HC Deb 06 July 1917 vol 95 cc1493-569

I beg to move, That this House is of opinion, in view of the continued growth of expenditure, taxation, and debt, that a Committee be appointed, consisting of Members of this House, with power to review all national expenditure, examine Ministers and officials, and report to the House. This Motion stands in the name of a large number of Members drawn from all parties in the House, and from all shades of opinion in each party. May I say that this movement is intended to assist the country and the nation in the struggle in which we are now engaged, and we have no desire, in any sense of the word, to rake up the past actions of this or the past Government.


Before we proceed, on a point of Order, I should like to ask why four questions which I put down have been erased from the Paper. The first question was to the Under-Secretary of State for War—


We have passed on to the business of the day.


I shall endeavour first to show the necessity for the proposal which we are bringing before the House, and secondly, the manner by which the Committee will work. Let me first of all give six reasons why we suggest that the House should appoint this Committee to review the national expenditure. Three months ago the Chancellor of the Exchequer estimated that our expenditure would be 6¼ millions a day. During the last few months the actual expenditure has been 7¾ millions. The difference between the estimated and the actual expenditure, if continued throughout the year, will amount to the whole sum of the national revenue of the year. Three months ago the Chancellor of the Exchequer introduced his Budget. He made provision in that Budget to raise £7,000,000 a day extra additional taxation, excluding Excess Profits Taxes, while at the same day the expenditure for the year will entail a permanent burden for the year, and for future years, of £80,000,000 per year. To-day, through the concessions which he has made on the tobacco and entertainment taxes, the permanent additional taxation will only yield £4,000,000, while if the expenditure is continued at the present rate the interest on the Debt alone will entail a permanent burden of £110,000,000 a year. Three months ago the National Debt was £4,000,000,000, and was increasing at the rate of £135,000,000 per month. At the present time the National Debt is increasing at the rate of £180,000,000 each month. The Chancellor of the Exchequer said some time ago that our resources were not unlimited, but that we could outlast Germany. It is for these reasons that we invite the attention of Parliament to our economic position. We cannot restore our old system, but we believe the entry of the House of Commons into the realm and conduct of finance is bound to have a salutary effect. The Chancellor of the Exchequer frequently reminds us of the sayings of Burke. May I remind him of one saying of that gifted man. He said: A system of frugality will not lessen our riches, and they ate not likely to be increased by wasting them. How would the great War Chancellors of the past—Pitt, the great Unionist Chancellor, and Gladstone, the great Liberal Chancellor—how, I say, would these great statesmen have faced the situation? Would not their treatment of the House of Commons, a sovereign body, differ profoundly from the present régime? Would they have palmed off dummy estimate on the House of Commons? Most new projects pass through four Parliamentary stages before they become law. The first is the stage of complete indifference. Four months ago in this House several hon. Members, with myself, raised this subject on the Third Reading of the Consolidated Fund Bill. Although due notice was given, I think one Cabinet Minister attended the Debate for half an hour. That was the stage of complete indifference. The second stage was reached when the Chancellor of the Exchequer endeavoured to pour cold water on this movement. He said, "I do not see how it would work during the War." The third stage was reached when the Chancellor of the Exchequer invited suggestions. We valued his remarks, and we appreciate the new outlook. I make no complaint because of the attitude of the Government during the first two stages of this movement. But bearing in mind the facts and figures which I have mentioned, we do claim that the support we have received in the country, and in this House, is of so weighty a character that the Government should have afforded us, instead of the present occasion, a full Parliamentary day to discuss this Resolution.

The CHANCELLOR of the EXCHEQUER (Mr. Bonar Law)

May I say in regard to that that I understood my hon. Friend and his Friends would be satisfied with to-day? If I had understood that they were not, I should have tried to arrange otherwise.


Perhaps then, in view of that observation, the Chancellor of the Exchequer, if we are unable to complete the Debate this afternoon, will give us a full Parliamentary day next week?


I do not know about next week, but if the feeling of the House is that the matter has not been properly discussed to-day, I shall certainly try to meet my hon. Friend.


I am very much obliged to the Chancellor of the Exchequer, and I shall pass at once from that aspect of the subject. The first reason are the facts and figures which I have mentioned. The second reason is that the supreme object of the House of Commons is to control expenditure. But the necessary knowledge is deliberately withheld, and without knowledge control cannot be effective. Without publicity facts cannot be known, and without discussion the present position cannot be remedied. Publicity in these matters is not a danger but a safeguard. Obscurity and lack of knowledge cover up mistakes and enable those mistakes to be repeated. Strategy is common sense applied to war. Unless the cost in men and materials is known, how can success be achieved? Publicity is essential. The Government evidently consider that publicity in some matters is essential. The Government use the Press daily for their purposes, and the increasing use of the Press by the Government has diminished the power of this House. The House of Commons is not properly informed about finance. The Government ask for supplies of money and refuse supplies of information. Day by day Ministers give information to the Press and exchange view for view. They leave the House of Commons out in the cold till they come and ask for money. We are becoming an instrument for registering the decrees of the Government and for providing the necessary supplies. Is this the moment, when the authority of all Governments is being questioned, when the spirit of revolution is abroad, to deprive a representative institution of its legitimate functions, so exposing it to the criticism of the people?

Another reason for this proposal—and I am sure the Chancellor of the Exchequer will not think I mention this in any personal sense—is this: To-day the Chancellor of the Exchequer is not only a member of the War Cabinet, which sits daily, but he is in constant attendance as Leader of this House. He has also to undertake the duties of Chancellor of the Exchequer. Is it not a physical impossibility for any one man to perform those duties day by day, as well as to safeguard, with vigilance and minute attention, the extraordinary expenditure of the day? During the past six months the Financial Secretary to the Treasury, it is said, has been daily occupied at the Treasury. That point of view has been pressed on the House of Commons. The House of Commons will be surprised when I remind hon. Members that the major portion of the time, when the late occupant of the office was nominally at the office he was actually miles away from this country. In a burst of candour the Government emphasised the day-by-day occupancy of the office. Day by day we were told the Financial Secretary was safeguarding the national expenditure: in reality he was miles away from this country during the major portion of that time. Another reason is that the Prime Minister told a recent deputation to adopt bold measures. A bold measure generally implies a big raid on the Treasury, and I have little doubt that when the War ends Bill after Bill will be introduced making an inroad on public funds. Even to-day we have schemes for the purchase of the liquor trade, schemes for subsidising the loaf, large and comprehensive schemes of housing reform, and schemes for a Ministry of Health. Those are only a few which are being ventilated. Opinion in this House will differ as to the wisdom of these measures. I hope to support any sound scheme, but every hon. Member will agree with me that an independent report by Members of this House on the financial side of these measures will make Departments more careful to bring forward watertight measures. At present we only have the most meagre information, which we are able to extract after great trouble from the Government.

Let me advance another reason to justify this Resolution. Last week, in this House, the Vote for the Ministry of Munitions was being considered. The speech of the Minister revealed the manifold activities of that Department, but he did not provide us with any information to enable us to judge whether it was efficiently administered or not, and the ensuing Debate revealed that the House of Commons had not sufficient knowledge to criticise the working of that Department. No one questions the effort of that Department, yet few will doubt that the results could have been achieved at a much lower figure. At present this Department has a blank cheque. This House does not know what they are doing. I say the time has arrived when this House should know how the people's money is being spent, and that some measure of control should be applied. My last reason is one which I think will appeal to the Chancellor of the Exchequer. He will shortly require to issue another Loan. Will not the public subscribe more readily to that Loan if they have the knowledge that the money they are asked to subscribe from their hard-earned savings is efficiently and wisely administered? I can think of only one argument against this proposal, and it was interjected by the Secretary of State for India in a recent Debate, when he said that the House of Commons is always urging increased expenditure. That seems to me a remark tainted rather with a prewar outlook. True economy, I agree, sometimes involves increased expenditure. What is meant by economy is the proper application of money. We will suggest a method by which the House of Commons can take a real interest, and judge the results of constant demands of expenditure. So far as I can learn, during the War the House of Commons has only pressed one form of increased expenditure upon the Government, and in this matter I think have shown a more true insight than the Government. The only increased expenditure they have pressed and insisted upon is the claim of our soldiers and sailors and their dependants. Since the outbreak of War the Government have been pouring out money to the inhabitants of this country, but it was only after pressure that they dealt fairly with the claims of our soldiers and sailors.

Economy in peace time may have a narrow meaning, but when the whole resources of the nation are organised for war it is a word of deep significance. By economy I mean conserving the resources in men, material and money, and thereby enabling the nation to put forth its best efforts. That doctrine must be applied to Government Departments, and a new atmosphere in Government expenditure created. I think when this Committee is set up you will not find any party differences on that Committee. We shall seek to conserve the nation's resources not only to-day, but in the future. No one suggests-that lack of money, but, in reality, lack of credit, will bring the War to an end. We have to think more of public credit than of money. The money can be created so long as there are printing presses and paper available, but the decline of credit and the accumulation of debt will influence the final position. A nation cannot, any more than an individual, add constantly to its liabilities without coming to the end of its resources. Since the outbreak of war the House of Commons has been much in advance of the Government on most questions of the day. We have witnessed the spectacle in a democratic House of Members in all quarters of the House rising to urge increased taxation. That is another reason why I think this House should accept our Resolution. It is not necessary for me this afternoon to instance individual cases of waste. I mentioned a few cases when speaking in this House some months ago. Our case for this Committee does not rest on individual cases of waste. It rests on a much wider and a much deeper basis. I hope the House will agree that I have advanced sufficient reasons to justify the necessity for this Committee.

Let me refer to the methods by which this Committee will seek to attain its purpose. Our proposals were put in writing to the Chancellor of the Exchequer some two months ago. We suggested that a Committee of this House be appointed with a Treasury official as secretary; that the main Committee should appoint several sub-committees to review expenditure in various Departments; and that the main Committee should approach the subject of controlling national expenditure by means of business accounts similar to those employed in large commercial undertakings, and by these methods endeavour in time to obtain sufficient information to satisfy the House of Commons that value is being received for our large daily expenditure. I notice on the Order Paper an Amendment that a Departmental Committee should be appointed to revise and report upon our present form of Estimates. The idea of business accounts was suggested by hon. Members associated with me in this movement, and some six months ago I myself wrote to the Prime Minister urging the adoption of these business accounts. It would be part of the work of this Committee to examine this subject and to suggest modifications of the present form of Estimates to the House of Commons in good time. I appeal to the House of Commons this afternoon not to be led aside by this Departmental Committee. It may report favourably of our ideas, but it will shelve the question. Neither the Government nor the Treasury have taken sufficient steps to control expenditure or oven to suggest business accounts. The House of Commons itself now proposes to take this matter into its own hands. There are three stages by which control can be applied to expenditure. The first is in policy, the second in administration, and the third in auditing and accounting. Let me take the three points one by one. The Committee seek power to review expenditure both present and potential. We have no desire to rake up past expenditure. I have quoted in the earlier part of my speech instances of potential expenditure in the future.

We do not seek to question or delay the execution of any policy, but to examine the expenditure decided upon. Financial foresight and the preparation of proper estimates will not contribute to failure, but to success of policy, and policy is interwoven with expenditure. Frequently policy can only be clearly reviewed when the cost is known and the results compared. No one desires to check the proper power of the Executive at this moment, but is there not room between the complete freedom which exists to-day and undue interference for some immediate development of our Parliamentary machinery? The second stage where control can be applied to expenditure is in administration. At present, through lack of knowledge, the House of Commons leaves control of administration severely alone, with the result that Ministers regard smoothness and not efficiency of administration as a safe course to follow, and seek to promote, as it has been well said, the working of their machinery by the copious application of Exchequer lubricant. I have spoken of Treasury control over Departments; but is it not a fact that at present, and in the past, the Treasury bullied these Departments and through lack of knowledge are unable to control the great spending Departments, frequently disheartening Government service by raising small points. I do not stand, neither do hon. Members associated with me, for any cheese-paring policy, either now or in the future; we stand for knowledge, for the House of Commons gaining control over expenditure. The Chancellor of the Exchequer told us in a recent speech of the steps he has taken to control expenditure, and he referred to the more efficient methods of placing Government contracts. I realise he has effected considerable improvements in that direction, but the placing of contracts is only one side of expenditure. What steps have the Government taken to check the unnecessary employment of men and the multiplication of officials? What steps have they taken to check the use of materials purchased, the number of buildings commandeered?

I know the Government are not enamoured with the French system of Grand Committee. The French system of twenty-one committees may not be suitable for this country but there is a wide gulf between their system and the present demand from this House. I understand that the Members of the War Cabinet rejected the French system after a conversation with Monsieur Briand—no doubt at a dinner; he spoke strongly against these committees after experiencing a harassing day with various committees. The Government sought for information regarding the working of the French system from the French Prime Minister and his officials. You might as well ask the President and late officials of the Indian Government if they favour the House of Commons and publicity as ask the French Prime Minister and his officials if they favoured the working of these committees in France. Even if the Government advise the House of Commons to vote against this proposal no Minister of the Crown himself can vote against it and thereby shield himself from public criticism. I am strengthened in that remark by a speech made by the Prime Minister himself. Speaking on December 19th he said: We might refer the matter to Parliament to settle because it is not so much a question for the Government as a question for Parliament itself to decide, subject, of course, to any criticisms or suggestions which the Government wish to make as to the best and most effective methods during the period of the War, of exercising Parliamentary control over the Departments. I hope if we go to Division this afternoon that at any rate the Members of the Government will bear in mind the words of the Prime Minister last December. I am reminded that it was before he paid a visit to his French colleague across the water. The Leader of the House also in April stated that it would be an advantage for the House of Commons and the Government if some means could be found by which the House of Commons could take a more direct interest in the business being carried on. I welcome that remark as well as I welcomed the remark of the Prime Minister, which I read when I was many miles away. I was simple enough to believe that this system might be adopted; but I am sorry that the Government in the meantime have rejected it. How can the House of Commons exercise an earnest, active, and vigilant interest in the course of the War unless they have first-hand knowledge of how our expenditure is arising day by day? The public are aghast at the Mesopotamia revelations. Are only the actions of soldiers to be criticised, and not the actions of politicians? Is there to be one law for soldiers and another for politicians? Is the fierce light of publicity to be applied to the actions of the Indian Government and not to the actions of the British Government?

If the Government refused the appointment of this Committee the public will say it is a deliberate attempt to shield their actions from criticism. To-day there are 3,000,000 Income Tax payers, and every citizen is feeling the financial effect of this War. I challenge the moral right of the Government to impose taxation if they withhold control and knowledge of expenditure from this House. I hope I have shown to the House of Commons the scope, purpose, and method of this Resolution. It is admitted on all hands that Treasury control has failed; it is admitted on all hands that the policy of concealment is not justified. Everywhere men are crying out against bureaucracy and the multiplication of unnecessary Departments. The evils of borrowing and inflation are apparent to all. What we are now proposing every business man recognises as essential for the successful prosecution of his own business. The Mesopotamia Report was an instance of bureaucracy. Brushing aside every relevant and irrelevant argument, both for or against this Resolution, what is the main issue? Is it not whether this House and the democracy of this country is to guide the affairs of this nation or whether it is to be left in the hands of bureaucracy itself? The bureaucratic spirit is in the ascendant to-day, but I am convinced, after nearly three years of war, that an instructed and well-informed democracy is a better instrument for government even in war-time than bureaucracy itself, and evidently our new Allies in America, judging from the reports in the Press, are carrying out that policy to-day. To-day we are mortgaging the future and distributing the money to the inhabitants of Great Britain. This expenditure is creating a strange spirit in the country. Men everywhere are seeking Government employment, and the distribution of Government money is not too carefully guarded. Will not this in time affect the moral outlook of the nation? Is not this expenditure creating a false atmosphere? Away yonder in France, Salonika, Egypt, and Mesopotamia men are fighting for one shilling per day. Soon, maybe, when they return, they will share equally with us the burden of debt and high taxation. Should we leave a stone unturned to try to lessen that burden and safeguard their interests in the future? I wish that I had been able to do justice to the length and breadth of this Resolution, but hon. Members associated with me in this movement are more than ever convinced that the proposals which we developed months ago, and which now appear on the Order Paper, are both sound and salutary, and we recommend them with confidence to the favourable consideration of the House of Commons.


I rise for the purpose of seconding the Motion which has been proposed by my hon. Friend the Member for Greenock. I confess that I have been astonished, and I am sure the House will share my astonishment, that this duty should have been imposed upon myself. I hope the House will not misunderstand me. I do not mean to pretend—it would be an affectation to pretend—that I have not given to the questions involved in this Motion very long and grave and anxious consideration, but that consideration has been given under conditions very different from those under which I speak to the House this afternoon, and, as the House very well knows, I am entirely unversed in the art of Parliamentary presentation. Therefore, I ask the House, with very deep sincerity, to overlook the defects of presentation and to concentrate their attention only on the strength and importance of the subject-matter of the Motion which I desire to support. This Motion really rests upon two fundamental propositions, and leads up to a very definite and specific conclusion. The first of those propositions, as I understand it, is that the House and the country—and the country perhaps even more than the House—view with the greatest apprehension the recent rapid growth in public expenditure. In the second place, the House and the country deplore the loosening and diminution of the effective control which this House is able to exercise over that expenditure. We go further, and we suggest a specific remedy. The hon. Member for Greenock, from a point of view which I do not entirely adopt, devoted the greater part of his very forceful speech to the third of these points, the specific remedy. It is much the most important, and his position and his experience entitle him to lay stress upon it. I shall attempt rather to emphasise the other points in this Motion.

1.0 P.M.

The other day the Chancellor of the Exchequer, with great frankness and candour, told us that in time of war it is really impossible, do what you will, to check or to control expenditure. We will take it at that. It is a proposition which it would be impertinent for me either to confirm or to deny. Let us for a moment leave this question of war expenditure. For my part I am quite content to rest my case, or, at any rate, the first part of my case, in support of this Motion upon the growth and extent of pre-war expenditure; in fact, I should prefer to do so, because I think by that means I can most easily emphasise the point which I desire to make, for during the War it is obvious, and it is admitted, that we have lost all sense of financial perspective. We are accustomed, and we are almost encouraged, to think in hundreds and in thousands of millions. Therefore, I would recall the attention of the House to the position in which we stood at the close of our last great war epoch. The House will remember the enormous financial efforts during that great twenty-three years of war. At the conclusion of that war we found ourselves faced—I only wish that we could look forward to a similar situation—with an expenditure of £65,000,000 a year. In seven years, at a time of very great financial and commercial dislocation, we had reduced that expenditure to £53,000,000. It was the work of that much maligned, and, in my opinion, very unjustly maligned, Government of Lord Castlereagh and Lord Liverpool. Gradually, by 1835, we had reduced it to-£45,500,000, and I ask the House to recollect, as I am sure they will, that-of that £45,500,000 no less than £30,000,000 was represented by service for debt. The expenditure outside that service was only £15,500,000 a year. Meanwhile, you had got your new political regime in 1832, and from the time of the inauguration of that new regime expenditure gradually, but very slowly, increased till we came to the first year of Mr. Gladstone's financial administration, the year before the outbreak of the Crimean War, 1853. In that year we found the expenditure at £63,000,000 a year. Eight years later, after the Crimean War—a War which was paid for to the extent, if I remember aright, of something like 50 per cent. out of revenue—we were faced with an expenditure of £72,000,000. That may seem a very small expenditure to us, but Mr. Gladstone was very gravely disturbed by it, and was absolutely determined to get it down again. He knew it was a Herculean task. He wrote to someone, I think it was Cobden: It is more difficult to save a shilling than to spend a million. That, at any rate, is a sentiment in which I am sure the present Chancellor of the Exchequer will concur. Mr. Gladstone was determined to get the expenditure down even from £72,000,000, for this reason—a reason which I venture respectfully to commend to the House—that to him public economy was a moral issue no less than a fiscal issue. When Mr. Gladstone believed a thing to be a moral issue, as this House knows very well, he was a very difficult man to stop. How did he propose to diminish that expenditure? In two ways. First of all, as I ventured some time ago to remind the House, by meticulous economy—by saving candle-ends and cheese-parings. It is his own phrase. In the second place—this, I think, will astonish the present generation—he proposed to diminish it by the abolition of the Income Tax. The House will remember that he very nearly did it. My recollection is that he got it down to 4d., if not 3d. If he had been returned to power in 1874 he was under a pledge to abolish it altogether. Let the House look at the immediate scene. You had an expenditure of £65,000,000 a year when Mr. Gladstone resigned in 1866. It gradually rose in the next forty years until, at the close of the last century, it was just over the round hundred millions. Then came the South African War. After the South African War again a successful effort was made by the late Prime Minister, and he got the expenditure down again to about £152,000,000. Then came the deluge between 1908–9 and the outbreak of the present War.

What are the points which emerge from this very rapid and impressive survey? The first point I want to emphasise is the enormous debt which we of this generation owe to the financial skill of the financial Ministers of the nineteenth century. To their prudence, firmness and skill the country at this moment owes, in its credit, an incalculable debt, a debt very imperfectly realised and very inadequately acknowledged. You had a rise in expenditure it is true, but it was very slow, indeed, very much slower than the increase in the wealth of the community at large. The third point I desire to emphasise is that in the contribution to that expenditure, moderate as it was, all classes took their reasonable and equitable share. At the end of the last century, indirect and direct taxation were just balancing each other, Each contributed—Mr. Gladstone thought that the ideal—50 per cent. to the total revenue. The distribution of taxation is, in relation to the expenditure, a point of capital importance, a point upon which if time permitted, which it does not, I should desire to lay very great emphasis this afternoon. In the early part of the last century the heaviest part of the fiscal burden was borne by those who had no power in the government of the country. That was palpably unjust and wrong. To-day the main burden is borne by a very limited and diminishing class, whose influence upon the determination of policy and the objects of expenditure is very rapidly decreasing. I put this point very strongly to all candid minds in all parts of the House: you admit and you emphasise the injustice of the state of things which existed in the early part of the last century, prior to the fiscal revolution effected by Sir Robert Peel. I ask you, do you in your hearts think that the present distribution is politically just and economically expedient? For my own part, I do not believe you will ever get back to sound methods of finance and to that financial control which this Motion demands, so long as you dissociate, and increasingly dissociate, financial responsibility from political power.

There is another point which is not less important. I have spoken of expenditure. Let me say one word on the question of debt, which is also raised by this Motion. You started the period I have been passing rapidly under view with a debt of something approaching £900,000,000. You ended that period, just before the outbreak of the present War, with a debt of about £650,000,000. That is to say, despite the Crimean War, which was paid for to the extent of more than 50 per cent. out of revenue, you had reduced your debt by nearly £250,000,000 since your last great war. I am afraid the House will begin to think that I am almost hopelessly Victorian in my outlook upon finance, but I do not believe there is a man now living who will not, before he dies, look back to the financial history of that period with admiration, with gratitude, and, let me add, with very envious regret. Now for the reverse side of the picture. I find myself here in a position of great embarrassment. I am most anxious to avoid, and it is proper I should avoid, anything in the nature of personal or party recriminations. What we are impeaching by this Motion are not men, but methods. I, at least, cannot be accused of any party recrimination when I say that I exceedingly regret that the late Prime Minister ever left the Treasury, for from the moment of his departure the deluge began. He left us with an expenditure of £150,000,005. In about six years that expenditure was increased by 25 per cent., and in the last year of peace it was up to £207,000,000, which was the estimated expenditure for 1914–15. Some of the causes of that expenditure are, at any rate platonically, approved by every party in this House. It is not the objects of the expenditure to which this Motion is primarily directed, but the method of the expenditure, which no party can defend. Among the contributory causes of this increasing and deplorable expenditure two must be regarded as of primary importance. There is first the fact that the Treasury has, as we think very unfor- tunately, become in itself a great spending instead of a great controlling Department. I believe that is the root of the trouble. The second cause is the abdication of control by the House of Commons over the Executive and Administrative Departments. That diminishing control seems to be really due to two main causes: partly to the congestion of business in this House—no one is to blame for that, but it is a fact—but secondly—and this is much more important—to the increasing autocracy and omnipotence of the Executive over the Legislature. One of the reasons why I very greatly regret the decision to which the House came on Wednesday night is that I believe the proposal which was embodied in the Bill for the Representation of the People would have been a means of diminishing that autocracy. It would have led, as I thought—and on that ground I mainly supported it—to a closer control of the House of Commons over the Executive.

But it is not only a question of the growth of the autocracy of the Executive. It is much more subtle than that. It is the growing independence of the administrative Departments. Outsiders sometimes see most of the game, and I have been, until recently, an outsider, and I have sometimes wondered whether this House fully realises the extent to which it has, in recent years delegated its legislative function to the administrative Departments. This tendency has been noticed and very strongly emphasised, not only by the learned clerk in the House in his classical work on "Legislative Methods and Forms," but it has also been noticed by the most observant of foreign observers of the institutions of this country, and in particular I refer to the very important work on the Political Institutions of this Country by the President of the University of Harvard. I am quite certain that this tendency has received rather insufficient attention on the part of the House of Commons. I am equally certain that it is in no slight degree responsible for the growth of that uncontrolled expenditure which this Motion deplores and which we seek by our proposals to remedy. The fault of the delegation to which I refer does not lie wholly with the administrative Departments nor with the Executive. It lies very much more with the House of Commons itself. That is a point on which I naturally speak with great hesitation and diffidence. But so far as an outsider can judge, I have been led to the conclusion, and not recently, that on the part of the House of Commons it has been not so much a case of deprivation of rights as of abdication of functions. This House has allowed one of its most ancient, most important and moat Responsible functions to fall into desuetude. Now, suddenly we are brought-up sharp against a situation of overwhelming gravity. I am tempted rather to concentrate the attention of the House on the state of things which was beginning to exist before the outbreak of the present War, but if the case rested upon that experience is strong, it is too obvious to need demonstration that the case is enormously strengthened by the colossal addition to our financial responsibilities which have been imposed upon us by the conduct of this War. To remedy that state of things we are asking, by this Motion, that a Committee of the House—not a Departmental Committee—should be appointed, and we claim in support of the Motion the support of all who believe that the necessity is urgent and that it can be met only by the method which we suggest. I do not forget—I should not be able if I were disposed to forget—that there is in existence an exceedingly important financial Committee of this House. I refer, of course, to the Public Accounts Committee, which is, I suppose, the most important Committee of the House, and I should be the last person in the world to belittle the importance of the services which it rendered to this House and to the country at large. I should be the last person in the world to belittle the importance of the functions of that most important and responsible official, the Controller and Auditor-General. But those functions are in the nature of postmortem functions. It is un Audit Committee. What we want is not to be assured that the death of our Friend is regular and legal. We want to take measures that death shall not occur at all. We want to come in before the death and not afterwards. That is why we axe pressing for this Committee and not trusting entirely to the very important and admirably performed functions of the Public Accounts Committee.

I have only a few words to add, and the first shall be addressed to the hon. Member who, I understand, will follow me and to the party which he leads and represents. With all possible deference, but with all the earnestness I can com- mand, I would appeal to that party in the interests of the whole community, and in particular in the interests of that organised labour which they represent, to give to this question of national expenditure their closest and continuous attention. I think they will allow that I am not wholly without a right to make this very earnest appeal. For more than twenty-five yeans I have laboured to do something—I have done very little—for the higher education of wage-earning people. I have been very deeply impressed with the response of the universities in this regard, and I have done what in me lay, very imperfectly, to discharge that responsibility. It has not come to much, but it does, perhaps, entitle me to make a very earnest appeal to the representatives of organised Labour in this House. I would beseech them to throw their whole weight with us into the crusade for national economy and Parliamentary control, for, believe me, if the interests of all classes are involved in this matter, their interests are most nearly and most vitally involved. I know there is some quarters an idea that the wage-earning classes are directly advantaged by extravagant expenditure, and that they can throw the burden of that expenditure on someone else. Immediately and superficially they can, but I would beg them not to forget the warning which comes from someone who speaks with much greater authority than myself, and one whose transcendent honesty has never been impugned. I refer to Lord Morley of Blackburn. He said: Be sure that the burden of taxation, however spread however disguised, at last falls ultimately on the shoulders of the industrial community. I have only one final word, if I may address it respectfully to the Government themselves. The Government have been making, for these many months past, impassioned appeals to the community, and to all classes of the community, to economise in their personal expenditure. You have done your best to compel some classes, at any rate, to be thrifty by taxation, but may I very respectfully and deferentially Bay that there is all the difference in the world between mechanical restriction on individual expenditure and a wise education in national economy; there is all the difference in the world between mechanical restrictions and education. You can coerce people into temporary economy, but you can only permanently educate them in habits of thrift by example. If they see that you are recklessly and carelessly extravagant, they will be extravagant too; if they see you are saving, there is a chance, at any rate, that they may, in time, follow your example. I was returned to this House only a few months ago with a single and specific mandate. I was sent by my Constituents to give to the Executive Government every possible support in a vigorous and whole-hearted prosecution of this War. If I thought or imagined this Motion was in the least degree inconsistent with that mandate no power on earth, not even the persuasion of the hon. and gallant Member opposite (Major Collins), would have induced me to support, much less to second, this Motion. But it is because I am confident and absolutely convinced that the measure advocated in this Motion is essential to the fulfilment of my mandate, because I am convinced that economy is the complement of efficiency, and because I am convinced, if the Administration is to be run on sound methods of finance, and this House recover the control which it has so largely lost, that I give to this Motion, not merely a formal, but a whole-hearted support.


I beg to move to leave out from the word "That" to the end of the Question, and to add instead thereof the words as a first step towards the better control of the public expenditure, it is expedient to appoint a Departmental Committee to consider and report what changes are necessary in the forms in which Estimates and Accounts are laid before this House to make them more effective for that purpose; and, further, that it is expedient to appoint a Select Committee on Parliamentary Procedure. I want to begin by assuring those hon. Members whom I have the privilege of addressing that I do not rise in any sense of hostility to the Motion which is upon the Paper. My object—and my hon. Friend and I have frequently discussed this subject—is the same as his, and that is to seek some method, to find some way of so altering our Parliamentary procedure as to establish a real and genuine control of the House of Commons over expenditure. The hon. Member who has just sat down, and the hon. Member who moved this Motion, seemed to think I had suggested a Departmental Committee in substitution for the House of Commons Committee, which they propose. No Departmental Committee could in any way be a substitute for a House of Commons Committee, and no Departmental action can in any way be a substitute for the House of Commons action.


I understand, then, that my light hon. Friend does not propose his Amendment as a substitute for our Motion, but as an addition to the main Resolution?


No; I am afraid not. I propose my Amendment in substitution for my hon. Friend's Motion, but not out of hostility to it. My point is this: It may well be, I think very likely is, that the verdict of the House of Commons is that he has probably chosen the best method. If he was here introducing a Bill, we who wanted the same object could move Amendments in Committee, and suggest alternatives, but as he now seeks to appoint this Committee with those powers, even though I am anxious to achieve the same objects, it is my duty to suggest to the House of Commons an alternative method of procedure. We have had Committees of this kind before. We had a Committee on the Estimates in 1911, 1912 and 1913. My hon. Friend is afraid that if my Amendment were accepted the real control which he seeks would be postponed until my Committee had reported. I am afraid if his Motion is accepted a new Committee on Estimates will be set up, which will be found to be no more successful than the old Committees set up, because the preliminary steps have not been taken. That is my sole reason for suggesting my procedure.


All that this Motion asks for is a Committee to be appointed by this House, and that it should possess certain powers. That is what we ask for.


That is the point. The hon. Member thinks that the best way of controlling financial expenditure in this House is by appointing a Committee to control expenditure. I submit to the House that the right way to achieve the same object is to appoint a Select Committee of the House of Commons to consider the best method of obtaining financial control.


The right hon. Gentleman proposes a Departmental Committee.


The hon. Member has not done me the honour of reading my Motion. I propose both—a Departmental Committee for certain technical work, and a Select Committee to sit at the same time to consider the right forms of Parliamentary procedure, and to use the material which the Departmental Committee will give them. I cannot help thinking that one of the reasons why the House of Commons has lost a certain amount of financial control is that it has kept the semblance and forms of financial control, and while it has been content to keep forms which waste time it has thereby been precluded from accepting alternatives which would be better. Can anybody say that the twenty allotted days in Committee of Supply are any use at all for financial control? Can anybody say that the Resolutions in Committee of Supply, the Resolutions in Committee of Ways and Means, the Second Reading of the Consolidated Fund Bill, the Committee stage of the Consolidated Fund Bill—on which Amendments have been proved by frequent trials to be almost impossible—the Third Reading of the Consolidated Fund Bill, the Resolutions which we have before the discussion of Financial Clauses in non-financial Bills, excellent opportunity though these stages may be for criticising the Government, offer any opportunity for real financial control by the House of Commons? They waste the time of the House of Commons. They contribute to overburden the House of Commons in the way that has been suggested by the hon. Member behind me. They are a block in the way of real financial control. I want the Select Committee of the House of Commons to consider whether these cannot be brushed aside, and whether a financial procedure can be substituted for it which will ensure that the finance, not the policy, of proposals that are put before us and the administration of Ministers can be considered by properly constituted authorities of the House of Commons.

That is my suggestion, in the second part of my Motion—that the hon. Member's Committee and all other proposals of a similar kind should be at once referred to a Select Committee on procedure. I do not think that it would take the Select Committee long—not more than a few weeks—to consider the financial part of our procedure. My right hon. Friend (Mr. Lough) asks with some impatience and some reiteration—and he is perfectly right—why, if that is what I have in view, I have suggested in the Amendment which I propose to move that the Committee should consider the whole of the Parlia- mentary procedure, and not merely financial procedure? I do so because, first, I think, if I may say so with great respect, that the whole of our procedure does want overhauling. I will not argue that now, because I suppose that it would be out of order. Suppose that the Government was to appoint a Select Committee on these financial matters and confine it to that, it would preclude the appointment of a Select Committee on procedure; but if they appoint a Select Committee on general procedure, with a reference to it, and ask it to report on financial procedure first, then I think they achieve the same object as if they confine it to financial procedure and make quite sure that they do not preclude the wider inquiry which I am afraid it would be out of order to discuss just now.

I now come to the portion of my Motion which I think most important. Let me assure the hon. Member who spoke from behind me that I do not mean by a Departmental Committee which, rightly or wrongly, has become so distasteful to the House of Commons, a Committee of Departmental officials. I want the Estimates put once for all in a proper business form. I am now speaking in complete agreement with my hon. Friend, who desires the same thing. I need not argue the point. I think that it is quite obvious. It as no use to the House of Commons to know that the Army spend £200,000 upon medicines one year and £200,600 the next year; but if we knew how much per patient per hospital the War Office spent, and could compare that with what the Admiralty spent, then we should be able to watch and see in what respect the actual cost was increasing, and we should be in a better position to judge whether money was being wasted, and we should be able to put our finger on the right spot. It is exactly the same with the scattering of items through the Estimates under headings which do not show their purpose. For instance, take "staff travelling expenses." Without knowing what particular purpose the staff are going to fulfil, it is quite impossible to come to any definite conclusion as to what the Estimates mean. We want a system of unit cost, and we want a system of purposes. There are two Estimates which I think purport to give some of these details. In the Post Office Accounts the telephones, telegrams, and post are grouped together, but they do not give the units. On the other hand, in the Naval Expenses Account, although they give the account per unit per ship, they do not go into sufficient detail, and they do not show the variations in design which the ship may have undergone during the time of building, and so they do not enable a true comparison to be made.

When a Committee on Estimates sat in 1912 they were up against this point at every moment. For instance, I remember that when we were dealing with the Office of Works, it looked as if the staff at Osborne was far too big; but as the staff for patients in the hospital was lumped with the staff for showing visitors over the State apartments, there was no possibility of getting the accounts properly, and we made recommendations on that. Next year, when the Committee dealt with the Navy, they found items for certain things spread through all the different Votes under all the different headings, and they suggested an improvement. I think that for the Committee to put the Estimates in the right form—the Accounts will follow the Estimates—is an essential preliminary to the work which my hon. Friend wants to undertake, and I think that that ought to be done by a Committee of Members of the House of Commons, united with people who are not necessarily members. I believe that for this technical work you want a certain form of talent among your membership which may or may not exist in its most available form in the House of Commons. For instance, I am told—I speak subject to correction—that in the old days the telephone companies' system of accounts was far better, in certain details, in the way in which it elaborated the cost per district than the Post Office system. You may find frequently that you want the assistance as members of your Committee of business men who are not Members of the House of Commons, of Government officials with the great experience of presenting estimates who ought to be there to assist you in your deliberations, and not merely as witnesses; and it is for this purpose, in order to reinforce the House of Commons who, I think, ought to form the bulk of this Committee, that I suggest a Departmental Committee for this purpose.


To be appointed by whom?


I suggest that we should ask the Government to appoint that Committee.




My hon. Friend has an objection to that, I gather.




I would be perfectly willing if he would consider my Amendment to incorporate in it words securing that the majority of members should be Members of the House of Commons, or, if he prefers it, suggest some other method of appointment rather than by the Government. The House of Commons, so far as I know from precedents—I may be wrong—has only power to appoint a Committee consisting entirely of its own Members; and I want a Committee which will have the benefit of outside help. When I come to the second point, of the Select Committee I want to consider his proposal, I wish to suggest that at the present time not only will the Committee he wants be hampered by not having Estimates in their proper form, but by not having Estimates at all, and on that point I want to make a direct appeal to the Chancellor of the Exchequer. During the earlier stages of the War when the war Departments were expanded the system of Token Votes was adopted because of the impossibility of proper Estimates? Is the right hon. Gentleman quite satisfied that it is necessary to keep to that system now? I am told that in France they have found it possible to give Estimates in considerable detail, even of expenditure on munitions. Let us say, would it not be possible to present to Parliament every three months an analysis of the general expenditure during the past three months and a forecast of the general expenditure during the coming three months? Could not the War Office, Admiralty, and Ministry of Munitions supply us, if not in great detail, at any rate under big heads and in as great detail as they could, something which would show the House of Commons in what direction the money was going, at intervals of three months, in order that we could keep track of expenditure. A little reform like that would go far to help the House of Commons and to provide the material my hon. and gallant Friend suggests. If he does not get that sort of information and has to wait while they are preparing it I feel certain that this Committee will achieve no more than the Committee on Estimates in 1912, 1913, and 1914, and that it will find itself doing the very thing that the Treasury finds itself doing, bullying the small Departments that do not matter because they have not the necessary information or knowledge to get the information out of the Departments that do matter.

It is no use in time of war to set up a Committee to inquire into and consider the expenditure of the Home Office, or the Local Government Board, or some Department of that kind, because that is not where the money is going. It is going, roughly, in the War Office, the Admiralty, and the Ministry of Munitions. You want to inquire into this, and until you get the information in a proper and intelligible form such as will be useful to business men it is, I submit, quite useless to set up the Select Committee which is proposed. When you have the information, I think then you ought to set up the right machinery. I cannot think that you ought to plunge on a particular machinery to-day without an investigation by the House of Commons as to whether that is the right machinery or not. I will again say what I mean by that. In the lifetime of the last Government certain Committees were appointed to investigate expenditure in the Admiralty and in the War Office. I believe that my hon. Friend who sits behind me (Mr. Holt) was a member of one of them. On the last occasion on which I spoke in the House of Commons on this subject I advocated a plan whereby those Committees, or bodies comparable to these Committees but consisting entirely perhaps of Members of the House of Commons, should report in every year—I do not know how far that is practicable in war-time, butt it certainly ought to be practicable in peace-time—on the Estimates of the particular Departments to which they were attached in substitution for the Committee stage on Estimates, as a matter of financial expediency. I do implore my hon. and gallant Friend opposite not to say that every counterproposal that is raised to his proposal is hostile to it or is meant to delay it. The history of the House of Commons ever since the year 1887, and before, is littered with inquiries as to the best form for financial procedure to take in this House. Some of them have produced no Reports; others have produced some Reports. We have tried again and again, and now, with all the lessons of the War before us, my hon. Friend cornea down and says that, without examination, we should select the course that he and his Friends prefer. Surely we do not want to make any mistake. Surely it is time we got our procedure on a footing that will command the respect of the business community of this country, Und for that reason I cannot think that we ought to accept any proposal to-day. I would urge that the Government instead should set to work to have this matter thoroughly investigated by the House of Commons itself, and, pending that, that it should put its Estimates in proper form by the Departmental inquiry which I have suggested.

In conclusion, I would venture to say that I do not think my hon. Friend ought to expect much result from, or ought to found his case, upon, the size of the daily expenditure during this War. It is, unfortunately, still true that the prime necessity of the War is not economy. It is still true that the Services come first, and I do not believe that the growth that he has referred to of the last three months is due to increased extravagance; it is due to increased necessity. In the second place, I am so afraid lest some part of this Debate might be quoted as suggesting that my hon. Friend, one of the most progressive-minded men in the House, fears the expenditure which is certainly coming on some of the objects which he has mentioned. It has always seemed to me that just as meeting current expenditure out of loans puts a burden on those who come after, so refusing to meet the necessary expenditure of the time out of revenue puts a burden on those who come after, and the so-called extravagance of the epoch which preceded the War is very largely the aftermath of the rigorous economy and cheese-paring which went on in the epoch before that. We shall have to face expenditure—large, lavish expenditure—even at a time when, from the point of view of taxation, we should want to cut down expenditure. For that time we want the best House of Commons machinery that can possibly be found, and I submit that that House of Commons machinery can only be devised by a Select Committee of the House of Commons itself.




I forgot to make one thing quite clear to the House. One's position at this box is sometimes open to misunderstanding. I was speaking on behalf of nobody on this bench except myself. I have not consulted anybody, and I feel very strongly on the subject. I hope my hon. Friend will forgive me for this explanation.


I forgive the right hon. Gentleman with pleasure, because it certainly seemed to me that he was speaking for himself and probably not for many other persons besides himself. At any rate, I should hope that that is the case, because, in spite of what he has said, I am bound to come to the conclusion that the Amendment which he has moved would act as a dilatory Motion; it would, and does, confuse the issues which the original Motion intended to put before the House, and it is, in my opinion, an entirely unnecessary Motion under the circumstances in which we find ourselves. For instance, he has himself admitted that Committees on procedure and things of that kind have constantly sat from 1887 up to the present day, and have brought forward nothing which has remedied the evil sought to be remedied by the Motion now before the House. I would point out to him everything which he suggests can be done by such a Committee as the original Motion proposes. If it is a question of accounts, the form of accounts, the question of control of estimates, and suggestions with regard to those estimates, I venture to say that the very first thing this Committee would do, if it were set up, would be to attempt to set the procedure right, to have the forms of the accounts put in order, and to give itself a status which would enable it to carry out the work which it attempted to do.

2.0 P.M.

The very interesting historical survey which the hon. Member opposite (Mr. Marriott) gave us in seconding the Motion seemed to me to have very little indeed to do with the Motion before the House. There was in the speech of the right hon. Gentleman who has just sat down, and the speech of the hon. Member who preceded him, a point of conflict in which 1 agree with the right hon. Gentleman, that the rigorousness of the Victorian era which appealed so much to the hon. Member for Oxford seems to have resulted in the necessity for an increased expenditure in pre-war days, and still more in after-war days. The hon. Member for Oxford made an appeal, to which I listened with great interest, to the party which I represent, in regard to the question of economy and expenditure. In regard to what I would call real economy, I will respond to that appeal at once. With reference to the question of control over expenditure and seeing that the expenditure, when it is made, goes to the purposes for which it is voted, and is no more than is necessary for those purposes, I would follow his appeal, for I do honestly believe that the control of this House over expenditure is getting in the loosest possible position, and that we do require and must have some further control over expenditure than that which we now possess. It is not the amount of the expenditure, after all, which is the great matter in this respect. It is the purpose to which the expenditure is put. [An HON. MEMBER: "It does matter!"] The amount, of course, has something to do with it, but it all depends. An hon. Member says the amount has something to do with it. Would he in this War stint the Government in any degree whatsoever for the necessary expenditure to carry the War to a successful issue? If not, then the purpose for which the expenditure is being voted is the necessary qualification. You want to see that it is expended economically, profitably, and efficiently, and therefore you require, I submit, a Committee such as my right hon. Friend has proposed in the Motion now before the House.

I do not propose to traverse the historical aspect of this matter. I have really got up to support the hon. Member for Greenock's proposal that a Committee of this House should be associated with the Government and should have the power to examine accounts, to examine the estimates, to work before the expenditure occurs, and to watch it as it goes along. I think that such a Committee is an absolute necessity in these times, and I am astonished that the House of Commons has not see that it is impossible for it as a whole ever to deal with a problem of this kind. It must delegate it to some extent to a Committee, and it seems to me that the procedure which is exercised—you have your Finance Committees on every town council and every county council—in local government, where you proceed by the method of committee—ought, if it is good there, to be excellent for the national body also. The control which a committee exercises in a town council or in a county council is precisely the same. I would have a Committee, which would be appointed by this House, for control over the national expenditure. It is a much bigger thing I agree. It has a greater area to cover, but the same principle which the House has insisted upon with regard to the control of local expenditure is the precedent we ought to set and follow in this House itself. No one has suggested, I would like to point out to my hon. Friend, the French system of committees, after all, and particularly the question of finance committees, has not acted in the national interests in France. Whether it has been an inconvenience to Ministers is another matter, and whether many of the committees are necessary or not is another matter. They may have overdone the committee system, run it to death, and so on. Relatively, I dare say that is perfectly true. I do not think that the House would believe in setting up twenty-one Committees, but if we had one Committee dealing with the question of expenditure, and with some power in regard to it, I think this House would get an insight into and a control over the national expenditure which it does not possess at present, and which I think, in the national interests, it ought to be able to exercise. I agree with the hon. Member for Oxford that in the last resort the interest on our National Debt, and taxation generally, do filter down and fall upon the working classes of the country, and if there is any class in the country which has an interest in seeing that there is economy, in seeing that expenditure is of the wisest possible kind, it is the working class, and in their name to-day I ask the Government, if they can see their way, to accept this Motion now, or that at any rate they will not shut the door upon the possibility of a Finance Committee being set up in this House of Commons which will check and control the expenditure of the country, and which will be in a position to do something, at any rate, to mitigate the evil effects of that bureaucracy which is growing all-powerful and all-dominant in this country to-day.


My justification for intervening in this Debate arises from the fact that for over nine years, and during the whole of the War period, I have been Financial Secretary to what was, before the War, the largest spending Department, and which is now one of the three largest spending Departments. I am very glad an opportunity has been made for this Debate, because I am sure it will remove some misconceptions as to the extent to which a check upon financial expenditure already incurred has been possible during the War. And, on the other hand, it may very well be that the result of the Debate will help. I believe it will. If that be so, it will be all to the good. As befits my office, my remarks will be of a strictly practical character. The House does not need to be reminded, I am quite sure, that the task of those who control war expenditure is by no means an easy one. Always we have to keep in mind the needs of the fighting Services, and their full and immediate satisfaction. It often happens that those needs cannot be met as promptly as necessity demands, by following step by step the sound procedure of peace time. We quite realise that we may be open to two criticisms all the time. Either we may be censured for delaying necessary action, by adherence to procedure not altogether suited to war conditions, or, on the other hand, we may be censured for omitting necessary precautions for the proper control of finance in our anxiety to give the soldier and sailor instantly what is required. To put it bluntly, we know that the possibility is that the more successfully we escape the one criticism, the more the chances are that we shall have to face the other. We cannot escape the shot of what I may call two enfilading fires, and, unfortunately, we cannot dig ourselves in. If we dodge the minnies and the whiz-bangs of the sticklers for adherence to the well-established procedure of peace precedent, down may come a crump from the gingerites. But I will say this, that the task has been made possible by the good sense, if I may respectfully say so, and the reasonableness shown by the House as a whole. I think it is due to the Treasury to say that they have met the war situation quite fairly. I can imagine that it must have been, a wrench to Treasury officials, to concur in the short-circuiting which war conditions make necessary. My right hon. Friend opposite (Mr. Montagu)—if I may with respect say so—was always most reasonable, always most helpful, and never "sticky," to use a word which admirably describes officialism at its worst.

Let us get to close quarters with the real problem before us. Let us see how the Parliamentary control of finance—so far as the fighting Services are concerned—is affected by war conditions. Parliament loses the opportunity of examining detailed proposals for expenditure afforded in peace time by the submission of annual Estimates. Annual Estimates, in my opinion, are a great advantage for the purposes of comparison year by year, and certainly they ought to be explained in such a way as to present a real and substantial comparison to those people interested in the matter, as we all are. The Debates on the Estimates in Committee of Supply have a very considerable value and influence upon administration, but in recent years, in our case, those Debates were mainly concerned with discussions on policy in connection with the material strength of the Fleet. The last detailed Estimates for the fighting Services submitted to the criticism of this House were those for 1914–15. Since the War, we have had three annual submissions of what are called "token" Votes. No one pretends that they are anything more than the merest form; no one will pretend that they in the slightest degree fill the place of the old detailed estimates, but they are, I think, the only thing possible in the circumstances. I listened with interest to the suggestion that the time had not come when, with regard to the fighting Services, we could depart from the token Estimates, for which my right hon. Friend was largely responsible as Secretary to the Treasury at the time. The justification and necessity for token Estimates is to be found in the Treasury Minute, with which my right hon. Friend is familiar, dated the 5th February, 1915, a very valuable and interesting document, which I commend to all who are interested in the effective control of public expenditure. What the continuance of the policy of submitting Estimates, even in the token form, does secure is this, that the machinery for the examination of proposed expenditure is not, for the time being, entirely scrapped. It is simply kept in being in a state of suspended animation through the war period. I took note of the suggestion that the fighting Services should depart from the token Estimates and should be given in some more detail. I can given no undertaking as to that.

Passing from the stage at which proposed expenditure is reviewed—a stage which for the time being is, in fact, perforce, omitted, I come to the actual question of the expenditure. Of course as regards the two fighting Services particularly the expenditure has enormously increased. As regards our own it is somewhere in the region of four times the last pre-war standard. Supplies have had to be obtained for both these Services on a scale which of course has no precedent, and obtained in many cases without the circumspect deliberation of peace time practice. Contracts had to be placed with firms of whose capacity and efficiency neither Department had experience. Contracts had to be placed with firms undertaking the work to be executed for the first time. This is particularly true of the vast output of munitions of war for the Army. Contracts had to be placed under pressure of time which made it impossible to go through the usual procedure of competitive tenders. Promptitude of execution made the issuing of specifications amongst firms likely to compete and the preparation of estimates by the firms and the examination and comparison by the Departments concerned of the tenders offered quite out of the question. In many cases in lieu of the fixed price contracts placed after competitive tenders, it was necessary, in the early part of the War, to place work out under the "time and line" system, a system for which I admit the only justification lies in the urgency with which work has to be placed, or in the fact that the work is of a purely experimental character. Further, it is the fact that in the prosecution of war you sometimes have to incur expenditures, and rightly so, to meet a situation which may not arise. In that case your expenditure is wasted. But of course it is the duty of everybody concerned to do his best to reduce waste to absolutely unavoidable limits because in a war of this character the prudent and careful conservation of your resources is a vital factor in the successful prosecution of the War. Observe the advice of the present Prime Minister given when he was Chancellor of the Exchequer and when he was about to become Minister of Munitions. Let me give an extract or two from a speech which he made on the 4th June, 1915, at Liverpool, when Chancellor of the Exchequer: This is no time for the usual methods of doing business with the Government. … This is not a time for the usual roundabout methods of Government business…. We want to suspend, during the War, not merely trades union regulations, but soma Government regulations too. … There is one thing we want less than usual, and that is red-tape. It takes such a long time to unwind and we cannot spare the time. … We have no time to go through the same process of examination, of bargaining, as you usually get in the matter of Government contracts. Whatever is done must be done with promptitude. That involves our trotting to the integrity, to the loyalty, to the patriotism of the business men to do the best for us, and to do it on fair terms. That is the situation, and it is the inevitable consequence of war conditions and represents a sharp departure in many cases from the procedure followed in peace time in entering upon expenditure. But the question of the checking of expenditure after it has been incurred is another question altogether, and it is to that question I now propose to direct the attention of the House. I think there is some confusion of thought arising out of the policy of "Token" Estimates. Some of my hon. Friends seem to think that when you have Navy Token Estimates simply showing something short of £20,000 and when the Appropriation Account is completed showing an expenditure at the end of the year of over £200,000,000 that Treasury or Parliamentary check has gone to the winds. That is not really so. Certainly, and I have admitted it, the process of examining and criticising proposals for expenditure before they are made is for the time being no longer possible. But the machinery for the checking of expenditure after it has been made remains pretty much what it was in peace time.


As a matter of fact, did not the Admiralty keep the Estimates well within the mark for the year 1914–15?


As to the Estimates for 1914–15, which were prepared before the War, had it not been for the outbreak of war I had hoped that those Estimates would have worked out all right.


I meant the war years.


Oh, no! There were no Estimates except Token Estimates for 1915–16, 1916–17 and 1917–18. As I have said, the expenditure has necessarily been incurred under conditions not similar to those of peace time. But at the close of the financial year we still go to work just as in peace time to complete the Appropriation Account. We submit that account to the Comptroller and Auditor-General within nine months of the close of the financial year as usual. He reports upon it in the early part of the following year and submits his Report to Parliament as usual. That Account, I admit, during the War period is condensed to a certain extent, and this with Treasury concur- rence. So that whilst it does not show in complete detail the precise object of all expenditures—that would obviously not be in the public interest—the full total expenditures are shown in every respect. Here they are for the Navy for 1914–15 and 1915–16. That procedure as to the condensing of the Account was duly notified to the House in reply to a question put to me on the 18th January, 1916, by the Chairman of the Public Accounts Committee (Sir R. Williams). Further, the Public Accounts Committee itself, with the Comptroller and Auditor-General, has access naturally to all vouchers and details which it may demand. The Public Accounts Committee proceeds to examine the Report of the Comptroller and Auditor-General, examine Departmental officers upon it, and submits its Report to Parliament as usual. It submitted its Report on the 1914–15 expenditure on the 8th August last, and the House debated it on the 24th October. No doubt the work of the Comptroller and Auditor-General has enormously increased as a result of the War conditions. I see, in reply to a question, that the staff which consisted of 249 persons on the 1st July, 1914, consisted of 305 on the 1st July, 1917. It goes on to say: His staff have throughout the War worked longer hours and their annual leave has been curtailed. Further, as was stated in reply to a question put by my hon. and gallant Friend the Member for Greenock, on Wednesday: Steps have been taken by applying a less Complete audit to the Civil Service accounts, which are to a slight degree only affected by the War, to increase the staff employed on the accounts of war expenditure by more than 100 per cent. I have referred to the Report of the Comptroller and Auditor-General. I have explained that the Report on each financial year does not reach Parliament until nearly twelve months after the close of that financial year, and that the examination of the Public Accounts Committee upon it does not proceed then, but it is taken up immediately thereafter. But the Report of the Public Accounts Committee does not reach the House until three or four months further have elapsed. That, is to say the House does not have the Report and judgment on the expenditure until fifteen or sixteen months after the expenditure has been finally made. That again is the existing pre-war system. My right hon. Friend opposite to me is one I of those who think it would be a very j good thing if this examination were made I concurrently with the expenditure. That is to say, that the Public Accounts Committee, or some similar body with the same authority could be in a position to supervise more concurrently the expenditure made, and the appropriation of the public funds involved. I will not go into that now, but I would like to say two things upon it. The first is that absolutely concurrently with the expenditure there is proceeding day by day in these spending Departments a very considerable check of the expenditure for the particular year in which the expenditure is being made. Take our own Department. The Comptroller and Auditor-General and staff are conducting, where possible, checks upon expenditure, and at this moment no less than fifty or sixty officers of the Exchequer and Audit Department are engaged upon checking our vouchers, etc., at the moment while the expenditure to which they refer is being incurred. I do not know that that fact is generally known. This particular case to which I refer, and which they are checking at this particular moment, is the current expenditure for 1917–18. I admit that does not come before the House in the form of the Comptroller and Auditor-General until 1919, and in the form of the Report of the Public Accounts Committee upon that Report, until some months after that. But it is, nevertheless, the fact in regard to this, that at the moment, as the expenditure is being made, and as soon as possible, officials from the Exchequer and Audit Department are following up the accounts and examining them. Let no one suppose, either—and I have some experience in the matter in my present office—that the officers of the spending Departments do not always keep before them the fact, when they are incurring expenditure, that in due season they will have to sit in the witness-chair of the Public Accounts Committee. I can assure the House they do.


Is the right hon. Gentleman quite sure?


That is my experience, that the examination—though in the nature of a post-mortem examination—of the Public Accounts Committee, and its Report upon appropriation, does create a considerable effect upon administration. Let no one suppose that the Public Accounts Committee's Report on the 1914–15 Appropriation Account, which the House no doubt remembers, has not been the subject of careful consideration by the Departments concerned ever since. Of course it has.

I should like to add to these general reflections two other observations. As regards our expenditure and the method of control within the Department, I will not go into that. I have described it to the Public Accounts Committee as well as I could in the evidence I gave last year, and even during the War, before the Public Accounts Committee. Of course we have made mistakes. I do not pretend that we have not. I am not going to pretend that all has turned out precisely as we had reason to hope and expect. I dare say in expenditure of this sort the administrator is just as often as wise after the event as is his critic. But there is this difference between the two, that whilst all the administrator can do is to apply his wisdom after the event to see that the same mistake does not happen twice, his critic is in the happy position of being able to assure everybody—and there is nobody to contradict him—and often does, that if he had only had the handling of affairs the original mistake would most certainly never have happened at all. That comment does not, I admit, apply to the critics of to-day. Let me give shortly one case further, and carry the matter outside the Department in regard to the relations between us and the Treasury. On the outbreak of War the Treasury asked us to agree, and of course we did, that proposals for emergency naval expenditure should be dealt with by a Standing Committee appointed for the purpose, instead of by the ordinary rather tedious method of official correspondence. We at once agreed, and a Committee was appointed, composed of the then Financial Secretary to the Treasury, the right hon. Gentleman the late Minister of Munitions, as Chairman—whose successor is the present Financial Secretary to the Treasury—Sir John Bradbury—whose place is now taken by Sir Robert Chalmers—Mr. G. L. Barstow, and Mr. V. W. Baddeley, representing the Admiralty. This Committee has held upwards of 350 meetings during the War period. It has considered and dealt with about 6,000 items. By this method which has, I think, proved most satisfactory to both the Departments concerned, care is taken that the Treasury never fail to be consulted on all financial matters which require sanction or approval. The busi- ness is dealt with with great rapidity, meetings being held, if need be, at a few minutes' notice, and decisions recorded and acted on within an hour or two. The subjects dealt with are naturally of the most multifarious description, ranging from the purchase of a battleship to the grant of an allowance of 2d. a day to a barber.

What does all this come to? It comes to this: Although the preliminary examination by the House of Commons of the details of proposed expenditure is for the time being not possible, although expenditure has enormously increased, although in many cases it has had to be entered upon without the deliberate and cautious circumspection possible in peace time, and although when the written page is complete it may be found that expenditures have been incurred which have not been fruitful of the result expected and to the extent anticipated, yet notwithstanding all this—and that is where I think my hon. and gallant Friend the Mover has not quite justified his position—there remains at work precisely the same as ever the peace-time check upon expenditure after it has been incurred of the Comptroller and Auditor-General, of the Public Accounts Committee, and finally of the House of Commons itself. No doubt the War has put a very severe strain upon these checks. I am bound to say, so far as that aspect of the case is concerned—the review of expenditure for what it is worth after it has been made—I really cannot admit the proposition that the strain has broken down the machinery for checking public expenditure which we created before the War. It is not true to say that war has meant the entire abandonment of Treasury and Parliamentary checks upon expenditure and the appropriation of money out of expenditure. If the check is defective—and I am not going to say that it cannot be improved—it is not a consequence of the War, the defect was there before the War—though I admit that war conditions will not minimise the defects. As regards the two proposals now before the House it will be for my right hon. Friend the Chancellor of the Exchequer to state the position of the Government towards them. All I will say is this; if the House of Commons can, without reducing the fighting efficiency and instant readiness of the Fleets and Armies, stop any leakage of public expenditure to wasteful uses, if the House of Commons can, subject to the same proviso, improve and extend the system of checking war expenditure, it will, in performing its constitutional function, have served also the highest ends of patriotism by rendering it possible for us to continue more vigorously and more effectively the successful prosecution of the War.


I am extremely glad that my hon. and gallant Friend the Member for Greenock (Colonel G. Collins) and the Government have given the House an opportunity of ventilating this matter. It has been ventilated in interesting speeches from different points of view, and I am satisfied, after listening practically to every word of the Debate, that the Debate will be valuable from the country's point of view. That a case has been made out for fuller information as to the need for national economy and supervision of national expenditure is without doubt. The original Motion speaks of debt, taxation, and expenditure. We know that the deadweight Debt immediately before the War was £651,270,000; now it exceeds £4,000,000,000. In regard to taxation, Income Tax immediately before the War was about 1s. in the £ on the average; now it is 5s. in the £, or, where maximum Super-tax is paid, 8s. 3d., and it has been pressed on the Government that if the taxation increases at the rate it has we may find ourselves considerably handicapped at the end of the War, when we want to increase our production and extend our trade. Take such a case as the "ton for ton" policy, advocated by myself and others. Suppose the War does not end so conclusively that we can get ship for ship, or ton for ton from Germany, to which we consider we are very properly entitled, over-taxation will damage our chances of building further ships, and therefore it is quite plain that we ought to be circumspect as far as possible in this and in many other ways as regards overtaxation. As to annual expenditure, immediately before the War it was £197,492,000, for 1916–17 it was £1,825,000,000, and, as has been said, we are spending something like £7,000,000 a day.

What is asked in this Motion is that the Government should show a good example of good management to the public, to whom we are preaching economy. Over and over again there seems good ground for suspecting that the economy, such as it is, or the expenditure, such as it is, practised in public Departments is not what it properly should be. There is suspicion of much overlapping. It is constantly urged, and I suspect with good reason, that the Ministry of Labour and the Ministry of National Service overlap each other, and consequently that there is duplication of expenditure in many quarters. Similarly Labour Exchanges overlap, and agricultural committees overlap with similar agencies in other Departments, which are working much on the same lines, and you see large staffs established in old Departments sometimes, and in new Departments sometimes, a large portion of which might not be justified at all. It is rumoured that in the Ministry of Munitions, for instance, the number of clerks, porters and others is something over 8,000. It sounds a startling figure if it be true. In minor matters, whether it be stationery, the sending of military telegrams, or the sale of Government boots by auction, all of these seem to want supervision. Endless expenditure seems, to the outside public at any rate, to be often incurred, and it brings us to the point that, while the Treasury endeavours to control salaries and the multiplication of offices and officials, it really has very little power. Who is it that authorises all this increased expenditure? When it becomes a question of starting a new Department or having a staff of officials, does the matter go seriously before the Treasury? I gather that what really happens is that the question is submitted to a rather desultory and a very rapid decision of the War Cabinet, who have a great deal else to think about, and probably cannot devote their attention to details as to whether this or that expenditure is fully justified. If the Treasury, as I quite understand, cannot wholly control in war time the expenditure, at any rate it ought to have the power to some extent to supervise it, and equally this House ought to have the power to some extent to supervise it. The misfortune is that the Treasury since 1908 has no longer properly performed its duties as a watchdog over every Department. It has become one of the great spending Departments, just as much as the War Office, the Admiralty, or the Ministry of Munitions. It really has responsibility for old age pensions, the Insurance Act and similar legislation which has caused large sums of expenditure.

It brings us back to the cardinal point that neither the House of Commons nor the Treasury have got the control over national expenditure which they ought to have, and it is the object, I take it, of this Debate to find some kind of remedy for that state of things. The House is growing restless, and very naturally so. Information, which is sometimes, no doubt, necessarily withheld from it, is its only means of checking unreasonable expenditure. It is no use turning to the Public Accounts Committee because that Committee is really in the position of shutting the stable door after the horse is stolen.

Colonel Sir R. WILLIAMS (Chairman, Public Accounts Committee)



It is not very much more than that, I would submit. I agree it has a kind of control, but the fact remains that all this expenditure is submitted to it after the money has been spent, and that being so it must necessarily be that when the horse is stolen the door is shut. The Public Accounts Committee can only criticise and tell the officials not to do it again. It cannot stop the expenditure which has been incurred. Therefore I do not think we can look for great remedies from the Public Accounts Committee. The French system has been suggested this afternoon. Into that I had some considerable opportunity of inquiring on more than one occasion recently with the Allied Parliamentary Committee in Paris, and whilst the French system has a certain amount to recommend it, I think it is open to very serious abuse.

When M. Briand openly says that as Prime Minister during one week he was summoned to make thirty speeches before these official committees, I think the matter becomes one which does not much commend itself for adoption. Either you must trust your Ministers or you must not. If you want to have a really efficient Minister you cannot possibly subject him to be bullied by this kind of committee. While in theory the French system may be a very good one and may give a very wide control over any expenditure or any policy, after all the proof of the pudding is in the eating, and the frequency of the change of French Ministries seems to me to show that there is a good deal to be desired. In any case, if we set up Committees here of this character I would submit that no Committee ought to have the power of interfering with ministerial policy. They may control expenditure in connection with policies, but I do not think they ought to have the power to dictate to the Ministry what policy is to be carried-out. I do not think, therefore, the French system altogether washes, so to speak.

The suggestion of the right hon. Member for Chesterton of a Departmental Committee would not go far enough to carry out what this Motion desires. He also suggests that a Select Committee should be appointed to look into the whole matter. As regards a Select Committee, at any rate it can do no harm, although I am not quite certain how much good may come out of it. As regards the Departmental Committee, I do not think that, at any rate by itself, it adequately grasps the nettle which this Motion has set out to try and grasp. Therefore, I do not feel the House as a whole is likely to be fully satisfied with the Motion of my right hon. Friend. But I should like to make as much contribution as I can to this Debate and to refer again to the Estimates Committee which existed between 1911 and 1914. It was dropped in 1914 largely because of the Token Votes to which the Financial Secretary to the Admiralty has just referred. It was impossible to look into the Estimates if they were merely presented as Token Votes, but I do believe something more might be made of the Estimates Committee than was really made of it. The Public Accounts Committee has the advantage of an official in the person of the Comptroller and Auditor-General. The Estimates Committee used to work without any kind of official of its own, and I am not at all clear that if one or two officials of its own were to be appointed it could not be made a much more useful body than it then proved to be. It might be able concurrently, or shortly afterwards, to check expenditure that was being proposed and incurred. I sometimes wonder whether it would be necessary to have in addition to the members who constitute the Estimates Committee three or four assessors who might sit with them and be public servants, and who would perform the rôle of inspecting the Departments which were under suspicion of incurring expenditure which it was thought necessary to watch and regulate. After all, the ideal you want to get at, whatever may be the result of all these Committees, is to get men of real business capacity constantly looking over the shoulders of the clerks and permanent officials, and you might have inspectors or assessors of a reconstituted Estimates Committee to perform these duties, that would go far to establishing both the control of this House over unnecessary expenditure and of watching most closely and contemporaneously unnecessary expenditure that was being incurred. Short of that I see no very probable course that is likely to lead to much result other than aiming at putting men of real business capacity in the public offices where they should be able to supervise detailed administration and help to revive the full powers of the Treasury. If this suggestion is of any use, either to a Committee appointed under the Motion of my hon. Friend or to one appointed by the Government, I hope it will lead to some more practical results than previous efforts have achieved in enabling the House and the Treasury to control waste.


The defence that has been made so far officially for the present system really does not touch the trouble which we are endeavouring to remove. Growth of expenditure has arisen under the present system, and many instances come to our notice in this House of expenditure incurred by public Departments, and especially by the Ministry of Munitions and the two fighting Departments, for which there is no adequate justification, and the defence of which has been allowed to go by default for the very good reason that there was no adequate defence which could be made in public. The difficulty is not so much that checks on public expenditure, which, adequate or inadequate in time of peace, have broken down in time of war, but rather that owing to the necessary exigencies of war they have been totally suspended. We know quite well when we tried to transform ourselves from a civilian into a military country we were face to face with this fundamental fact, that the one supreme national requirement for at least the first two years of war was the speediest delivery of the necessary material at the appropriate place. That, and that alone, was the thing to which the Government had to devote itself, and the question of expense never entered into the matter, and rightly so. That creates a different situation altogether from one which any Public Accounts Committee or Comptroller and Auditor-General ever had to deal with in peace time. It leaves the whole matter out of their purview, and creates a situation which it is surely the bounden duty of the House of Commons to face without delay. Therefore it is not so much a criticism of the Executive Government that we are making as an admission that, in war time, and in an emergency like war, you must suspend these appropriate checks, which are maintained at their full force in time of peace, in order to get the maximum of efficiency for your fighting forces. Therefore the Executive has been exalted far over the Legislature as a war machine. War cannot be conducted either by Legislatures or by these checks and balances which are so useful in time of peace.

But now, when we have arrived at a time when the military machine is practically provided with all it needs, when we see that the political issues raised by the War are beginning to overshadow the purely military issues, then it is time for the representative body to step in and say to the Government, "The time has arrived for us to take a share in the control of all the issues of the War, and this is one of the most vital." This issue affects not only the conduct of the War from now to its successful end, but it affects even more deeply the social and political situation with which we shall have to deal after the War. It will not be the fighting Departments which will then have to deal with those questions. It will be the political Departments supported by the House of Commons, and, unless the House of Commons makes an effort now to deal with the preparation of that situation, it will find that it has allowed its case to go by default, and we shall be face to face with the immediate necessity of dealing with the troubles which will arise. It is notorious that the Ministry of Munitions, to take an instance, was created without any financial check whatever, and probably rightly so, but now there should be some organ created with sufficient authority to take that ministry by the throat and insist upon a proper explanation of its disbursements. This does not only apply to the Ministry of Munitions. The case was raised the other day—it is a minor case, because the sum involved is not very great—of the Maryport Brewery Company and the Liquor Control Board. People all over the country are asking why the proprietors of that brewery received many times the value of their shares because they were dealing with a public Department. The check of the Public Accounts Committee is far too distant to operate in a case like that. There was a case quoted the other day in an American newspaper, the "New Republic," in which an American manufacturer was asked to supply, at the earliest possible moment, a certain article for munitions. He said to our representative, "Well, I shall require to reorganise our work." Our representative said, "How much will you require to do it?" He said, "Two hundred thousand." He received a cheque for £200,000, and he meant dollars. These instances have proved long ago to every one outside the House, and outside the Government, that some more drastic change is required in expenditure than we have had.


Might I ask the hon. Gentleman to give us some more particulars about that case, because it is very interesting and important.


I gave my authority, which is a very reputable American newspaper, the "New Republic." If my right hon. Friend wishes the matter pursued further, I shall be delighted to do it in his company.


I should like to know who gave £200,000 instead of $200,000.


The representative of the present Government in America. It does not matter whether it was an American or an Englishman. There is the fact that a gentleman representing the British Government could do it.


What authority has the hon. Gentleman for the statement that the Maryport Brewery Company received a sum very much larger than they ought to have done? We did go into that matter on the Public Accounts Committee, and that was not the impression left upon my mind.


I am not prepared at the moment to give all the details, but, after all, this does not rest upon any individual case brought forward by me or by anybody.


Cannot he go a little further? The dollar story will go forth to the public as if it were a fact, and really, with the greatest possible deference, the hon. Gentleman ought not to make a statement of that kind unless he has something behind it besides a mere newspaper report.

3.0 P.M.

Colonel GREIG

It is very well known who are the British agents in America, and to make such a statement as that on the mere authority of an American newspaper is going far beyond the rights of a Member of this House.


Can he give us the name of this gentleman?


I am not now in a position to mention names, but I shall do so if I can. It seems to me perfectly preposterous to raise a storm like this. We know that the case is far more gigantic. I only quoted this as a case which has been discussed in America, which has appeared in the American Press, and which, if it has not appeared in the Press here, is remarkable. I am prepared to withdraw every word that I have said if there is any doubt cast upon it. I presume the hon. and gallant Gentleman for West Renfrewshire (Colonel Greig) referred to the financial agents at present in America, but I never attempted to cast any doubts upon them at all. Since the controversy has been raised, I freely withdraw any imputation upon any individual, and I would point out that every instance which has so far been brought forward proves conclusively that tile system which prevailed in the early part of the War, and which was then right, of unrestricted expenditure in order to get delivery of the goods, is now wrong. If a single instance in evidence which I have quoted proves to be wrong, I am prepared to withdraw it, because I do not think the ease will be weakened but rather strengthened by the withdrawal of any doubtful evidence. Supposing this Committee had been in operation when the proposal was made to buy a very large number of small warships from America, and it had had proper powers to bring before it those responsible for the decision. Either that decision would never have been made and £4,000,000 would have been saved, or the order would have been given in a very different form. The net result is that we have a large number of war craft of which a great many, by the common consent of everybody who has used them, are of very little value for the purpose for which they were bought.

The French system of Commissions has been criticised as not offering us the kind of reform that we want in our system. We do not propose to introduce the French system completely. When the right hon. Member for Aston Manor (Mr. E. Cecil), for instance, produces Monsieur Briand's evidence to the effect that he was called thirty-one times in one week before Commissions of the French Chamber, we have to remember that Chamber has in constant running order sixteen large Commissions, in addition to the Budget Commission, which reviews the general expenditure of the War. Therefore, it stands to reason that a Minister coming into power with a new programme—and the larger the programme and the more the personal responsibility for the Ministry rests in an individual Minister (as it did in the case of Monsieur Briand), the more it will be so—will be called in by all these Commissions in succession to give his evidence. We are not asking for that. Monsieur Briand is a very remarkable witness to bring up against the French Commission system, because his whole political success was founded upon the Report of the Commission on the Bill for the separation of the Church and the State in France. His experience in Parliament and his great reputation as a skilful Parliamentarian was founded upon his work in the Commissions. We are not asking to have set up a whole system of Commissions. We are not asking that a set of inquisitions should be inaugurated to examine into the whole range of policy as well as of finance and Estimates. That is the French system. The French system covers the whole range. You have to remember, whenever you bring forward any argument in relation to the French system and our own, that each of these Commissions is a microcosm of the Chamber itself, and the Chamber is an entirely irresponsible body, which can turn out a Ministry when it likes. It is a very different matter in this case. We are asking for a Committee of Inquiry representative of Parliament to be set up, in order to criticise a very restricted area of public administration, namely, the financial administration of the country.

We are driven to make this demand owing to the circumstances which I described at the beginning of my speech, namely, that, owing to the state of war, we had to suspend any check in order to get delivery of the goods. We now have to reinstate the House of Commons as the great engine of national control over finance. I fully admit that this Committee, in itself, will not achieve the desired result unless the House of Commons as a whole is informed with a, spirit of vigilance. That part of the speech of the hon. Member for Oxford (Mr. Marriott) which was devoted to the decaying spirit of control which has been evident in this House for so many years past was very much to the point. This Committee will be just like any other Committee; it will be set up, it will do its work, it will pass away, and it will leave no permanent impression upon the institutions of this country unless the House of Commons makes up its mind and does what it wants to do with devotion and energy. It is a peculiarity of the House of Commons that throughout the history of this House we have claimed that it is the sovereign power in the Legislature of the country and that its power rests upon its control over finance. Yet we have the spectacle now of the Government coming forward and, acting more or less in collusion with their Friends on the other side of the House, attempting to side-track the legitimate demand of the representatives of the people that the people's money shall be properly spent.


The Debate has run into rather confused lines lately. I should like to make one remark about the story the hon. Member for Perth (Mr. Whyte) told us from an American newspaper of a cheque which was given for £200,000 instead of $200,000. He does not say that the matter was set right in the final account between the British Government and the American manufacturer. He seemed to imply that the cheque for £200,000 was given, and that it was a great waste of money. I do not believe that could possibly have been the case. It was evidently a pure mistake, made in a great hurry and under great pressure of business. That being the case, to leave us without full knowledge of what became of the cheque for £200,000 is a very unworthy method of bolstering up the case. The Debate has ranged over a wide field, far apart from either the Motion or the Amendment. The House has to put the Amendment and the Motion together and see how they will work either together or separately. There was a great outcry in the House when a Departmental Committee was mentioned. That came from an ungenerous fear of what are called Departments in these days. Those who know the work of the Departments know very well that they are keenly alive to the necessity for careful administration of the money committed to them. The hon. Member for Perth truly said that at the beginning of the War it was necessary that material should be ordered almost recklessly, because time was of the utmost essence. In fact, we had not got the time and we had to spend the money. Now he says the House of Commons is getting into the better way. That is saying that nothing has yet been achieved in that direction. I would ask hon. Members who are so keen about this financial question whether they have read the excellent White Paper on the work of the Contract Department of the War Office? It might have been drawn up by the most skilled man of business in the country. In fact, it was drawn up by a member of the War Office Staff—one of those much-maligned Departmental officers. Have hon. Members seen there that the cost of certain things has been brought down by a quarter and sometimes one-half, which has saved the country millions of pounds? That has been done in the Departments, quite apart from the action which the House is now asked to take. That is an example of the carelessness—I do not like to use a stronger word—with which Members of the House of Commons deal with the question. They talk of a Departmental Committee as if it were a committee consisting wholly of officials of the Department, which is sure to crab anything that comes from this House. The hon. Gentleman who proposed this Motion proposed a Committee composed solely of Members of this House, and he wants to call witnesses and take advice from outside people. He will never get the same advice from outside people as you do with people sitting on a Committee. The advantage of a Departmental Committee is that it does not consist wholly of Members of this House, but includes those Civil servants who are best qualified to render help, and that you can call in the best brains from outside to sit on the Committee. The hon. Member for Greenock is an illustration of that fact. He has a great right to speak on this question, because for some time he was a member of the War Office Staff, Because he knew a great many things he saved the country many thousand of pounds by his work. The country owes him a great debt of gratitude. He could not have done that work from the outside. Inside the Department you get the best expert knowledge which enables you to act. That is why you want a Departmental Committee.

It has been suggested by the Amendment that the quick way of doing what is absolutely necessary is to revise the forms of Estimates and the forms of accounts. For some time it has been borne in upon those who have had something to do with accounts that the accounts are not presented to this House in a form which enables it to understand them or to put its fingers upon the weak spots. The accounts are very incomplete. They are not presented on business lines, and no doubt they want reforming. How are we going to reform them? The best way is to get Members of the House of Commons, members of business firms outside and members of the Civil Service, who know all about accounts, to meet together in one room and to give them the task of reorganising the accounts. You may appoint as many Committees of this House as you like, but you will never get the financial control you want until you revise your accounts. If you appoint the big Committee suggested by the hon. Member for Greenock you cannot get the outside help. Of course that Committee could appoint sub-committees, but it would be a very long time before they took the matter up, because they could not do everything at once. It is suggested that we should appoint a Select Committee to revise the Rules and Procedure of the House. Will anybody pretend that the procedure of this House, as the House uses it, is a real financial check? The Army Estimates, for instance, are considered, and a reduction of £100 in one single item is moved in order to spend the whole evening in blaming the Secretary of State or the Commander-in-Chief, or something of that kind.

Is there any control of expenditure? Do you ever get a reduction of £100 moved in order to blame some particular bit of extravagance? The House as a rule never tried it, and you have some eight or nine stages of all sorts of Committees of Supply and Ways and Means and Financial Resolutions. Are they used for economy? None of them, but always for a political debate of some kind, and it generally starts on the side of the Opposition and not of the Government at all. Therefore a Select Committee which might sit at the same time as these Departmental Committees, if it is possible to find time for it, could and certainly would provide a new form of procedure of the House which would conduce to a real financial control. Therefore the objects of the hon. and gallant gentleman (Colonel Collins) are for warded by these two proposals because they can run side by side. What remains is what the hon. Member (Mr. Wardle) called a Finance Committtee of the House on the same lines as the finance committee of a town or county council, to call Ministers before it and to examine them. Is there a single Minister who has time in this War to come before that Committee? Is it possible to ask Ministers and Members of the War Cabinet? As it is, the House keeps them here a great deal too long very often. It forgets that there is a war going on and keeps them on that bench when they ought to be somewhere else. I think it would be found quite impossible to call Ministers before the Committee. Further, we have a Finance Committee in the shape of the whole Cabinet, and one of the great dangers of a Committee such as is asked for is that of weakening Ministerial responsibility. It would be a very great danger to this House if we did anything which took away from a Minister the full responsibility of everything they do. A Minister knows everything of his Department and has great power over any Committee before which he appears and over the House naturally enough, and if you get anything to stand between the Minister and his responsibility you will do a very bad thing for the expenditure of the country.

Something has been said about the control of the Public Accounts Committee. I quite agree that it is entirely post-mortem, and that what is wanted is control over the living expenditure, and in some cases what you might call pre-natal expenditure as well, and over that the Public Accounts Committee, alas, has no control. But I can bear witness that the effect of the Public Accounts Committee upon the spending Departments is very real indeed. Not very long ago an hon. Member who has been working very hard for the Government, raising battalions for them, came in rather discontented. I said, "What is the matter?" He said, "I cannot get this particular Bill for the War Office passed because of your Public Accounts Committee." I do not know what the Government is going to say, but I wish very much that these two Motions could be amalgamated. If a Committee of the House is desired, if the House really want to try to put what I call a fifth wheel to the coach, a Committee to interfere more or less with the work which is being done under great pressure at present, I think they will not be very wise, because I think they will find that the war pressure is such in all the Departments that they will not be able to go as far as they want to. If the House appoints that Committee I am quite sure it will find that in all the Departments a great deal of strict economy is being exercised at present. The hon. Member (Mr. Whyte) referred to the uncontrolled expenditure of the Ministry of Munitions. It is not uncontrolled. I agree that since the Treasury became a spending Department it has been much more difficult for it to exercise that simple control which is its function, and I greatly regret that other duties than control duties were ever put on the Treasury. It is a great mistake, and I hope it will be remedied as soon as possible. But meanwhile, of course, Treasury control is weakened, and if the Admiral or the Commander-in-Chief who is responsible for carrying on the War says "I must have this," the Treasury cannot object. Therefore, in time of war, full Treasury control is almost necessarily weakened by the supreme exigencies of war.

I should very much like if these two Amendments somehow could be amalgamated. I am sure a Select Committee would do some good. I am sure the Departmental. Committee would do a great deal more good, and I think possibly the Committee of the hon and gallant Gentleman (Colonel Collins) would do some good in satisfying the delightful desire of the House for economy. I have been in the House for twenty odd years. I never saw it so full for a financial Debate as it is at present. I have had the opportunity three or four times of bringing the Reports of the Public Accounts Committee before the House, but I never got an audience like this. Usually it seems to be a case where everyone stays away. It is no use bringing half-digested stories and grumbles without taking the pains to see whether they are justified or not. I hear grumbles every now and again. I always say to my informant, "Please give me the name of the man who did it, and the place where the money was spent, and I will examine into it." In ninety-nine cases out of a hundred the answer is, "I would rather not do that, I am only repeating what I have been told." That is not the way to exercise financial control. It is unfair to grumble at the Government like that, and to listen to stories like that, when they are doing their best, without endeavouring to ascertain whether the stories are really true. If they are true, the responsibility can be brought home, and the evil will very soon be remedied. If there is really a desire on the part of the House to exercise financial control—and this proposal would secure it—I would not stop it, although 1 do not think it will do the good the hon. and gallant Gentleman expects. I think he would do much better to accept the other two and work with them. If the House is really going to take an interest in finance, the War will have done something, at any rate, and the hon. and gallant Gentleman will have done something also by bringing this matter before the House, and with three Committees I should hope that within a very short time we might put the control of the Estimates, the Accounts, and the checking on a really firmer and more useful footing.


We are becoming quite accustomed to a certain form of procedure that has been adopted by the supporters of the Government during this War, and that is, that when the House of Commons raises any particular question on which it feels strongly, and asks that something definite should be done, somebody immediately representing the Government gets up and offers something which is entirely different. I do not know that I should mind that so much—it might be perfectly natural—but the right hon. Gentleman who was commissioned to offer that something different persists in trying to persuade us that it is the same thing as we asked for, though in its immensely improved form we cannot quite recognise it.


I do not think the hon. Gentleman should say that my right hon. Friend the Member for the Chesterton Division (Mr. Montagu) was in collusion with the Government. I should have proposed it myself.


The right hon. Member for the Chesterton Division is quite able to defend himself, without any hon. Member doing it for him. The House of Commons in this particular case has really made up its mind what it wants. It does not want a Committee of Inquiry, or a Departmental Committee on procedure, or a Select Committee of the House of Commons to draw up new standing orders of the House. That is a task that would take months and months, and possibly years, to achieve. It is undoubtedly a very desirable thing to have the rules of procedure altered, but that does not bear upon the particular issue before the House at present. What we feel at present is that the executive power of this House is falling into too small a number of hands, and that the Executive is tending to ignore the proper function of the House, which is to control the Executive. I do not say this in any critical or offensive sense. I am not for a moment suggesting that the Government, past or present, is conspiring in any way to deprive the House of Commons of its legitimate function, but I do say that, slowly but surely, the powers given to the House of Commons relating to finance are being reduced, are being whittled down until they are almost taken away from the House, and that the Executive of the day, instead of being the servant of the House is becomings its master, and that Ministers, instead of feeling that they must submit questions of policy to the House, that they must confer with the House, and consult the House and take their instructions from the House, have come to regard the House of Commons as a sort of necessary nuisance which they are quite justified in ignoring and neglecting. Some of us feel very strongly about this, and we know that in this particular criticism we have the support of the country behind us. Ministers must not imagine that when they are given a free hand for the prosecution of the War—that is a phrase which is becoming almost nauseous—the country desires that in all these important questions of expenditure and commitments in advance of expenditure the elected representatives in the House of Commons should be ignored—that they, the Executive, are possessed of some divine and supreme power and nobody has any right to control or criticise them. Therefore, to make that point quite clear, and in order that there shall be no mistake as to what is in our minds, and what is our policy, we ask for a specific and definite thing. We say that we want a Committee of this House, not a sort of General Purposes Committee, not a sort of General Accounts Committee of that amiable and philanthropic description which the hon. Gentleman who has just spoken has described, but that we want a Committee of this House which shall be the guardians of, and responsible for, the privileges and responsibilities of this House; that shall call Ministers before it, and say, "What is your financial policy? We see you have in your Estimate a proposal to buy all the coffee and cocoa taverns. We want you to tell us what is your financial policy in that respect, and to indicate what are the present and future commitments involved thereby." We want this Committee not only to examine Ministers, but if it is not quite satisfied with the information given by them—I live in perpetual fear of Ministers and I do not want to be disrespectful to them—the Committee shall say, "We want to see the principal officials of your Department and to know what they are doing—whether they are having private meetings and making commitments, whether they have any scheme for the acquisition of fried-fish shops all over the country." I do not think I need pursue the subject, which is merely by way of illustration. We want to restore to the House of Commons not merely the right to audit the expenses that are being incurred, but to control the financial policy and expenditure of the country. I cannot conceive why the Executive should ever dream that they really constitutionally possess the powers that they have exercised. I will not refer to the French constitution, but I will take the case of the American constitution. There, of course, the executive powers are not possessed either by the House of Representatives or by the Senate. They are vested in the President, but notwithstanding that fact, although the House of Representatives has not even the theory of executive responsibility, yet they feel it to be their duty to have their financial committees and actually call the President before them as well as the members of the President's Cabinet and the great officials of the departments. Though the House of Representatives has no power to dismiss the President, or any of his Ministers, or to dismiss even the humblest subordinate official in any department, yet as the House of Representatives has the power and duty and obligation to vote supplies, it has been deduced by an intelligent, enlightened and free people that having to vote the money they also have the power to cross-examine as to what is the policy of the executive power of the State, even though that executive power is quite in- dependent of the elected authority. When you come to examine the position in this country and find that the executive power is not based by a separate vote and election in the Prime Minister, and the War Cabinet, or any other Cabinet; that all the executive power these Ministers possess is power derived from this House of Commons; that they are subject to dismissal by an adverse vote of the House of Commons; that they have no power except what they have taken from the House of Commons, then I say quite calmly and equably that it is a piece of arrogant presumption on the part of any Executive to adopt any financial policy and ignore the views of the House of Commons. I do not think that any member of the Government would disagree with this, but the difficulty is that though pious in their professions they do not put them into practice, and therefore I want something to bring that home, and I am not in the least satisfied with this alternative proposal. The idea of putting these two things together! Fancy joining together in holy wedlock the members of two different species! We do not want the absurd doctrine of Departmental Committees, Special Committees, and the rest of it, wasting public money and wasting time. The only good thing they do is to keep some of their members out of mischief in other directions. There is no justification for appointing them. What we ask for and what we want, and, I say respectfully to the Leader of the House, what we are determined to have, is some sort of effective control over the financial policy of the Government—not simply to audit the accounts but to say quite definitely, "We do not like this policy; we will not have it; we will not approve of it until we get further information," and if you do not give us a Committee of that kind when h is asked for in a peaceful manner we shall have to pursue a policy of persistent agitation until we do get it.


I always listen with the greatest respect to anything said by the esteemed Chairman of the Public Accounts Committee. He is always interesting and improving. In our Debate to-day I understand that my hon. and gallant Friend does not oppose the Motion. He simply damps enthusiasm by offering one or two arguments against it. He asked, Has the House read the White Paper issued in reference to the Contracts Department? I have read it most carefully, and I think that, probably more than any other Paper that has been issued since the War started, it justifies the Motion now before the House. My hon. and gallant Friend says, "Look at the great economies that have been effected in expenditure. In some cases £1,000,000 a year ago has been reduced to £500,000 now." The Committee then admits that there was an extravagance of half a million pounds in that one case which might have been avoided. The whole Paper, if my hon. Friend will only study it from a different point of view, is an admission of most extravagant expenditure, and that a constant series of mistakes has been made by Ministers and Departments during the period of the War. My hon. and gallant Friend then dealt with another matter. He asked the House contemptuously, Has it any control over expenditure? If the House of Commons had retained its ancient privilege it would have perfect control over expenditure.

I do not agree at all that our accounts are badly prepared or presented. The accounts of the House of Commons were devised by financiers of the greatest ability in days gone by, and presented to this House in a way that is a credit to any country, and has been an example to many of the civilised States of the world. Still we have not full control. What is the reason that the House of Commons now can get no sufficient inquiry into any expenditure. It is because it has adopted a principle called the automatic closure of Supply, and every Minister who sits on that bench knows that there is not the least necessity to answer any criticism. There is no necessity to get these Estimates through at all. He just talks pleasantly to the House about it and treats the House with perfect contempt. He knows that at the end of the year by the falling of the guillotine every Estimate which he desires will be granted. That is the reason that this House has lost control over finance and that this Motion is brought forward, and I may say, with great respect, that this Motion, or something of the same kind, will have to be carried. I agree entirely with the remarks of my hon. Friend opposite who has made one of the most interesting contributions to this Debate, though all the speeches have been very good. This is no small question which we are discussing. It is a question of the very existence of the House of Commons.

From the most ancient times this House insisted on its right to control all the taxes, all the expenditure. It was by pursuing that traditional policy that the House in days past humbled the power of kings, and it will have to apply the very same force now to humble Ministers and to discharge this ancient fundamental duty. There is just as much danger from autocratic Ministers to-day as there was from autocratic kings in past periods of our history. [An HON. MEMBER: "More."] In one sense my hon. Friend is right, because the Minister comes forward in constitutional guise, and one is forced often to think of the wolf in sheep's clothing. He looks so very innocent and ready to follow constitutional form and yet is prepared to perpetrate any extravagance. So we are pursuing to-day the same historic struggle which this House has had to follow from the earliest times in trying to get full control over the purse against those who want to get the purse out of our hands. I do hope that we shall be faithful to our old traditions in this matter. The Motion is a very simple one. It really only means this one thing: that the House of Commons shall be able to get an answer to a question. The House of Commons says, "We want to know the details about cases of extravagant items," but we never get any answer at all because a system exists which enables Ministers to get through the whole thing without saying "Aye" or "No" to the House. Look at one or two of the answers! We had a long answer given to us by the able representative of the Admiralty. And the same answer was given by the Chancellor of the Exchequer when this matter was brought up before. It was repeatedly said that in time of war expenditure would be delayed by making inquiries. That is the favourite answer which Ministers give us—that money was to be spent in a great hurry when the pressure is on.

There is nothing in this Motion that prevents any expenditure or stops it for any time at all. The difficulty that is put here is one that has to be dealt with in every business place. Look at the matter from a business point of view. In every great business establishment there are buyers. The head of the business insists on controlling the buyers, but he does not interfere with everything they do. He does not stop them going into the market. He does not upset them or scold them. He simply, at few and convenient oppor- tunities, says, "Will you explain this and tell me about that?" The reason why extravagance has gone up in this country lately is because this House will not discharge the duty which it owes to the country. Then another way in which it is met, and in which it used to be met by the late Prime Minister—one Prime Minister seems almost as bad as another in this respect—was to say that you must not give the House of Commons control because it is extravagant. On that I will say that the House of Commons has got the right to be extravagant if it likes. It represents the people, and we are all held responsible for extravagance by our constituents when we go back. Ministers of the Government have no rights whatever as against the House of Commons. Therefore, even from this point of view, when it is said that the House is extravagant there is no foundation whatever for the argument.

We have put forward this request for a long time. We have always put it forward in a humble and businesslike way, and we always get the shuffling answer which was given to me by the Chancellor of the Exchequer on 16th March last. I asked the right hon. Gentleman whether he would use his influence to appoint a Committee of this House to consider the national outlay with a view to restricting the total expenditure, and I suggested that such a Committee should make inquiries into the expenditure so that no delay should be caused to the progress of any military operations. That was quite a reasonable appeal, and I will quote to the House what the Chancellor of the Exchequer said. I will not quote the whole of his reply, but there is one sentence in it which I think is very bad. The Chancellor of the Exchequer said: The House will easily understand that, with this enormous expenditure, the Chancellor of the Exchequer or anyone trying to exercise control, would be very foolish if he spent his time trying to save a hundred pounds here and a hundred pounds there. I never heard anything more shocking than that. The hon. Member for Oxford quoted a remark of a great Chancellor of the Exchequer, a great financier, Mr. Gladstone, who said he found it much easier to spend a million than to save a shilling.


Mr. Gladstone was not dealing with expenditure during a war.


There were wars in his time, and the greater the war the greater the emergency, the greater necessity there is for economy. When so many people are busy conducting a war we want one man who will not be too proud to save a hundred pounds here and a hundred pounds there. I say that it is unworthy of the Chancellor of the Exchequer to make such a statement, and he ought to reconsider his position with regard to that matter. I will not detain the House more than a few moments, but I want to make one remark about the alternative proposal. It is the most extraordinary thing to me that this bargain should have been put up. I could never understand exactly the position of my right hon. Friend, but I readily forgive him, because he has had a long official experience, and since he was elected a Member of this House he may have easily drifted into errors of this kind. The Amendment is the very sort of thing I should expect my unhappy friend to propose. The Motion suggests that powers should be given to the House of Commons, and my right hon. Friend comes forward, and says the powers should be given to a Departmental Committee. I think that is the general opinion of the House as to his alternative. We ask for our historic rights. He says, "Set up a Departmental Committee." It is this love of the Departments with their salaries, safety, obscurity, and secrecy which is the cause of many of the scandals of to-day, and yet my right hon. Friend comes forward and proposes this Motion for substituting a Departmental Committee.




I want to be kind, if possible, to my right hon. Friend, and my answer to him is that if we set up a Committee of this House, then the Departments of the State are its servants, and they are bound to give information to the Committee, and are bound to make every inquiry that is asked—not unreasonable inquiries during war time—and there is no more comparison between these two proposals than there is between two animals of different species. I think the fundamental mistake my right hon. Friend makes is this. He assumes that all wisdom rests in the Government Department; it knows how accounts should be prepared, how economy should be secured. This House is a body of fools; we have no business men—nobody who understands financial questions. I would remind my right hon. Friend that we have one merit: we are chosen by the people of this country, and sent here to carry on the affairs of the country. The responsibility rests on us, and I do not believe in shuffling off, by a Motion of this kind, this responsibility on to the backs of others. I think, then, that if it is a choice between the alternatives, this House will not hesitate long as to its decision. My right hon. Friend fully believes this, and so he has put in at the end of his Amendment that there should be a Committee on Parliamentary Procedure. Of all the absurdities which crop up periodically in my Parliamentary experience, a Committee on Procedure is the worst. We had one in 1913, and they went grumbling along for about fourteen months, and were only brought up in their inquiries by the beginning of this great War. So he asks for another Committee on Procedure. I asked, How do you know this Committee will touch finance? He said it would soon touch finance.


That is not what I said, and the right hon. Gentleman's speech is a gross parody of what I said. I suggested that the Committee on Procedure should have, as its first reference, to report on the proposal of my hon. Friend and other proposals for reform and financial procedure.


My right hon. Friend is coming late to repentance. I am glad I am getting him round. Why should not these excellent words have appeared at the end of the Motion? That is my answer, and I think it is complete. If that is what my right hon. Friend meant yesterday, he would have put it down. No, Sir. What he finds now is that the House of Commons is out of sympathy with his proposal, and so he strives to amend it by bringing it nearer and nearer to the true gospel. Really, I believe the mistake into which he has drifted is owing to Ms youth and inexperience. I commend to his example the great independent Members of this House, who have not been vitiated by office, and through all the ages have striven to maintain the rights of the House of Commons against Departments. I am obliged to hon. Members of the House for having allowed me to say these few words; and I hope it will not allow itself to be set aside from the excellent Motion, proposed in an excellent speech, the best I have ever listened to, and supported in the orthodox way. I appeal to the Whole House to accept the Motion unanimously, and so achieve a great reform.


I am sure I shall be expressing the opinion of every Member of the House when I say how grateful we are to the hon. Member for Greenock (Colonel Collins) for the energy and persistence with which he has pursued this subject, as well as for the able speech, to which my right hon. Friend who has just sat down, in his concluding words, made reference. I have listened practically to the whole of the Debate, and I have found considerable unanimity of opinion in this, that the present methods of financial control are by no means adequate. What are they 1 In the first place, there is within each Government Department a financial organisation of its own to supervise and check expenditure, and that, of course, is the place, at the very initiation of expenditure, where control can most effectively be applied. At this moment such control is far more difficult than before the War, not only on account of the great volume of contracts and orders, but also because the system of competitive tender which was the great safeguard of public finance has necessarily, over a large field of expenditure, had to be in abeyance during the War. Whether the control within the Department is effective or not depends greatly upon individuals, upon the characteristics of the Minister at the head of the Department, and upon the capacity of the particular Civil servant into whose hands is entrusted this measure of control. If the Civil servant is stiff-backed and obdurate this expenditure may be on a very different level from what it becomes if he is lax and easy-going. Then outside the Department comes the control of the Treasury, and here again it is common agreement that that supervision is not, and cannot be, as effective as it used to be and was required to be in times of peace. The Treasury inevitably were swept off their feet by the great spate of expenditure which came sweeping through the Departments when war broke out. There, again, control depends largely upon the Minister concerned, oven in time of war.

4.0 P.M.

When the present Government was formed we were told that Sir Hardman Lever, who had exercised a very powerful influence over economy in the Ministry of Munitions, had been appointed Secretary to the Treasury, and had been charged with the special task of checking the details of the large expenditure and outgoings during the War. Hardly had he been appointed, however, when he was sent to America, and he has been there ever since. The third control is that of the Comptroller and Auditor-General, who is an officer of this House, appointed by them, and who reports to the Public Accounts Committee of this House. There again, however, there is universal agreement, concurred in just now by the Chairman of the Public Accounts Committee, that this control also is not adequate. In the first place, it operates only a year or two years after the expenditure has been incurred, and, in the second place, it is really more in the nature of an auditor's control than a board of directors' control. It is a question of rather more than checking vouchers. It does consider impropriety of expenditure as well as the actual conformity of the expenditure to the things that have been bought; but it is not the kind of control which hon. Members of this House at this moment are seeking to effect. It is not a sufficient control. Then, lastly, comes what used to be regarded as the keystone of our Constitution—the control of the House of Commons itself over expenditure; and on the present methods by which that is effected not a word, I will not say of praise, but even of confidence, has been uttered by any hon. Member in this Debate. By universal agreement—and every man I am addressing will concur with this view—the control of the House of Commons itself over the expenditure of Departments is a mere simulacrum of control. It is perfunctory; it is unreal. If expenditure goes up in any Department in time of peace by two or three million pounds the attention of Parliament is directed to it, and the Minister in charge has to explain and justify his proposal, but for the rest, Parliament is unable to take cognisance of any of the details of expenditure. Sometimes there may be a more or less amusing discussion in Committee of Supply of some increase of £5,000 which the Minister in charge at the moment is not able to explain because he has not sufficiently learned his brief; but real, effective, businesslike control of Parliament is entirely absent. I forget who it was who compared the House of Commons to an elephant in that, just as an elephant was powerful enough to uproot a tree and at the same time able to pick up a pin, so the House of Commons can exert the greatest possible force and, if necessary, upset Ministries, while at the same time its capacity is fine and delicate enough to accomplish the most detailed task. But in finance matters the House of Commons is like an elephant trying to pick up pins with its feet, and the process is bound to be a failure. The Chairman of the Public Accounts Committee suggested that there is a fifth method of control—control by the Cabinet. If ever there was a real control by the Cabinet over ordinary accounts of expenditure throughout the whole of our finances, such control cannot conceivably exist now. The present War Cabinet could not be expected to look into these matters of detail. I do not believe they could focus their eyes on any expenditure smaller than five or ten million. The House to-day has really been discusing three matters closely connected together, yet not identical with one another. The first is the one which hon. Members really care about most, and that is to secure some measure of effective control over the present vast expenditure which is now going on upon the War. The second is the question whether or not the form of accounting by the Departments for their expenditure is satisfactory, or whether it could be improved, and, if so, by what process. The third is whether there ought to be some change in the permanent methods of control over finance by Parliament. The question of the methods of accounting is undoubtedly of grave importance. I quite agree with my right hon. Friend the Member for the Chesterton Division of Cambridgeshire (Mr. Montagu) on that head, but I do not agree with him that to settle the right form of accounting is an indispensable preliminary to this House exercising any effective control over current expenditure.

During the greater part of last year I had the privilege of being chairman of a Committee appointed by the late Cabinet which examined into the expenditure of the Admiralty. There was a similar Committee at the War Office under the chairmanship of the right hon. Gentleman who is now Secretary of State for the Colonies. The Committee at the Admiralty consisted of my hon. Friend the Member for Hexham (Mr. Holt), the late Sir George Franklin, who had been president of the National Telephone Company and was also an accountant by profession, and myself. There were only three mem- bers. We had the advantage of the advice at Ml our meetings of the Accountant-General of the Admiralty, Sir Alfred Eyles, a very able official, who sat with us and advised us as an assessor. We inquired not systematically into all the items of expenditure at the Admiralty, but into specific matters as they were brought to our notice by Members of Parliament and others in which it was thought there might have been undue expenditure. I would mention just four specific points, because I think the procedure of this Committee will be of interest to the House in this connection, since it illustrates that the method of accounting is not a really vital part of the question now before us. I think all these matters can be mentioned without the slightest danger of detriment to the public interest. We found, for example, that while in the Army the supply of meat was frozen meat, in the Navy the great bulk was fresh meat. Fresh meat was supplied on board everywhere that it could be supplied, although the men in their homes were accustomed to frozen meat. We found that if they were supplied with frozen meat on board, there would possibly be a saving of 25 per cent. accomplished. We recommended that to the Admiralty, who, finding no reason against it, adopted the suggestion, some hundreds of thousands of pounds being saved, and, of course, as the price of fresh meat rose higher, the saving effected became greater.

We found, in connection with the Salonika Expedition, that the bulk of the supplies were sent to Alexandria and afterwards forwarded to Salonika; that was begun in the time when the Salonika Expedition was a small one, and it was thought better to have the bulk of the supplies sent to Alexandria to be forwarded afterwards to Salonika. The expedition grew large, and obviously it became more economical to send the great bulk of the supplies direct to Salonika. That also was done. Thirdly, we found that there was a great deal of temporary staff employment at the dockyards, and that the number of persons employed, the hours worked, and the amount of overtime, were not systematically surveyed. We recommended an examination into these matters with a view to effecting economies. We found that the establishment charges allowed for in some of the earlier contracts, still running at the Admiralty, were on too high a scale. They had been made in the early days, and in the rush of the War, and had not been revised, and the expenditure was undue in that direction. We appointed a Sub-committee, which included two able accountants to go into the contracts, and when I left office and resigned the chairmanship of that Committee the Sub-Committee was still engaged in its examination. In a report which we made to the Cabinet we dealt with some thirty points, and in the great majority of them we found that on the whole the Admiralty practice was excellent, and that no comment or criticism was to be made, but with regard to some others there were some suggestions. The point which I wish to bring home to the House is this, that an improvement in the method of accounting would not enable us to detect any of these matters in a better way than we could have ascertained them with methods of the kind we have now. I may state that the Committee sat in an informal fashion, and occupied little of the time of the officials; they practically called f r no fresh returns or statistics of any kind; they did not set out to find fault, but they set about their inquiry, assuming that the officials at the Admiralty were doing their very best to effect economies wherever possible. We looked upon them as colleagues and treated them as colleagues, while we received the greatest possible assistance from all the officials with whom we had to deal. We formed the opinion that on the whole the Admiralty control was very good

Still, at the same time, it is well that fresh minds should be brought to bear upon these problems. There are numbers of Members of Parliament now engaged in assisting Government Departments in various ways, and I am sure the universal experience of those who have had to do with administration during the War has been that their help is of the greatest possible value. I believe it would be quite easy to find twenty or thirty Members in this House, responsible men, with business or administrative experience, who could divide, themselves into comparatively small Sub-committees, who would sit in various Departments, and who would have the assistance of the officials of those various Departments and of the Treasury. They would receive from other Members of the House or from other quarters suggestions as to the directions their investiga- tions should take, and the various Government Departments themselves might be able to indicate items of expenditure on which further control or safeguard might be necessary. I do not think that a Committee such as is now proposed would give rise to the dangers which some of its opponents or critics foresee. Of course, war requirements must have precedence over financial considerations. The most important thing is not to save money, but to win military and naval success. We are spending every day seven million pounds or thereabouts, but we are spending every day during these months of campaigning something infinitely more precious than seven million pounds or more million pounds; we are spending four or five hundred lives of British soldiers. But I feel sure that the House of Commons is just as fully alive to that consideration as the Government, and I feel quite certain that no Committee of this sort would on any occasion embarrass the active prosecution of the War by suggesting undue economies. In any case, it is not proposed that these Committees should have any Executive powers. Their whole function would be to inquire and report, and it would be then for the House, if necessary, and the Government in any ease, to consider their recommendations. It is essential, I think also, that any machinery of this kind should not involve delay. You must not slow down the administrative machine. I do not think it would be right for any organisation of this sort, and I do not think my hon. Friend suggests, that they should require that before any expenditure is incurred the sanction of the Committee or its Sub-Committee should be obtained. I am strongly of opinion that we ought not to create Sub-Committees within the Departments or send Sub-Committees to the Departments which would fill the position so to speak of a Second Chamber through which every item of expenditure would have to pass. That was not done by the Committees of the Cabinet, and I do not think that it would be done by the Sub-Committees such as those proposed.

Thirdly, I am quite sure my hon. Friend is of opinion, and certainly I hold the view very strongly, that these Committees would not be competent, and would recognise they were not competent to decide questions, of policy. They could consider whether the expenditure upon Salonika, for example, was on an excessive scale for the number of men kept there. But they could not have the information, and they ought not to ask for the information, as to the reasons for sending the expedition to Salonika. They cannot enter into tie strategic questions involved, or into our obligations to our Allies, and they would not have the material on which to form opinions upon large questions of policy such as that. These, of course, are possible dangers if the Committee were to act in an unwise and unpatriotic fashion. But I feel certain that the common sense of the Members of the House of Commons serving on such Committees would prevent them from pressing economy to a point at which war operations would be hampered or delaying the current routine work of the Department, or endeavouring to put their fingers into matters of policy really beyond their competence. This is the first time that a proposal in this form has been before the House. In 1911 the desire was for an Estimates Committee to examine the Estimates. I was then a Member of the Cabinet, and I strongly supported that proposal. The Estimates Committee was set up. Its functions were very restricted, but it rendered some useful service until the War came and the Estimates disappeared, and with the disappearance of the Estimates disappeared also the Committee to examine them. The proposal now made is not the French system of committees, of general administrative control. I ventured some weeks ago to trouble the House with my views on the matter, and to express my disagreement with the proposal of the French committees. Those committees not only, I believe, in effect exercise administrative functions; they act, so to speak, as colleagues of the Ministers. The- Minister has to get their sanction before any policy which he desires can be carried out. As a result, those committees, in my opinion, greatly embarrass administration, and tend, to a large extent, to cause the instability of government, which is one of the great defects of the French Parliamentary system. But a Committee which would divide itself up into a series of sub-committees to cover the Departments and to review the current expenditure is quite a different proposal from the adoption of the plan which forms part of the French constitutional arrangements.

My right hon. Friend the Member for the Chesterton Division proposes an Amendment which he suggests not as an addition to the Motion before the House, but as an alternative. It deals with two subjects—the question of accounting and the question of permanent methods of control. I feel sure he is right in regard to accounting. If we could have accounts on a costing basis, and not only on an appropriation basis, it would certainly enable more effective control to be exercised. I had the privilege for about five years of being at the Post Office, and the Post Office has been obliged, for its own purposes, to create a system of commercial accounts in addition to, and side by side with, the system of Appropriation Accounts which it has to present to Parliament. Without that it would not in any way adopt any businesslike management of its services. It must know the commercial cost of every branch of its service. The Admiralty have, to some extent, adopted this system with regard to building of ships, and, although the system is not perfectly devised, they can tell whether one dockyard compared with another dockyard is extravagant or economical. Recently, during the War, the War Office has adopted the system of costing accounts for military hospitals, and have been enabled by this means to effect very large economies indeed by being able to tell what is the actual expenditure per head per patient in the various hospitals. They can inspect and control those in which the expenditure is excessive. The more that system can be extended to the whole area of Government expenditure the better. But I do not think it will ever be possible to cover all Government expenditure, because there are very many heads, as my hon. Friend will soon see, which cannot really be effectively put upon the suggested basis. However, it is all to the good that the thing should be done as far as possible.

With respect to the permanent methods of control, there also there is ground for inquiry. But I do not think the House would be disposed to be content to-day after all this discussion, after all the interest that there has been in the proposal of the hon. and gallant Gentleman the Member for Greenock, merely to consent to a Committee being set up to consider whether a Committee should be set up! If that proposal were adopted, seeing we are now towards the middle of July, to select the members, to decide the terms of reference, and to have the oppor- tunity for electing a Committee would take us probably a fortnight. The Committee would not begin to sit until the beginning of August, and then we would find that as this part of the Session was about to be brought to an end the Committee could do little until we met again. It could not be expected to report until November. We should be lucky if we got the opportunity to discuss its Report before December. We should then be told that the Session was almost at an end and no change of procedure could be accomplished until next year. [HON. MEMBERS: "Hear, hear!"] I am not exaggerating the matter. It is precisely what would happen. As a matter of fact, nine or ten months hence we should find the House of Commons in precisely the same position, so far as doing anything effective was concerned, as it is on this Friday afternoon.

I think the House would be very reluctant to confine the clear, simple issue brought before it by this Motion by importing now the side issues of methods of accounting and methods of permanent control. If my right hon. Friend were to make his proposal not as an alternative but as an addition to the Motion before the House, either in its present words or some other words, I have no doubt it would be acceptable; but as an alternative, so far as I can gauge the feeling of the House, the House is unwilling to be side-tracked by the proposal. This Motion is not intended in any way by any Member as a censure either upon the Government or upon any Government Department. It is simply the desire of those who feel themselves to be the representatives of the taxpayers of the country to get information as to how the taxpayers' money is now being spent, and to get real information in an effective way. If the Committee or its sub-committees discover no extravagant expenditure, well and good. The Committee still would have served a purpose merely to have secured that result. It would reassure the House of Commons, and it might tend tin some slight degree to reconcile the taxpayers to the very heavy burdens which they are now called upon to bear, and will be called upon in future to bear. If, on the other hand, this Committee and the Sub-Committees discover excessive expenditure here and there, that is an overwhelming reason why their appointment should be pressed.

I regard this Motion as a test of the desire of Members of the House to make their function as Members of Parliament a reality, and, for my own part, although I have been in office a great many years, I have always felt myself more a House of Commons man than a Minister, and I think that Ministers make a very great mistake in trying to divide themselves off too much from the House of Commons. It is good neither for the Government nor for the House that too great a gulf should be made between the two. The Government should try to carry the House of Commons along with it in the measures which it takes. The present Prime Minister, in his first speech to this House last December, when he declared the broad lines of policy of his Government, laid great emphasis upon this, and he said that in his view Parliamentary control was now inadequate, and ought to be increased. Well, we now have an opportunity to proceed on the lines of policy emphatically declared in his initial statement of policy by the head of the Government himself. The House of Commons ought not to regard itself merely as a kind of electoral college for the appointment of the Executive, and to consider that once the Executive has been appointed its function really is to watch, to criticise, perhaps to influence, but not to control. I believe it is bad for this country and dangerous for this country if this process proceeds further. If it is not checked and reversed, people will begin more and more to lose faith in Parliamentary institutions, and to feel that we have in effect not the reality but only the appearance of a democracy.


Before I try, as briefly as I can, to deal with the main issue before the House this afternoon, I should like to get out of the way some of the ideas which have been suggested by various speeches to which I have listened. For instance, one of the reasons for the Motion itself is the growth of expenditure, and my hon. Friend who moved it gave as an additional reason that the expenditure actually incurred, as was shown in a statement I issued the other day, has, since the Budget, exceeded the estimate by more than a million, perhaps by a million and a quarter a day. I want the House to realise that that is nothing new. Unfortunately, during the War, at the time the Estimates were made, I pointed out that it was impossible that Estimates could be anything more than guess work under the then conditions, but during the time of my predecessor, as well as my own, the expenditure had been regulated not by any pre-arranged plan as to what you should expend, but by what was necessary to give us increased efficiency in the War. The result of that was, of course, both in his time and again in my own, unfortunately from the point of view of money, but fortunately from the point of view of an increase in the efficiency of our Army, expenditure had gone up considerably. There is another point of that kind I wish to put also to the House. My right hon. Friend who spoke from that bench a short time ago held up as something very reprehensible a statement of mine that I did not think it was my business to spend my time in trying to save £100 here or £100 there. What can be done by any one man is limited by the number of hours in the day, and, at the time when we are spending millions, in my belief the functions of the Chancellor of the Exchequer are much better exercised in trying to get a good system of expenditure, and good men to carry out that expenditure, than in spending his time in details, cutting down £100 here or £100 there. There is one other remark of that kind to which I wish to refer. Reference has been made to Sir Hardman Lever. I confess to the House I have been disappointed that we have not been able to have his assistance in the very work for which he was appointed; that was to try to superintend expenditure and to keep it down in the Department. But it so happens that the most critical business man of the Treasury was in America. He seemed to me the best man to send there. We sent him there, and I should like to take this opportunity of saying to the House that in my judgment he has rendered us, and is rendering us, invaluable service.

Then my hon. Friend who moved the Amendment made another observation; he said he was sure I should not regard it as unfriendly to myself, and I did not; indeed, I have never had occasion at any time since I occupied my present position to complain of anything in the nature, I will not say of discourtesy, but of anything that did not show complete goodwill towards me personally. His remark was, it was impossible for me to fulfil the duties of Chancellor of the Exchequer with the other duties which I am trying to carry out. There is a good deal in that criticism, but I should like to say to the House that I certainly should not continue to be Chancellor of the Exchequer if I did not think that I was capable of performing the duties, and the House will readily agree that I have no object in doing it on any other terms. They will agree for two, reasons. In the first place, I am not fond of work. For the last twenty-five years at least I have never done anything which I could persuade somebody else, or pay somebody else, to do for me; and in the second place, if we are influenced by personal position—I suppose we all are—the House will at once see that my position is not improved by being Chancellor of the Exchequer if I continue to hold the post the moment I cannot fulfil its duties. As a matter of fact, I have not been able to give the time that I should have liked to have given to my duties in the War Cabinet. I would have preferred that. Everyone, while the War lasts, would rather have his mind occupied with it. I have not been able to do it to the extent I ought to have done, and I think the result will be that the Prime Minister, with whom I have discussed it within the last few days, will find it necessary to make other arrangements and probably have an addition to the Cabinet to do the work that if I were free I should be able to do.

With these preliminary observations, I should like to come direct to the Motion before the House. I have no fault whatever to find—indeed, I am in complete agreement, if I may say so—with the speech of my right hon. Friend who has just addressed the House. No one who was Chancellor of Exchequer could fail to have the feeling, which I know is almost universal, that the scale of expenditure now is something appalling, and that we have the right to be sure that it is not greater than it ought to be. No one can avoid having that feeling, and, in addition, I should be the last man to quarrel with the view expressed by him that the House of Commons ought to have control in matters of this kind. My hon. Friend the Member for one of the Divisions of Sheffield (Sir Tudor Walters), in a speech which I thought extremely interesting and amusing, said that he was afraid of Ministers. Hitherto he has always managed to conceal his feeling. I can assure him that his fear of Ministers, if I am a fair example, is nothing like the fear which Ministers have of the House of Commons. There is in this connection one thing which I should really like the House of Commons to bear in mind. Over and over again, in the course of this Debate, the suggestion has been put forward that the Government and the House of Commons are not only independent, but hostile bodies. Supposing we set up a Committee of any kind, it would be dependent upon the House of Commons, and so is the Government. I say for myself, and I am sure every Minister would say the same, that the moment the House of Commons comes to regard us as not representing them that moment we cease to hold our office. I think, therefore, we should put aside the idea that we are hostile forces in regard to these matters.

I come now to the speech of my right hon. Friend and his views on the Motion before the House. I do not think, unfortunately, that his speech at all represents the Motion, and it certainly does not represent the speech made by my hon. Friend who moved it. He says that he is quite opposed to these Committees interfering with policy, and that all he want them to do is to assist the Government in controlling expenditure. If that is all, I am ready at once to fall in with the suggestion. The whole difficulty is to divide control of financial expenditure pure and simple from policy. It was in that connection that the references were made previously both by the Prime Minister and myself to the French system. The Prime Minister, in a speech which he made in December, expressed the views which he then held, and which were rather in favour of that system. It may be good or it may be bad, but it does involve complete control of policy and a very large and constant interference with policy. The result is that members of these Committees of necessity know more about the strategy and about the intentions of the different Departments than is the case here with anybody except the Ministers who are actually carrying them out. That is what happens. If we take the words of this Resolution, and, I am afraid, the speech of my hon. Friend who introduced it, it was the intention to set up something of the kind here. He said that they meant to control not only expenditure that had taken place, but expenditure that was taking place now. If it means that before the money can be spent this Committee is to give its sanction, obviously that is utterly impossible here.


I do not think I gave utterance to any such expression. I did not take that line at all.


The difficulty is to separate them. The Motion is quite definite, that you are going to control the expenditure of all the Departments—


Only review it.


Or review it. After all, the House knows enough of these matters to understand that if the Treasury is in the position, as it is, that before the money can be spent its assent has to be got, it has control. All that we want is to find some method which will keep policy distinct from expenditure. That is the whole thing. If the Motion means that each Department is to come and justify its expenditure, that obviously means that the Committee before whom it has to do that is going, I will not say to control, but to review policy. Take, for instance, any of the services. You find you have to spend so much on meat or anything else. You are asked, "How many men is that for?" You give the number of the men, and yen have to explain it. The whole policy comes out.




That will be the effect. The right hon. Baronet need not worry now, because I am trying to find some method which will do what he wants and yet fail to do what I do not want done.


We are agreed.


This Motion as it stands would have that effect.


May I—


No; I would rather go on. I say that that is the effect of the Motion. There may be differences of opinion, but that is my view. Let me illustrate the difficulty by the speech of my right hon. Friend who last addressed us. He wants to have Committees of a particular kind, to which I think there is no objection as they were explained in his speech. But I wish the House to bear in mind that he expressed himself as entirely opposed to the kind of thing to which I object. When he and I were members of the same Government the difficulty was so strongly felt that when the Retrenchment Committee was set up we, the Cabinet, would not allow it to deal with the only branches of the Service where large sums of money were expended. We would not allow it to deal with the fight- ing Services. Another illustration of the difficulty is that those Committees to which my right hon. Friend referred, which went into the different Departments, were each of them presided over by a Cabinet Minister. That was done because the Cabinet at that time unanimously came to the conclusion that only a Cabinet Minister could make sure that in going into these different offices the distinction would be made between policy and expenditure. It was for that reason that it was insisted upon that the Chairman of each of these Committees should be a Cabinet Minister. What is the position? It has been said that the Amendment of my right hon. Friend the Member for the Chesterton Division (Mr. Montagu), whose speech, as was natural from his previous experience, was of great weight, is the Government proposal. We never intended to make any such suggestion to the House of Commons. We feel that the expenditure is so large that even from the point of view of satisfying the country, apart altogether from the House of Commons, that everything is being clone to keep it down, it is desirable that further examination by the House of Commons should take place. We come to the proposal. What has been said in every one of these speeches shows that there is great difference of opinion as to the meaning of this Resolution, as to the nature of the Committee that is to be set up, and the duties which are to be entrusted to it. I am going to tell the House what I am not only willing to see done, bat what I should myself like to see done from a Treasury point of view. The Committees to which my right hon. Friend referred were each of them presided over by a Cabinet Minister. I have no objection, and I should like to see that kind of examination made by Committees of the House of Commons. But it must be clearly understood that reference must be of such a nature as to cut a hard and fast line, if it is possible, in the reference, between criticism of policy and an attempt to control expenditure. That is what we desire.

Leaving that out of account, for that we are willing to do, is it not evident that there is great difference of opinion and great difficulty in arriving at the best way in which we should keep more permanent control by the House of Commons over expenditure 1 I will put this to the House. If the Committee really had any of the powers that, I think, the wording of the Resolution gives, it would break down. It would be found that they could not be carried out and nothing would happen. Therefore, in my view, provided there is no waste of time, provided the House of Commons does not think this is done merely to shelve the matter, this, is the right course to take. There are now, in addition to the Members of the House who have not committed the crime of being Ministers—though some of those who have committed the crime have forgotten it—a number of Members of the House who are not in the Government and who have had the widest experience of the whole financial position and the general carrying on of Government. We have two ex-Chancellors of the Exchequer and, I think, three or four ex-Financial Secretaries. One of the Chancellors of the Exchequer is the late Prime Minister. The other is the right hon. Gentleman (Mr. McKenna), whose views I should have been glad to hear on the matter, because he knows exactly what the difficulties are. I propose that we should appoint a Select Committee for two purposes, first of all—I am not attempting to give the exact terms of reference—to consider whether additional control can be obtained and in what way it can best be obtained as a permanent arrangement, and in addition to that we should authorise the same Committee to do at once what was done by those Cabinet Committees of which my right hon. Friend spoke, and go into the Department to examine the method of expenditure, and make recommendations either to the House of Commons or to the Department. That is my proposal. It is not a shelving Motion in any sense, and it only carries out what is certainly my own view, that we ought to do something more to satisfy not merely the House of Commons but the country that we are doing all we can to get value for the money we have spent. As regards the terms of reference, I cannot give them to-day.


May I ask who is to appoint this Committee which is to inquire into the Departments and to whom are they to report!


The Select Committee would itself be the Committee to do this work. That is my suggestion.


Would it divide itself into sub-committees?


Yes; I should think it would, and at once consider the proposal made by the hon. Member for Cambridge, and consider whether there ought not to be a change in the form of accounts. I cannot give the terms and reference, because, as a matter of fact, that would require very careful thought, but what I would suggest is this, that, if possible, the terms of reference should be agreed upon between the Government and Members of the House generally who wish the Committee set up. I am sure it could be agreed upon, but in any case, at the time the Select Committee was being set up the terms of reference would appear, and the House of Commons would then have the opportunity of considering both the Committee and the reference upon which they were to act. I really do not think that more than this can be expected or asked from the Government. It does not differ in the least from the speech of my right hon. Friend; it does differ from the terms of the Resolution. But if the House of Commons only desires—and I am sure it does (not to appoint a roaming Com mission to seek out grounds of criticism and attack upon the Government)—to effect some more real control over the vast expenditure, then that is what is desired by the Government also, and my proposal gives it the opportunity.


I am sure the whole House will agree that the spirit in which the right hon. Gentleman has left the Motion is a generous spirit, and it clearly is that of a desire to meet what we understand are the intentions of the hon. Member for Greenock (Colonel Collins). It is a little difficult to appreciate exactly what it is that the Leader of the House has offered. So far as I can judge, his offer in truth coincides with the Motion on the Paper, but unless one has the time carefully to examine the precise terms of the offer it would be difficult to say whether or not it in fact answers all the requests which the hon. Member for Greenock has made. I would suggest, therefore, under these circumstances, as we are approaching Five o'clock that we should adjourn the present Debate so that if on examination we find, as I believe to be the case, that my right hon. Friend has substantially met the proposals, which it is quite obvious the great majority of the House desire, and if we find the wishes of the House substantially met we shall then have no occasion to renew the Debate. But if on examination it appears that some further Amendment to the right hon. Gentleman's offer is wished for then we shall be able to renew the Debate on a subsequent day. Therefore if that is in accordance with the general wish of the House I move, "That the Debate be now adjourned."


Do I understand that if the House finds that it is in accordance with my proposal we shall not be asked to give another day?


That is so.


Then I am entirely in agreement.


I think that the Chancellor of the Exchequer has made a very fair offer. The only thing I am not clear about is the terms of reference to the Committees which are to examine into the expenditure by the Government Departments. If the terms of reference are the same as the terms of reference drawn up by the late Cabinet for the Cabinet Committees that sat in 1915 and 1916 they will be quite satisfactory to us. I understand that the other proposition is that the Government propose to set up a Committee on the whole subject of additional taxation and of control of expenditure by the House of Commons. The feeling of the House is that we should accept the proposal made by the Chancellor of the Exchequer, and thank the Government for meeting us very fairly this afternoon.

Question, "That the Debate be now adjourned," put, and agreed to.

Debate to be resumed upon Monday next (9th July).