§ May I ask the House for a moment to consider what progress has been made in the liquidation of Departments and of services which were created during and in consequence of the War? Thirteen Departments have already been altogether closed. Of 90 trading accounts arising out of the Vote of Credit, 56 have been already closed, and 14 are being closed as rapidly as they can. All subsidies will have stopped by the end of the year—the bread subsidy, the coal mines subsidy, the railway subsidy, and the subsidy for the postal service. By the end of the year all subsidies will cease. [HON. MEMBERS: "Housing?"] War subsidies.
Mr. CHAMBERLAINYes, I mean the financial year. I turn to the consideration of what possible further steps the Government can take in the future, and here I beg the House to remember what our Estimates are and what is the system of accounting in accordance with the practice of this House. In the first place, the House must remember what I said a few moments ago in reply to an interruption by my right hon. Friend the Member for the City of London, that the accounts which we keep are cash accounts, with very minor exceptions, where legislative sanction is taken to borrow a particular sum of money and charge a particular expense to the sum so borrowed, and if your current cash expenditure is brought to charge for capital outlay. For instance, in the present Estimate there appears the sum of £36,000,000 for loans to Allies. There appears a sum for Export Credits. All that money ought to be recoverable, but it is presented to Parliament and charged in the accounts of the year as if it were current expenditure on current account. In the second place, in the case of the Post Office, there is brought into account, not the profit or loss made by the Post Office, but the whole expenditure and revenue, so that both sides of the account are swollen by a sum of £50,000,000. When you talk of the sum raised by the taxpayer, or the sum paid by the tax- 2498 payer, you are including in the sum paid the £50,000,000 contributed by the users of the Post Office service as payment for the services rendered
In the next place, we have in our Budget system no such distinction as is common in a good many other countries between the ordinary and the extraordinary expenditure. We do not have a Budget of ordinary expenditure and a Budget of extraordinary expenditure, but whether the expenditure is annual or continuous or whether it is wholly exceptional expenditure, like the case of the coal mines' deficiency, or the re-conditioning of hotels or other buildings taken over by the State during the War, and now given back to their proprietors, it is charged to the current accounts of the year. Lastly, every charge coming in course of payment must be met from the year's revenue, no matter when the charge was incurred. That is of some importance. It leads to widespread misconception as to what our actual expenditure is, and as to what is the cost of particular Departments, and it is a misconception which is not confined, apparently, to those whom one would have expected to entertain it, but is shared by my right hon. Friend the Member for Paisley (Mr. Asquith), who himself has been Chancellor of the Exchequer and who has himself been Prime Minister, and the payment of whose debts he now charges as an act of extravagance on the part of his successors. I am very sorry that my right hon. Friend is not here. I understand he is fulfilling another public engagement, or I should make complaint of his absence, because he has been up and down the country ranting about the expenditure.
§ Lieut.-Commander KENWORTHYIs that expression Parliamentary?
§ Mr. STANTONAs Parliamentary as you are.
§ 6.0 P.M.
Mr. CHAMBERLAINI understand it is Parliamentary. Mr. Speaker will correct me if it is not. I confess I am sorry the right hon. Member for Paisley is not here to justify his statements, and, may I add, even his criticism. I say that every expense that has been incurred has to be charged to the year in which it is brought to account. For instance, the right hon. Member for Paisley tells gentlemen, who are assembled somewhere in Finsbury to listen to him, that the 2499 cost of the Ministry of Munitions for the current year is £65,000,000. The true figure, I observe in passing, although it is not really my argument, is £31,300,000, and that should have been known to the right hon. Gentleman at the time when he spoke, if he had consulted the Estimates before the House. But of this £31,300,000, over £17,000,000 is in liquidation of war obligations. It is not current expenditure of the year. It is not extravagance which the Government ought to have prevented. It is the payment of war debt, and those obligations, I say again, are as much part of the war debt as the £8,000,000,000 which we borrowed. I may say, in passing, what the right hon. Member for Paisley did not think it worth while telling the people of Finsbury, that this Department is expected to produce for the country over £212,000,000 from the realisations which they are carrying out. Then the right hon. Member for Paisley proceeds to the Ministry of Shipping, which he says costs £21,000,000.' Mind you, these arc things which arc produced as illustrations of the extravagance of the Government. Of that £21,000,000, £19,500,000 is the liquidation of war commitments. Those two Ministries have been carrying out, under the supervision of Ministers who are themselves business men and who give their services to the country for nothing, with the help of other volunteers, themselves business men, many of them giving their services to the country, two of the most gigantic businesses the world has ever seen, and have carried them out with signal and conspicuous success. I think some words of appreciation of what they have done would have come better from my right hon. Friend the late Prime Minister, and a Prime Minister during war-time, than a gibe at their expense. I come to the bête noir of my right hon. Friend the Member for Paisley. That is the Ministry of Transport, which the right hon. Member for Paisley says costs £1,500,000, but this time I am astonished at his moderation. If he had followed the practice he adopted in respect of the other two Departments, he would have added in the sums which are being paid to the railway companies. The true comparison—and my right hon. Friend the Minister of Transport must have appeared small with his £1,500,000 alongside his 2500 colleagues of the Shipping and Munitions Departments!—the true comparison, on the basis put forward by the right hon. Gentleman the Member for Paisley, should have been, not £1,500,000, but £24,500,000. The cost of administration and liquidation of the debt for the new activities of the Minister—whatever they are—is £300,000. Does the House think that is very extravagant? The right hon. Gentleman the Member for Paisley does He comes to us with the suggestion—and suggestions are always welcome—that in the early days of the War the Government took over the railways without the addition of a single man to the staff at the Board of Trade. He says:
The railway department of the Board of Trade, with the co-operation of a committee of railway managers and directors, took over the whole business, and dealt with it throughout the strain and stress of the War—on the whole very efficiently—dealt with it with a staff of 35 men.What does this mean? Under the agreements made by the right hon. Gentleman and his then President of the Board of Trade, the Railway Companies collected or spent nearly £600,000,000 of the taxpayers' money annually. Our pre-War Budget was about £200,000,000, yet the right hon. Gentleman thought that the control of an annual expenditure of £600,000,000 could be safely left to a Department formed for wholly different work, without any of the experience necessary for this work, and comprising in all 35 men! What expert control did he provide for these huge financial transactions? In his own words: "Not a single man." He left it to the railway managers to safeguard the taxpayers—against their own shareholders!
§ Sir F. BANBURYNo.
Mr. CHAMBERLAINTalk of setting the cat to guard the cream. What result do you expect? The result is that the railways have cost the Government £45,000,000 up to August without making allowance for the cost of Government traffic calculated at the full rate. That is what happened. It would be fortunate if it ended there, but there are, unfortunately, outstanding liabilities under these agreements which, on the basis of the interpretation understood to be placed upon them by the railways, may amount to £150,000,000. The House knows that the proper interpretation of these agreements is being considered by a Committee 2501 under the chairmanship of Lord Colwyn. I invite my right hon. Friend opposite (Sir D. Maclean) if he will be so good, to convey to our friends the Member for Paisley and to Mr Runciman an invitation from the Government to attend that Committee, and to explain to its members the bearing of the agreements which they signed, and the estimate which they formed of the cost in which they would involve the country. These things may be good enough for Finsbury Park or Paisley but they are not good enough for the House of Commons
§ Sir F. BANBURYrose. [Interruption.]
§ Mr. SPEAKERThe Chancellor of the Exchequer is in possession of the House.
Mr. CHAMBERLAINWhat happened was that my right hon. Friend entrusted this work to that small body of men without assistance-in fact, he gave them a blank cheque.
§ Sir F. BANBURYYou made a charge against me.
§ Sir F. BANBURYYes, you did. I am chairman of the directors—
Mr. CHAMBERLAINIf my right hon. Friend thinks I made a charge against him personally, I will give way at once.
§ Sir F. BANBURYOh, personally, no!
Mr. CHAMBERLAINThe right hon. Gentleman the Member for Paisley thinks this is an opportunity for economy What, in fact, he did in the way of economy was to give a blank cheque, and to leave his successors to pay the bill. Is it not time that we should have some expert advice upon these agreements and upon their effect—some expert examination into the claims which arose on them.
§ Lord HUGH CECILWhat is the use of recriminating?
Mr. CHAMBERLAINI do not quite understand my Noble Friend's interruption. I am dealing with the charge that the Ministry of Transport described as "a grandiose department," with no functions to justify its existence—
§ Mr. HOWARD GRITTENNone what ever!
§ Mr. GRITTENA useless Ministry!
Mr. CHAMBERLAINIf it saves us some part of the liability of £200,000,000 with which we are threatened it will have earned its pay over and over again. So much for the past. We now come to examination—and I shall make it pretty brief—of the cost to be incurred in the coming year. We are invited to adopt a definite sum—
§ Mr. LAMBERTYour own.
Mr. CHAMBERLAINAnd to name it as the sum to be fixed as the limit beyond which the Government will not go. I observe that there are two Budget suggestions. There is the anti-waste Budget for £600,000,000. We know something of an anti-waste Member. He begins by promising the impossible, and continues to support economy everywhere else, but urges lavish expenditure in his own constituency. There is my right hon. Friend's suggested Budget of £808,000,000. He says: "That is my Budget figure." My right hon. Friend behind me was fair and good enough to quote the conditions which attach to that Budget. Both my right hon. Friend and he were alarmed at the difference between the first sketch of a Normal Year Budget and the second sketch. Did any of them take the trouble to discover wherein the difference lay? Old Age Pensions have been increased by this House, also Health and Unemployment Insurance—I need not go into the exact items—but the biggest item of all is that whereas in the first sketch only £40,000,000 was provided for the redemption of debt, in the second one £180,000,000 was so provided. It is no good for my right hon. Friend to try to trap me with a normal Budget for next year. I told the House, and not only did I tell the House in general terms that the normal Budget went on the supposition that there would be no increased charges, but I told them that it would not be realised "this year, next year or the year after." That normal Budget estimate was only available for one purpose, and that is the purpose for which I presented it to the House, and explained it in the following words:
The value of the paper is that the House might understand that every time they sanction fresh expenditure they are upsetting the balance here shown. If they choose to sanction new expenditure they are rendering it necessary to impose additional taxation.
§ Lieut.-Commander KENWORTHYAfter you have spent the money.
Mr. CHAMBERLAINLet us look at a few—a very few—figures which no one will challenge, which, indeed, are beyond all dispute. You must pay the interest, £345,000,000—I am dealing with, the current year—you must pay the other Consolidated Fund services—I exclude land settlement, but include local taxation —of £19,000,000; you must provide—for reasons I explained earlier—a minimum sum of £110,000,000 for the redemption of debt. Add to this Old Age Pensions and War pensions, and we have already exceeded the ante—waste Budget of £600,000,000. I go on to the Revenue Departments, including the Post Office, which will cost this year £60,000,000. The police, which will cost £12,000,000. Allow ourselves to fulfil our obligations to the men who have been insured in the schemes we have framed against ill-health and unemployment—£17,000,000; and provide the £35,000,000 required for the training of ex-soldiers, and their settlement on the land, and other purposes; add to all this an item which may be challenged but which cannot be rejected, £56,000,000 for education, and you are already up to the figure which the right hon. Gentleman invites the House to commit itself to as the total figure for next year's expenditure. There is nothing for unemployment, nothing to mitigate the crisis or the hardships that may arise from the slackness of trade, nothing for housing, no provision for a single soldier, sailor, or airman, and no provision for either the services or salaries of any of the other Civil Departments, except those in the Departments which I have specified.
What is the use of practical men sitting down to consider, as the financial scheme for next year, a budget of that description? That is not everything. Since I have mentioned the Civil Services and education, let me just say this: The cost included in the Education Estimates is not the result of the Bill of 1918. It almost entirely arises from increases of salaries. Let me again try to stop the repetition of the constant misrepresentation or misapprehension of people, not those in this House, but people outside, who speak as if £557,000,000 under the head of Civil Service expenditure were the expenditure on the Civil Service staffs. As a matter 2504 of fact, the pre-War salaries of the pre-War staff of the Civil Service, excluding Industrials, as far as I could make out, cost £29,500,000. The salaries of the same people now, owing to the added cost of living and the general rise in salaries elsewhere, comes to £65,500,000. [AN HON. MEMBER: "For the same number?"] Yes, the same number, and the same rank, as near as I can estimate. The total cost of the whole service to-day is estimated at £86,000,000. If, therefore, you could discharge every single man in excess of those who performed the smaller functions required of Government before the War, the total saving you could make would be in the neighbourhood of £20,000,000.
I am not going to emulate either the anti-waste candidate or my right hon. Friend by presenting to the House at this period a Budget for the next financial year. I think that is not very practical. A more practical course seems to me to b-3 to tell the House as shortly as I can not only what the Government have been doing, but the resolutions they have taken, and the results which they will have within the course of the current financial year. My colleagues on the Finance Committee and in the Cabinet have been giving our financial situation, and the prospects of the coming year, the'r anxious and continuous attention. We are not less eager than any of our critics to secure for the country every economy that is possible. We are perhaps a little more conscious than some of them of the conditions on which our security, internal and external, depends, and working with that sense of responsibility, and with these limitations this, Mr. Speaker—if I may use the classic phrase, "For greater accuracy I have provided myself with a copy"—is the decision of the Cabinet: