NATIONAL EXPENDITURE. (Hansard, 17 May 1881)

§ MR. H. H. FOWLER

, in rising to move That, in the opinion of this House, the recent increase in the National Expenditure demands the earnest and immediate attention of Her Majesty's Government with the view of effecting such reductions as may be consistent with the efficiency of the Public Service, said: On the night that the Chancellor of the Exchequer made his Financial Statement I ventured to call the attention of the House to the omission in that Statement of the subject of this Motion; but the right hon. Gentleman then pointed out to me that I had made my remarks at the wrong time, for in Committee of Ways and Means was not supposed to be an occasion for settling the National Expenditure. However, the right hon. Gentleman stated at the same time that this was a question of grave importance and interest, and one which ought to be brought before the country; and, therefore, I have felt no hesitation in taking the earliest opportunity in my power for submitting the matter to the judgment of the House. The last time that a Resolution of this sort was brought forward was something like 20 years ago—I think it was in the year 1862 that my right hon. Friend the Member for Halifax (Mr. Stansfeld) submitted a similar Resolution for the consideration of the House of Commons. On that occasion the Resolution was met by an Amendment, moved by the right hon. Member for the University of Cambridge (Mr. Spencer Walpole), and Lord Palmerston very adroitly defeated his opponents by making it a question of confidence or no confidence in the Government. On that occasion the House of Commons did vote an abstract Resolution, which was not so strong as that of my right hon. Friend the Member for Halifax, though I think that almost every Member of the present Government voted in favour of the stronger Resolution. They, however, were beaten, and a very mild Resolution was agreed to by the Government, and from that hour to this the question has gone on without general attention being called to it; and the National Expenditure has been steadily increasing. It seems to me that we who sit on these (the Ministerial) Benches occupy a peculiar position in 711 reference to this question. At the last General Election we went to the country upon two distinct issues—namely, the Foreign Policy of the late Government and the Expenditure of the late Government; and if we are consistent in what we said when we addressed our constituents in reference to the extravagant expenditure of the late Administration, we are bound to say the same here; and we are bound to carry out the pledges which we gave to our constituents on the hustings, or else, if we are not prepared to do that, we are bound in common justice to tell hon. and right hon. Gentlemen opposite that we were wrong, that we misled the country, and that the expenditure of the late Government was necessary. I, for one, am not prepared to do that. I believe the expenditure which was sanctioned by the late Administration was an extravagant one; and it is because I believe that the National Expenditure has been still further increasing that I purpose to call the attention of the House to the matter. I see that the Expenditure of the year 1881, which closed on the 31st of March, 1881, the gross Expenditure was £83,107,000. That, of course, appears to be a very enormous sum; but it would be unfair to represent that that amount was the real Expenditure of the country. It would be unfair to do so for this reason—that out of this £83,000,000 a large amount of work is done for the public, for which the public pays, and gets its money's worth for its money. In order to ascertain the true amount of the Expenditure of the country you must, in the first place, deduct the amounts for the Post Office and the Telegraphs, as that is work for which the Government receives payment from the public. You must also deduct the cost of collecting the Revenue, and you must also deduct the interest on Local Loans—that is, loans which the Government lend to the Local Authorities, and in respect of which the Local Authorities pay interest. You must also deduct the payment for the specific loan for the Suez Canal Shares, in respect of which the Government receive interest. These sums amount, in the aggregate, to £8,877,661, which leaves the Expenditure of the country at £74,230,000. Now, that £74,230,000 is made up of three or four different items. There is our 712 Debt, which is a charge of £28,920,000; Civil Fund Charges, which amount to £1,669,000; the Army, £16,658,000; the Navy, £10,702,000; the Civil Service, £15,700,000; and a grant to India of £500,000. In round figures, the Debt costs £29,000,000; the Military and Naval expenditure, £27,750,000; and the Civil Service, £17,500,000. Those are the great items of expenditure, and the House of Commons has the means of exercising power of retrenchment over only two of them. The first thing which I ask the House to affirm by this Resolution is that there has been a considerable recent increase in the National Expenditure, and in doing so I shall call attention to four periods extending over two decades. The years which I will take are the years 1865, 1870, 1875, and 1880; and I think the periods that I have selected have this advantage—that in 1865 and 1870 we had a Liberal Administration in power, and in 1875 and 1880 we had a Conservative Administration in power, and the Chancellor of the Exchequer during the first of those periods is happily still with us, and now occupies the same position, and the Chancellor of the Exchequer of the two last periods is also happily still with us. Therefore, I am dealing with an expenditure which Members of both the late and the present Governments carried on. Taking those four periods, I find that in 1865 the net Expenditure was £60,900,000; in 1879 it had grown to £62,700,000; in 1875 it grew to £66,500,000; and in 1880 it had reached £76,100,000. If I were to sit down here, without saying another word, I think I should have established my charge that the National Expenditure has recently very heavily increased. Now, Sir, with respect to the details, I find that the greatest items of increase are the Army and Civil Service. In 1865 the Civil Service expenditure was £9,300,000; in 1870 it was £11,000,000; in 1875 it was £13,500,000; and in 1880 it was £16,900,000. Our Naval and Military expenditure in 1865 was £25,280,000; and in 1880 it has reached £30,422,000. The rate of taxation per head during those periods was, in 1865, £2 5s.; in 1870 it was £2 4s.; in 1875 it was £2 5s.; and in 1880 it was £2 9s. It cannot be said that we are at a time when the national prosperity goes by leaps and bounds; because at the present we have 713 had a period of the most unexampled agricultural and manufacturing depression. Every industry in the country is at a disadvantage compared with what it was five or six years ago; and it appears that ld. on the Income Tax this year produces considerably less than last year—a striking indication of the decrease in the earning and saving power of the country. Yet not only do we find in these circumstances an increase in the National Expenditure, but an increase in local taxation. The pure local taxation levied in this country last year, independently of gas rates, water rates, and every rate for which service was directly rendered, was £21,000,000 sterling; and local loans, which were also increasing, amounted in the last two years to upwards of £30,000,000—a fact which surely proves the necessity of placing some check upon local expenditure. Well, the question arises, in what direction is relief to be looked for? My answer is, in two quarters—the Civil Service and the Military and Naval expenditure. The first thing that I shall deal with in the Civil Service expenditure is the great increase in our educational expenditure. I am the last man to deprecate the expenditure of money on National Education; but I think that the guardians of the public purse are bound to see that we get our money's worth for our money. There is such a thing as educational expenditure and extravagant educational expenditure. I rejoice to see an increasing number of children receiving the grant for education; but the increase of late has been owing not only to an increase in number, but to an increase in the grant per head. In 1865 the grant per child was 9s. 4d.; in 1870 it was I 0s. 1d.; in 1875 it was 13s. 3d.; and in 1880 it had reached 15s. 6d. Not 50,000 were presented in Standard VI., and only a percentage had passed in that Standard, which cannot be considered at all satisfactory; so that both as to efficiency and economy very strict supervision is required. I now come to what, after all, is the great source of the expense of this country—a source which is a question of policy—a source which we, as Liberals, invariably attack in the country, and which we ought to be consistent in attacking in this House—the expense for Naval and Military purposes. I am one of those who hold the opinion of Mr. Cobden 714 that our Navy should be supreme above all other Navies in the world. Our Navy is our first and last line of defence, and no Englishman would grudge expenditure to make the Navy efficient in all parts of the world; but our Army is not so much an expenditure for defence as an expenditure regulated by policy; and if we attempt to become a rival of any of the Continental Military Powers, we at once embark upon a great increase of our Military expenditure. Let me draw attention to the increase in our Army expenditure. I exclude the Indian Army. In 1865 the number of men voted was 78,410; in 1870 it increased to 84,361; in 1875, when we had the first dawn of the Imperial policy, the number increased to 92,386; and in 1880 it increased to 108,287.

MR. H. H. FOWLER continued

I have said this question of expenditure is, after all, a question of policy. Nothing is so easy as to sneer at those who advocated a reduction in the Military expenditure as the "Peace-at-any price Party." Well, I am not ashamed to say in this House that I believe all war, except a purely defensive war, is a crime; and as a Christian nation we ought not to engage in any war except in defence. And if we adopt a policy of peace, of non-intervention, of attending to our own interests, of not posing as arbiters of the whole civilized world, of not maintaining that no shot shall be fired in Europe except with our consent, we can adopt one scale of expenditure; but if we adopt an aggressive, interfering policy, 715 we must pay for it. I want to call the attention of the House to the pressure this expenditure has upon the working classes of this country. There is a general opinion that our expenditure is a matter of very little import whether it rises or falls. A penny off or on the Income Tax is a matter of very trifling moment, and so it is to people of large accumulated fortune; but if we would realize how our taxation presses upon the working classes, and upon the class above the working classes, and how unfair and unequal it is in its incidence, you would see that there are other reasons, besides those of economy, in favour of a reduction. Our taxation is not only heavy, but it presses unfairly. The Chancellor of the Exchequer, in his Budget, proposes to place 3 per cent Probate Duty. Now, suppose a man dies worth £10,000. That is a largo sum to be made, say, by a professional man by the exercise of his brain and the sweat of his brow. He is taxed at once £300. Another man dies worth £1,000,000, and you tax him £30,000. Do you mean to tell mo the incidence is the same? But where do you levy the bulk of the taxation? You do so upon articles of daily consumption. You levy it upon the pennies; and those pennies are a serious item in the weekly income of the working classes. You levy it upon tea, coffee, tobacco, and beer, and these are the necessities of every working man's daily life. The tax upon tea is from 20 to 25 per cent; tobacco is taxed between 300 to 400 per cent. The tax upon beer is something like a farthing a pint. These are considerable taxes; and if the working classes of this country ever realize—and the day will come when they will realize—the amount they pay out of their weekly earnings for the taxation of this country, they will, as Sir James Graham said about another tax, want to know the reason why. The average earnings of the artizan class are from £2 per week to £1 per week, and with a tax of 25 per cent for one necessity, and 300 or 400 for another, you are subjecting them not only to a heavy pressure of taxation, but to an unequal pressure which no other class suffers. I hope the day will soon come when the working classes will ask to be relieved of this burden; and it is wise on the part of those who manage our financial affairs to make ready for a rainy day by 716 the reduction of the extravagant expenditure of this country. I had intended to call attention to what the Prime Minister uttered during his memorable campaign in Mid Lothian. No one spoke in stronger terms, or denounced in severer language, the extravagance of the late Administration, and we as Liberals are bound to strengthen his hands. I do not believe he has changed. I believe he is the most economical Chancellor of the Exchequer that ever held the reins; and if the House of Commons will back him, he will be prepared to carry out practically and to good effect those principles which have been the principles of his financial administration, and upon which he took Office. I ask the House to pass no censure on this Government or on that Government; but I do ask you to affirm the fact that the expenditure of this country has gone on recently and rapidly increasing, and to express your opinion that it is the duty—I think it is the first duty of Her Majesty's Government to take immediate steps to diminish that expenditure. Motion made, and Question proposed, That, in the opinion of this House, the recent increase in the National Expenditure demands the earnest and immediate attention of Her Majesty's Government with the view of effecting such reductions as may be consistent with the efficiency of the Public Service."—(Mr. Henry H. Fowler.) Notice taken, that 40 Members were not present; House counted, and 40 Members not being present, House adjourned at a quarter before Nine o'clock.