HC Deb 04 June 1919 vol 116 cc2133-74

I beg to move, That the present rate of Public Expenditure causes anxiety in regard to the financial stability of the country, and that all possible means for the reduction of expenditure should receive the immediate attention of the Government. The subject of this Resolution is of great interest at the moment, and is one of the gravest national importance The position in which we find ourselves owing to the expenditure on the War calls for the most rigid economy in every Department of state, and it is the duty of every Member of this House to give all the publicity which he can to the actual financial situation, so that all of as may more and more be imbued with the necessity of caution in regard to spending money In drawing attention to this question, and what I consider excessive Government expenditure at the present, time, I have no desire to make any attack upon the Government. In a democratic country—and there is no more, democratic country than our own—Governments always will be to a large extent the victims of circumstance, and if at the present time the Government is liable for any unjustifiable expenditure, I think that we in this House are also to a large extent responsible, and also that responsibility cannot be taken from the general public of this country. In consequence, it is well, when opportunity is offered, that we should call the attention of the electorate of the country to the financial situation as it presents itself to us. Owing to his private affairs, and his attention to the ordinary business of the country, the elector has neither time nor opportunity, and no doubt in some cases he has not got the aptitude, to realise what the Estimates of the year really mean, but it seems to me well that he should realise what is the actual financial position. In my brief remarks I would devote myself chiefly to certain items of expenditure of unusual magnitude which appear in the Estimates of the year.

I would first call attention to the expenditure which we are called upon to face during the current year in connection with our railway system. The Government is under an obligation to pay the owners of our railways an amount equal to that which they received in the year 1913. It is stated by the Board of Trade that during the current financial year the expenditure on our railways in excess of what was expended in 1913 will be something between £104,000,000 and £109,000,000. That excess expenditure apparently will be met to a considerable extent by an increase in passenger fares, an increase in parcel rates and other increases, and also an expected increase of business which will reduce this, large amount to the extent of some £40,000,000 or £50,000,000, but that leaves us in the unfortunate situation that the taxpayers, the industries, of this country will have to find some £60,000,000 or £70,000,000 to carry on our railway system in this financial year. This is not the time and it is no part of my duty to discuss the question of nationalisation of railways, but in passing one cannot help calling attention to the fact that if nationalisation means running our railways at the present rate of expenditure, it is hardly a profitable venture.

I pass from the question of the enormous subsidy to the railways to the question of our coal mining industry It is not for one like myself, untutored in these matters to come to any very exact conclusion from studying the Estimates, but, under correction, I have come to the conclusion that the coal mining industry during the current financial year will cost the country from £30,000,000 to £40,000,000. In the Report issued by Mr. Justice Sankey and his colleagues, it appears that up to the 31st of December this year the increased, cost will be something like £30,000,000. The Treasury estimate for the remaining months of the financial year another £7,000,000 will be required. Also under the coal mining agreements there is a sum of £6,000,000. It is true that some £2,000,000 of this is for expenditure in the last financial year, but that does not interfere with the point which I make, that £6,000,000 will be required as well. I put not exactly on the same level, but it comes to the same thing in the end, the fact that the direct taxation of shareholders in coal mines will of necessity be lowered. I have taken the advice of those who are qualified to speak on the matter, and the only conclusion I can come to is that in direct taxation there will be a loss of something like £16,000,000 in the present financial year as the result of the recommendations of the Commission and other matters. That will not be met by any taxation imposed on the increase of wages. No doubt a certain amount of revenue will come from that source, but if you put this at £1,000,000, it will be as much as you can get. The result is that, look at it as we like, we must come to the conclusion that, under present conditions the coal-mining industry is not a paying concern. Turn to another industry—the iron ore industry. Unfortunately, I am not in a position to give any exact figures which I can rely upon sufficiently, but under present conditions, undoubtedly, the iron ore industry must be ranked as a subsidised industry and not as an economic paying concern. I believe it is possible that by-and-by an alteration may take place, but as matters stand it is not an economic proposition. It seems to be somewhat of a tragedy in days like these that such great industries as those I have mentioned should be losing rather than making millions as they did in days gone by. It is a situation which cannot possibly continue and we must hope that it will not be long before we see some alteration.

I turn to another item in the Estimates, of a somewhat staggering nature. I am not mentioning to the House anything that it docs not already know, but it is necessary that I should state the facts. I refer to the subsidy which it is estimated will be required from the public funds for the bread making industry. The 4lb. loaf at present is limited in price to 9d. The baker is able to sell the loaf at that price owing to the fact that the Government let him have flour well under cost price. It is possible that every loaf that is made costs the country from 3d to 4d. At any rate, in the aggregate the public purse will have to be crippled by some £50,000,000 for the bread making industry. It seems to be an appalling thing that one industry should receive a subsidy of that kind in a single year. In coming to another item I have no desire to open a discussion on the unemployment benefits. Personally, I regret the system by which these donations have been established. I could wish—and I think it would have met the requirement—if some system of insurance had been employed instead of the non-contributory scheme, which I am afraid in many cases has been an incentive to unemployment rather than an incentive to work. The period between war and peace had to be met. It was obvious that there would be a great deal of unemployment and the country insisted that some scheme should be put forward. The House, moreover, was pledged to carry it out. The result has been appalling, whatever way you look at it. During the current financial year £37,500,000 of public money will be paid to men and women who are doing nothing, when every industry in the country is calling out for labour. That is a most undesirable situation, and I hope that some alteration may take place before long.

I pass to another Ministry, the Ministry of Shipping. From the way in which the Estimates are presented I find it difficult to understand on what commercial basis they stand, but it appears that something over £20,000,000 of current expenditure will be met out of receipts arising from the sale of ships in excess of the payment for new ships. It appears that £20,000,000 of capital is being used for revenue purposes, to meet losses of a commercial character. In coming to such a conclusion I stand under correction, but these conclusions I came to and I have taken into account the fact that the Ministry of Shipping is responsible for the conveyance of troops. I come next to a smaller item—canals. We might have thought that that would be at least not a matter of expenditure, but here again we find that a sum of something like £1,000,000 must be paid in subsidy during the present financial year to carry on the canals. I turn to the Post Office, a huge commercial concern doing a vast amount of business, so vast, in fact, that one might expect a profit to be made out of it if it was run on strictly commercial lines. In days gone by we looked on the Post Office as one of the paying Departments of the Government. I do not remember quite what the figures were, but I do not think that I take an excessive estimate if I say that £5,000,000 or £6,000,000 was the amount usually expected as a return from the Post Office, in the present financial year it appears that there is to be a contribution to the Post Office rather than a profit.

My attention has also been directed to an expenditure of £2,000,000 in connection with the Treasury Security Deposit Scheme, which was inaugurated primarily and very rightly for the purpose of maintaining the rate of exchange between the United States and ourselves. As the American exchange has now been improved I think it is highly desirable that as soon as possible this scheme should be wound up. I do not know whether action has been taken in that direction, but I hope that every effort is being made. If we add the various sums together we find that they amount to subsidies of several millions to be paid in. the present financial year to a number of undertakings which at the moment are nationalised. My right hon. Friend the Chancellor of the Exchequer comes down to the House and borrows money to meet that expenditure. The taxpayer is not called on to pay and does not know of this. I suggest if those large sums are to be continued they should come out of the taxation of the country so that everyone should know. We have to pay the interest on this money now, and some day we will have to meet the debt incurred. The people of this country are not unreasonable. There is a tremendous amount of commonsense amongst all classes of the British people, and once they are given to realise the facts, however an comfortable they may be, they will face them. I think if the Government frankly told the people of the seriousness of the British financial situation they would realise that we cannot afford to give these subsidies out of borrowed money. Much might be said in regard to excessive expenditure in several Departments. I am afraid we must recognise that Government Departments are always run more extravagantly than any private concern. In a private concern the head or managing director, or whoever it is who is in charge, must, as his first business, make it a paying concern, and incidentally to avoid waste. In a Government Department the head is chiefly concerned with the policy and the making of that policy acceptable to this House. He is not cognisant of and does not know the details of what is going on in his Department. There are many consequences, and one of them is elaboration of system which undoubtedly multiplies two or three times the personnel which you would find in any business concern. I am very far from desiring to make any criticism of our Civil servants, who are a most admirable body of men for whom I have the highest respect, but the security of tenure which they enjoy militates against economic practices. As our expenditure has reached such a huge amount I think it would be well, in connection with the spending Departments, to appoint another Undersecretary, whose duty it would be in every possible way to cut down the expenditure of the Departments he represented. Expenditure has become almost a second nature with officials and the order of things which prevailed during the War still exists to a great extent. Officials have not yet fully realised that the pro- cedure which was indispensable during the time of War is altogether inexcusable in peace circumstances. I do not think officials are conscious of extravagant practices, and it has not been insisted strongly enough on them how necessary economy is at the present time. I wish some spirit of emulation could be introduced into Government Departments to practise economy. I hope we shall avoid as far as we can any pressing of the Government to any excessive expenditure of money. It is customary to ask for a concession here or a concession there, but our present financial position, I think, calls for nothing but the hardest business-work. If the Government will only act on the strictest business lines and not be diverted from that course by clamour or by any desire to please, I feel confident that they will always have a majority at their back in this House. There never has been a House of Commons with greater work to perform than this. It cart only do it by hard business work, and if our work were conducted on such lines I feel sure that this House would gain lasting respect, though it might lose some temporary applause.


I beg to second the Motion.

My hon. Friend says, quite truly, that the curtailment of expenditure is never a popular thing to recommend, and he suggests that we should begin by looking at home. I have been a good many years in the House of Commons, and I have always found that the majority of Members of the House if you meet them outside or in the Smoking Room are all very anxious for economy. But inside the House, when someone proposes some measure which calls for expenditure, those who oppose it find themselves very unpopular. That has been the invariable practice for many; years, tout I hope the seriousness of the present situation will cause an alteration. The other day I ventured to say that I believed the necessity for economy was present to the mind of the Chancellor of the Exchequer, and he acknowledged that statement by nodding his head. I went on to say, and this second statement was not contradicted by the right hon. Gentleman, that I very much doubted whether it was in the minds of his colleagues.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)

I must try to correct myself of that bad habit of nodding my head. It is dangerous. If I am to shake my head every time I disagree and to nod my head every time I agree, I shall never be quiet. The right hon. Baronet must not connect me with criticism of my colleagues merely because I sat silent.


No, I had no intention of doing so. I think it is patent to everybody in the House and the country that, with the exception of my right hon. Friend the Chancellor of the Exchequer, the desire for economy does not burn very fiercely in the breasts of the other members of His Majesty's Government. Like my hon. Friend, I have no wish to make any attack upon the Government or upon anybody else, but the fact remains that the expenditure is going on with the sanction of the Government, and so far with-out any very great interference on the part of this House. But I hope that after this Debate the result will be that some due regard will be paid to economy. This afternoon the President of the Board of Trade informed us that the result of the curtailment of production by the miners would mean a loss of £46,000,000 a year, which would have to be borne by somebody—either the taxpayer or the consumer, or very likely by both. Let us consider what that means. In the old days £46,000,000 would have been a very enormous sum. It is very nearly, if not quite, half the whole annual national expenditure when I first became a Member of this House. That £46,000,000, if it is borne by the taxpayer, will add a very serious burden to the very heavy burdens which are already pressing upon him, and if it is borne by the consumer it will be a very serious burden upon the industries of this country. It is very necessary for the industry of this country that coal should be cheaply produced, but at the present moment coal is not being cheaply produced, and the expense of the production of coal is thrown upon the taxpayer.

I attended this afternoon a meeting in one of the Committee Rooms of this House, and Mr. Harold Cox gave us some very interesting figures showing the result of the interference of the Government with these various industries in the country. He gave these figures as applicable to a certain colliery. He said the royalties had increased by a penny a ton, the profits had increased from 2s. 3d. to 3s. 8d. a ton, but out of that the coal-owner had to pay Excess Profits Tax, but the wages have gone up from 4s. 11d. a ton to 15s. 11d. a ton. This is the result, as far as I can make out, of Government interference, and it is quite impossible that the country can go on bearing burdens of that sort. I could not quite make out from Mr. Harold Cox whether it was 3s. a day or 3s. a ton, but under the Sankey award 3s. a day or a ton is given to the miners. And what for? For not working. If they do not work they get 3s. a day or a ton, as the case may be. My hon. Friend alluded to the results of the subsidies which are being given by the Government, and this is one of the effects of those subsidies. What the Coal Controller has cost us before I do not know, but at any rate he is now going to cost us £40,000,000. Then there is bread, which I understand is much nearer £60,000,000 than the figures which my hon. Friend gave. That is £106,000,000. Then there are £60,000.000 for the railways, and very nearly £40,000,000 for unemployment. That comes to £206,000,000. Then there is housing, and what on earth that is going to cost I do not know. Just consider what these figures are. Over £200,000,000 a year without housing. Then there was a comfortable little Resolution to-day which suggested that £45,000,000 should be obtained from somewhere or other for electricity. That, I think, is not an annual, but a capital expenditure, but still, it is an extremely large amount.

Then I happened to come across, as Chairman of the Select Committee on National Expenditure—I do not think there is any secrecy about it—a little item of about £500,000 a year to be spent on civil aviation. I dare say it is a very excellent thing, but why we should subsidise it by spending £500,000 a year on it I do not know. If we want to make any improvement in aviation, let us make it with the forces of the Crown. But why we should allow civilians to benefit by a subsidy from the State I fail to see. Therefore, putting aside the question of housing, which is an abyss into which I do not want to fall, there is over £200,000,000 on quite a small number of things, and that is quite irrespective of the enormous expenditure we must meet for pensions, interest on debt, and for a variety of other subjects of that sort. My hon. Friend—and here I rather disagree with him—seemed rather to object to the Chancellor of the Exchequer borrowing money for this year. I myself do not object to that. I think it was the only thing to do, and I think, if I may say so, we are very fortunate in having my right hon. Friend as Chancellor of the Exchequer. I hope he will not mind my saying that. I say it with all sincerity. I do not think it was possible for him to do otherwise than he has, but when next year comes, when the War is over, and when we ought to pay off all the various arrears of expenditure which have arisen out of the War, then I do think that we ought to pay our annual expenditure out of our annual revenue—that is, after March or April of next year. We first of all have to think whether this House will do that. It will be very difficult to do if we do not curtail expenditure to a very appreciable extent. It will be impossible, I believe, to do it if we do not curtail expenditure, or if we increase it. What I view with so much dread is that I see no sign anywhere of any real desire to curtail expenditure, In the public Press and everywhere one comes across projects—I dare say they are good; I do not say for a moment they are not—but they are all projects which involve the expenditure of money. In my young days—I am not sure in my old age I should not like to spend a certain amount of money and enjoy myself, but if I have not got it, I must exercise a little self-denial and say I must not spend that money or enter upon that pleasure. That is exactly what I want the Government to do, but they do not feel inclined to do it, or, rather, the nation will not back them up.

9.0 P.M.

One of the most extraordinary things is what the nation is doing at the present moment. Where is all the money coming from? You see people going to the Derby; you cannot get a taxi-cab; there are motors all over the place; every train is full; the passenger traffic for the last four months has been larger than it has been at any time within, I should say, twenty years, or probably longer. I am not at all sure it is not larger than at any time in the history of this country, and that notwithstanding we are told the fares are so high that people cannot afford to pay them. So far as I can see, from my experience as a railway director, they can afford to pay double, and even then we should find it very difficult to carry them, so anxious are they to travel about in our comfortable and luxurious carriages. However that may be, where does the money come from? So far as I know, all my friends are certainly far poorer than they were before the War. Their incomes in the majority of oases are less, and they have to meet an enormous amount of taxation, and what is left to them is not worth what it was before. But I am afraid that the fictitious prosperity—because it is nothing else—which exists at the present moment is due to the fact that these people who have made out of the War a considerable sum of money arc spending it as fast as they possibly can, and a good deal, I venture to say, is owing to that horrible system of currency notes which have increased by a sum of something like £60,000,000 since the Armistice on 11th November. I think I am right in ray figures. They have gone up from £290,000,000 to £345,000,000 at the present moment. There is a little fall; it was £349,000,000. That enormous amount of currency notes, I ventured to say a few weeks ago in this House, is worth no more really than a bit of paper It is greatly owing to that printing press that a good deal of this fictitious prosperity arises.

The first thing I think we have to do is to endeavour to cut our coat according to our cloth. It is going to be a little unpopular. Unfortunately, a great many Members made a large number of promises at the election. We must forgive them for doing it in the excitement of the moment. When standing on the platform in front of a cheering audience sometimes one's tongue runs a little away with one, and one says things which arc met with a burst of cheering. Then one goes home, has a bottle of soda water, sometimes with a little whisky in it—if you can get it—and you feel what a great man you were. Very often, in your calmer moments later on, however, you regret it. That was what occurred at the last General Election. A great many promises were made, but very few can be carried out, and the sooner we let the electors know the better that we have all made mistakes—not for the first time in our lives—and that there is not going to be a new heaven and a new earth, and that the only way to make a new heaven and a new earth is not to expect higher wages and shorter hours, but to do as much as you can to produce something which is valuable, and to work as hard as you can to produce as much of that valuable commodity as you possibly can. I was very glad indeed to hear—I think it was the day before yesterday—several Members of the Labour party pointing out the necessity of increasing production, because I am sure that is the only thing you can possibly do to make the country prosperous again by increased production and diminished expenditure. By so doing you will compel people to live a little longer in an uncomfortable house, but not at a high rent, because the landlord is the only person, so far as I know, who has not received in some shape or form a war bonus to meet the increased cost of living, except perhaps the rentier, a man living on a fixed income.

I feel quite certain, speaking from many years' experience in the City, that if this expenditure goes on we are on the road to ruin. It is no use denying it. It is much better to take time by the forelock when you can. We cannot go on spending money on every scheme, however good, however desirous we might be of doing it in different times. We now have to face a very serious time before us, and I think we owe a great debt of gratitude to my hon. Friend for putting down this Motion. We have got to make the country understand. I am sure if they understand they will do what they did in the War—their duty!—so that they may leave something for their children to inherit, something as good as they themselves have been able to get. If we do not make them understand that, well, then, I am afraid—I will not say what I am afraid of—it is really too serious a result to mention. I, however, do earnestly ask the House and I am sorry there are not more here to listen to what is said on this subject—and I earnestly ask the Government to consider whether the time has not come when we should tell the country that we have not got the money to do all these various things asked for; and that, therefore, what they have to do is not to consider how to get all these things, but how to do without many of them. As was told us in the Committee Room, a card was sent round to certain workmen asking them, "Would you like shorter hours and increased pay?" Of course they said "Yes." So would I, and so would everybody else. But what we have to do is to ask them, "Will you work harder and for less money?" That is the only way. If the country becomes bankrupt, then the whole thing goes. You can save the situation now; if you do not you will rue it. I have great pleasure in seconding the Motion.

Lieut.-Commander KENWORTHY

I rise to speak on this most important matter, and I must congratulate the hon. Member for Whitehaven who has raised it. The matter is one of extreme importance, as we have just been told by so eminent a financial expert as the right hon. Baronet opposite. But I am rather surprised at this Motion coming from the other side of the House. So far as I can make out the demand for the most excessive expenditure of all comes from that side. I suppose the greatest drain upon our resources at present is the result of the demand voiced by right hon. and hon. Gentlemen sitting on the opposite side of the House. I refer to our subsidies to the various expeditions in Russia. I think the House will be well-advised to consider most carefully this most important matter. The Minister for War gave us a glowing account of the progress being made by the various counter-revolutionary general in Russia. We are going to supply these Russian temporary Allies of ours with everything in the way of munitions. They are even wearing the uniforms of our soldiers. I saw it stated in the Press that 100,000 tons of war material had been landed recently in the south for General Denikin. Many of our instructors—British officers—are with these armies. These instructors will have their staffs with them; they are drawing travelling expenses, and they are spending money in every possible way. This expenditure will be incurred for at least, I should think, three years; for, should these counter-revolutionary movements succeed and reach the old capital of. Russia—Moscow—we shall have to support, them in the same way. It would make one much more comfortable if we knew that the Chancellor of the Exchequer was giving due weight to the serious financial situation in which we are placed by this sort of policy. In the Minister for War's, speech not one word was said about expenditure. I am not going into the Russian policy at the present moment, but I desire simply to draw attention to this very serious drain upon our resources.

There are other serious drains. One of them is the great number of people being kept in this country on unproductive work, and, as I believe, unnecessary work. I do not refer to the people out of employment, largely through no fault of their own, who are drawing unemployment donation: I am referring to the undemobilised persons in this country. I am not now in any way referring to our Army of Occupation on the Continent or to our armies abroad in our different Possessions and Protectorates: I am re- ferring to the large army of demobilisable persons round the coasts of the Kingdom and in the various towns. It does not require a very bright lookout to see these establishments throughout the country. Take, for instance, the aerodromes. During the War we were faced with the very serious submarine menance. One of the most effective means of combatting this was by the establishment of seaplane bases around the coasts. These are certainly being slowly wound up—but all too slowly! Not only around the coasts, but on the Continent are these air stations. Their hangars are empty, yet they have their operational staffs, with due allowances, and with the women belonging to the "Wrafs" and their officers. These officers have to have men along with them and other persons clearing up the messes. They are performing no useful functions, because everyone of the German submarines is safely in our keeping, and there is no reason whatever why these aerodromes should not be wound up and the men demobilised, apart from the provision of any reserves that might be wanted in the future.

It is months ago since the Armistice. We are now in June. We had the German fleet in our keeping early. Again, take the question of flag-officers and commanders, a subject I perhaps know best about. Take the officers and men employed in connection with coast defence, control of the sea traffic, and engaged in the anti-submarine warfare around the coast. They are not being demobilized. Practically no reduction has been made since the Armistice. Each one of these flag-officers and commanders has to have his retinue and staff, furniture allowance, and, in some cases, entertainment allowance. There is no work for these officers to do. I hope the hon. Gentleman opposite (Mr. Baldwin) will point out to the Chancellor of the Exchequer, and if he can also give a hint to the Admiralty in this matter, that the demobilisation of these gallant officers might be expedited. With them will be able to go a good many junior ratings who, at any rate, want to return to productive work in industry. There are also various military camps. There are coast defence forces still remaining, for example, in Kent. I do not know whether anyone still proposes to invade us, or why these camps should remain with their nucleus staffs. A great economy could be effected if these could be demobilised. It is the same with the fighting forces in the big towns. There are different regional commanding officers with their staffs and they are holding on to their jobs as long as they possibly can. If they were demobilised and returned whence they came, or placed on half-pay, they would still be able to live.

In the parlous state of the finances of the country I am sure the House will agree with me that this should be done at the earliest possible moment. It may be stated that a great number of these women have done good work in the War as members of the Auxiliary Army Corps and the Air Force, and that if they were suddenly demobilised they would come under the unemployment head, but at any rate they would not be a charge on the country for rations, clothing, and quarters, and other people again to look after them. In this way a great economy could be brought about at once by hurrying up the demobilisation of the home forces at different places in regard to coast defence and anti-submarine warfare, and also in regard to the subsidies and expeditions in which we are supplying munitions to Asia and Eastern Europe. Freights are tremendous at the present moment, and I hope we shall examine this expenditure with the greatest care. Paper money is flooding the country, and there is no gold reserve behind it, and this is one of the most serious charges that is now being made against the Soviet Government in Russia at the present moment, and I am sorry that we are doing the same thing. The result, is that up go the prices and there is a demand for higher wages, and the whole of our finances get deeper into the mire. There must be a halt, and that very soon.


I represent a purely agricultural district, and I confess that I am absolutely lost when I come to matters of finance. I have listened to the speech of the hon. Member for Whitehaven (Mr. Grant) and the speech of the right hon. Baronet the Member for the City of London (Sir F. Banbury), and although both of them have been advocating economy neither of them put a finger on the spot where we could economise. My Constituency sent me here in order to see where we could reduce taxation. I should like some enlightenment as to how a common or garden Member of this House can put his finger on the extravagance alleged and put a stop to it. The Minister for War the other day mentioned that he wanted £65,000,000 for the Air Service, and that nearly knocked me down. I went out of the House and into the corridor and asked myself how I should vote upon this question. I spoke to several other hon. Members, and they were in exactly the same plight. We seem to have no means of putting our fingers on the spot and checking the figures. Then I reflected what would happen if I went back into the Chamber and objected to this £65,000,000 being voted for the Air Force. In all probability I thought the Minister would say, "Do you object to the number of men?" I have nothing to guide me as to whether the men are sufficient or insufficient. Supposing the Minister said, "Do you object to the number of machines?" Again I have no means of checking them, and there is nobody to ask how many are required. If the Minister said to me, "Do you object to the number of aerodromes?" I could have said that I do, because in the county of Gloucester we have aerodrome after aerodrome put up at great expense, and they are not being used at all.

The next point is that we are asked to vote so many millions for the Army or the Navy. How am I to know whether the number of men put down is sufficient or more than sufficient? There are hon. Members who say that you may reduce the Army by thousands and hundreds of thousands and the expenditure by many millions. What check have I on any expenditure whatsoever in this House? I have nothing to guide me, and if someone would point out to me how I, as an agricultural Member, can get to know whether certain figures are necessary or not, whether so many ships are wanted in the Navy or not, or whether so much money is necessary to be spent on the railways, I shall be greatly obliged. I confess if I cannot take this information back to my Constituents they will think I am a worse duffer than I am. I know I am a duffer, but I do not want to be a duffer longer than I can avoid.

I have had many letters asking about the release of men from the Army. I had one asking for the release of three pivotal men, and this man says that he is not able to retain the men he has got in his employment because they are only labourers, and his pivotal men are being retained in the Army doing odd jobs which is like washing up cups and saucers, although they are men who would earn between £6 and £8 a week in this country. There must be something topsyturvey about a system under which skilled engineers are employed upon electric lighting, and who are kept doing odd jobs which might be done by unskilled labourers. I spoke to a builder this week and he said, "I have any amount of unskilled labour, but as for masons, carpenters, blacksmiths, or glaziers, I cannot get them out of the Army." And yet the War Office release unskilled men who come over to this country, and they are now without work, drawing unemployment pay. If someone will tell me where I can get enlightenment and what sort of an answer I can make to my Constituents on these points, I shall be uncommonly pleased.

We are told to go in for economy, economy, economy, but I see no signs of it. I am the trustee for a poor widow, and all her money is invested in small house property, which was heavily mortgaged at the beginning of the War. The Income Tax has gone up, but there has not been a penny piece of vent increase. I have known this property for many years, and I know there has been no raising of the rent on that particular property for twenty-five years, so this lady cannot be described as a blood-sucking landlady. Here is a case where, owing to heavy taxation, this poor widow, who used to get £130 a year from her property, is now reduced to £80 a year. I put it that this £80 ought to be £160 in order to keep her in the same position. It is that class of person who is hit harder than anybody I know. [HON. MEMBERS: "Hear, hear!"] Yes; but where is the remedy? This kind of thing is going on all over the country, and it is not confined to any particular district or city.

Taxation seems to go round in a vicious circle. The working classes say that the cost of living is going up, and they must have more wages. The person producing the goods says he has to pay more for raw material and for wages, and, therefore, his prices must go up, and this vicious circle goes on all the time round and round, and it is time a stop was put to it. I want to know where I can put the brake on. I went into four Government offices one day last week, and I confess that the number of people who waited upon me was so great that they were tumbling one over the other, and no less than five people came to me and asked, "Who do you want to see?" I should like to have seen four of them out of it getting their living in tome other way. I have seen motor car after motor car in St. James's bringing up officials to have their luncheon. Why should I pay for that? They do not pay for me to have my luncheon, and I cannot see why money should be spent in that way when it is so much needed for the necessaries of life. If some one will get up and point out how we can put our finger on the spot and cut down our expenditure, I will follow him into the Lobby every time.


The last speaker, in a very interesting speech, has shown how sterile a discussion of this kind can be. If we are to deal with the Motion in the way in which he discussed it, we I shall really discuss the whole mode of management of the Empire and each of us will have a different opinion as to how economies are to be effected. I agree largely with the hon. and gallant Member for Hull (Lieut.-Commander Kenworthy). I believe that there is a great deal of unnecessary waste in military expenditure. I do not know why the Chancellor of the Exchequer should have to answer, because he is the one person in the Government least guilty for this unnecessary expenditure. I should like to ask him, however, how many Armies we have got fighting in the world at the present time? I am not speaking of Armies of Occupation but of Armies which are on active service, and in which casualties may, unfortunately, be taking place. I do not believe that the public has the least idea how many wars this Government is carrying on. While everyone, of course, has the warmest sympathy with our gallant troops abroad, I believe that the public is not in favour of military adventures in any quarter of the world. That is my opinion and the opinion of my hon. and gallant Friend. The hon. Baronet (Sir B. Stanier) wants to see the bread subsidy abolished. The hon. Gentleman who moved (Mr. Grant) wants to see the unemployment grant abolished. Another hon. Gentleman wants to see the money withheld from the provision of houses. I think that to abolish the bread subsidy would be like leaving the motor cars in Kempton Park out in the rain. It would be to destroy the most useful part of the national machinery. We have our idea as to how the bread subsidy could be reduced, but it carries us into another controversy. It is really futile for us to attempt to put forward all our opposing views about policy, because you could frame the policy of this country in two or three different ways each of which would mean more expenditure in one direction and less in another direction. I should like to deal purely with the question of administration, which is really a question of efficient business management. I make no apology for attempting to deal with it from the point of view of the man in the street, the man who is not very well informed, and is not very familiar with the excuses or finely-spun arguments by which it is attempted to justify that which he regards as gross extravagance, but who follows what appears in the newspapers. It is not an unreasonable view to take, because the Resolution refers to the financial stability of the country, and that depends a great deal upon what the man in the street thinks, the man who has to put I is hand into his pocket to subscribe to the Chancellor's Budget.


He must find something in his pocket.

Captain BENN

All I am saying is that the opinion of the man in the street is an opinion to which we should pay respect. What does he think of the present state of affairs? He is, of course, well aware that the country is passing through a transitional state, and he does not expect a Budget that is no greater than a Budget in peace time. He knows that we are passing from war to peace and he expects, therefore, the Budget this year to be a good deal larger than the Budget of a normal year. He is encouraged, however, by the statements made by the Government. He hears that the Shipping Ministry is going, that the Food Ministry is being wound up, that the Ministry of Reconstruction is going, and that the Ministry of National Service has probably already ceased to exist. He is anxious about demobilisation, primarily because he knows that there are lots of men being retained in the Army and doing menial jobs who are wanted to start new industries at home. That is the main reason that he takes an interest in the demobilisation question. There is the financial aspect of it. He knows that every man gets so much per day. He is encouraged, however, when the Secretary of State for War comes down and says that 3,000,000 men have been demobilised. He thinks: "Here we are. At last, we are coming to a time of reduced expenditure." Then he examines the Estimates of the year, and he finds that whereas during the War we were spending £6,000,000 a day, now, in a time of transition to peace, we are still spending over £4,000,000 per day. He cannot understand how it is, when the War is over and the Germans are defeated, that we cannot get down to something less than two-thirds of the expenditure during the War. On the top of all this he gets the Reports of the Committee on National Expenditure, and of the Comptroller and Auditor-General. He reads some of the picturesque stories that appear in those perfectly serious official documents. He reads of the Ministry of Munitions hiring motor lorries at so much per week, and at the same time letting out motor lorries to contractors at a smaller figure. He reads of a factory to make rifles, or some weapon of war, put up at a total capital expenditure, advanced by the Treasury, of £135,000. The thing is a failure and the transaction is compromised by granting the factory to the proprietors at a figure of £37,000. Then he reads that a few months later the factory is taken back again by the Ministry of Munitions at a valuation of £50,000, although the right hon. Gentleman's Department protested throughout, as indeed it should, against the whole transaction. Then he reads of the case of Army officers travelling.

Captain B. STANIER

And men.

Captain BENN

And men. I do not wish to discriminate between the two. There is a great deal too much travelling on duty. A great many people are sent hither and thither because it costs them nothing. To-day an officer in uniform can travel in a railway train for half the pre-war cost of travelling. I should be sorry to say anything unfriendly to officers, but in the present state of national financial danger I do not see why they should be allowed on pleasure to go hither And thither at, not half the increased fare, but half the pre-war fare, especially when they have the luxuries and comfort provided by the right hon. Gentleman's railway company. There was the interesting—I might say the classic case of the sentries provided by the Royal Defence Corps at a total cost of £850 each. People may say: "What is the good of raking up all this wasteful and loose administration during the War?" I know that it is not much comfort to the man who has had to pay and who is hard up to tell him that the money is irrecoverable and that he had better say no more about it, but he asks, "Where are these people who were responsible for this waste of expenditure?" and he finds that they are still there, cheerfully preparing other schemes for wasteful expenditure in future. Therefore, that which has happened in the past is germane and relevant to a discussion as to the future. You thus get in the mind of the average observer a state of suspicious apprehension. He is prepared almost feverishly to watch for these examples of a useless waste of money. There is plenty of material. We hear of thousands of motor cars sunk deep in the mud and being dragged out by cranes. The man-in-the-street hears that various Departments are being demobilised, but he finds that we have a Vote for Public Buildings amounting to £7,000,000 against £3,000,000 last year. During the War the average person had more than his fair share of official forms to fill up, yet in the first year of Peace expenditure the Stationery Office Vote is put at £5,000,000, as against £1,500,000 in the last year of the War.

Mr. BALDWIN (Joint Financial Secretary to the Treasury)

The hon. Gentleman should remember that much of the expenditure in war-time appeared only in the Vote of Credit.

Captain BENN

Of course, the Financial Secretary to the Treasury is familiar with these details, but the White Paper recently issued shows a very large increase of expenditure for the ensuing year.


I hope my hon. and gallant Friend will forgive me for again intervening. But both my hon. Friend the Secretary to the Treasury and I have done our best to make the House and the country understand the meaning of these figures. During the War we financed all expenditure arising out of the War out of Votes of Credit. This year, for the first time since the War, we have given up Votes of Credit and put the expenditure in the Estimates. Yet the hon. and gallant Member compares the Estimates for this year with the Estimates for last year, omitting entirely the fact that there were then Votes of Credit. That is an entirely misleading and mischievous comparison, and I beg my hon. and gallant Friend, after the fallacy has been explained so often, not to give further publicity to what is really a mischievous misrepresentation.

Captain BENN

Of course, I accept the right hon. Gentleman's statement. I have had no time to search further, but if he will give me an assurance that the expenditure for the Stationery Office for the following year is not in excess of the expenditure for the past year, I will not press the argument. I accept his statement that there is no increase in the printing and stationery Vote for the ensuing year. But even though the right hon. Gentleman proves to be right. I must point out that there is a general tendency—an unrestricted tendency—to multiply expenditure in every direction. Take the case of political offices, a most important thing which very nearly concerns this House. Take the case of the Ministry of Health Bill, with which everyone sympathises and wishes to see passed into law. It has been accepted by the Government that the work of the Department can be done with one Secretary, and yet it was left to the economical determination of another place to enforce that. Now the Bill is going to be passed into law it is to be worked with one Secretary, whereas originally there was an unnecessary expenditure proposed for a second Secretary. Take the case of the Estimates laid before Parliament—the Financial Secretary will correct me if I am wrong. We are told that the National Service Ministry and the Reconstruction Ministry are about to be wound up, but, as I read the Estimates for the ensuing year, the salaries of the Presidents of those two Departments are provided for the whole year. What is going to happen to that money which we are asked to vote, although the offices will shortly cease?

It is very difficult indeed, especially when coming fresh from a long absence, to follow all these complicated financial arrangements, but it certainly does not look as if there is any anxious determination to cut down expenditure in every direction. The salary of the Lord President of the Council has been increased by £3,000 a year. No doubt it is richly deserved, but it does not restore public confidence to see expenditure being increased without any real justification, in view of the urgent straits in which we find ourselves to-day. There is the question of the Lord Chancellor's residence. Nobody, of course, wants to make a small debating point, but it really is not dignified that when the country is hard up and must economise the Lord Chancellor, who is annually in receipt of £10,000 a year, should have to be told by a Committee of the House of Commons that it is not dignified to grasp at a residence for which the last occupant paid something between £500 and £1,000 a year. The motor-car question has already been touched upon. My right hon. Friend the Chancellor of the Exchequer is the one person who is struggling against it. But why should Ministers' Secretaries and people of that sort have all these motors? It is hardly worth while to trouble the House with figures, but according to a Return which I have there are fifty-nine motor cars in use at the Ministry of Reconstruction, which is going to be wound up. A motor car is a very expensive thing. You have to have a chauffeur and petrol, and to provide for the upkeep of the car. One Department, I think it is the Ministry of Labour, has the use of thirty-five motor cars. What possible justification can there be for this sort of expenditure, and what is the effect on the minds of the public.

You often hear people saying how ridiculous it is for a munition girl worker to buy a fur coat. But what can you expect her to do when she learns that the Lord Chancellor is quarrelling over his residence, that the Lord President of the Council is getting £3,000 a year more, and that a large number of motor cars are being used by the unemployed at Whitehall? The right hon. Gentleman told us it was very desirable for the Chancellor of the Exchequer, if possible, to get the reluctant assent of the public to the taxes. But how can he expect to get that while these flagrant things are going on in public expenditure. Last week in Scotland a very respectable woman came to me. She had for the first time in her life been called upon to attend a Court because she could not pay her rent. The reason she could not pay was that she could not get her son demobilised from the Army. He was being kept there as an officer's servant, and she had found it impossible, with the allowances of which she was in receipt, to make both ends meet. But what must she think when she reads in the papers that £850 a year is the cost of maintaining one immobile sentry outside a perfectly useless office? I have before me the case of an old age pensioner who received 12s. 6d. a week in respect of the death of her son, and, because she got that additional grant, her old age pension was cut down. That, of course, was according to law. But what must be the impression created upon the minds of people like that when they read that the Govern- ment entertainment Grant for the ensuing year is to be £200,000 instead of £25,000, as last year?

What control is there over the expenditure of this country? In the old days there used to be a Cabinet. I think I am right in saying that the Estimates used to come before the Cabinet and be passed. Who passes the Estimates now? Perhaps the right hon. Gentleman will explain. They surely cannot be passed by the War Cabinet in Paris. What control is there, and who passes the drafts of these Estimates before they are submitted to the House? That is a point very germane to the speech made by the Mover. This House ought to show a stern example of economy to the country. That is one reason why I, speaking for myself, am greatly opposed to the extension of any privileges whatever to Members of this House. I am in favour of the payment of Members of Parliament, because I believe this House ought to be open to talent and to whoever the constituencies wish to send here, to the man who has nothing as much as to the man who is rich. That is a sound principle of democracy. But I do not think that polities should become, or appear to become, a lucrative profession. In the old days Ministers served, and were glad to serve, without any salary at all. There were always Ministers who served in an honorary capacity. Why cannot we get back to something of that kind? Why should it be necessary, in order to maintain the dignity of the Government, to apply all these perquisites and increases of salary to the members of the Government, or anybody else? The House ought to regard most jealously all expenditure to or on behalf of members of its own body. It would add greatly to the moral weight as well as to the dignity of this Government if the Ministry lived in dignified poverty. There has been a great War. Many people have sacrificed everything—not only money, but much more. It is not very creditable to be rich today. Why should not the Government be a Government of poor men, who exercise a stern economy on behalf of the nation, and for their own services are satisfied with the reward of public esteem?


I am glad that the House should on the Motion of my hon. and gallant Friend, devote an evening to the consideration of public expenditure and of the condition and prospects of the national balance-sheet. I confess I am anxious that no word that I say tonight should seem to anybody to indicate any underestimate on my part of the need for economy, for the severe prevention of waste and for the punishment of culpable waste, if such exists. With the speeches of my hon. and gallant Friend who opened the Debate and my right hon. Friend who seconded the Motion, I have no possible cause of complaint, unless it be that, while drawing attention to the large expenditure—some of it of a very unsatisfactory kind—and to the consequences which will follow if you cannot reduce it, they had no very practical suggestions to make for immediate remedy. But I confess I do rather deprecate the character of some of the observations made by the hon. and gallant Gentleman who has just spoken. He trotted out again with great vehemence and with some violence a well-worn them It is, of course, the case that during the War there was unnecessary and wasteful expenditure. But I beg the House, in judging those who made mistakes in very difficult circumstances, to remember the attitude of the House itself at that time. It was not very easy to say exactly what would be required. The pressure then throughout the House and throughout the country, and rightly in both, was that the Army should be provided with what was required. The pursuit of inquiries and precautions which ought to precede and accompany expenditure in peace time, means in war again and again that what you save in money you spend in blood. I remember when I first joined the Coalition Government of Mr. Asquith that again and again the present Prime Minister as Minister of Munitions was ordering military supplies in excess of those demanded by the military authorities. I and some others thought at times that he was ordering too much. I cannot remember a single instance in which before those supplies were ready the military authorities had not increased their demand even beyond what he had ordered.

In these circumstances and amidst these difficulties, it is not surprising that mistakes were made. It is not surprising that here and there a factory was put up which had better not have been put up. It is not surprising that the War, coming suddenly to an end at a time when all of us were contemplating that we should have to wage it for another year, you should find works unfinished on your hands which are now in the nature of a white elephant but which might have been of vast import to the successful conduct of the War. These things should be borne in mind when you are criticising the past. Let me add one further word of caution. I have a very high regard and respect for the office of Comptroller and Auditor-General and for the Gentleman who fills that office now. But the House must not take every statement which appears in his Reports as submitted to the Public Accounts Committee as proven, and the Comptroller and Auditor-General would be the first person to tell you so. He finds a primâ facie case. I have known many instances—no doubt the Comptroller and Auditor-General could give you more—where, on examination by the Public Accounts Committee, the transaction has worn quite a different aspect from that as it first appeared in the Comptroller and Auditor-General's Report. The hon. and gallant Gentleman opposite treated big questions and little questions as if they were of equal importance. I think that sometimes, unlike others who have spoken, he was less concerned with economy than with a certain amount of party or personal feeling. The hon. and gallant Gentleman thought it becoming and proper to speak of its having required a vote of this House to teach the Lord Chancellor that he was not to be extravagantly housed at the public expense. Was that a fair statement, in view of the facts known to the hon. and gallant Gentleman, which are already public property? The Lord Chancellor did not want to occupy that house. He did not ask for it. It was a decision of the House of Lords that the Lord Chancellor should have that residence, and it was a decision of the House of Lords Committee that he should not pay rent for it. As a matter of fact, the Lord Chancellor never wished to occupy it. It would have involved him in increased expense. But since a Committee of this House, in a virtuous outburst of economy, has at last found a way to save public money by refusing to put a second bath in a house containing thirty rooms, the Lord Chancellor will remain more comfortably housed in his own house. It may be wrong to provide public residences. It is not wrong to make them decent, and it is not in any case a proper subject for attack against my right hon. Friend that the Office of Works, in pursuance of its ordinary duty, should have sought to make the House reasonably habitable when the House of Lords had requested that the holder of that office should occupy it.

10.0 P.M.

I am sorry to have had to devote even that amount of time to a petty detail of that kind. We are really discussing much bigger questions. I am not here to palliate or to excuse any form of waste. I speak not for myself only. I speak for the Government, for my colleagues as well as for myself. We have none of us any excuse to make for continued waste. We are all bent on producing in our own Departments and through the public service the economies which are compatible with the due discharge of the public service. But I beg the House to remember the problems with which we are confronted. The transition from peace to war produced a crop of new problems which we only grappled with by degrees. The transition from war to peace produces as many new problems. It produces them the moment you begin the transition and before peace is signed. The hon. and gallant Gentleman (Captain Benn) and others say, "Why do you not demobilise your pivotal men?" Does he suggest that we should go through the Army now, picking out pivotal men, to the exclusion of others, for demobilisation? We went as far in that direction as was compatible with discipline and contentment in the Army, and I speak what is known to everyone when I say that the picking out of individuals, whether as pivotal men or for whatever other reason, caused grave discontent in the Army, because in its practical operation to the men who were left serving it was indistinguishable from favouritism. To demobilise men as rapidly as possible is the desire of us all, and of no one more than the Government. But you cannot demobilise on the principle which the hon. and gallant Gentleman suggests without consequences which, if he were in a responsible position, he would not face. Is this demand for the demobilisation of the military, naval, and air forces a natural one? That demobilisation has already been carried very far, and the preliminaries of peace are not yet signed. We do not know what confronts us. A great part of the world is still restless. Many parts of it are still fighting. The reactions of war are not over and you only proceed gradually, and even if peace were signed there still remains the overlap of war. The very demobilisation of the men involves you in increasing expense, for they are entitled to their bounties on demobilisation. The stoppage of contracts in course of execution for military supplies, which had to be provided in ever increasing quantities up to the last moment of the War, involves you in expenditure, and whichever way you turn you cannot suddenly cease all expenditure because fighting on the Western Front has ceased.

But I think my hon. Friends who moved and seconded the Motion showed a better appreciation of the real problem which is under discussion than the hon. and gallant Gentleman. It is not waste that is the danger. Waste is excused by nobody, and will be defended by nobody where it is found and proved. That is not the danger. The danger to which the Motion calls attention is that the present rate of public expenditure causes anxiety in regard to the financial stability of the country and that all possible means for the reduction of expenditure should receive the immediate attention of the Government. I have no fault to find with that Resolution. The position gives cause for grave attention and constant care. It might easily become one in which it would give cause for the gravest anxiety, but that will not be because of wasteful expenditure in the sense in which the word is ordinarily employed. I repeat what my right hon. Friend (Sir F. Banbury) said with the authority which attaches to a warning of this kind from a person who holds the office of Chancellor of the Exchequer and with a sense of responsibility which is present to him at every hour of his day's work. The real danger is that the House and the country do not realise, in their normal daily action, that we have not the means to carry out all the large programme of amelioration and improvement which it is sought to carry out at once. We may do it by degrees, but at present it is not sufficient, it will not be sufficient for the House of Commons to vote down waste, to put a stop to what is habitually called extravagance, to the payment of unduly high salaries, to the use of motor cars where they arc not really required, to the employment of an unnecessarily large staff—that alone would not be sufficient unless we realise that our cloth is limited and we must cut our coat according to our cloth. I wish the House would realise that. Look at the Question Paper to-day. My hon. Friend who had the curiosity to go through it counted sixteen questions, all asking for more expenditure and some of those questions were put by an hon. Member who-has taken part in this Debate. That is typical of any day. There is not a subject which comes up, there is not an economy which the Department has made for itself, or which the Treasury has enforced upon it, which does not become the subject of questions and criticism in this House and of complaint that the money which we have saved is not being spent. It has to be realised that in many instances the case made out for expenditure, taken by itself, is good. The object is a good one. The people for whose benefit the expenditure is intended are deserving. There is nothing to be said against it on its merits, it that was the only thing we had to consider and the Exchequer was full to overflowing. But what is the use of my hon. Friends asking for the reduction of taxation when on every hand we arc being pressed not to spend less but to spend more; when we are called upon to carry out these immense schemes and at the same time to revise every tax that we made, to extend every concession that we accord to a larger class of people, and to antedate to some past time every allowance which is now created in present circumstances.

I do not rise to defend waste. I should be unworthy of my position if I did. My colleagues will not defend waste. They and 1 are working together to secure pure economy, and to secure efficiency, but unless the House will put some check on the demands made on the public purse, our efforts will not be sufficient to avert the danger to which my hon. Friend's Motion calls attention. My hon. Friend the Mover of the Motion said that he thought the Ministers at the head of Departments did not know the details of the work. That is quite true. Take the Secretary of State for War, or take the Chancellor of the Exchequer. I cannot know of the detailed work of my Department and the Secretary of State for War cannot know all the detailed work in his Department. If he could, and if he had time for it, you would not get a Minister of the authority and position of the Secretary of the State for War. He has bigger problems to deal with, but he can inspire his officers with the spirit which inspires him. He can impress upon them, as I know he is seeking to impress upon them, the need for economy, and he can ask them to work out with him the means by which it is enforced. The difficulties of the Depart- ments I do not overrate. No man likes having economy forced upon him. Each Minister is anxious to spend more money in proportion as he is keen about the service of which he is the head, be it military or civil. Each one naturally thinks of the circumstances and the needs of his own department, but, working together, we do try to measure the total burden and keep it to something which is reasonable and possible for the country to bear. My difficulties are not with my colleagues, and their difficulties are not with me. They come to me again and again and say, "Did you listen to last night's Debate in the House of Commons?" or, "If you had been present yesterday afternoon you would have seen that the matter raised is one which it is impossible for the Government to resist." There is constant pressure on every occasion—except on the Vote for the Chancellor of the Exchequer—upon the Government and upon Ministers to spend a thousand pounds with an occasional expression of the hope that they will save £5. The House must co-operate. It must view the problem as a whole. It must cease to look at it departmentally or sectionally, considering each policy by itself and never considering where it is tending to as a whole.

We have gone through this tremendous struggle which has proved the strength of our financial position as well as our national strength in other ways. We have been the financial backbone of the. Allies. We carried the great burden, unevenly I might almost say, up to the time when America came into the War. We did not and could not relax our efforts even when America came in, and in spite of this gigantic bur-don and in spite of the sacrifices we have made we arc in a stronger position than any other combatant excepting the United States, which entered so much later into the War, after having reaped the immense advantage of its earlier neutrality. I speak of what I know when I say that the strength of our position, despite the sacrifices we have made and the readiness of which they "were borne, has excited admiration, even wonder, among our Allies, and perhaps among our enemies. In virtue of that we are in a better position than any other belligerent to meet the future as it now confronts us, and we can meet it with success on condition that we realise that the immense expenditure on the War is not a reason for spending more but is a reason for spending as little as is compatible with social order and good government, and on condition that on each occasion when expenditure comes before us we ask, not whether we like this, not whether it is a particular thing to be done if we were prosperous and the Exchequer overflowing, but is it a thing so urgently necessary that even in a situation as difficult as at present, and whilst we arc as heavily burdened as we are we must, nevertheless spend money upon it. If we deal with expenditure in that spirit, the danger which my hon. Friends fear will pass away, our stability will be increased, our debt will be gradually reduced, cur trade will be encouraged, and our prosperity will return. But these results can only be obtained if throughout the whole field we exercise wise economy and put away the spendthrift habits which necessarily overtake us in time of war.

Captain BENN

Can the right hon. Gentleman say why the Government is increasing for the ensuing year the hospitality fund from £20,000 to £200,000?


I have not all the details of the Vote. I am told, however, that my hon. and gallant Friend is mistaken in supposing that the Vote last year was £20,000. He has overlooked the Supplemental Estimate of £60,000 which raised the sum to £80,000 in all. The sum for the present year will not be expended unless it is necessary.

Captain BENN

It will not be surrendered. It says so in the Estimates.


It will not be spent unless it is necessary. If it is not expended this year, so much less will be required to be voted next year. I cannot give my hon. Friend the detail of the expenditure. Nobody can give him the details of this particular Vote until the expenditure has been incurred, but I. understand that the additional provision was made for this year in view of the possibilities of peace and of visitors who may have to be entertained. If it is not necessary for that purpose I can assure the hon. Gentleman that it will not be spent, I can give him the further assurance that that fund is as jealously guarded and is subject to as strict Regulations as to the purpose for which it can be expended now as at the time when he was a member of the Government which initiated it.


Those who have listened to this Debate will, I am sure, feel grateful to the Mover and Seconder of this Motion, because it has drawn from the Chancellor of the Exchequer the extremely valuable speech to which we have just listened. My excuse for rising after him is that he asked the House for practical suggestions. I felt great sympathy with my hon. Friend the Member for Cirencester (Mr. T. Davies), because he reproduced some of the feelings which I had myself when I entered this House some years ago. But I was fortunate shortly after I entered the House to become associated with the movement which resulted in the constitution of the Select Committee on national expenditure in the last Parliament, which, on the admission of the Government, and under the very able and experienced Chairmanship of Mr. Herbert Samuel, was recognised as doing very valuable work. I agree entirely with what has been expressed so much better than I can express it by the Chancellor of the Exchequer, that the standards which we were accustomed to apply to expenditure in peace time, and which certainly ought to be applied, were not applicable in time of war, because there were so many questions of policy involved, and policy in which the determining factor was not, could not, and ought not, to have been financial considerations. I served under my right hon. Friend (Mr. Samuel) on the Sub-committee that dealt with the War Office, and at every turn we were being confronted, when we put questions probing into the reasons why certain expenditure had been incurred, with the answer, "We have got to do this, and for this purpose money is no object."

During the War we nearly always had to accept the view that things had got to be done. But now that that period is practically over, the test that should be applied to all national expenditure is, "Are we getting value for our money?'' And I was delighted to hear the assurance of the Chancellor of the Exchequer that, speaking not only for himself, but for the Government as a whole, the Government collectively and individually abhorred waste, and I think that we are quite convinced that the present Chancellor of the Exchequer will do his utmost to make that proper view prevail. The opinion that the Select Committee on National Expenditure in the last Parliament arrived at was, that there is no royal road in enforcing economy on Government Departments, and what one has to do is to try to create an atmosphere of economy, which shall permeate all Government Departments, which can be maintained only by the personal exertions of the Chancellor of the Exchequer and members of the Cabinet, and which the House of Commons ought to back and can do a very great deal also to maintain. I have only one quarrel with the Government over its reception of the Reports of the Select Committee, on National Expenditure in the last Parliament. While the Government accepted certainly a very high proportion of the suggestions made by that Committee—and the number of suggestions which they accepted alone proved the value of its work—they rejected, or, at any rate, have not accepted up to the present what was, from the House of Commons point of view, far and away the most practical and useful suggestion that was made in the whole of those Reports. That is, that an attempt should be made to institute again a Committee on Estimates in a somewhat new form, such as in earlier years was set up and presided over by my right hon. Friend the Member for the City of London (Sir F. Banbury). That suggestion has not been, I think, absolutely rejected by the Government. We were told that such Estimates Committees could not be set up during the present financial year, but that the suggestion might be further considered next year.

I hope the House will make it perfectly clear that it expects action of that kind to be taken as soon as possible. The reason why such action is absolutely necessary is this: that when Estimates are submitted to this House in Committee it is, as every business man must recognise, impossible for Members to make a business inquiry into the details. Every business man knows that when you want to ask questions as to why certain items are appearing in Estimates you must have the people before you who compile the Estimates and are responsible for the figures; that you must probe into it, ask questions and take evidence in a more or less informal way. That cannot possibly be done in this House. It cannot uesfully be done even by such Standing Committees as those which this year have been examining the Estimates of the year. One of the most important recommendations of the Select Committee was that an officer in this House comparable with the officer who performs the responsible duties of Comptroller and Auditor-General, should prepare the way for the Committee on Estimates, go into the questions, and, if I may put it colloquially, put up the game for the Committee. We found in our examinations of Departmental accounts that it was absolutely necessary to have associated with the special Sub-committee dealing with a particular Department a finance officer of that Department, so that he might indicate the directions in which we might usefully make inquiries. That system worked extremely well, and we were confident that if a Committee of this kind became a permanent feature of our organisation we should require an officer of our own, provided with a staff, that he should have the entry into every Department, see the officials and all their papers, and suggest to the Estimates Committee the directions in which they might usefully prosecute inquiries. It was not intended by the Select Committee that these Estimates Committees should replace the examination of the Estimates formally by this House, but that when this House came to examine by a process of Debate the Estimates, then, at any rate, they should have before them Reports from the Estimates Committee in which there would be pointed out to the House the directions in which the Estimates could be criticised, and, armed with that information, the Debates in this House might be more fruitful of results than they have been in the past. That is a practical suggestion which has been made by a very strong Committee of this House. As a very junior Member of it, I can express that opinion without egotism. It was an unusually strong Committee, and it was acknowledged by the Government to have been a good Committee. Yet they have not acted upon its most important suggestion.

The Chancellor of the Exchequer has asked for a practical suggestion. Mine is that when this House appoints a responsible and expert body of its Members to go into a financial matter of this character, then let this House back its own Committee and see it through. Then there will be some chance that it will increase its power of effective control over the finance of the country. That is my answer to the hon. Member for Cirencester—that these matters have been very carefully inquired into, that suggestions have been made, and that if these suggestions are carried out he and others will feel more confidence, in their capacity to deal usefully with the national finance. I do not wish to labour the point further, but I am, and always have been, exceedingly keen that greater attention should be given in this House to questions of economy, because finance must always be at the root of all useful reform and of all successful administration. Too much attention cannot be given to it by those whose inclination and training give them a special aptitude and knowledge to deal with these matters.


Like the hon. Member for Cirencester (Mr. T. Davies), I am a somewhat unsophisticated Member of this House. I do not think I should have spoken this evening were it not for the reference to the Lord Chancellor's residence. I happen to be the Member who proposed that a sum of £3,800, and a further £1,000 for decorating the house, should be deleted from the Estimates, and I did so on the direct advice of the right hon. Gentleman the Chancellor of the Exchequer. I went from this House asked by him to do all we could to practice economy in all Government Departments. I at once put that into effect upstairs by moving that this sum should be deleted from the Estimates. I have no regrets. It is not so much the sum but the principle underlying it. I want to ask, were we justified after having a sermon from the Chancellor of the Exchequer, in going straight upstairs and in giving the Noble Lord in another place another £1,000 a year, for that is what it amounts to, with his salary of £10,000 per year, in addition to spending £1,000 on the residence and decorating it according to his instructions? I know it is said he did not want it, and I heard the Chancellor say just now that it would be an additional expense to him. I fail to see it. A grateful country finds him a house to live in and decorates it and puts in a bath, at a cost of £3,800, and he lets his own house, and then I am told that is putting him to some additional expense. I wish somebody would put me to some additional expense of that sort. There is another matter connected with these Estimates. It came out that not half of the money was already spent. I know certain routine work has to be done, but I object to having Estimates brought before us for new work when that work is already done, and I am going to be no registering machine on any Committee. I will read a letter I have received from an officer which will perhaps convey to the right hon. Gentleman somewhat of the feeling of the man in the street about this. He says: Will you permit me to offer you ray most grateful thanks for your stout and successful effort against profligate waste of public money by the present Government. I refer particularly to your successful action yesterday against the proposed expenditure on the Lord Chancellor's house. It makes me see red to think I am charged on my wound pension— That was before the Budget— I could spare it if the money were honestly needed, but not to see money squandered in this way. I was crippled for life in November, 1914, and I want a lift in the house far more than a young man like Lord Birkenhead. That is the feeling existing in the country, but the right hon. Gentleman's Friend sitting next to him would tell him at once that that is not the only item I proposed upstairs should be deleted from the Estimates, and which I gave grounds for doing. I am not peculiar in doing so. I acted on the advice of the right hon. Gentleman himself. This is not a party matter. I was sorry to hear the right hon. Gentleman accuse my hon. and gallant Friend (Captain W. Benn) of having some party motive in bringing this forward. This was supported upstairs by Unionists, Liberals, and Labour men, who were all agreed that the principle underlying this was wrong and that the expenditure was unnecessary. We have been asked whether we are getting value for money. I have not had a very long career in Government service, but I have served in throe Government Departments during the War—a short time at the Ministry of National Service, under the War Office, and under the Ministry of Food; and I think there is a good deal of expenditure that is not warranted. We have heard a great deal to-day about devolution. We have got the worst form of devolution that any country has got—devolution by the Government to Government Departments. There is no Government by Parliament in this country. It is government by permanent officials and Government Departments. I have spoken in the old days in ray simplicity about Government by the people, of the people, for the people, but I had not been in Parliament long before I found that there is no Government by the people in this Parliament. It is Government by bureaucracy and by Government Departments. Strong a believer as I was in nationalisation before the War, that belief has somewhat wavered after my experience of Government Departments lately. There is no control by the elected representatives of the people who sit in this House. I have just heard the right hon. Gentleman ask for the co-operation of Parliament, but all I say to him is this: "Give us a chance to do it Give us an opportunity to have some voice in the matter, and we shall be only too glad to help you to reduce the expenditure." If complaint is made of expenditure in the Committee upstairs about work being done, they say: "The Treasury have sanctioned it." I do not quite understand who the Treasury are. I heard a question put the other day to the newly appointed President of the Board of Trade respecting imports and exports, and he told us that the restrictions had been taken off certain articles, but it took too long to tell us what restrictions. Does Parliament know anything about that before it is done by the Department? Has Parliament any voice in it at all? I would like to refer the President of the Board of Trade to a letter I have received from a big tradesman in a town in the North Midlands. He says: Over twelve months ago we wanted some castings for a Wolseley commercial car. We have not been able to get same owing to Government officials refusing permission to supply. On making a purpose journey recently to the Wolseley works to get those parts we saw a number of back axles complete, and as the castings required were for back axles we asked if we could have a back axle, but no, the Government would not give them permission to Bell, though they will not take them themselves, and the parts still lie there, dozens of them, and people like ourselves have their businesses suspended from want of same Are we getting value for our money when we are having things held up in this manner by a Department of which the right hon. Gentleman (Sir A. Geddes) is the head? I gave an instance in this House not long ago. A manufacturer had a large order for Sweden. He went to the Hoard of Trade and tried to get a licence, and sent a telegram costing 10s. 11d., but could get no answer. He got a telegram at night to say the order had been given elsewhere owing to the delay. I want to know if we get value for our money. Take the Ministry of Agriculture. Are they earning their money? I can take the hon. Gentleman to the county division I represent. Land is being sold every day to speculators, and tenant farmers who want to buy their little farms are being blackmailed. The Parliamentary Secretary to the Board of Agriculture said he is quite aware of it. Then why does he not put a stop to it? It has been going on for the last six or eight months. Agriculture is going to suffer. I am told it is a dying industry; yet landowners put up the rents and sell the land on the basis of the high rents. Then I am told that Government Departments are doing their duty. Centralisation—and that is what we are having—has entirely broken down. If it is profitable for land speculators to buy land in this manner it is time for the Government to consider the nationalisation of land apart from industry altogether—I am not speaking about that.

I have worked in the Ministry of Food. I was Food Distribution Officer. My chief job was in breaking regulations or ignoring them to make a success of my office. I heard a discussion here the other day as to whether it was necessary to continue the Ministry of Food. I am here to say something about it. Although I was asked to give up my position on 1st December last, on the ground that I was becoming a candidate for Parliament, I am still getting every day the same Regulations, the same Orders, and all that sort of thing, just as though I was distribution officer for that part of the county of Derby. I want to know whether we are getting value for our money. I heard the Minister of Food say, like the loyal head of a Department towards his permanent officials, that the Ministry must have credit for rationing in this country. He was never so wrong in his life. It was entirely due to devolution that rationing was a success in this country. I stood in a queue on four winter mornings, from four to eight, to find out the cause of queues. We had our rationing scheme in operation in the town in which I was a fortnight before the Government Department sanctioned it at all. We borrowed £1,000 to buy some rationed articles of food to make it a success. And then I am told that a Government Department must take the credit! It is because the Government Departments are governing that we are in the position we are in today over the gross and reckless expenditure we see all about us. The chief qualifications of men in many of these offices—I am not saying anything about the Minister of Food—is that they know nothing at all about their job. There is absolutely no Parliamentary control over the multiplicity of offices and staffs, and little Government control over these offices and staffs. I heard the other day, in a Committee on which I sit, that an expert Committee is to be set up to inquire how far the hotels are still needed, and how far the staffs are still needed. I asked, "Who are on the Committee?" I was told that they did not know at all who were on these expert Committees. There is no Member of Parliament or representative of the people on. I have handed in a question to-night to ask whether the Prime Minister will consider setting up a Committee consisting of Members of this House to inquire into these large staffs and the Government hotels. When you ask a question of this sort you are in effect told by the Governmental Front Bench to mind your own business, that it is not customary, as was said the other day, to give names. It is the chief object—and I am saying this with some knowledge of the facts—in life of these Government officials and staffs to keep their jobs and to employ as many as they can under them.

Economy! When I am told that Government Departments are practising economy I say that I want to see some evidence of it. I see none except lip-service coming from that bench opposite. In my experience it is never thought of. The welfare of the country is never thought of, nor the prosperity. There is no breadth of vision whatever. It is all considered from the inside of the Government offices, but the economy seldom materialises. I have worked under the War Office. I worked under the right hon. Gentleman opposite for a short time, not very long ago when he took over the Ministry of National Service. I was not a military man, and therefore I lost my job. The men who had made the thing a success, to some extent, had to give way to officers. The failure of National Service before the right hon. Gentleman took it over was due largely to the jealousy of another Government Department, the Ministry of Labour. I can prove it. When I was appointed an officer under the National Service scheme I called a meeting at Chesterfield to explain the whole object of national service, and at my own expense. What happened? I had criticised the Minister of Labour at some of the tribunals.

The late Director of National Service said: "You must cancel that meeting." I got a telegram to that effect, and that I had to appear before my superiors, and bring all documents. I wired back: "You can have my resignation. I shall hold the meeting unless law and force prevents me" I held it. They sent a man from London to report all I said. I had desired to make the thing a success in my own county, where I have lived for thirty-five years. Then I had to appear before the officer—a factory inspector who had been made chief officer at a salary of £l,000 a year, and who knew nothing at all about the job. He said: "When you make an after-dinner speech you should submit it to the head of your Department." I replied that it depended upon what sort of dinner you had had.

This is the kind of officialism going on throughout the country. People may think it has stopped since the War. That is not so. It is just as rampant to-day as ever. The right hon. Gentleman knows a great deal about recruiting, demobilisation, and substitution. He knows as well as I know that before he came on the scene money had been literally thrown away. 1 am not certain that it is not being thrown away to-day. Look at the confusion we are in at the present moment. I know it was wartime. 1 asked my own substitution officer—the officer commanding at York—to allow me to interview an agricultural company at Darlington. He offered to parade the company before me for me to pick out my men. I said, ''I do not want the men paraded. I am going to examine all these men individually, and in their huts." I examined eighty-seven, and out of these only one man had ever been on the land, and that was when he was fourteen years old. I placed sixty of them in work that they had been used to, and I got sixty fit men for the Army in a week. They stopped me the week after. I was doing it too fast. It took them three weeks to substitute one man. This is the sort of work and management that you find in many public offices. These men are sent out to a farm one day and are sent back the next. I know that an accountant was sent out as a ploughman. Some of us have only in a subordinate capacity had some experience of what is going on in public offices at the present moment. I have heard a good deal about the failure of the Committee upstairs. The hon. Member for Stafford said last night that their only solemn triumph was depriving the Lord Chancellor of a bath, but we are not doing anything of the sort, because he can get a bath and so can I. I proposed many other reductions. These old Parliamentary Members who have been used to proposing that the Minister's salary shall be reduced by £100 talk all day about it and then finish up by withdrawing it altogether. I proposed to reduce an estimate by £20,000 the other day, and putting up new buildings in the Royal parks. I said, "Why not spend this money upon houses for the working classes?" and the Committee adjourned to see if it could be done. They wanted the old custom of reducing the salary by £100 and I proposed a reduction of £20,000 and lost. It seems to me that that is the way to reduce Estimates if we have courage enough to do it. It was proposed the other day upstairs not to agree to the £3,000 increase for the Lord President of the Council. I was not there or 1 should have gone to a Division upon that question, and I should not have been hoodwinked by what was said. Is this the. time to increase the salary of the Lord President of the Council by £3,000? I really think that he will not accept it. I think that he will rather be insulted, being a member of a noble house, at being offered an increase of salary at a time like this.

In many of these cases the Estimates ought to be reduced, and it is due to the new Members that they are not reduced. This is because the old Members are somewhat chary about altering this old Parliamentary procedure. The hon. Member opposite is much younger than I am and has had much more experience, but may I suggest to the House that what we want is government by Parliament? We want Parliamentary control, and that has been lacking. If I care to introduce a little bit of party into this matter I might say how terribly easy it was last December to speak of that Utopia we are coming to, and that Elysium we are hoping for, but it does not seem to materialise quite as quickly as I expected. I came here expecting all these things to materialise, not by the magic wand of hon. Gentlemen opposite, but by hon. Members sticking to their pledges. We ask the right hon. Gentleman on the opposite bench, if he wants the co-operation of the House of Commons, to let us into his confidence, and go to these buildings that are now housing a lot of people who are doing very little for their country. I do not know how many girls they have in those offices, but it seems to me that the better looking they are the longer they are likely to retain their jobs. I want the House of Commons to inquire into these matters, and until the House of Commons regains control over the expenditure we shall never be any better with regard to it.


I am sure the House has listened with the greatest pleasure to both the Mover and Seconder of the Resolution, and also to the warnings given by the Chancellor of the Exchequer. But I do not think the Debate has produced any very practical suggestions as yet. I am going to try to put before the House and the Chancellor of the Exchequer what I think might be a practical step towards economy. Perhaps the greatest sinners in this matter of expenditure are the Members of the House of Commons themselves. The hon. Member who has just sat down has certainly brought some fairly strong cases against Government Departments, but I am not certain that you could not bring stronger cases against Members of this House. Until hon. Members themselves are really determined to carry out economies these Debates will be of very little value whatever. The Chancellor of the Exchequer has said that on the Order Paper every day there are a certain number of questions entailing expenditure. To-day he tells us there were sixteen questions entailing expenditure. Would it not be possible to print in italics every question put by hon. Members entailing expenditure? It is a very simple suggestion, but in would at once, so to speak, pillory the questions which entailed expenditure. Let us assume that the expenditure of this country is quite high enough and should not be increased, because with all our commitments we cannot afford to spend more money at the present time. The Chancellor of the Exchequer has told us that. Therefore, let us assume the present expenditure is the datum level which must not be exceeded. Then, if you printed every question which involved expenditure in italics and they were tabulated once a month, you would by that form a pillory which could be very simply carried out and reduce the demands on the Chancellor of the Exchequer and thereby reduce expenditure. That seems fairly simple, and it is far more practicable than anything I have heard tonight. I hope, therefore, that the right hon. Gentleman will seriously consider it.


I understood the Chancellor of the Exchequer to suggest that the greatest economy was to be found in curtailing part of the programme of social reform which we outlined at the last General Election. That would be not merely cutting your coat according to your cloth, but it would also be penny wise and pound foolish. If you are going to curtail your programme of social reform, are you going to curtail your housing schemes? Are you going to-ask those who have been living in the slums of our large towns, suffering from heavy sickness and a high mortality rate, to continue to do so? If so, instead of finding your cost reduced, you will find it increased by incapacity for work and unemployment. That will be false economy. Are you going to curtail your expenditure on the Ministry of Health and those schemes for the care of mothers and the welfare of child life? The child life of our nation is a bigger asset to-day than it ever was. If we are going to struggle with our economic difficulties we shall require a more vigorous childhood and manhood than ever before. It would be false economy. Are you going to curtail your expenditure on education? Surely nothing could be more false than that. We have a world's competition to face, more strenuous than ever before, and the experience of recent years has taught us that we have spent far too little on our education and not too much.

I submit with all due respect it would be an entirely false sense of economy to curtail housing, or the Ministry of Health or Education. Let us rather look at home to the various illustrations we have had of gross extravagance in Government Departments. You cannot go into any Government Department to-day but you will find gross extravagance. But do not make an excuse, and instead of dealing with that curtail the programme of reconstruction held out at the last election, a programme which I am sure the majority of the House want to see carried out.

Resolved, That the present rate of Public Expenditure causes anxiety in regard to the financial stability of the country, and that all possible means for the reduction of expenditure should receive the immediate attention of the Government.