hon. Member for Ipswich had taken the trouble to ask the accounting officer of the Department, whose laches he was criticising, or if he had taken the trouble to examine the Estimates, he would have found that the obscurity in the items relating to the history of the war was not so great as he asked the House to believe. In the Estimates he would have found in each year an item for £6,000 for "preparation of the history of the South African War." Another ill-chosen example of criticism, that in connection with the College at Osborne, referred to the transfer of expenditure from a sea-going ship to the establishment on land, and this showed the folly of purely arithmetical criticisms unless they were accompanied by a review of the circumstances under which the Estimates were presented. This expenditure was due to the creation of a college, one of the most succeessful pieces of construction by the naval department, and it was because the college was completed in so short a time that the money was transferred from one item to the other. The hon. Member for Ipswich said that £40,000 was asked for, and £160,000 was actually spent, and he wished the House to understand that that was extravagance.

MR. GODDARD

I did not say that. I said that the Estimate began at £40,000, and it had gone up to £160,000.

MR. ARNOLD - FORSTER

accepted the hon. Member's explanation. He wished to point out, however, that there had been no departure from the purpose for which the money was intended. He thought it was the duty of somebody on behalf of the Government to state how these Reports had been received by them, and the task had fallen to his lot because it happened that the larger part of the recommendations of the Public Accounts Committee concerned his Department. The Government had accepted the unanimous Report of the Public Accounts Committee, and he would like to say one or two words about the principal items accepted.

MR. LOUGH (Islington, W.)

What does the right hon. Gentleman mean by accepted?

MR. ARNOLD-FORSTER

said the Report made certain recommendations. Those recommendations had been accepted, and it was proposed to act upon them. The first had reference to the grant of £500 to general officers commanding for unforeseen charges. The War Office and the Treasury shared the opinion of the Public Accounts Committee that those amounts should be applied exclusively to the purposes for which they were granted, and they would be so applied in the future. The second recommendation concerned military, naval, and other works. He was aware of the particular case that came under the notice of the Committee, and he could not find that there was any failure on the part of the War Department to furnish the particulars asked for; but the principle that such particulars should be furnished on all occasions was readily accepted by the War Office and the Treasury.

There was one more item which was of more general interest, and was, no doubt, of great importance. It dealt with the accounting officer referred to in the new Army Order. He was anxious the He use should understand the position of the Army Council with regard to this matter. The War Office, like every public body, was bound by the law of Parliament; and the law of Parliament had enjoined that the accounting officer was responsible to the House, and that he should have his representative in all the great spending Departments of State. There was no desire or intention to challenge that fundamental law; but at the same time it ought to be made clear that the Army Order which had been made the subject of criticism was drawn with a very deliberate intention. It was not the intention to exclude the right of the accounting officer to communicate directly with representatives of the House, but there was the intention of giving a greater liberty to officers in charge of administration of districts. In this connection he would like to read one or two passages from the Report of the Esher Committee. They said— The entire system of War Office finance, which has been built up during many years, and has its origin in a distant past, is based upon the assumption that all military officers are necessarily spendthrifts, and that their actions must be controlled in gross and in detail by civilians. This theory is largely responsible for the unreadiness for war which has been frequently exhibited, as well as for reckless and wasteful expenditure. Again, the Esher Committee said— The theory that military officers of I all ranks are, by the fact of wearing uniform, shorn of all business instincts has inevitably tended to produce the laxity which it is supposed to prevent. While the present system of financial control is futile in peace, it is ruinous in war. Officers unaccustomed to bear any financial responsibility and ruled by excessively complex regulations cannot at once improvise a system for the control of expenditure in the field when the restraints are suddenly removed. The result, as in South Africa, is the waste of millions. Those were very pregnant sentences, and it was the intention of the War Office to give effect to that sound doctrine. The Army Order had now been modified in a form which met with the approval of the Treasury. They had preserved a far greater liberty than that which had hitherto been allowed to the general officer in charge of administration, but it had been made clear that the control of Parliament should be maintained, and he believed that the Army Order so drawn would satisfy the House.

There was one other item which called for remark, and that was the question of refunds in South Africa. There, again, they had accepted the-recommendation of the Public Accounts Committee. The Committee recommended that those items which had not yet been satisfactorily dealt with because of the length of the inquiry and the distance which separated this country from the scene of the transactions, should be carried over to a suspense account until the investigation that was going on was complete. They accepted the recommendation. These accounts was aid be carried to suspense account. In conclusion, he said he thought that on this, the first occasion when the Reports of the Public Accounts Committee had been brought under the review of the House of Commons, there had been a ready acceptance of its proposals by the Government, because they had felt that those proposals were framed after an examination of the problems with which they were concerned from a purely non-party point of view, and with an eye to the good of the country at large.

DR. MACNAMARA (Camberwell, N.)

referred to the question of the meat and vegetable rations sent out to the troops in South Africa. In his Report of January 31st this year the Comptroller and Auditor-General reported that 5,571,622 of the rations supplied were condemned and destroyed in South Africa. In addition he reported that 497,125 emergency rations supplied by the firm of Maconochie Brothers, never having left these shores, were returned to that firm and condemned as being unfit for use. He also reported that this same firm replaced 365,000 rations in place of those condemned and that many of these were subsequently found to be unsound; and he finally informed the House, through his Report, that of the total rations destroyed, 955,727 were Maconochie emergency rations and 1,053,563 were Maconochie meat and vegetable rations. The Public Accounts Committee took all these facts into consideration and they heard what Messrs. Maconochie had to say. The explanation given by the firm was that the War Office, in November, 1899, came to them in a great emergency and asked them to supply large quantities, under great stress, of these emergency meat and vegetable rations. The firm was invited if it had not material at hand to use pemmican, which was at Woolwich in the possession of the Government, in manufacturing the rations. It was further stated that the firm understood that the rations were for immediate consumption—at any rate, consumption within the next few months. The firm agreed, and they appeared not to have agreed very eagerly, because they had to lay aside a great deal of their own business, which, he understood was permanently lost. That was in February, 1899, and the firm pushed on with the order at the special wish of the War Office.

In December, 1899, down came the War Office with a contract to be signed by Maconochie Brothers, and what happened at this juncture? The Report showed that the hon. Member for East Aberdeen was examined, and in his evidence he said that he told Mr. Major, the late Director of Contracts at the War Office, that his firm could not sign the usual contract form and this was not an ordinary contract, and that the sort of thing he was supplying would not keep for more than twelve months and so his firm could not give the usual guarantee. Then Mr. Major replied" but we must have something for office reference." Then the firm's reply was "If that is all then we will sign it," and it was signed. Mr. Major, the hon. Member explained might have understood that as a guarantee, but the firm understood exactly the opposite, and said that if that was all they would sign the contract. Now what was that contract? It stated that the contractors warranted the articles to keep sound and wholesome in any climate for a period of two years from the date of delivery, and it further stated that this warranty would not be enforced in trivial cases or upon small rejections. And so the firm of Maconochie Brothers said they were asked to sign this for office reference, and they signed this contract on December 2nd, 1899. Mr. Major was subsequently asked whether the statement that this contract was merely for office reference was true, and he denied it in his evidence and would not admit any such suggestion. The next reply of Messrs. Maconochie was to the effect that the rations were made from Woolwich pemmican, for which they were not responsible. The final reply of Messrs. Maconochie was to the effect that the rations were exposed to extremes of tropical climate and that they were badly stored and kicked about here, there, and everywhere in all weathers and therefore went bad. He dared say that was true of a good many, but it was the fact that 497,412 condemned rations never left these shores, and therefore this answer could not apply to them.

The matter of the condemnation of these rations had been the subject of a voluminous correspondence between the War Office and Messrs. Maconochie, and on November 19th, 1904, the firm wrote an important letter in which it stated that it was prepared, without prejudice, to make over the sum of £2,500 to the War Office in settlement of claims in respect to condemned rations. It appeared from the next letter that the Treasury rather opposed this, but the Army Council appeared to have acquiesced and the offer of £2,500 was accepted. That was the conclusion of this part of the matter. The final judgment of the Public Accounts Committee was this (paragraph 10)— Your Committee, while admitting that the manufacture of these rations was something in the nature of an experiment, are of opinion that Messrs. Maconochie sent in defective rations, and that they cannot plead either the effect of tropical climate or rough usage or the presence of Woolwich pemmican to excuse the non-fulfilment of their contract for the supply of emergency rations for the troops. As against that the hon. Member for East Aberdeenshire, on page 169, told the Committee that the firm had received numerous letters from the ordinary soldier, and that he thought he could say at that moment that there was not a single service Member in the House of Commons who would not admit that the ration was the best form of food he had. As to that, again, they had the Report of the General Officer Commanding in South Africa, issued in a Parliamentary Paper, transmitting the opinions of a board of officers on certain supplies of meat and vegetable at Pretoria considered to be unfit for use. General Lyttelton said— Consequent upon frequent complaints about these rations having been received from the Office Commanding the Pretoria District, whose medical officer attributes to them the prevalence of diarrhosa amongst the men, an analysis was made by Major Beveridge, of the Royal Army Medical Corps, a copy of whose report is enclosed. The hon. Member then read the analyst's report upon one case, twenty-eight tins Maconochie's meat and vegetable rations, which stated that the sample contained heavy traces of iron, that seven tins out of the twenty-eight were blown and their contents decomposed, that the remainder showed commencing decomposition, that in each case the interior of the tin was blackened and corroded in places, thus accounting for the large proportion of iron in the meat, and, in conclusion, that if this was a fair sample of the consignment the whole should be destroyed, being unfit for consumption and a danger to health. He hoped that he had now put perfectly fairly the whole statement on both sides. The Public Accounts Committee made a statement on which he would not comment, but about which he would ask a Question. They said— Your Committee feel it right to draw the attention of the House of Commons to Clause 9 of the contract signed by Messrs. Maconochie, namely, 'no Member of the House of Commons shall be admitted to any part or share of this contract or to any benefit derived there from.' Upon that point the hon. Member for East Aberdeenshire himself gave evidence. The hon. Member for North Norfolk directed his attention to this clause in the contract. The hon. Member for East Aberdeenshire said that his firm was a private limited liability company, and that he was a shareholder in it. The question was then asked— You had no port or share in the profit, or any benefit derived therefrom? The answer of the hon. Member for East Aberdeenshire was— I presume, with regard to that contract, that anyone who takes any shareholding interest in any company that takes a contract gets a benefit the same as any shareholder in a railway company that carries troops gets a benefit by his stock in the company. The contracts were entered into in 1899 and 1900. As far as he could gather the company was registered as a private limited liability company on September 29th, 1900. The hon. Member for East Aberdeenshire was managing director and, of the 100,000 shares, held 79,996. Two other members of his family held between them 20,000 shares. He dared say that was quite proper. He was not a business man and. offered no opinion on the subject. But he would allow himself to make this comment. He could not help thinking that the hon. Member, when he put it to the Public Accounts Committee that he was as a shareholder in a railway company, was not quite frank in view of the fact that he and two members of his family held 99,996 out of the 100,000 shares of the company. He desired to ask the War Office these two Questions: (1) Would the Government undertake that the whole of the incidents connected with the supply and condemnation of the emergency meat and vegetable rations to the troops in South Africa should come before the Royal Commission, and (2) if not, would they undertake, having regard to the condemnation which was set out in the Report, that the firm of Messrs. Maconochie Brothers should no longer remain upon the list of contractors to the War Office?

MR. MACONOCHIE

(Aberdeenshire, E.) said it did not often fall to the lot of a Member of that House to sit for two years under the pillory of the personal attacks of his political opponents. The hon. Gentleman the Member for Camberwell hid deliberately misstated the facts of the case. [OPPOSITION cries of "Order."]

DR. MACNAMARA

On a point of order, Sir, I am sorry there should be any heat introduced, but I ask you whether it is competent for an hon. Member to charge another hon. Member with deliberate misstatement of the facts of the case.

MR. SPEAKER

I do not think the hon. Member is justified in using suck an expression.

MR. MACONOCHIE

said he withdrew the expression at once. He meant to convey that the hon. Gentleman had not the facts at his finger ends. He-thanked the Chairman of the Public Accounts Committee for withdrawing a statement which had certainly prejudiced him very much, and he trusted the right hon. Gentleman would carry out that simple act of justice by inserting his withdrawal in the Report.

With regard to the emergency rations the statement of the hon. Member opposite that he was not a Member of the House was-perfectly true. He was pressed to undertake work that, he was given to understand, could be undertaken at the time by nobody else. The conditions surrounding the production of this article were very arduous, and the work had to be undertaken in a very short time. The article known as an emergency ration was composed of four ounces of pemmican and five ounces of cocoa paste in two tins joined together by band. He would specially call the attention of the Public Accounts Committee to the fact that they were totally misled when they understood that the rations were hermetically sealed or that they were sterilised. Wherever they were exposed they were subject to deterioration in a very short time. What were the facts concerning this contract? The Department that had to do with it could not supply their requirements and could not obtain what they wanted elsewhere. His firm put on one side many thousands of pounds of their regular trade in order to supply them, much against their wish and to their great injury. Twenty-two months after they were delivered there was complaint made that they were defective. He then referred to the conversation the hon. Member had quoted, and explained that the firm had no responsibility, that the article did not bear their name, that it was manufactured for the Department, and that they took no responsibility, but that, being desirous of preserving their good name as it had always been, and he hoped to-night it would be reinstated, he said that they would replace the tins if the necessary material were supplied under rigid supervision to make them good, and that the firm would pay expenses incurred. This was done, and three years and seven months after the original order the goods were found defective, so that even if there had been a guarantee it had expired. However, it supported their contention that the article would not keep, and there was evidence which could be read in the Blue-book that, so far as the War Office was concerned, it was not an article of which they had had very much experience, and to a certain extent it was experimental.

He did not think his firm had been treated in the matter very reasonably. It must have cost the firm £12,000 to £15,000—a good sum to pay for obliging the Department in time of stress and trouble. The hon. Member omitted to state that the meat and vegetable rations had been lying out in the open exposed to frost, sun and rain and all the vicissitudes of weather out there, and it was no wonder that some proved defective. If tin goods were taken out of any grocer's shop and kept in an open field for twelve months how many of the articles would they find at the end of the period which were not defective? He repeated here, and he was not afraid to say it anywhere, that in every case, so far as the particular ration which they invented in 1898 was concerned, there had been great praise given. Every service Member of the House had personally testified to him that there never was any complaint made during the campaign about it. But no goods could stand the exposure in the open, as, for instance, that which those stored within 500 yards of the sea at Durban received. He did not see how they could have expected any article of food in any kind of vessel to stand the treatment to which those articles were subjected. Correspondents of experience had vouched for the excellence of the goods, and he need not refer to the work done by the firm over and above that for which they received pay. He felt that the Department had treated his firm in a way they would not have been treated if he had not been a Member of that House. He was not ashamed of anything the firm had done, and was not afraid to stand before any tribunal. He felt that the House would deal with the matter in a proper spirit and do him justice.

THE FINANCIAL SECRETARY TO THE WAR OFFICE

(Mr. BROMLEY DAVENPORT, Cheshire, Macclesfield) said the hon. Member opposite had fallen into an error in confusing emergency and vegetable rations. It was necessary to bear in mind that they were different things. An emergency ration was a small tin containing pemmican and cocoa paste. Every soldier had to carry one, so that, he could fall back upon it in the event of his being cut off from his ordinary means of supply, but he was never to use it except in case of real emergency. In that case he was allowed to draw upon his emergency ration. It was, in fact, an insurance against the starvation of the soldier.

At the beginning of the South African war a large quantity of these rations Was required. The Department had a difficulty in obtaining a supply, and the firm of Messrs. Maconcchie Brothers were asked to undertake this work. With the rations sent out to South Africa he had not to deal. They were probably exposed to some treatment in that country which explained why they went bad. But of the emergency rations remaining in this country 497,000 were found to be going bad. The contractors, under protest, agreed to replace them. They actually replaced 366,000 of the rations. When he came to the War Office they had yet to replace 131,000. As those emergency rations were perishable and it was doubtful whether they would last for two years, he thought it a more common-sense arrangement to get a sum of money down from the contractors rather than to ask them to replace the rations. It was estimated that it would probably cost the contractors £3,000 to replace the rations, and therefore he thought he was driving a good bargain for the public when he agreed to take £2,500 instead of the 131,000 rations which were not wanted and could not be used. He was perfectly satisfied in his own mind that so far as the public was concerned he did drive a good bargain, and that so far as the contractors was concerned it was perhaps rather a hard bargain.

The hon. Member asked him whether he would remove the firm from the list. It was no part of his duty to defend the firm; he had enough to do to defend his own Department. He knew that the hon. Member would not willingly do injustice to any person under any cirstances. It was very doubtful whether it was possible to make emergency rations which would last for two years, and, therefore, so far as Messrs. Maconochie were concerned, he thought it would not be fair to strike the name of the firm off the list because they had failed to do that. No meat and vegetable rations went bad in this country. They went bad in South Africa, where they were subjected to treatment which made their going bad reasonable. He would point out that of the meat and vegetable rations supplied by other firms 16 per cent, went bad and had to he destroyed, while only 8 per cent, of those supplied by the Maconochie firm went bad and had to be destroyed. He thought, therefore, the House would agree that it would not be doing an act of justice if the firm were struck off the list. As to the suggestion that the matter should be referred to the Royal Commission, of course the Royal Commission could go into it if they desired; but as the whole question had been fully investigated by the Public Accounts Committee he thought that would be an unnecessary proceeding on their part.

MAJOR SEELY

(Isle of Wight) said the hon. Member opposite had made an appeal to the service Members of the House. He did not propose to deal with the financial aspect of the question. It was not his business to defend the hon. Member, but as the question of the quality of the goods had been raised he thought it was only fair to say that he had lived upon the emergency rations for some time in South Africa, and that they were very good indeed.

MR. AUSTEN CHAMBEELAIN

said he desired to express his personal sense of the value of the work which was done by the Public Accounts Committee, and also of the courtesy and care which the light hon. Gentleman the Member for Walsall brought to bear in the discharge, of his duties as chairman.

Question put, and agreed to.

Ordered, "That the four Reports of the Public Accounts Committee be now taken into consideration."—(Sir A. Hayter.)