§ In pursuance of the policy of reducing national expenditure, the Cabinet are acting upon the following principles in preparing the Budget for the Financial Year 1921–22:
§ (1) General.—Whilst recognising that there are many reforms that are in them selves desirable in order to improve conditions in the United Kingdom, the Cabinet, having regard to the exceptionally heavy taxation which is the inevitable consequence of the War, the high 2505 cost of material, the trade reaction that has set in, and the emergency measures required to mitigate the hardships of unemployment, consider that to the extent that such reforms involve further burdens upon the Exchequer or the rates, the time is not opportune for initiating them or putting them into operation It is an instruction, therefore, to all spending Departments that except with fresh Cabinet authority schemes involving expenditure not yet in operation are to remain in abeyance. This general principle applies to all spending Departments, but exception must be made, as I have already stated, for such temporary measures as are necessary to deal with the special problem of the unemployed.
§ Mr. BILLINGDoes that mean that the municipal housing schemes are to be stopped?
Mr. CHAMBERLAINNo, Sir. The sums which can be saved by the above means would not amount in the aggregate to a very substantial figure, even if all those reforms were completely arrested. The only method of effecting a saving on a considerable scale is in the War Departments.
(2) The winding up of certain Departments created during the War. The Ministry of Munitions and the Ministry of Shipping will be wound up this financial year, and any outstanding functions will be discharged by other Ministers in other Departments. Legislation may be required for the purpose.
§ Lieut.-Commander KENWORTHYWhat about the officials?
Mr. CHAMBERLAINThe officials whom it is necessary to retain will have to be transferred with their functions to the Ministries taking over these duties.
(3) As regards the Food Ministry the liquidation of the Food Ministry has already made great progress. Twelve months ago the Estimates of the Ministry were £2,500,000. Six months ago they were £1,500,000, and now they have been reduced to £750,000. By the end of this month the Live Stock Organisation and the Regional Organisation will both have been wound up. Four-fifths of our commitments in respect of imported meat have been liquidated without disturbance to trade. It is doubtful whether it will be possible to complete the de-control of 2506 both sugar and wheat within the financial year, but the Ministry of Food, as a separate Government Department, will cease to exist at the close of the year, and such powers as may still be found necessary will be transferred to another Department in accordance with the provisions of the Ministry of Food Continuance Bill.
(4) Military Expenditure.—The Cabinet are convinced of the necessity of curtailing military expenditure to the utmost extent compatible with the fulfilment of our Imperial obligations and national safety. The principal field for economy is in the Near and Middle East, and the position in these regions is being fully explored with a view to further drastic reductions of expenditure the moment the situation permits. The Government of Persia has already been notified of our intention to withdraw the last of the British force from that country in the coming spring. The force in Palestine is already in course of reduction. In Mesopotamia the aim of the British Government has always been to develop the resources of this region, to set up an Arab Government, and to replace the Imperial forces by an Arab army. In accordance with this policy the forces there had already been reduced from 222,000 men at the time of the Armistice to 79,000 men by June last, and were in process of further rapid reduction when the outbreak of a serious rebellion not indigenous but fomented from outside Mesopotamia, necessitated their reinforcement.
Even if the Government had decided to withdraw from Mesopotamia and leave the country to its fate, it is by no means certain that this course was possible as a military operation, and certainly it was not possible without heavy loss in life and stores. There was therefore no choice but to reinforce the garrison and to suppress the rebellion. This task has been almost accomplished. Simultaneously with the suppression of the remnants of the rebellion, Sir Percy Cox, the High Commissioner is actively engaged in the creation of an Arab state, and the Provisional Government is pressing forward the creation of an Arab army which will provide a substitute for the British forces. We hope that within a reasonable time an Arab Government will have taken over the administration and defence, the Imperial forces will have been reduced to a small 2507 nucleus garrison, and Mesopotamia, a country with great potential resources, will be self-supporting.
(5) Naval Expenditure.—While determined to maintain the Navy at a standard of strength which shall adequately secure the safety of the Empire and its maritime communications, the Cabinet, before sanctioning a programme of new construction, are bound to satisfy themselves that the lessons of the War have been definitely ascertained, more particularly as regards the place and usefulness of the Capital Ship in future naval operations. They have, therefore, decided, and I am glad to say the Admiralty welcome the decision, that the Committee of Imperial Defence shall institute at once an exhaustive investigation into the whole question of naval strength, as affected by the latest development of naval warfare. They will present no programme for capital ship construction to Parliament until the results of this inquiry have been confirmed.
(6) Air Expenditure.—The utmost economy will be enforced in the administration of the air programme, and the position and function of the Air Force will be examined in relation to the Army and the Navy.
That is the present aspect of the policy which the Government has been pursuing, is pursuing, and if granted the confidence of the House, will continue to pursue, and I submit it with confidence to the judgment of the House.
§ Mr. CLYNESThe speeches of the Mover and Seconder of this Motion were some answer to the question which some time ago was asked in the country as to whether Labour is fit to govern. Both those speeches were a record of the blunders and incapacity of the Government, of its waste and want of foresight, and they pictured the difficulties with which the nation is confronted as a result of the policy which has been pursued. Speeches of that kind are, I believe, some reply to the question which Ministers themselves have asked as to whether Labour is fit to govern. I can assure the House that Labour would not like to govern as this Government has governed, nor would it care to produce anything like the results described in the powerful speeches of the Mover and Seconder of this Resolution. I doubt 2508 now whether, after the very lively answer of the Chancellor of the Exchequer, Members of this House are very much enlightened, for he has left the question of finance substantially where it was. Certain economies, certain savings, certain promises are made, and so far as there is any substance in any one of those announcements, that substance is due, not to the initiative of the Government, not to any well-ordered plans or foresight on his part, but to public pressure and to the repeated demands which have been made in the last two years, particularly from this side of the House. The steps which halfheartedly have been announced to-day as steps which in the future, either near or remote, are to be taken, are to a great extent steps which effectively could have been taken, very much to the saving of millions of money, 18 months ago. I cannot therefore congratulate the Chancellor of the Exchequer upon the case which he has presented in oposition to the Motion. At the same time, those for whom I speak cannot vote for such a Motion. It is not business, to say the least of it, to insert a definite figure of this kind at such a time as this and bind the Government, whichever Government it may be, down to that particular figure, and thereby prevent the necessity of certain expenditure which it might be wise and proper to incur.
I want to deal with some of the opening observations submitted to the House by the Mover and Seconder of the Resolution and by the Chancellor of the Exchequer himself. Objection has been taken to the Ministry of Labour on the ground of the cost, I suppose, which it incurs. The Ministry of Labour was not in the ordinary sense of the term a product of the War. It had been demanded long before the War. Labour, whether we like it or not, is changing in its relation to the State. There is an enormous body of legislation, an ever increasing number of Acts of Parliament, affecting industry, affecting millions of workers, affecting in the broadest sense of the term the general prosperity of the country, and it is an old demand that there should be a responsible State Department with a Minister answerable to the House competent to deal with questions which in the nature of things must arise in large numbers every working day of the year, and it would be folly to con- 2509 clude that expense could be saved and economies could be effected by terminating the life of a Ministry of that kind or in any sense diminishing its power. It had its counterpart on the side of capital, or on the side of trade, in the existence of the Board of Trade created by a special Act of Parliament very many years ago, and if trade is to have its State Department and its special representative to look after its interests, depend upon it Labour will demand and claim the right to have a special Department to look after its interests also. I think it was nothing less than an unnecessary sneer on the part of the right hon. Gentleman (Mr. Lambert) to refer to Labour leaders walking in and out Downing Street to discuss these Labour questions. What if they are not discussed? Is it better to fight them out than to talk them out? Does it mean that it would pay the country to ban Labour leaders in regard to any approach to any State Department, or even to the Prime Minister himself, who has been so frequently engaged in handling and settling these differences? There is certain expenditure which in the highest sense is State economy, and this is the kind of expenditure that we cannot afford to terminate.
I am glad to have heard the announcement of the Chancellor of the Exchequer that whatever they propose to save on it is not intended to try to economise m regard to insurance for unemployment. But I should like him to have gone further and touched on the topic of why, in face of the ever increasing unemployment, the Government has not taken some step specially to provide for those who are disqualified from receiving the benefits of the new employment insurance merely because they wore out of work and unable to pay the contribution at the time the Act came into force. I think the very fact that they were in that lamentable position of losing their wages gives them a prior claim even, if there is to be preference as between one and another, as those men who, according co the speech of the Chancellor of the Exchequer, have been kept in the dockyards employed upon uneconomic labour rather than that they should be thrown out of a job and therefore swell the ranks of the unemployed. This is not equitable treatment as between workman and workman, and if, as has been revealed, it is true that men are being kept on doing 2510 work, at a loss evidently to the public and at a charge to the taxpayer, in one State Department it is not fair that the State should inflict this severe privation upon working men who happened to be out of a job at the time when the relief Act of Parliament, the new Insurance Act, came into force.
I suggest further that there is a bigger task before the Government in relation to this problem of the men out of work. No one need encourage or stimulate new and vigorous action on the part of men who are out of a job. They look at matters now very differently from before the War. I need not go into the case, but they do, and we must take note and learn by these experiences and lessons of what bodies of workmen will do, not recklessly nor thoughtlessly, not under a momentary impulse, but under the propelling force of organisation and direction. These men who take over town halls, libraries, and public institutions, deliberately prepare to do it. It is part of a plan naturally formed in the mind of men who see on the one side idleness with plenty, and yet in their own case idleness enforced upon them under a state of real service. I will not say a word to instigate any lawless and improper action on the part of these men, but I am rather drawing attention to a new aspect of the case of which the State must take note. I believe they can only regulate, check or prevent disorderly mob action on the part of these men by treating them individually as Britons expect to be treated who played the part that many of them did during the years of the War, and this will become State service the more employers of labour as private individuals fail to discharge that service. I do not blame employers of labour. I do not believe, as is asserted in some quarters, that employers of labour have deliberately restricted employment or thrown men out of a job in order to so depress the labour market as to enable them to pull down wages. I see no proof of that, and I cannot think so meanly of a fellow Briton, even though he be an employer, as to believe that he would go to that extreme for any mercenary purpose of that kind. I do not believe it. But the private employer under existing industrial and economic condi4ions clearly cannot keep in full employment these hundreds of thousands of men who are out of a job, and if the private employer 2511 fails to find these men work naturally they turn to the State, and I regard it as a State duty, however extraordinary it may be, even though there is no precedent for it and no body of doctrine to justify it, yet it is a fact which I think ought to impress upon the Government the necessity of keeping these men out of mischief, if nothing else, by so organising a State service of work of real production as to turn these men from being what they are, a sea of waste, into being the producers of a bountiful supply of wealth of which this country is still really in need. If private employers of labour cannot find these men work they have an excellent and unquestionable right to turn to the State and insist that the State shall do more than merely hand out a small dole to them barely to keep them alive. This policy of doles is itself the worst evidence of the policy of waste of which to a great extent the Government has been guilty. I suppose by this time £50,000,000 of money must have been simply given away. We were not in such a state of affluence after the War as to be able to give away all that money for nothing, and yet it is done. It would have been far wiser and in keeping with that policy which this Government claims for itself of statesmanship to have spent that money upon productive work, and to have had results in the form of the wealth which would have been produced by the labour which could properly have been employed.
I should like to put to the Chancellor of the Exchequer, by way of further emphasising this, what is certain to be the result of this one substantial scrap of proof that there is in the announcements which he has made. He has told the House that we are going to save, I hope, very large sums in Army expenditure by bringing home men who have, too long in our judgment, been kept in foreign fields for military purposes. We are going to give some better opportunity to the people themselves to police or to arm these territories, and the soldiers will be brought home. They will be brought home to a market which is already choked with the unemployed. They will take their part in the unemployed processions, and they will very soon begin to ask, is it for this that they have fought and risked their lives abroad?
§ Mr. CLYNESYes, but I am speaking of the men who will come back—the men who are on our fronts—the Britishers who in large numbers are still abroad in the many theatres of war, who will come back further to swell the ranks of the unemployed. Indeed, one of the reasons why the unemployed army in this country is giving us more trouble than ever is that it is an army in another sense. It is not only an industrial army. It consists very largely of the men who constituted the fighting forces, the military Army, and they have brought back some of the fighting spirit which they had to take to war for the purposes of defending their country against a foreign foe. It becomes all the more necessary to treat this question of unemployment in a new light, and to set aside any of the old barriers of economic doctrine which might have stood in the way of anything effective in the past. Another direction in which, before long, the Chancellor of the Exchequer will find himself forced, is that of resorting to the plan—I only want just to mention it now—that has been very often suggested from this side of the House, the plan of securing some definite part of the store of capital in this country, of the total sum and stock of wealth in this country, for the purpose of giving relief to the overburdened taxpayer. This weight of taxation is for many trades and industries nothing short of ruinous. That has been fully proven in the speech of the Chancellor of the Exchequer -this afternoon.
§ Mr. CLYNESIf the method suggested by the Chancellor of the Exchequer, not only this afternoon, but especially in his last two Budget speeches, is the method to save the country, why is there this sense of scare to-day? What of the outcry, what of the condition of ruin on which it is said we are bordering? If this plan of taxation for purposes of temporary relief is better than the one we suggest, how is it that these ruinous and scaring results have been produced? I suggest that even a resort to a capital levy upon such lines as have been suggested would have been less of a handicap to the trades and busi- 2513 nesses and commerce of this country than this state of high taxation, which, evidently, for a long time must continue. I do not propose, on this occasion, at any rate, further to argue the matter, though there is a complete answer to the question of the Chancellor of the Exchequer as to whether they will be helped or hindered toy taking some part of their capital. Nothing will result, from any announcement in the speech which we have just heard, seriously to lessen the state of high prices which prevails, and which, in a very large measure, is a cause of this condition of unemployment. There are some workmen who believe that one way to find people work is to see that others do less of it. I do not believe that, and I submit that the experience of this year is a complete disproof of that delusion which is entertained in some labour quarters that, by doing less in one week or one year, you will be more assured of finding work for others. I do not want to argue this, but I assert that the whole experience of this year has completely proved my point. The year 1920 has been a year of low production, due to certain conditions of unemployment—whole in some cases, part in others—due to reduced hours of work, and to certain other changes in industry. From all of these causes the year has been one of low production, and we are finishing the year 1920 with the largest number of unemployed that we have had for many years past. If it were true that a state of low-production found work for other men, there would not be a single workman in this country out of a job to-day.
We ought to learn something from these lessons, and to seek to master some of those simpler and more elementary parts of the real laws of political economy. You must not, however, expect working men to believe the truth of those laws without assurances that they will not suffer, as they have suffered in the past, through the foolish, and, in some instances, dishonest, action of employers of labour. Working men who have worked hard and have increased output, got, as a result of their services, not increased pay; they were thrown out of a job altogether as the result of what they had done, and suffered reductions in wages. It will take many years to drive that bitter experience out of the heads of working men, and that is a matter in which the Government 2514 might further co-operate with employers of labour in winning the confidence of workmen for this purpose of wealth production. Until you have gone far towards reducing prices, so as to bring the act of buying more within the power of the would-be purchaser, and thereby to give rise to a greater demand for the commodities which now stock our warehouses, and which create, in the case of the Lancashire cotton operative, the state of half-time under which he is now suffering—you cannot, until you have done these things, solve this recurring problem which burdens the life of masses of working men in this country. I agree that something may be said for saving in a small way, though in this matter of what may be termed petty economy not nearly so much can be saved as under the head of those huge items of expenditure relating to the fighting forces of the country. It is under those heads of expenditure that economies should be effected. The Army, the Navy, the Air Force, all these big spending non-productive Departments are the Departments to which Ministers should turn their attention; and they can only effectively turn their attention to them when more has been done in this country and in other parts of the world to create that certainty of world peace that will drive all these wasteful implements of war completely out of our minds. There are some Members of the Government who might under that head have done more to assist the Chancellor of the Exchequer.
I would just make one comment, as I feel a certain little personal interest in the matter, upon the announcement made this afternoon as to what is to be the near fate of the Ministry of Food. Frankly, I cannot say that I lament the disappearance of the Ministry of Food, in view of our experiences of the past half-year, for the Government has allowed it to do so little that its functions have been without any value whatever to the consuming public of this country. At least something effective and useful might have been done, in the interests of the consuming public, better to regulate and to lessen, in the case of certain items of food, the retail prices—the only matter in which the masses of consumers are really interested. We have had Acts of Parliament, which we sat up all night to pass, to deal with the profiteer. They rested upon the Statute Book, and were never 2515 really effectively or vigorously put into operation. Few of the wrongdoers have suffered from legislation of that description. Unless a Ministry is to be allowed to have a policy, and to carry it through and be a real protector of the public, it is better to disband that Ministry and save its administrative cost to the nation. I regret that my right hon. Friend the Minister of Food is not present to hear the announcement, but I do say that, in face of the impotency of the Ministry, and the failure of the Government to allow it to have a policy that would really protect the public in relation to prices, I do not lament the disappearance of the Ministry of Food.
I was very sorry to hear the hon. Member for Oxford (Mr. Marriott) say what he did on the question of education. I accept in all sincerity his statement as to his own regret at taking that side on such a question, for he himself has done so much to teach mankind that he ought to be one of the last men in the world to put any obstacle in the way of any of the poorer class of the country receiving the benefits of the best education that can be given. There is no State expenditure more worth incurring than this outlay upon educating the masses of the people, and I hope that the Government will revise that part of its plan of economy which falls under this head of education, and will turn a deaf ear to the appeals which have been made to save in what I would describe as this wasteful way. The condition is bad enough as it is. I do not complain of the headway that we have made in the last generation in the matter of education. Enormous strides have been made to meet the demands of the school-boy of to-day, as com pared with the conditions when many of us were lads and had little chance of any thing but the ordinary elementary schooling. Let us think in terms of the generation immediately ahead of us, and consider our duty to them. After a few years, when, as we hope, a state of peace will be really established, and the world turn; to its work, the battle will be between wits, brains, skill, efficiency, the ability of masses of people to produce. Are we to handicap ourselves in this competition for wealth and life by seeking now to save upon our educational system? We could pay no better premium for the future efficiency and skill of our people 2516 than the money which this House only recently resolved should be paid for the purpose of attaining an improved educational standard. You cannot save by impoverishing the intellect of the people. You cannot gain by the continued ignorance of the people. Those are propositions from which, I hope, no man in this House will dissent. If there be any man who does dissent, he at any rate would claim not to deny himself any of the opportunities which can be derived from an educational system.
7.0 P.M.
Much improved as we are, let me give to the House one fact that will show how far we have yet to go. As I recall the figures, the position roughly is this. Taking every thousand persons between the ages of 15 and 23—the years in which education operates, the receptive years, the educational years—0taking every thousand persons between those ages in this country, only 100 are going to a school of any kind and getting any kind of educational instruction. You have, therefore, the great mass of the working classes, qualified to vote, qualified to organise in their trade unions, entitled to all the rights of a nation progressive in every other direction, and yet doomed to this state of ignorance, and reaching an age of maturity without ever, I may say, reaching an age of wisdom. It will not do, therefore, for us to be responsible, in this year or the next, for saving some few millions a year out of the enormous reserves of the country's wealth, at the expense of continuing that mass of dangerous ignorance which will go with us year by year until it is enlightened. Our position internally is extremely serious, and I am certain that the most cheerful of Ministers, whoever he may be, must have his moments of gloom when he turns to the immediate commercial, industrial, and economic outlook. The situation, it is not too much to say, is unusually grave, and yet enormous profits are being made in some businesses. Ten, 12, and 15 per cent, is still being offered day by day to those who have money privately to invest. I am merely stating facts. These comparatively large sums of interest are being offered in competition with the lesser sums which the Government can offer. Indeed, that is one of the reasons why the Housing Bonds and Government Bonds are not so attractive to the investors when they find they can get very much 2517 better returns. The Government might well consider one side of this industrial problem in relation to these problems. The workman is expected to submit to what is termed his "minimum wage." Would it not be equally fair to require capital to submit to maximum profits? One of the most disturbing factors in the working-class mind is due to the spectacle of seeing these budgets or balance sheets of most prosperous firms telling not only of 20 and 30 per cent, profits, but of great bonuses and shares being doubled without a single further farthing being sunk into them. This is not a problem beyond the genius of the Prime Minister. He has faced strange questions before and new problems from which other men have turned away.
§ Mr. CLYNESI suggest that the most effective way to kill two birds with one stone would be to fix a reasonable limit to the profits of capital, and thereby reduce this disturbance in the working-class mind and the anger which results from it, and incidentally reduce very greatly the prices of a great many articles and commodities which are far too high because of the great profits they have to carry. Let me, as I close, suggest to the Prime Minister that there is still one matter left unmentioned in all this Debate which very seriously turns upon the question of finance and upon trade. Ireland, India, Egypt, Russia, all have their place in this problem, and they all touch very closely the purse of the British taxpayer. They are not things you can detach and say they have nothing to do with the question. I was pleased to find both the Prime Minister and the President of the Board of Trade recently asserting with great vigour that we must trade with Russia. We on this side of the House wish we had done much more to bring that about two years ago. We have lost enormously through these delays. These delays have produced problems in a more accentuated and disagreeable form. The sooner we can turn to trade with these big countries with vast populations the better it will be for us. We cannot afford the enormous sums which we are spending in Ireland. The Prime Minister within the last few days has had, I think, some opportunity to improve the tendencies towards a better 2518 spirit in the handling of that pitiful Irish problem. We have as yet heard nothing definite, and seen no sign of anything but what is termed the policy of "1No Surrender." Ireland is costing us per month considerably more than £1,000,000. Hon. Members ought not to be so complacent or think in such terms about expenditure of that kind, for the sooner we can seize that outlook the sooner we will come to a settlement of the problem itself. If we went on spending that or a bigger sum under such a system of Government as now exists in Ireland, you would only finally end by exhausting your purse and having the problem still to deal with I hope this Irish policy will not be persisted in if for no other reason than its bearing upon this important question of finance.
§ Major O'NEILLMay I interrupt the right hon. Gentleman for a moment! He has talked about the question of Irish settlement. May I ask him why he and the party which he represents, when the Government of Ireland Bill was going through this House, did not make some attempt in the ordinary constitutional way to bring about an amendment of that Bill?
§ Mr. DEPUTY-SPEAKER (Mr. Whitley)That leads us a good way from finance.
§ Mr. CLYNESIf I may be allowed to answer the question definitely—we deliberately decided to take the course we did in relation to that measure for the reason that we could not regard it as offering any prospect whatever of settling the question, and in keeping with Labour opinion in Ireland, we decided on the course which, so far, we have assumed. I do not want further to transverse these points than to say it appears to us on this side of the House that we may go on month by month and even year by year pressing the Government to do certain things until the very things we have urged are forgotten, and then there comes a day in the House when a Minister gets up and announces that the Government have resolved upon the very plan that we have for so long been suggesting. Therefore, if it is true that we are a long time in making these suggestions for the better government of our country, it is also equally true that we never live long enough to get any credit for them. We have the satisfaction, however, of seeing 2519 that if we are not in office we are in some position of influence in the counsels of the country, and that at long length some of the suggestions that have been made are bearing fruit. I ask the House seriously, in conclusion, to consider that this general question of finance is the one upon which all others hinge. Prices, unemployment, trade, a state of more peaceful mind among the masses of the people—all these things hinge upon the money problem. The worst aspect of all this problem is that it concerns us in this bitter part of the winter—I refer to the men out of work. I suggest to the Prime Minister that whatever else he may do in the saving of the money of the State or of the taxpayer, he ought not to stint a single farthing in helping the masses of the workers who are willing to work and produce wealth if permitted. At least help them to carry over the bitterness of the months that are ahead of us, no matter what the cost of that policy may be to the Government of the day.
§ Sir GODFREY COLLINSI beg to move, to leave out from the word "House" to the end of the Question, and to insert instead thereof the words
realising that the reduction of national expenditure will tend to a diminution of the necessarily high cost of living and in order to secure a sound financial position with reduced taxation in the future, urges His Majesty's Government in preparing the Estimates for the coming year to reduce to the utmost extent possible the expenditure in all public services.The House of Commons this afternoon has listened to a statement of first-class political importance from the Chancellor of the Exchequer. That statement I think will give satisfaction to this House, and the result of that policy will be felt in every home throughout Great Britain in the months to come. If I understood correctly the policy of the Government it is first to reduce our military commitments abroad. I hope the Prime Minister will pursue that policy even at the cost of estranging some of our Allies in the late War. The second part of the policy is to delay the building of capital ships in this country, and as I listened to the statement this afternoon it reminded me that perhaps in 1921 this country is going to have a naval holiday which was originally suggested by the present Secretary of State for War in 1912. The other side of the Government policy refers to social 2520 legislation, and here their policy will cut across the pre-War mental outlook of some political parties. If I understood that policy aright, they are going to refuse to support any new scheme of expenditure. No Department is to be permitted to initiate any new scheme involving a new burden on the taxpayer. I am convinced myself that national economy can only be secured by a national method which will cut across the pre-War mental outlook of political parties, and the policy of the Government this afternoon seems to fit in completely with that point of view.May I say one or two words in connection with the Resolution moved by the right hon. Gentleman who initiated the Debate this afternoon. It is quite evident to this House that the figure of £808,000,000 is an impossible figure. Probably no hon. Member thought it feasible, but there are many careless taxpayers throughout the country, and many householders whose hopes are being raised by the mere mention of such a figure. Their hopes are being raised because they think that by some possible policy the burden of taxation can be so reduced that our total expenditure need not exceed £800,000,000. The figures which the Chancellor of the Exchequer has quoted to the House show that the normal year which we all desire will not arrive for a few years yet, and so, in asking the House to examine our expenditure for a few minutes, allow me to say that I do not think it is really realised that 10s. in every pound of taxation, that is, 6d. in every shilling paid by way of taxation, is required this year to pay the interest on debt, the redemption of debt, and the cost of pensions. Practically half of our total expenditure this year is for these three services, and until the rate of interest is lower, and capital is plentiful, the yearly burden of the interest cannot be reduced. In the Estimates for this year there is also included a large sum for what I may call "Transitory Services." This includes subsidies, which the Chancellor of the Exchequer told us will be abolished at the end of the year, and which stand at £87,000,000. Loans to our Allies and Dependents stand at £36,000,000; the cost of the Ministry of Shipping at £17,000,000, and land settlement and demobilisation at £24,000,000. A total sum of £191,000,000 will automatically disappear at the end of this year. 2521 In our expenditure this year there is a further sum which I may describe as the cost of social policy. The cost of that policy this year is £130,000,000. The Post Office costs £60,000,000. All the other Civil Services cost £123,000,000. That is the position to-day.
What will be the position in the year 1921? I ask the House to address itself for a very few moments to a consideration of what may be our estimated expenditure in the coming year. Interest on debt will remain about the same. The payments to local authorities and for road improvements—the total payments out of the Consolidated Fund will remain about the same. The cost of pensions this year will absorb £123,000,000. I think no one will begrudge that. The actual sum paid to pensioners is £109,000,000, but in the total there is a further figure of £14,000,000 required for hospital treatment and administration. In other words, for every £7 which is paid to the pensioner it costs the State another £1 for administration and hospital treatment. Can any economies be effected in that direction? Are there too many doctors employed? Are their fees too large? I understand the Ministry of Pensions has this matter under consideration, and I suggest the Government might direct their attention to that sum of £14,000,000, which has been paid out this year for hospital treatment and other forms of administration.
The statement delivered by the Chancellor of the Exchequer promises a modification in the cost of armaments. It is difficult for any private Member to gather definitely what will be the cost of armaments in the coming year. I should like, however, to direct the attention of the Chancellor of the Exchequer to certain items in our naval expenditure. He has referred to the dockyards. The wages in the dockyards amount to £10,000,000, with £5,000,000 for raw material. Memories are so short that people are apt to forget the historic surrender of the German fleet. The question I want to put to the Chancellor of the Exchequer is, are all the seven dockyard towns necessary to-day-Portsmouth, Queenstown, Devonport, Chatham, Pembroke, Sheerness, and Rosyth. Will they all be necessary in years to come with the North Sea menace removed? In addition to the dockyard expenditure, contract work absorbs £10,000,000, and there is a further £6,000,000 for naval armaments. Then there is £2,500,000 for new 2522 works, and a further sum of £10,500,000 for coal and oil fuel. This latter figure reminds me that during my younger days spent in the Navy we frequently lay for three months at anchor in port. What we lost in efficiency we gained in personal pleasure. The Navy might appreciate in the coming year a repetition of this very pleasant experience. The items I have just mentioned-dockyards, contracts, coal and armaments-absorb £44,000,000. In the estimate for the normal year the Chancellor of the Exchequer allocated £60,000,000 to the Navy. Should this figure be exceeded in 1921? I know the pay of the Navy and the keep will absorb £28,000,000, but I would suggest to the Chancellor of the Exchequer that for 1921 it might be possible to reduce some items so as to bring the amount within the total for a normal year.
Turning from the Navy, let me ask the House to consider the Air Estimate. The cost this year is put at £21,000,000. This includes a sum of £5,000,000 for winding-up War charges. That, of course, is a non-recurrent charge, and it leaves £16,000,000 for the expenditure. In that figure there is a sum of £4,000,000 for works, buildings, and land. While referring to the subject of works, buildings, and land, may I suggest to the Government that their general policy for the coming year should be that no Government Department, whether it be the Army, the Navy, the Air Service, or the Labour Ministry, should be permitted to spend a single penny on any new building in the coming year. Let there be a complete cessation of new buildings by all Government Departments, except for houses for the working classes. In the Air Services we provide for 30,000 men. The total cost of the administration is nearly £1,000,000. I think the Chancellor of the Exchequer will agree with me that that figure for the administration of so small a force would appear to be excessive. May I make this suggestion to the right hon Gentleman? He is aware that the Ordnance Board, on which soldiers and sailors have sat for many years, has done very excellent work, but in view of the necessity of curtailing our commitments and reducing the staffs of Government Departments in London, would it not be possible for the Government to abolish completely the Air Ministry and place the Air Service under 2523 the Army and Navy? The cost of administration is very great, and I suggest to the Government there might be some room for economy in that direction.
I have touched upon the Army, Navy and Air Services. I am glad the Government have decided to delay the operation of the Education Act of 1918 until a more opportune period. The time has not yet arrived for that Act to be put into operation. We all admit that higher education is a good investment, but we have not the money to invest. We must first take every available step, by Government policy and otherwise, to so lower the cost of living that employment will be given to our people in the coming year. I have referred to the General Services. I have pointed to the total cost of the Civil Services. I have endeavoured to show the cost of the Post Office and of armaments. The total cost of all other Civil Services this year amounts to £123,000,000. What is included in that total? Payments for roads, local authorities, Customs and Excise, and cost of police. Deducting these services, the total of the other Civil Services amounts to £83,000,000. There is an idea in the public mind that if every war-time Ministry were wound up, and if every official were got rid of, the economy effected would be an immediate and quick reduction in the burden of taxation. There is no truth whatever in such a statement. The total cost of salaries in these Departments represents a very small figure. But do not let the Government be diverted by that fact from the knowledge that public anger against officialdom is very great. The public knew and realised the disadvantages of officialdom during the War, and little by little they are turning away from their pre-War outlook and love of officials. I hope, therefore, the Chancellor of the Exchequer will steadily, cautiously and intelligently reduce the number of officials in all these Departments and try and bring them back at the earliest possible moment to pre-War standards. I have endeavoured very briefly and perhaps not completely to mention some of the broad channels of expenditure during the coming year, and having applied my mind and given much thought to the figures, I suggest it is quite impossible for the State, putting on one side the reduction of debt in the 2524 coming year, to be run at less than somewhere about £950,000,000.
§ Sir G. COLLINSThe chief items are:—
£ Interest on Debt and Pensions 470,000,000 Armaments 152,000,000
§ Sir G. COLLINSThat represents a mere fraction. The total cost of armaments this year, excluding war charges, is £195,000,000, but with the policy enunciated by the Cabinet this afternoon, would it not be possible to reduce the cost of armaments in the coming year to £152,000,000? Let me continue my table—
This includes education, old age pensions, insurance and health. If the Government; refuse every demand for new expenditure, that item could in the next year be kept within £134,000,000. To continue the table—
Social policy £134,000,000 Some of my hon. Friends think there might be a still greater reduction on the charges for social policy. I am endeavouring to frame a moderate estimate. No one would be more glad than I to find that the figures could be still further reduced. The total estimate would thus amount to £945,000,000 for the coming year: say £950,000,000. The Chancellor of the Exchequer informed the House earlier in the afternoon that we must find by taxation or otherwise £110,000,000 for the reduction of debt. That would give us a total estimated expenditure in the coming year of £1,060,000,000 and if that could be secured its effect would be at once felt in every home and in every business in this country. With a Budget of that magnitude the Chancellor of the Exchequer would be able to reduce taxation. What taxation should be reduced is a matter for the Government to consider.
£ Post Office (including Capital Commitments) 60,000,000 Other Civil Service 110,000,000 Supplementary Estimates 10,000,000 2525 There is another point to which I am anxious to call the attention of the Chancellor of the Exchequer. I spoke and voted in favour of the Excess Profits Duty in July. Conditions in industry have changed considerably since that date, and in the coming year we shall be required to meet the most intense competition that this country has ever experienced. Therefore, let every tax which hampers trade and every control which restricts industry be removed.
§ Sir G. COLLINSThe arrears of Excess Profits Duty are rising rapidly. In 1919 they amounted to £164,000,000, in 1920£217,000,000, and in 1921, according to the Chancellor of the Exchequer's estimate, the arrears will be £400,000,000. The House will note the rising figure, the sharp upward rise in the amount of the arrears of Excess Profits Duty. I appeal, therefore, to the Chancellor of the Exchequer when reviewing his proposals for the coming year to take a bold course and to relieve industry as far as possible. Turning from the Excess Profits Duty, I am anxious to congratulate the Chancellor of the Exchequer upon the steps he has taken to limit the issue of currency notes. The Brussels Economic Conference and the Supreme Economic Council have urged all nations to avoid the multiplication of paper currency. It is considered by good judges that if the issue of our paper currency could gradually be reduced by £50,000,000, say, at the rate of £3,000,000 or £5,000,000 per month, the price of commodities would fall from their present level by 25 to 30 per cent. To secure that result a surplus of revenue over expenditure is necessary. By a reduction in our paper currency the individual who would gain most would be the wage-earning and the middle classes, and I appeal to the Chancellor of the Exchequer to carry his own policy a step further in that direction.
The Government in their statement this afternoon announced that the Ministry of Food, the Ministry of Shipping and the Ministry of Munitions are to be abolished. Let them also at the same time remove control from every industry Interference with industry creates uncertainty, and if there are very real practical advantages in the way of decontrol, let the Government pursue that policy step by step and 2526 month by month in future. In moving the Motion which stands in my name I have endeavoured to show that the Resolution moved earlier in the afternoon would not commend itself to the judgment of my fellow Members. I have spent much time and labour, until illness supervened, in endeavouring to study the problem of national expenditure and to secure economy in public services. I commend the Resolution which stands in my name to the judgment of my fellow Members. This House during the last five or six years has faced with courage a grave situation. Let us maintain the same spirit in the days to come. It will not be by panic or by being driven by outside forces that this country will regain and maintain its proud position in the markets of the world. Let this House, therefore, facing abuse, facing misrepresentation and distortion of facts, realise that they are the custodians of the public purse and the guardians of the public wellbeing. Our ancestors so worked and planned that the people of Britain have weathered the gravest crisis in our history. Let the Commons of Great Britain at this time assembled so fashion the policy of His Majesty's Government that in the days to come it will be said of us that we were worthy of those who went before.
Lieut.-Commander HILTON YOUNGI beg to second the Amendment. The House met to-day with a sense of very great gravity. Whether that feeling has been wholly removed by the important pronouncement we have heard from the Chancellor of the Exchequer I do not know, except that in my own case it has not been wholly removed. The sense of the gravity of the situation is so great and the emergency is so grave that some more definite assurance of an adaptation of policy to our needs is required than that which we have had. It may be looked upon as meaning much or as meaning little. In the first place, let us look at the pronouncement with respect to the restriction of fresh expenditure in undertakings at home. As I understood it, the Chancellor himself admits that in this direction there is no big economy to be effected, but small economies only. As the memorandum informs us, to achieve economies to the extent which we believe to be necessary we must look to the much more difficult and larger regions of service expenditure on the forces, and when I refer to the actual 2527 wording of the memorandum in that respect I find that it may cover much in the way of improvement in economies in future, or it may cover very little. I find the blessed word "exploration." The Government is going to explore the question of economies in Mesopotamia. It is not very reassuring to hear that they do not yet know their way about that question. In the third reading of economies to be effected we welcome—I understand it to be the almost unanimous feeling of the House, with very few exceptions—the pronouncement as to a prompt and speedy termination of the temporary Ministries. There again I find a phrase which gives, possibly, a hint of disquietude as to the transfer of their residual activities. It appears to me that the economy to be effected by the actual cessation of the staffs and separate organisations of those Ministries is not comparable in importance with the economies to be effected by the cessation of their activities. If the undertaking means that much of the staff and many of the activities and a great deal of the stocks of these temporary Ministries are to be transferred to other older Ministries who are to take over the business, we shall be very little the gainers. All through this business of liquidation of war organisations and war businesses it is not so much to the disappearance of names and officials that one would look for advantages to be gained, but to the rapid and prompt realisation of stocks. It is not the actual expense of the Ministers and the salaries of the officials that are working real harm to the commerce of the country. What works far more harm is the actual holding up of enormous sums of capital and stocks in Government hands. We have £60,000,000 worth of wool, for example. Then we have timber and ships and many other things. This dislocates, amongst other things, the capital market and prevents it from resuming its normal and healthy state.
Let me glance at what appears to me an essential point of the situation which has been brought into relief by the speech of the Chancellor of the Exchequer. He, told us that he was continuing and had resolutely set his face against further inflation. Let us acknowledge the success of his efforts in that direction to prevent further inflation by direct Government 2528 borrowing in the course of this year. Is that the whole of the picture? To see the picture in its true aspect you must look elsewhere. I said at the outset of my remarks that we met with a sense of gravity on this occasion. If I understand what causes that gravity, it is due to the belief that in our mind to-day we have got another instance of that age-long chronic fight for economies in detail, the prevention of waste and so on, and that for the safety and security of the nation in future, it is essential that on this-occasion, here and now, we should establish a whole, fresh policy as regards expenditure. The urgency of that is contained in two or three figures that are very likely present to the minds of many Members, and if not it is essential that they should be present to our minds at the present time. They are the figures which show that at the present time we have overcharged our taxable capacity and we have exhausted our margin of savings in the course of the year. Before the War we used to put aside for Government expenditure and for saving and reinvestment £550,000,000. At the present value of the £ we may reckon that at about £1,300,000,000. Out of that we are raising a tax revenue of £1,088,000,000. But in the meantime the-actual amount put aside now is far less- 20 per cent, less than it was before the War. That 20 per cent, less would produce a margin in the course of a year over Government expenditure and for the restoration of industry a margin of £1,060,000,000. You have a margin of £1,060,000,000 and a tax revenue of £1,088,000,000. The figures leave no room, for doubt that with so great a proportion of the national wealth going in the direction of national expenditure, not enough is left either to maintain industry refreshed at its pre-War rates or to refresh it with the special recuperation, and with the special effort at reconstruction which are needed after the havoc of the War. What results would you expect, what results would any business man expect from such a state of affairs? Where would he look to see the result? He would look to see it in the wide field of the general effects of trade depression. What symptom would he look at, to find the effects of over-expenditure eating up too much of the margin of wealth in the country? He would look to find it in trouble between 2529 the industrial and trading community and the banks. That is the symptom which you are beginning to see now, and which, unless we change our view, we may continue to see with ever-growing menace as the winter goes on.
The trader is asking for accommodation and not receiving it. The banks are beginning to make difficulty. What else can be the result of raising the level of national expenditure right up to your margin of saving? Where will that lead? It will go on, of course. Possibly the best thing that could happen would be for the banks to take the brutal short cut towards a remedy and to close down any business for which they could not find capital. At any rate, that is one alternative. If you soak up into the Exchequer all the available supplies of fresh capital needed for industry, the banks sooner or later must close down many accounts. What other alternative is there? It is the melancholy alternative from which, I think, the Chancellor of the Exchequer turned away his eyes. This situation which I have ventured to describe-the margin of capital for industry dangerously reduced-may lead directly towards the indirect manufacture of credit, indirect inflation by the banks, in order to supply to traders that accommodation which, owing to the size of taxation, they are not able to do. I venture to suggest that if we go on in our present state the only possible alternatives before us are liquidation of industry, of undertakings, in a simple and less welcome word, bankruptcy, or a period of slow inflation, of manufacture of fresh credit by the banks in order to keep industries going. Anyone who takes a broad view must realise that that can only postpone the trouble and lead back in the end to the first and more violent form of disaster which lies ahead of any course of unsound finance.
Of course, the remedy is obvious and well-known. It involves leaving more of the available margin of savings for the use of the credit of the country. How are you to do it? How are we to get this dead weight of expenditure shifted and to get the wheels of economy turning? We welcome the assurances given us to day. We will welcome still more some-thing which is more definite. I have not been able ever to content myself, though 2530 I have sought to do so, that there is any practicable possibility of setting a limit to expenditure by the method of rationing recommended in the Motion. I do not see how it is common sense that the House, even with all the attention which it gives to the subject, and even after the most prolonged private inquiries, can possibly hope to meet here and arrive at a figure for our national expenditure. If they seek to approach it from the-. point of view of what we can afford to spend they will find there are no statistics available to help them. If they seek to arrive at it by regarding objects of expenditure in the Departments, there again, I believe that the actual amount of knowledge is too small and too little in detail for us to be able to discriminate. Also the field is too, wide. It is impossible for the House,. with all its varied interests and views, to survey so wide a field of expenditure and to relate the different objects together. Besides, rationing has very great disadvantages. You fix a sum with the idea that it is to be the amount, and then you find that you are driven from it by casual expenses, and the scheme breaks-down. On the other hand, you have the-experience that detailed criticism of expenditure leads us nowhere.
Is there no halfway house between the two which w ill enable us to lay out some broad outline as to the standard to be observed by the Government in economising? It may be difficult to find, but I believe there are certain ideas, definitely related to common sense, about our standard of expenditure, which need no invention. Were we to try to find one or two of these as aids in our attempt to fix some standard of economy and limit of expenditure, I believe we should find the most helpful idea of all in the extremely simple principle that what we. were spending in 1913–14 before the War-we ought to be spending now, and no more, except in so far as there is absolutely necessary and unavoidable war expenditure added to that standard. I think: we do, as reasonable men, all take that as, our standard involuntarily. We refer back to 1913–14 as the standard of what is reasonable. There are to be added, of course, War pensions, the increased debt services, the necessity for increased redemption and so on. If we took that 2531 standard, I believe we should arrive at this result: That there is an amount of expenditure which cannot be justified either by the fact that its objects were being served before the War or by any necessary or inevitable consequences of the War, amounting now to a sum of £200,000,000 a year. By various routes and in various manners we all seem to get back to that as about the amount we ought to be able to save. I believe this Debate will show that we have established in many minds, and, I hope, in the minds of the Government, that that is the amount of reduction on present expenditure which may be made and must be made. Can we but obtain a reduction to that extent, I think that we shall be able to contemplate the industrial future without the grave misgivings that otherwise we must hold about it.
§ 8.0 P.M.
§ Lord HUGH CECILThis is a discussion which might occupy almost any field, and so many subjects have been mentioned which it would be tempting to pursue, that I could, I dare say, very easily occupy the time of the House for a hour or more without digressing the rules of relevance. I should have liked very much to have said something about unemployment, and to have sounded the praises of co-partnership as the ultimate remedy. I should have liked very much to deal with an observation which my hon. Friend (Sir G. Collins) made in a singularly able and instructive speech, that if the Air Ministry were abolished it should go under the Board of Trade rather than under the Army or Navy. These topics, and there are many which might be added, I propose to avoid, prompted by a congruity of motives of hunger and unselfishness. My hon. Friend did not take the line which I rather hoped he would take. The speech of the Chancellor of the Exchequer contained a good deal of exposition, but I am sorry to say, also a great deal of recrimination which did not seem to me to have the slightest bearing on the Motion before the House. I do not care whether the right hon. Member for Paisley (Mr. Asquith) was justified in his observations at Finsbury or was not. That does not contribute a new element to the discussion.
§ Lord H. CECILNot at all, but if we are going to have the whole truth, the right hon. Gentleman was very merciful in only speaking for an hour and a half, because vast passages of truth would have to be left untouched in that time. What I was anxious to see dealt with was, to some extent, dealt with by the hon. and gallant Member (Lieut.-Commander Young) in the very interesting speech which he has just delivered. I had hoped that this discussion would have approached the problem from a new aspect. I do not want to go over all the ground as to whether expenditure was unjustifiable or unavoidable. I wanted to see the matter considered from the point of view of what is the economic condition of the country in consequence of the heavy taxation it has to bear, and how near are we to the limit of our taxable capacity, or how far are we already beyond the limit which makes taxation press on industry, and therefore on the trade and prosperity of the people, and cause unemployment, and much else. If we are, as I think the hon. and gallant Member showed, beyond that limit really now, and so heavily taxed that industry is suffering, and consequently there is unemployment, then we have got to a point when it is really essential that expenditure should be reduced. In his inference on that point, I began to disagree with the hon. and gallant Gentleman, and also with my hon. Friend (Sir G. Collins). I think the inference is that you should fix a limit of expenditure founded on the taxable capacity of the country, and that you should oblige the Government to act within that liimt, and leave to them, with their great administrative knowledge, the task of assigning the expenditure to this branch or to that. I think the gravity of the situation cannot be overstated. My hon. and gallant Friend gave us some very interesting figures as to the effect which high taxation is having already on the savings of the country. He took no account, I think, of local taxation in rates, and these must be estimated in addition, as being an additional burden on the capital and saving of the country.
In the course of his speech the Chancellor adverted to the fact that every 2533 other country in Europe, except Denmark, was in a worse position that ourselves, and that is, I suppose, with the object of showing that our management of finance is not worse than the management of finance by other people in other countries. I think it is in another aspect an additional ground for alarm, because if one of those other countries suffers financial collapse, that cannot fail to react on our financial position. We have to consider not only our own prospects, but whether we are so firmly placed that we can stand the shock of some national bankruptcy; it may be of one of the great European countries. After all countries are in the position that if they do not make the two ends meet, there must come a point when they will have to say to the public creditor, "We cannot pay you." It is a most disastrous point, but it is quite obvious that you cannot go on printing notes or other instruments of credit for ever. I do not know, the Treasury know much better than I could, what would be the effect on the economic condition of this country if some such event took place en the Continent. I think that is an additional ground for bringing down our own expenditure and making our own position as secure and stable as possible. How can we do that? I agree with the observation made by many hon. Members that 808 millions is not an exact figure, but I do not at all agree with the hon. and gallant Member in saying that no figure ought to be fixed, and that we had no data. He himself gave us some most interesting data on which it was possible to draw certain inferences. It may be said that the limit can be drawn by the Chancellor of the Exchequer, and that that is one of the functions of the Treasury. I have great confidence in, and admiration for the Chancellor of the Exchequer, and for his ability so admirably displayed in his speech, but there is one fault in the Chancellor, and that is that he is the colleague of Ministers who want to spend money. That is not a reflection either on him or on them, but they do want to spend money on their Departments, and it is only human nature. Many people find it a pleasure to spend their own money, at any rate for a time. The Chancellor of the Exchequer for his part does not want to break up the Government. The present Government especially are so convinced of their own indispensability that they generally wake up full of tears at the thought how sad 2534 it would be for the country if by any means they went out of office. Conscious as they are of that great principle of self-indispensability, coupled with the principle of self-determination, that great principle is constantly in the mind of the Chancellor, and hampers him in his efforts to bring down the expenditure of the country.
I believe it to be true that you must have a separate organ for saving the national money, distinct from the administrative body of the Government who are concerned in spending it. I should like to create a Select Committee of this House, with the authority of this House, not to go into details, not to lose themselves in long discussions as to whether you should cut a million off this or off that, but to approach the subject from the point of view of settling what was the limit of the taxable capacity of the country, and then fixing a sum to which the Government would have to conform and let the Government spread the expenditure as they thought fit. I have put a Motion on the Paper which illustrates that point of view. If there were such a Committee, it is not true to say that it would only act as the Treasury acts. It would be an independent body, it would have access to all official sources of information, and when it came to a decision it would act independently, and it would not matter to the Committee at all whether it vexed the Government or vexed this Minister or that. It seems to me the problem now is not so intricate in the present emergency that such a Committee would find it difficult to solve it. If some such course is not taken, what becomes of the control of the House of Commons? We never have these Debates, I am sure, without being convinced that it is quite impossible for the House of Commons to check the details of expenditure. Committee of Supply, and Committee of Ways and Means do not serve the purpose in the least. Committee of Supply is an opportunity for people to point out this or that defect in administration, but unhappily those defers are more commonly solved by increasing expenditure than diminishing it. The Committee of Supply, so far from being a committee of economy, is a committee which tends to increase expenditure. Newspapers vociferate, and we are told that this is an urgent problem, and the Government tell us from time to time 2535 that the duty and responsibility really lie with the House of Commons. How are we to perform this duty? It can only be done by a small Select Committee independently chosen by some person like the Chairman of Ways and Means, who is the financial officer of the House. Let him choose an independent committee to fix a maximum sum for national expenditure to which the Government will have to conform.
I am quite satisfied that we ought both ourselves contemplate, and the country should contemplate, the new aspect that has entered into these discussions, and that we ought to realise that we are face to face with a very serious national danger. A great many people are apt to think that national finance is only a question of expediency, a little better or worse, but the verdict of history is quite unmistakeable that more great nations have been injured or destroyed or brought down in the scale of national power by financial embarrassment than even by naval or military disasters. Nothing is more remarkable, in surveying the reasons why great countries have gone backwards, beginning with the Roman Empire and coming down to recent days, than the important part played by embarrassed finance. We ought really to realise that it is a vital question, and if we sink into a state of chronic financial embarrassment, and if our conditions become such that industry does not grow healthily with the supply of capital, we are incurring a danger as great as any danger, even from naval and military attack. Therefore I hope we will all lay the gravity of the question to heart. I think I should best express my sense of that gravity by voting for the Motion moved by the right hon. Gentleman the Member for South Molton (Mr. Lambert), and that I should support him in the Division Lobby, because that will enable me to register a vote in favour of rationing by some independent authority in the State.
§ Mr. HOLMESThe Noble Lord who has just spoken commenced his speech by saying that he wished that some of the speakers to-night had taken the line of inquiring into the effects which Government expenditure was having on industry I shall endeavour to proceed along the line he desires. I am one of those who believe if the present amount of Govern- 2536 meat expenditure is maintained, we as a nation are on the road to bankruptcy. I believe that in the main the slump of trade, the maintenance of the high cost of living, and the menace of unemployment at the present time are due to the extent of Government expenditure. I believe it has become the bounden duty of every Member of the House by every means in his power to induce the Government, not in any party spirit, but absolutely in the national interest, to drastically reduce the amount which they are spending. The hon. and gallant Member for Norwich introduced what, to my mind, is the basic point of our commercial success. For three or four generations before the War British trade was extending year by year. That was no doubt partly due to the enterprise and ability of employers and the skill and ability of workers, but all that enterprise, skill, and ability would have been thwarted had it not been for the fact that those who made money out of business in those days wisely set aside a portion of those profits for re-investment in their own or other businesses. It is probably correct to say that for many years before the War the nation saved and re-invested in its industries between £300,000,000 and £350,000,000 annually. With that money land was bought, factories were erected thereon, plant and machinery were purchased, and raw materials were obtained. So employment was procured for a growing population, and the prosperity of the nation was maintained.
Certain things will be as true in a post-War future as they have been in a pre-War past. One is that we cannot maintain our commercial position unless we as a nation year after year save money for reinvestment in our industries. The position to-day is that we are merely not saving but are actually drawing on our capital. Generally speaking it was the man who was termed the employer who made the large profits out of industry who saved the money before the War. The position of such a man in 1914 may he roughly summed up in this way. For every pound of income he spent 12s. upon himself and his dependents, paid 3s. in taxes and saved 5s. To-day the gross national income in terms of money is much greater than it was in 1914. Probably the same individual is not spending upon himself and his dependents more than 12s. in the pound but his taxes work 2537 out to-day at 8s. 6d. in the pound. So he is not merely spending the 20s. he earns but he is annually exhausting sixpence of his capital as well. It is clear therefore that the burden of taxation resulting from excessive Government expenditure is leading us to bankruptcy, and unless a reduction of expense can immediately be made there is no safety for us in future.
This brings me to another consideration. I said a moment or two ago that the pre-War savings which were re-invested in industry came mainly from the employer. The workers in those days received such wages that it was practically impossible, except in a few cases, for them to save. It is clear to everyone that that state of affairs is not going to be maintained in future years. The working classes are claiming a share in the control and profits of industry. Most wise men recognise that that claim must be acceded to in the national interest. While it is essential that savings should be re-invested each year in industries, all the savings in the world will not give us the production that we require unless the will to work exists. At present the will to work is not strong. It will only be secured in my view by a total revision of our existing system. It is necessary for us to rid the workers of the suspicion that someone is taking advantage of their labour, and guarantee them against unemployment and starvation, and to give either collective or individual reward for collective or individual output. In other words, you must introduce what the Noble Lord briefly referred to as a system of co-partnership. May I add the spirit of goodwill by which our national motto will be, "All for each and each for all," whereby the workers will be satisfied that the fruits of industry will be fairly divided.
The financial effect of this re-distribution of profit will be that employers will not take so large a share, and consequently will be unable to save as much out of their share as they formerly did. The workers will receive a larger pro portion, and since it is necessary for us to maintain the supply of capital from our savings, it must be brought home to the workers of the country that in return for the increased share of control and profits they must exercise thrift and contribute their quota to the savings which form the following year's capital for the national industries. If those three con- 2538 ditions are accepted-first, that a considerable sum of money must be saved each year from industry, second that the fruits of industry will in future be shared more largely by the workers, and third, that it will devolve on the many and not on the few to save and provide those savings for industry, it becomes more apparent than ever that the Government policy during the past two years has been one of national suicide. For instead of demonstrating to the nation that as a result of the war we have exhausted an incredible amount of our national wealth and that we are a poor nation as compared with 1914 and can only hope to prosper and gradually recover our old position by hard work, thrift and goodwill on the part of everyone, they have week by week introduced measures and created new Departments which have thrown increasing burdens upon both the taxpayer and the ratepayer, and have given the impression that our national wealth was inexhaustible and that our trade is so productive that any and every burden can be placed upon it.
They have maintained a system of taxation introduced by war which is producing dire results, and so we find ourselves at the present time as a nation short of money, with no enterprise in business, no will to work in industry, commodities at high prices, a general scarcity of goods and the menace of unemployment. Examine the various ways in which Government expenditure is the cause of these increases. I have already shown that it is absorbing the savings and taking the capital which should be used for the extension of old businesses and the commencement of new ones. It is in addition causing traders to borrow from the banks in order to pay their taxes, which is just as detrimental to national credit as if the Government itself were the borrower. It increases the demand for commodities in competition with business firms, and thus it keeps up prices of raw materials and increases the cost of production and diminishes the supply. It maintains the overwhelming burden of taxation in various forms, one of which, namely, the Excess Profits Duty, is and has been preventing men from commencing new businesses. It is also an important factor in the extent to which the exchange with America is against us.
2539 Examine for a moment this question of the rate of exchange with America. There is plenty of money in America and enormous sums would be invested in this country if it were not that Excess Profits Duty, Corporations Profits Tax, Income Tax and Super-tax are absorbing so much of the profits which Americans investing their money here would receive. This American money would act in two ways. In the first place, it would help to put the rate of exchange in our favour, and in the second place it would provide new industries and increase employment in this country, and if we could get the rate of exchange better with America, the cost of living in this country would be enormously decreased. To-day, owing to the rate of exchange alone, we have to pay £15 for the same amount of wheat which we bought for £10 in 1914 from America, and if the exchange were normal and we could pay for what we are now paying £15 the cost of the loaf would be reduced and of all kinds of raw materials as well. Our lack of production here is also preventing us from sending goods to America to pay for our purchases of wheat and of materials, and in that way, again, the exchange is maintained against us.
If I had had the opportunity of speaking before the Chancellor spoke, I was going to ask him a specific question with regard to the Excess Profits Duty. It has been the custom, I think, for five years for the Chancellor of the Exchequer when he introduces his annual Budget, about the end of April or the beginning of May, to make some alteration in the rate of Excess Profits Duty, and although each alteration was announced on the Budget it was dated back to the previous 1st of January. The Chancellor of the Exchequer last year during the Budget Debate intimated that he did not propose that the Excess Profits Duty, after 1st January next, should be more than 40 per cent. Most people are now convinced that the Excess Profits Duty is a great evil, and there is no doubt whatever that the business men of the country are wondering whether the Chancellor is going to abolish it altogether. There are two sets of business men who are interested in this matter. There is the man who would start a fresh business and so give employment in this country if he knew that the Excess Profits Duty was going 2540 to be abolished on the 1st of January. On the other hand, there are a number of firms and companies which are only kept going at the present time because they know that they can reclaim from the Treasury money that they paid during the War in Excess Profits Duty. From both these points of view, I suggest to the Chancellor of the Exchequer that it would be of national value that he should intimate as soon as possible what he is going to do, and not wait until the end of April or the beginning of May before making an announcement on this very important matter, which is going to date back to the 1st of January.
Perhaps I may say a word or two upon the solution of the question of national expenditure which the right hon. Member for Miles Platting (Mr. Clynes) suggested on behalf of the Labour party. They, apparently, are of opinion that all the difficulties of the moment could be solved by means of a capital levy. They would take away from industry about £8,000,000,000 of capital, and they would so avoid the payment of £350,000,000 per annum for interest on that amount. I have advocated the imposition of a capital levy, and I still believe in it as much as I ever did, but I frankly confess that it is no solution of the present situation. If you could escape the payment of £350,000,000 a year, you would reduce the present national expenditure to something under £1,000,000,000, but you would have to raise that sum in taxes, and you would have taken away from industry £8,000,000,000, and you would be expected to earn and pay the £1,000,000,000 out of that lesser capital. A capital levy is only a paper entry. If the gross national wealth is £20,000,000,000 and the national debt is £8,000,000,000, the net capital of the country is £12,000,000,000, and if by a capital levy you wipe out the national debt, the net capital of the country still remains at £12,000,000,000, and all that I -have said to-night with regard to the necessity of maintaining fresh enterprise year by year by means of national savings would still remain. An individual may clear off a loan from his bank by the sale of assets, but if he desires to expand his business, he must spend less than he earns and invest the balance as new capital, and this equally applies to a nation. In my view, therefore, the only hope for the country at the present time is a drastic reduction of national expenditure.
2541 With regard to the Motion of my right hon. Friend the Member for South Molton (Mr. Lambert), I think it is impracticable. I do not think the expenditure can be reduced to £808,000,000, because since that normal Budget was given to us by the Chancellor of the Exchequer the House itself has imposed a large number of fresh charges which it is beyond the Chancellor's power to defeat, even if he wanted to, and I think that if the figure was put at £908,000,000, that would reasonably apply to all the public money that it would be necessary to spend, apart from any sum to be devoted to the reduction of the National Debt. The hon. Member for Greenock (Sir G. Collins), who has moved an Amendment, has certainly given us a milk-and-water concoction which anybody in the House can take. He seems to have exceedingly charitable feelings towards the Government, and I think we can say he has lived up to his new position as representative of the Charity Commissioners. His speech was quite strong on economy, but I cannot help feeling that he is one of those whose lip-service would be much more effective if he would vote against such Estimates as the Supplementary Estimate for the Ministry of Food which we had last Friday instead of voting in favour of it as he did.
How can we reduce the present expenditure? We all agree that the interest on the war debt, the war pensions, the increased old age pensions, the land settlement grants and other grants for ex-service men, and the increased salaries to necessary civil servants, must all be met. It is necessary, however, for us to remind ourselves that expenditure is governed by policy, and that it may be increased by that policy being carried out in an extravagant way. Take the Army, Navy, and Air Force. The expenditure on those Departments depends on Government policy. We wasted £100,000,000 in Russia, and that was Government policy. We are wasting millions now in Mesopotamia. We are told it is to be checked. We are told that the Supplementary Estimate this year for Mesopotamia is £16,000,000, but I would like to ask whether, in addition to that, we really ought not to debit against Mesopotamia large quantities of stores which have been sent there, which had previously been bought by the Ministry of Munitions, and which if they had 2542 not been sent to Mesopotamia would have been sold in our surplus store, and so brought revenue into the Exchequer. Then we are committed by Government policy to something in Persia. We have paid through Government policy for hiring a Greek army to fight the Turks in Anatolia. We cannot afford money for these things. To save the world from bankruptcy, armaments must be universally stopped, and we must take the lead.
With regard to domestic legislation, it is clear while all of us desire to advance social reform for collective benefit, it is impossible for us at the moment to foot the Bill. Speaking personally, I entirely agree with every word the hon. Member for Oxford said with regard to education. The increased salaries of teachers must be paid, so far as the Education Vote is concerned. But I entirely agree with what he said with regard to the Bill of 1918, apart from that particular point. We must, in fact, examine our whole programme, proceeding with that which is absolutely essential, and postponing the rest until better days arrive. We have been told to-day that certain Ministries are to go. With regard to others, their staffs must be cut down without delay or favour. It has been my privilege to act as chairman of one of the Government Economy Committees, and my Committee have examined the Department of Overseas Trade. Now that Department is exercising a most useful function at the present time. It is assisting in developing our overseas trade, and is giving considerable help to the traders of this country. But I was appalled, in examining that Department very carefully, at the limitless possibility of expansion, and the danger that bit by bit, pound after pound might be added to the expenses of that Department. I believe that that Department could give 90 per cent. of its efficiency to the nation at half its present cost, and I do suggest that in these days, when we want to save money wherever we can, we should be content to accept 90 per cent. of the efficiency and so save a considerable number of millions. I believe that this would apply to many other Government Departments, and I especially commend to the right hon. Gentleman's consideration the Ministry of Labour.
As one who has worked on the County Council and in Parliament for over 11 years as a social reformer, it gives me 2543 pleasure to make a speech like this. Nothing would give me greater joy than to be able to support all these benefits for the general community which are suggested both here and elsewhere. But it is no use our living in a fool's paradise, or putting our head in the sand and pretending there has not been a war. We have expended millions of pounds' worth of our national possessions in the fight for right against might, and it has left us, though victorious, a poor nation. The first duty which devolves upon us, as the elected representatives of the people—and it is a duty which we must accept, if we are to be an example to the other nations of the world who are looking to us for a lead—is to create a spirit of good will throughout the nation, so that by pooling our capital, skill, ability and industry, and by sharing the resultant profits in a fair and equitable manner, we may work our way out of the present financial difficulty and regain the prosperity which was ours before the War. When we have done that, let us go full-speed ahead with all the measures of social reform which the wisdom of Parliament may deem advisable. In the meantime, by national and personal economy, by the industry and good will of all classes, we must fight our way through the after effects of the War in as resolute a manner as we fought through the War itself.
§ Mr. G. LOCKER-LAMPSONI am rather disappointed that this Debate should have taken place more or less under the influence of certain incidents which have occurred outside this House, and which was a good deal reflected in the temper of this House yesterday. I should have been glad if a Debate of this sort could have taken place without any other kind of influence except a genuine desire to see that the Government were brought to book for their past expenditure. Quite apart from that, I must confess I am very disappointed at the speech of the Chancellor of the Exchequer this afternoon. I do not in the least want to attack him personally, because I have the very greatest respect for him. But, after all, he is the Minister responsible for expenditure, and he is the Minister in the Cabinet who, presumably, ought to bring all the influence he can to bear upon his colleagues, the chiefs of the various Departments, to cut down 2544 any expenditure which they possibly can cut down. I took down one or two of the words of the Chancellor of the Exchequer. He said that the House would be reassured by the Estimates. I do not think we are going to be in the least reassured by the Estimates. So far as I can gather from his speech, there is absolutely no promise whatever that taxation is going to be reduced. He certainly has told us that certain Ministries are going to be abolished. He has told us that the Shipping Control Department is going to be abolished, and also the Munitions Department, but he also proved to his own satisfaction in his speech that those Departments cost him very little indeed. He showed, in fact., that they were costing only a million or two, and, if that is the case, the abolition of these Ministries is not going to lead to any noticeable reduction in taxation. He also held out the promise, which was very well received by the House-I was delighted to hear it-that no new expensive scheme is to be proceeded with until the Cabinet have thoroughly deliberated whether that scheme is necessary or not. That will not lead to a reduction of taxation, but is simply a promise not to increase taxation, if possible, in the future. So far as I can see, the House has no reason at all to be reassured by the Estimates we are likely to see in the near future.
He also said that there was no need to be gloomy. I think there is every reason to be gloomy at the present moment. I wish the Chancellor of the Exchequer had told the House what taxation was per head before the War and what it is to-day. I believe before the War taxation was only £2 10s. per head of the population; to-day I believe it is about £21 Os. I think there is every reason to take a very gloomy view of the state of affairs with this crushing burden of taxation upon the population at the present moment. Some very serious figures were brought out the other day by a gentleman who has really devoted the whole of his life to getting out this kind of statistics, and he showed that before the War 8 per cent. of the national income was being spent on Government service, and that every year the people of this country put by 15 per cent. in savings. To-day, instead of 8 per cent., no less than 30 per cent. is being spent on Government service, and, instead of 15 per cent. of the national 2545 income being put by in savings, only 5 per cent. is now being put by in savings every year. Therefore I certainly do not agree with the Chancellor of the Exchequer that there is no reason to be gloomy. There is every reason to be gloomy at the present state of affairs. I exceedingly regret that no limit has been put upon what the Government may spend year by year. I believe it is a figure that could be arrived at. Therefore, with my Noble Friend the Member for Oxford, I venture to put on the Paper an Amendment to the effect that there should be an Estimates Committee for the purpose, presided over by the Chairman of Ways and Means, who should say what amount of taxation the country can bear year by year.
After all, the Cabinet as a whole is responsible. The Chancellor of the Exchequer is one of the most important Members of the Cabinet. The Government as a whole is responsible. Look at the case of the Health Bill which was brought in the other day. We were told some time ago when we were expecting this Ministry of Health Bill that it was being delayed because the Cabinet were considering and examining it very carefully to see what was absolutely necessary to put in it. They bring it in. When the House threatens to defeat Ministers, the Leader of the House tells us that the Bill can be quite easily dropped. Why did not the Cabinet in the first instance, when it was examining this Bill so carefully, make up their mind that the Bill was unnecessary at present? If the Government have got economy so much at heart why did they pass this most expensive Bill in the first instance? Why did they only discover that the Bill could be dropped when their own supporters threatened to vote against them? It really looks—and I say this sincerely—as if the Government were only economical when they were scared into being economical by Members of the House or by the fear of being defeated in the Lobby. I believe that saving can take place in pretty nearly every Department of State. As a great many hon. Members desire to speak I shall only use a very few of the notes I have and I intended to use, but I should like to make one or two observations on one or two Departments and to give one or two instances out of the hundreds I think I could give to show where saving could be made to-day in the various departments.
2546 I will not deal with the Ministry of Food because we are told that is going, and it was dealt with very fully the other day, when the Government were very nearly beaten on the Division. I will not deal with education, because I understand now that the Government are not going on at the present moment with what may be called the Fisher scheme. Take the Pensions Department. Here is another case very much like that connected with the Ministry of Health Bill. There is to-day a Committee inquiring into the methods of administration of the Pensions Department. There has been, as everybody knows, a tremendous amount of dissatisfaction with what is known as the regional system of administration. Files are sent over the country and very often lost in the post, sent backwards and forwards to and from London, and the cost is very great. There is an inquiry going on into the whole of that with the idea very possibly of scrapping the whole thing that has already cost millions.
When that policy was inaugurated, did the Cabinet go into that question and really make up its mind as to whether that expensive regional system was necessary or not? The cost of dividing the country into these regional districts must have been simply enormous. For instance, you have in Leeds alone a staff of 575 persons costing £120,000 a year. The staff at the Ministry is still increasing. I find by looking at the official papers-I will not give the total numbers-but during the last month the staff of the Pensions Ministry has gone up 195. When a question w as asked in the House the Minister said that the increase in staff was due to hospital staffing expansion. Why on earth should hospital staffs be expanded two years after the Armistice? Take the Ministry of Health. I suppose that there issues from the Ministry of Health day by day some of the most expensive schemes this country has ever seen. Take, for one thing, the housing scheme. Members may think my point a small one. That is not so, because nearly everybody knows that in the expenditure of local councils on housing everything over a penny rate has to come out of the Exchequer. At the present moment local councils are being forced into the most expensive schemes by the Ministry of Health, into schemes they do not want.
2547 I have two letters. One is from a rural district councillor in Herefordshire. He says that the agricultural population is decreasing, that they do not want a housing scheme, that the houses would not be occupied, and they soon would be derelict. Yet their own scheme, on a much smaller scale, has been absolutely overridden by the Minister of Health. The Ripon Council apparently control a great many concrete Army huts, and a very 'large parade ground, giving plenty of ground for allotments to the houses, which it is possible to complete for £200. Yet the Minister is forcing upon that Council a most expensive scheme for houses that will cost over £1,000 apiece, every single penny of which, over a penny rate, will have to come out of the Exchequer. Housing is only one of the schemes flowing from the present policy of the Ministry of Health.
Before I sit down I should like to say how very disappointed I am that apparently very little is going really to be done to reduce expenditure at the War Office at the present time. It is almost impossible to know where to begin or end with the Secretary for War. Let me give a couple of instances. There is on the Tigris an enormous water transport service going on at present, and which is not absolutely necessary. I have had the advantage in the last week or two of talking with one of the most capable experts in the Kingdom. These ships that belong to the Government were sold the other day for £2,000,000 to people on the spot to carry on their ordinary trade on the Tigris. At the last moment the Government held the ships back. They have never been delivered, and the deposit on that £2,000,000 has had to be refunded. I say that the whole of that service ought to be abolished. At the present moment, it is costing about £2,000,000 per year for the upkeep, fuel, coal, supplies, and so forth. A great many of these ships at the present moment go up the Tigris with only one general on board. Every single staff officer out there thinks he has a right to a ship of his own of that enormously expensive transport service. The thing is an absolute scandal. I hope the Chancellor of the Exchequer will look into it. £2,000,000 perhaps is not much in view of the vast sums that are being spent, 2548 but I give it as an instance of what I am driving at.
Let me give another instance. Take the Scottish command at the present time. It numbers one cavalry regiment, three regiments of infantry battalions, and some 2,000 or 3,000 Territorial recruits, with a few skeleton regular depots which are practically negligible. I wonder what the House thinks necessary to train and administer that very small force? Let me tell them. At the present moment, for the training and administration of that very small force the War Office has got in Scotland one lieutenant-general, two major-generals, two brigadier commanders—shortly to be increased to six—and 48 staff officers of various departments and grades, including one field officer who is in charge of the air-craft. They have also got in Edinburgh a garrison adjutant with a headquarter officer, and a large number of staff officers. All that is wanted there is a small travelling committee to cut down any extravagant and unnecessary expenditure. What attempt is the War Office making to cut down its swollen and unnecessary staffs? The War Office Department has 7,767 more than it had in 1914, before the War. Not long ago 30,000 feet of vacant ground was vacated by the officials of a Government Department, and I asked what was going to happen to that ground and whether the huts would be cleared away. I was told that they were not going to be left vacant and that they were going to be occupied by War Office staffs, who were removing from requisitioned business premises.
I hope the Chancellor of the Exchequer will not be afraid of his colleague at the War Office. We all know that the Secretary for War has a formidable personality, but I do not think the House is afraid of him, and I hope the Chancellor of the Exchequer will not be afraid of him, and allow him no more latitude than he allows to the Minister of Health or any other Minister. These arc only a few instances of extravagance, and I could give a great many more. I hope that before long we shall get some limit to this expenditure, and I cannot imagine a better way than that the Chairman of Ways and Means and a Committee of this House should sit upon the question of taxation in this country, and the 2549 amount we ought to be called upon to bear. If an emergency arises the Government can always come here, and this House will always give the money if the Government makes out a good case. It is only by tying the Government down to a particular limit, unless some great emergency arises, that we can hope to stem the flood of prodigality that is going on at the present time.
Lieut.-Colonel BUCKLEYWhatever feeling the House may have on the subject under discussion, there is one point in regard to which we shall be in common agreement, and that is that the need for this Debate is very real and urgent. There is an impression in the country that this Government means to pursue its legislation with a complete disregard for the existing financial situation, and it is quite time that impression was removed. I think this House, and the country generally, will welcome the assurances we have had to-day from the Chancellor of the Exchequer. Although I must confess that I do not share his optimism with regard to the realisation of the current year's estimates, I am glad to see there is going to be some measure of economy shown. There has been so much limelight thrown upon this subject that I think we want now to look at it in the right perspective, and get a clear idea of what is meant by economy. Everybody is talking about economy, because it interests them, just as it interests people to talk about their health, and most of them are talking about it with about the same amount of knowledge and the same amount of ignorance.
9.0 P.M.
We find ourselves in two schools. There is the economist who always says, "No" to everything and the economist who always says "Yes." We have to try and steer a middle course between the two. When I first went into business I knew a bank manager who had a great reputation for firmness and sagacity because he always said "No" to every proposition which involved the smallest amount of risk. Of course, it was only a question of time when his bank had to be absorbed by a larger institution. The science of economy covers a very wide variety of ground, and one of the branches of economy is the utility of the services which are rendered. Everybody is blaming the Government today, and let us see what the Government 2550 have done. The real cause of our difficulty is the fact that we have been involved in a world war, and that it is not yet over. Whilst it was going on, the Government was forced to live on its capital and its credit, and I maintain that under the circumstances it was sound economy to do so. As soon as the War was over it was bound to go on living on its capital and credit in order to consolidate the efforts of the War, and to try and get trade back to the ordinary channels and to find employment for the men coming back from the Army, and to carry out measures of social reform which had been postponed for five years by a complete stoppage of all social and economic measures.
Although I do not agree with all those methods and the manner in which the Government has carried out its policy, I do urge that what this Government has done is to save the country from revolution and that, after all, has been the soundest piece of economy of all. We have to take stock of the situation. We cannot go on living on our capital and credit and spending more than our income. We have to take stock of the existing financial situation because it is really very acute. In order to completely understand this point let me analyse it. There has been a great deal of inflation owing to the War. Following on the War and the process of inflation, we had to proceed with a restocking process to reap the benefits of trade which we thought were going to accrue. We were encouraged by the banks who did everything they could to stimulate enterprise, so that people could get their businesses going. That has all failed because the aftermath of the War was much more complicated than we imagined it would be, and our markets have failed us. I was surprised to find the Chancellor of the Exchequer so optimistic, and he made so little mention of this point We are in this position that in most of the trades of this country practically a state of moratorium exists
The hon. Member for Norwich referred to the holding up of goods for high prices. That is not the difficulty to-day. The trouble to-day is not a question of realising high prices. It is that you cannot sell at any price, and that difficulty has been brought about largely by the fact that deflation has been proceeding far 2551 too rapidly, and there I disagree with my hon. Friend who talked about diminution of the necessarily high cost of living. We are not going to solve all our problems by bringing down the cost of living. What we have to do for the time being at least, in my opinion, is to check deflation and keep prices up. I should like to quote from a letter to the "Times" a few days ago by a well-known economist who points out far better than I can the dangers of deflation. He points out that "at the Brussels Conference Lord Chalmers said it was the British policy to bring about a large deflation of prices and a return to normal conditions." Let us see what that means. If we were to return to normal conditions, by which I presume are meant 1913 prices, "the national income would decline from £4,400,000,000 to about £2,500,000,000. If the national income should decline to £2,500,000,000 and the expenditure on national services be maintained at its present level, that is, £1,350,000,000, these services would call for 54 per cent. of the national income, wages would have to decline rapidly and ultimately reach a level of approximately 50 per cent. below their present standard. What prospect is there of such a fall in wages?" Let me give another illustration to illustrate the extreme danger of the existing situation. The process of borrowing which went on during the War has caused an inflation both of bank deposits and bank loans. This is what the position is. All these deposits in the bank are payable practically on demand whilst the loans on the other side of the account are backed up by securities which are constantly falling in value, and if anything like a bank run set in—I grant that it is almost inconceivable—the disaster would be wholesale, with a scale of unemployment which I dread to contemplate.
It is very easy to analyse the situation. Everyone is doing that. It has been very completely and well done to-day by most of the speakers. But it is no good analysing the situation if the analysis does not help you to suggest some remedies, and I am going to try to suggest one or two. Some of them may even not be worth discussing, but it seems to me that to-day we are all like drowning men clutching at straws, and anyone who can come along with anything which will help to alleviate the 2552 situation is the person we want. I suggest, first of all, that deflation should be checked by encouraging the banks not to contract their credit, but to extend it. Then I suggest that the question might be raised as to the lowering of the bank rate. I have never been quite able to understand what was the object of putting it up to 7 per cent. Everyone knows what the object was in pre-War days under the old system of credit, and how the bank rate operated successfully to check foreign exchanges, draw gold into the country and stop speculation. But that does not obtain now. The whole situation is in the hands of the banks themselves. If they want to stop credit, they can do it. They do not need to put the rate of interest up and force the Government to go into the market borrowing money at higher rates.
Then I think something might be done in regard to the foreign exchanges. This country used to live by exchanging its goods with almost every country in the world. You have only to look at the map to realise that, and you have only to consider the state of the world to-day to realise what a very serious thing it is for us that our markets have failed. The great difficulty is that we are in a position to sell, and no one is in a position to buy because the exchanges are too high. I find myself here divided between two schools of thought. There is the school that says: Leave things alone. Leave the economic machine to adjust itself in its own way, and that, after all, is the right way. But the time is so serious that we want to try to follow some other method if possible, and I think there is one course that might be followed. I do not pretend that it is a very satisfactory one, but in all the great trading countries of the world there are men who are accustomed to international trade. There are men in Germany who are accustomed to trade with this country, and there are men in France who are accustomed to trade with Austria, and so on. If these people could be got together—business men, accustomed to large transactions, with all the ramifications that international trade brings in its train and asked to formulate some scheme of credit -insurance therein we might find something to help us out of the very great difficulty we are in with regard to our foreign exchanges. Among the disappointments I felt in listening to the 2553 Chancellor of the Exchequer was the disappointment that there was no pronouncement as to the future course of taxation. There is no doubt whatever that trade to-day is very sick because it feels it is overburdened with a disproportionate burden of the national expenditure, and the Budgets of the last few years have ignored what I may call the mentality of trade. There is a great deal in that. I do not say that the Excess Profits Duty has killed the trade of the country because that would be folly, but undoubtedly it has adversely affected the mentality of the trader. He is disappointed. He thinks it is not worth while embarking on fresh enterprises. He is what we used to call in the Army fed up about the whole thing, and it is very important. There was a gentleman a few years ago who wrote a very learned book, as far as I remember, to illustrate the fact that the periodicity of trade crises occurred in accordance with spots on the sun. We all know we are always more hopeful in the springs. Things are always better in the spring, and I urge the Treasury to bear in mind what effect is made upon the mentality of the trader by the system of taxation.
I should like to say a few words with regard to currency, because here I feel that we are at the rock bottom of the whole situation. One of the greatest difficulties we have is the constant fluctuation in the value of the pound, not only abroad, but in this country. The pound to-day is merely worth what it will exchange for. Therefore its value is constantly changing between one trader and another. I spoke in this House about a year ago on the same subject, and suggested that the issue of currency should be based not on the requirements of the Government but on the requirements of trade. I believe that has been done, but it is very difficult for us laymen outside the charmed circle really to ascertain what the system of the currency issue is and how it operates. It is one of the most difficult and complicated subjects I know to-day. I suggest that the Government should reassemble the Committee, which sat in 1918, to consider the whole question of currency and foreign exchanges. It issued a most admirable Report, and I think the time has come when it should be asked to meet again and reconsider the new situation which has arisen in the few years which have 2554 elapsed since the first Report. There is something to be done there. An eminent banker, speaking in Liverpool a few days ago, advocated the establish meant of a gold exchange standard, or, in the alternative, a sterling exchange standard. I do not think that at the moment either of those courses is feasible, but I feel that they ought to be considered; and the question might also be considered of basing our currency upon the system obtaining in America amongst the Federal Banks: One thing about which I am satisfied is, that we shall never get stability of prices, nor anything like a real standard of value, until the currency is transferred back to the Bank of England, as it was in pre-War days, when the whole scheme operated so successfully.
The hon. Member for North-East Derbyshire (Mr. Holmes) spoke of the effect of taxation on national saving, and pointed out, quite rightly, that a gradual transference of capital is going on. The captains of industry no longer look forward in the future to so large a share of the profits as in the past. I agree with that. That process began during the War, when there was an immense transference of purchasing power from those who were accustomed to have it to those who were not accustomed to have it. What have they done with the money? It is true that their surplus earnings are probably of no great amount to-day, but that is merely an unpleasant phrase, and the time will come, sooner or later, when the new wage-earning class will have money to save. What are they going to do with that money, which is a source of saving that has never yet been tapped? These people are not catered for. The Post Office Savings Bank allows 2½ per cent. interest; it will only accept £50 in a year, and not more than a total of £200. Moreover, anyone who has had dealings with it knows that you are treated like a criminal if you want to have anything to do with it, and like a murderer if you want to draw any money out. It would get a great deal more money if it were brought up to date, and if it allowed a higher rate of interest. The results are most disappointing. In July, 1914, it had £180,000,000 worth of deposits, and in July, 1920, only £261,000,000. Its depositors had increased in number by 40 per cent., and its deposits also had increased by 40 per cent. Then there are the 2555 Trustee Savings Banks, whose results are very little better. They only have today £72,000,000 worth of deposits. They show an increase in depositors over pre-War days of 15 per cent., and in deposits an increase of 33 per cent. The third resource is the Joint Stock Banks, but people will not go to them for many reasons. The hours are inconvenient, they do not understand the system, and the whole thing is not catered for.
These people ought to be catered for. I may be told that they put their money in War Savings Certificates, but I do not think they do. War Savings Certificates amount to £426,000,000, and they are by no means all in the hands of the wage-earning classes. I have a War Savings Certificate myself, and I wonder if my right hon. Friend knows what it is costing the Treasury. As far as I can make out, it must be costing in interest 9 per cent. or 10 per cent., taking into consideration the fact that I do not pay tax on it; and there are hundreds of others who have such certificates likewise. I would suggest that the Government should consider the advisability of increasing the rate of interest on deposits in the Post Office Savings Bank, and of improving its facilities. They might also issue small bearer bonds somewhat on the lines of the French Rentes. The moral effect would be good. Give a man a small bond, make it payable in cash on demand at any time without accrued interest, and attach to it coupons that he can cut off, and you convert him into a capitalist. When he cuts off those coupons and goes to a bank to collect them, he gets a feeling that he has never had before, and he begins to realise that there is something to be said for capital after all. I cannot help thinking that we are reaping to-day the results of the bad financial policy which has been pursued by the Governments of past years The evil crept in in the time of Sir Henry Campbell-Bannerman, in 1906. I was reading Macauley the other night, and came across a passage which seemed to me to be so wise and so apposite to the considerations that are now before us, that I cannot refrain from quoting it. Writing in 1844, Macauley said:
The real statesman is he who, … when great pecuniary resources are needed, provides for the public exigencies without violating the security of property and drying up the sources of future prosperity.
§ Lieut.-Commander KENWORTHYI have only two points to make, and will make them as rapidly as possible. With regard to the Navy, we have had an important declaration by the Chancellor of the Exchequer to-day. My feeling throughout this matter has been that, while things are as they are, we must have efficiency at sea, and I bitterly resent the fact that money is being spent on the Army to-day for what I believe to be no good purpose, while there will be a danger in the lean years to come of the Navy being starved. The Committee which is being set up must not be set up by the Admiralty, or it will be coloured by the Admiralty, which is dominated by people who have been brought up in one idea—the idea of the great ship built in the days when we were a rich country. That may he a good idea or it may be bad. A committee of experts will be set up to look into it, but it should be set up by the Committee of Imperial Defence and not by the Admiralty. It must include the most distinguished and efficient naval experts, our best scientists and shipping experts, but they should be appointed by the Committee of Imperial Defence.
My second point is with regard to the remarks made by the right hon. Gentleman the Member for Miles Platting (Mr. Clynes) with regard to Russia I am not going in to the details of any trade agreement, but it affects our finance vitally Our Government has been converted at the moment, but possibly it may be too late. The people in Moscow may have got, to use an Army expression, "bloody-minded," and may refuse to deal with us. A very prominent American financier has just come back from Moscow, and there is lively to be a very great trade between Russia and the United States. The United States, however, cannot fulfil the requirements of Russia. With regard, for example, to the question of transport, Russia to-day needs 17,000 locomotives, and the output of the United States over and above the needs of their own railways and they are short of transport, too—is only 4,000 in three years. That means that we must come in to help. If Moscow thinks to-day that it can do without us and our manufacturing resources, it is making a great mistake. I fear, however, that we may possibly have been too late, and that military victory may have gone to their heads. In case any words of mine may possibly reach outside the 2557 walls of this Chamber and across the seas, I want to make an appeal to them to have patience with us, in spite of the ridiculous and ungrammatical articles by the Minister of War in Sunday newspapers. He has a following of about 20 people in this House and a following of 20,000 in the whole of England. He does not represent. England at all. The Prime Minister has been right on this matter. This House will support him, and the country will support this House in this matter of trade with Russia. The problem is for the other side
§ Mr. JESSONWhat is Russia going to give us in exchange?
§ Lieut.-Commander KENWORTHYThat is a question of trade. I am dealing entirely with the financial question now. I can discuss that with the hon. Member at length at any time. The Americans see that they can get something, and so do the French. I hope we have not been too late in this, and that, even if little difficulties are being made on the other side, we shall meet them if we can. A lot of bitterness has been caused in the minds of certain people in Russia during the last two years, but I hope that they now realise that we are in earnest and will meet us half-way.
§ Sir ERNEST WILDThis Debate technically is a discussion whether the Estimates should be fixed at a fixed sum throughout the year or whether we should express, in the words of my hon. Friend's Amendment, a pious hope that we should reduce them to the utmost extent possible. I notice the Debate has ranged over the whole field of what is called in journalistic colourings "squandermania," and my hon. and gallant Friend (Lieut.-Commander Kenworthy), who set us an example, perhaps for the first time, in brevity, finished by raising the question of the support which the Minister for War has. May I say he has 20,000 supporters in Dundee alone? We are here to assist the Government and the Chancellor of the Exchequer in the great call for economy that has been raised, and I am perfectly certain that this Debate—and I have listened to practically the whole of it—has been fruitful because, if I may say so, it has been eminently practical. We all agree that economy is essential where practicable. The Debate has done one thing: It has elicited a most statesmanlike speech from the Chancellor 2558 of the Exchequer with regard to the collective decisions of the Cabinet. To sum up the Debate from the ordinary backbenchers' point of view I think one way in which the House can help in the question of economy is by being very jealous of expenditure. Of course, the whole system at the present time is a ridiculous-one. You have your Committee to decide which Vote should be discussed, and when that Committee has decided you should discuss certain Votes, you then spend three hours in perambulations through the Lobby without a word of discussion. That is not the way any business man would carry on.
I certainly feel a great inclination in favour of the original Resolution, although I am not going to vote for it. If it were practicable, there is no reason why the expenditure of the State should not be fixed just in the same way as an ordinary householder would fix his expenditure. That is what we all do in our own affairs, and if it were possible for the Government to do it, it would be a good thing. But I do not think, for reasons that have been given in this Debate, and which I do not intend to recapitulate, it is a practical policy. First of all, if you were to fix a sum, that sum would, of course, become the minimum. Then there are the ordinary emergencies that arise, and which must from time to time necessitate Supplementary Estimates. We can best help our constituents and the Government by being particularly jealous with regard to these Supplementary Estimates. I notice that process has been applied during the last week. I am perfectly certain the Government Bill in no way resent the House being careful and watchful guardians of the finance of the country. For these reasons, I do not think a financial maximum is possible. If it were possible I would have preferred the proposition of the Noble Lord to the proposition of my right hon. Friend the Member for South Molton.
I personally have listened with interest and attention and vigilance to the admirable speech made by my right hon. Friend the Chancellor of the Exchequer. He showed that the Government is on the alert with regard to the right principles by which economy should be brought about. It is all very well for us to castigate the Government. The real sinners in these affairs are the private Members of the House of Commons, and the worst 2559 sinners behind them are their constituents. We come here and give illustrations and make suggestions to the Government, but when our constituents begin to press us we are only human if we begin to press the Government. Let me take one illustration. All my hon. Friends will agree with me, because they have had experience of this kind of thing. Take the case of the retired civil servants who have got their pensions. They come to us and say "We cannot live on them. The cost of living has increased, you must help us to get them increased." Do we not all help? I con fess I have. There may be one or two financial purists in the House who have not. Each of these individual cases is a case of great hardship, and we bring pressure on the Minister and get him to introduce legislation or votes, and then when you get the cumulative effect of it you hold up your hands in pious horror and say "Look, what an extravagance!" Let us cast out the beam from our own eyes before we proceed to pull the mote out of the Chancellor's eye. What the Chancellor and his Financial Secretary are looking about for is practical suggestions. My hon. and gallant Friend (Lieut.-Commander Kenworthy) has certainly given his, and so did my hon. Friend the Member for Wood Green.
It is no good getting up this sort of newspaper stunt against extravagance unless you can come along with some practical suggestion for reducing cost. There has been an eminent but anonymous contributor to "The Times," who has contributed certain articles upon this question, with a view to encouraging the "Wasters," as we are called, to vote in the right direction. I read those articles, and the only two practical suggestions I could find in them were those in the article of to-day. His practical suggestion is that there should be, what is in effect, another Ministry, that there should be an examiner of Estimates attached to every Government Department. He goes on to say:
The cost will be small, but the saving may be great.But in giving his advice to his unwilling disciples, this expert says:The higher ground the forces of retrenchment take, and the less they allow themselves to be distracted by details, the more likely they are to win.2560 It is when we come to details that we find the real difficulties in regard to practical suggestions for economy. We are all in favour of economy in principle, but when it comes to practice it is a different matter. First of all, we have got to pay our debts. Next, we have got to honour the promissory note we gave at the General Election. I listened with very much interest to the speech of my right hon. Friend the Member for South Molton. It is all very well for him to say he was "dazed" by the great War. I suppose we were all "dazed" by the great War when we made certain promises on the platform. But most of us got here because we made those promises, and one of the phrases that was used was something about "a land fit for heroes to live in." I quite agree, and we are trying to live up to it. That being the case, what I want to ask in a sentence or two is this, where are you going to begin?With regard to the forces of the Crown, I am glad to find that that matter is to receive the careful consideration of the Cabinet. I sincerely trust that even in meeting this cry for economy they will not allow themselves to reduce the forces of the Crown in a manner inconsistent with public safety. But with regard to the question of Mesopotamia—and I am perfectly certain all my colleagues will agree with me—we are glad that that matter is to be considered with a view to trying to get out of Mesopotamia as soon as we can with safety. The fact remains that when we take away the War charges, the charges essentially attributable to the War, we are paying for the three services—the Army, the Navy and the Air Force—bearing in mind the difference in the value of the £1, less than we were paying in 1913. Can we economise in regard to the welfare of the people? I was glad to hear the Chancellor of the Exchequer say that the Cabinet Committee are going to consider not whether one wants a thing, but whether we can afford it. There are certain things which have to be done. I do not care whether one is called a "waster" or not. There are certain things we have to do and we shall have to do them or be dishonoured. With regard to the questions of Old Age Pensions and Education, although I quite agree there are certain ways in which education might be given more economically and more efficiently, yet I am not in 2561 favour of cutting down the Education Estimates, nor am I in favour of cutting down the grants for police, health, insurance, war pensions, agriculture, and matters of that kind. They are all matters with which we must deal, although, of course, we can deal with them with one eye on the public purse.
I was very interested in hearing speeches from the right hon. Gentleman the Member for South Molton and of my hon. and learned Friend the Member for Oxford City who respectively moved and seconded the Resolution now under debate. It was very interesting to see that they were prepared to jettison certain things, and I was reminded of what was once said, "I will sacrifice legislation, won't you sacrifice health and housing, and so on." We cannot afford to sacrifice these things. My right hon. Friend the Member for Miles Platting (Mr. Clynes) used a phrase in reference to people's rights. We certainly shall not be right if we do not carry out our pledges with regard to health, housing. agriculture, pensions, and matters of that kind. I for one, although I am as keen an economist as any man in this House, will never be a party to treating the people of this country as if they were mere machines. These are matters on which economy would be false economy. Subject to these considerations I believe that the Cabinet's decisions are on the right lines. May I, in conclusion, say one word upon the cry of economy? There is no cry that can be so easily raised and there is no cry so calculated to mislead people. It is a cry which appeals to every householder, every taxpayer and every ratepayer. That is all the more reason why this House should not be coerced by what I can only call a popular stunt. It is a disgraceful conspiracy, that has been organised by the yellow stunt Press. You had it first with regard to two discussions last week. There was a Supplementary Estimate in connection with the mining industry, and upon that Estimate certain Members, after considering the arguments, voted one way, whilst certain other Members voted the other way. It was a matter very properly brought up by an hon. Member who would be the last person to say that those who do not agree with his arguments are wasters or people to be pilloried in the public Press. Then there came a discussion on the Food Vote. It was not really a Supplementary 2562 Estimate at all. It was brought on because the Minister desired to take the opinion of the House. He said he was prepared to take a Vote for three months only instead of asking for the money. required for a whole twelve months. I only want to say for my colleagues, on which ever side they voted, and whether they voted at all or not, there is among them no man who would desire to make political capital out of hon. Gentlemen exercising their best private judgment in the interests of their constituents. If this sort of persecution is to be tolerated, it means that on any reduction, by whosoever proposed, backed by whatever arguments may be put forward, if I do not go into the Lobby in favour of it I am to be pilloried as a waster and to be assaulted by postcards and matters of that kind.
§ Mr. BILLINGDo not take it so seriously.
§ Sir E. WILDIt is not a matter for levity. It was said, for instance, that eleven of my hon. Friends who happened to vote for one Supplementary Estimate and against another had "seen the red light." We have been told that "the wasters are nervous" and that this "is the acid test," and the Noble Lord who never enlightens the Debates in his own Chamber has had the impertinence to issue what he calls a Squandermania Number.
§ Lieut.-Commander KENWORTHYIs it in Order for an hon. Member to attack in this House a Noble Lord who is a Member of another House?
§ Mr. DEPUTY-SPEAKER (Sir E. Cornwall)The hon. Gentleman has not said anything which I consider out of Order.
§ Sir E. WILDI can understand my hon. and gallant Friend's solicitude for the Peers. I think I shall carry the House with me when I say we are not going to submit to this fresh Council of Action. It is not cricket; it is baseball. Having said what I wanted to say, and I wanted to say it very badly, for I thought it time somebody should stand up in this House and denounce this sort of treatment. I will conclude by remarking that our duty—I know it is my duty—is to continue independently to criticise these matters most vigilantly, to try and get rid of control as soon as possible, to get rid of Government Departments, because they 2563 never could do business, and to watch over official extravagance, but not always to be making cheap gibes against Civil Servants. I think a phrase was used by the right hon. Gentleman opposite which he will regret. He said that Civil Servants were "safe in their dug-outs.' I am afraid that sometimes when we desire to catch popular applause, to which the "Daily Mail" is always playing, we say cheap things which are unworthy pieces of criticism against Civil Servants who, after all, are doing good work. Above all we must cut our coat according to our cloth. I think the Government may feel glad that they have had more support to-day than possbly they thought they would get. It is often their own fault that they do not get more support, because Ministers will get up and make such inordinately long speeches that they do not leave time for those of their supporters who would like to speak in their favour. At any rate, they have had the best of the decision to-day, not only in the admirable speech of the Chancellor of the Exchequer, but in some of the other speeches that have backed them up. We all have but one stewardship, and that is to our constituents. My constituents are perfectly welcome to watch their M.P. I hope what I have said to-day will be reported to-morrow, because we are responsible to our constituents and not to yellow journalism or its like. I shall continue, in common with my colleagues, to support the Government when they bring forward measures for the good of the people, and to vote against them if they do the reverse.
§ Mr. BOTTOMLEYI trust that I shall not sound too discordant a note when I dissociate myself entirely from the concluding observations of my hon. and learned Friend, just as I dissociate myself from the opening observations of the Chancellor of the Exchequer, both of whom have thought it essential to their case to cast aspersions upon the Press. [HON. MEMBERS: "No."] Well, upon that section of the Press, which I say deliberately, did more to win the War than all the politicians put together [Laughter.] My hon. Friends laugh. When you wanted men and munitions, it was the Press that got them for you, and if the Chancellor of the Exchequer is right when he makes his reference to the ignorant and irresponsible agitation in 2564 the Press, let me remind him that that particular section of the Press to which he refers has among its principal contributors Members of his own Government Perhaps the Cabinet will officially disown the propaganda for which some of their colleagues are responsible.
I intend to vote for the original Motion, and for the Amendment. I shall vote for the original Motion because it expresses a theory which is unimpeachable, that this House has the right to say how much public money shall be used for the services of the State. I shall vote for the Amendment because it is a general, but not an unfriendly, reminder to the Government of our desire to effect all possible economies in public administration. I listened to my hon. and learned Friend (Sir E. Wild) and to the Chancellor of the Exchequer. I wonder if I dare suggest that, but for this ignorant and irresponsible Press campaign, we should never have had that catalogue of camouflaged economies on which the Cabinet have resolved. What does it come to? We are going to abolish all kinds of War Ministries, subject to this qualification, that when we abolish them we shall transfer such functions that they have not performed to some other Department of State, and transfer to those other Departments the necessary staff to carry them into effect. That does not cut any ice with me. We are going to look into the case of naval expenditure. We are going to wait and see what are the lessons of the War, and whilst America and Japan are building day and night against each other, we are going to be still until it is once more too late. May I beg, with great respect, the attention of the Chancellor of the Exchequer to the question which I am about to put to him. If it be the policy of the Government to stand still in the matter of naval armament until we have digested the lessons of the War, and until America and Japan have finished their mad competition-I want to know, and I have reason for asking-has that policy the approval of the present First Lord of the Admiralty? There is no answer.
Mr. CHAMBERLAINI do not know whether my hon. Friend is entitled to challenge me, and then to proceed with an argument based on the fact that I do not immediately interrupt him. I will read what I said earlier on this subject: 2565
The Cabinet have, therefore, decided, and I am glad to say that the Admiralty welcome the decision, that the Committee of Imperial Defence shall institute at once an exhaustive investigation into the whole question of naval strength as affected by the later developments of naval warfare.The course which we have taken not only has the concurrence, but it has the hearty approval of the Board of Admiralty, and is welcomed by them.
§ Mr. BOTTOMLEYI am not speaking of the Board of Admiralty, but of the First Lord of the Admiralty.
§ Mr. BOTTOMLEYThat is true, but he happens not to have been present at any meetings lately. We will wait and see what happens. Having made my point, such as it is, about naval expenditure, I am bound to say, and I say it deliberately, that for this country, with its sea traditions, to stand idly by whilst America and Japan are building capital ships as fast as they can is at least a dangerous policy. What about Mesopotamia? That blessed word "Mesopotamia"! We are going to wait and see if we cannot establish an Arab Government and an Arab army. Does the right hon. Gentleman seriously tell the House that that is within the range of practical politics?
§ Mr. BOTTOMLEYThen the right hon. Gentleman had better wait and hear the maiden speech of the hon. and gallant Member for the Wrekin Division of Shropshire. [Hon. MEMBERS: "When?"] Members of our party get up when they like. There are no strings. There I will leave that point. I had put down a Motion that we should limit the Government to £1,000,000,000 a year, and I am sorry that I was not able to move it. I do not attempt to do so now, but I do say in all seriousness, having regard to what the right hon. Gentleman himself put forward, and having regard to the figures and calculations and the economical theories that have been expounded today, this House might well say that £1,000,000,000 a year is as much as we can afford to allow the Chancellor of the Exchequer to spend, and that we should call upon him to say to the various spending departments, "That is all the money you have amongst you." It might be and 2566 probably would be that the amount mentioned in the original Motion would be inadequate in this abnormal year, and it might well be that £1,000,000,000 would be inadequate if you take into consideration the reduction of debt; but what have we to do with the reduction of war debt? Heaven knows we are paying enough today. So far as the reduction of capital debt is concerned, this War was as much and infinitely more for the benefit of posterity than it was for our benefit, and there is no sounder theory in finance than to let posterity pay its own debts, if not ours.
If the country has been misled into misunderstanding the expenditure of the Government under the various heads of Civil Service, etc., it is entirely the fault of that clumsy idiotic system of bookkeeping under which the Estimates are presented to this House. The Chancellor of the Exchequer says that we have only a cash account, and that we have no capital account. We put on either side our receipts and our expenditure, and when you have a huge item called "Civil Service" which is reduced on examination to an infinitesimal figure, it only shows how misleading the whole of these accounts are. I urge for the Chancellor of the Exchequer's consideration the suggestion that he should bring in a chartered accountant of some experience to remodel the whole system of accounts as presented to this House. [An HON. MEMBER: "Remuddle?"] No, remodel. I want to make a serious and practical suggestion to the Chancellor of the Exchequer. The Noble Lord (Lord H. Cecil), who spoke this afternoon, had in his mind the idea of a Select Committee of this House, nominated by the Chairman of Ways and Means, to check public expenditure. That is no good at all. Such a Committee would meet and talk and talk, as we have been doing to-day, with no practical result. I suggest to the Chancellor of the Exchequer, as representing the Government, that there should be a small Committee of this House, consisting of business men of experience, who should be empowered by the House as a standing permanent Committee to visit any and all of the Public Departments whenever they liked, to see what was going on, to check expenditure, to check work, to check staff and other things, and to make a Report from time to time to this House.
2567 We have gone miles away from the subject under discussion. We have had a sort of supplementary Budget statement, a list of economies which the Government hope to effect some day. We have had nothing about economies in the existing Department. I am not going to talk about the waste of money on public printing, the Income Tax forms, the Stationery Department, the Education Department, the meaningless publications of no earthly use whatever. I came across one the other day. What it cost I do not know. It was sold for 4d., and my technical knowledge told me that it would cost at least is. a copy to produce. It instructed the schools of the country as to 200 games to be taught to children. What it began with I do not know. I believe it was a game called "Pop goes the Weasel." There was nothing about ducks and drakes in it. All these small items do not matter in a Debate like this. The Debate has at least had one good result. It has taught the Government that at last the attention of Members of Parliament is riveted on the public purse. It has taught the Chancellor of the Exchequer that we look to him, as the guardian of the public purse, to cut his coat according to his cloth. My final word is this. You may jeer and laugh as much as you like, but I am convinced it is true that we are indebted for this great awakening of the public conscience to the Press which, however ignorant and however irresponsible, you will find is a very big power in the days to come.
§ 10.0 P.M.
§ Sir D. MACLEANMy hon. Friend who spoke last told us that the notice that had been taken in the Press of the extravagance of the Government and of the very serious financial position in which the country is placed is very largely responsible for the changed attitude of His Majesty's Government with regard to this great question. I think that that is partially true, at any rate. What, after all, is the great motive and driving power which has brought about this great change? It is the meeting of business men all over the country and the resolutions which representative institutions have passed, and the consequent interview that took place between the Chancellor of the Exchequer and representatives of businesses of every kind, combined with the undoubted, glaring and 2568 obvious facts of the situation. My mind goes back to October of last year. We remember the optimistic picture which was then drawn by the Chancellor of the Exchequer and the glowing periods of the Prime Minister in winding up the Debate, and the splendid financial prospect that was opened up. But words do not count a bit as against facts, and the facts of to-day are—it is now widely recognized—that this country has raised a revenue which is far beyond the reasonably taxable capacity of the country. The Chancellor of the Exchequer made some references to my right hon. Friend and Leader (Mr. Asquith), and invited him and my right hon. Friend Mr. Runciman to a conference of a Committee which is going to sit on the question of the cost of the railways. I have had no opportunity of consulting either of my two right hon. Friends, but I am certain I can say on their behalf that they would gladly accept that invitation. May I ask this further favour of the Chancellor of the Exchequer? Will he give me an invitation to be present upon that occasion, because I am certain that, whoever may enjoy that function, I certainly shall do so? I know the position which my right hon. Friends take up on that particular question and the facts on which they stand.
One of the most important questions to which the Chancellor of the Exchequer can direct his attention is, what is the taxable capacity of this country? I agree that to some extent he may congratulate himself on the immense sum he has raised by taxation; but I would remind him of the axiomatic truth that a much greater pride for a Chancellor of the Exchequer is not so much the amount that he can wring out of the pocket of the taxpayer as the amount that he can leave in it. We are raising to-day nearly £1,500,000,000. I admit that a large portion of that, £234,000,000, is going to the reduction of the National Debt, and a very good thing that is. But by what circumstances is it accompanied? By falling trade, by rising unemployment, by a dislocation of credit, and, so far as Europe is concerned, by a world reeling into bankruptcy. The deathbed repentance we have had to-day was called for at least two years ago. The Chancellor of the Exchequer and the Government will get a huge Vote of confidence in the Lobby to-night. On what is it based? We had a very sound test on the 2569 Supplementary Estimates. Supplementary Estimates, on the whole, allowing for contingencies which cannot he foreseen, are the measure of the error of miscalculation on the part. of the Government and the Departments concerned. What is the margin of error for which the Chancellor of the Exchequer allowed in his Budget? It was £20,000,000 for the whole financial year. In July he got from this House £20,500,000, and in the month of November just passed he submitted Estimates, which no doubt he will get no matter what the arguments are, as evidenced on Friday last and on other occasions. He expects to get for the Civil Services, £9,400,000. He told us to-day that he expects to get for the Navy and Air £8,000,000 more, and for the Army, in round figures, a total of £40,000,000. Those three last figures added together amount to 2,53,000,000, so that for the year up to now we must take as an error of miscalculation that sum with the £20,500,000 previously given, making a total up to date of £78,500,000. But that is not all. When the House meets next year, and when we go through the usual process of the Spring Supplementary Estimates, what are those likely to be? I make a guess that they will be £20,000,000 —HON. MEMBERS: £50,000,0001"]—that will bring the total to £98.500,000 on Supplementary Estimates for this financial year, or nearly half the total pre-War budget.
That is a fine record of these guardians of the Treasury, and a splendid ground for the confidence of their supporters in the Lobby. But, as we know, that is not the worst of it. All this money of the Supplementary Estimates has already gone. You can go into the Lobby as a protest against it, but the House is helpless. Somebody has got to find the money. I do not know their means but am sure my right hon. Friends could not between them find the money for any one of these Supplementary Estimates. I cannot blame my right hon. Friends for that system which is the system we already have. The Supplementary Estimates represent money already spent, and what care, then, can we exercise in this grave position? Is it any wonder that the Government at last should realise the position? I say, and claim with confidence, that the agitation, to which the Chancellor has devoted such denunciation, of my right hon. Friend and of the Press, and on the platform, is thoroughly 2570 justified by the facts of the situation. What do the Government propose to do? They propose at long last to abolish some of these Departments. The Ministry of Munitions is at last to go, and Shipping and Food. I want to ask the Prime Minister, does the abolition of these Departments mean real demobilisation? How long is the winding-up process going to be? That is a question which I am entitled to ask on account of the experience of the past. Are these unnecessary officials going to find a further resting-place in any other Department? Departments have been demobilised and abolished, and, as-far as any relief to the Exchequer is concerned, it is not reflected in the Estimates or the general cost of living. If this abolition is to take place, let it be a genuine one, and then we shall begin to believe in the reality of the intentions of the Government on this most important question.
Let me say a word or two with regard to the most important statement made by the Chancellor of the Exchequer with regard to the Navy. I heard, and I am sure all my hon. Friends who are associated with me on this side, heard with a very great sense of relief that His Majesty's Government have determined that they are not going to be rushed into building capital or other ships which may be quite unsuitable for the purpose for which they are intended, and that they do not intend to be rushed into what we regard as wasteful and unwise expenditure, and that they will wait before anything like a general policy is decided on with regard to the re-building of the Navy, because that is what it really amounts to, until they have the substantially real agreement of this Committee they propose to set up indicating the lines on which that policy should go. I also regard it as important that this House should have a full opportunity of having those recommendations laid before it and of discussing them on the floor of this House.
§ Mr. BOTTOMLEYYou will have the biggest Navy in the world.
§ Sir D. MACLEANLet me refer to the original Motion which pledged the House to a specific amount. That seems to me to name a figure which it is very difficult to reconcile with what must be the position in March. What alternative have I 2571 left? I am going to register my vote against the Government as my only opportunity of expressing my approval of the policy of rationing, which is a real difference in policy. I want to emphasize that by what the Chancellor said last year. On the Second Reading of the Finance Bill in 1919 he said:
It is quite true that one section of Members call for economy here, and another section call for economy there. So on, over the whole sphere. The Chancellor of the Exchequer and the Treasury must shoulder their own burden, fight their own fight, and come out as successfully as they can. I tell the House frankly that my endeavour is not and will not be to fight my colleagues. On the contrary, my endeavour is, and will be, to secure their co-operation in their own Departments. If it be true that Treasury control is the essential of efficiency, yet to make Treasury control really effective, to make it produce the results you might secure, the help of the Departments themselves and of the Ministers who minister to them is essential to the Treasury itself.There my right hon. Friend was only following what I agree was the traditional line of the past. That is the line that has hitherto been adopted by Chancellors of the Exchequer. The time has come for changing that. The financial situation in this country demands that the financial position should control policy. You have often heard that policy must control finance, but the seriousness of the position does not require any emphasis of mine. Bankers are engaged to-day very largely in financing customers to pay the taxes of the Government. The taxable capacity of the country according to a very high authority has been reached. Many say that it has been exceeded. Here is a genuine difference of policy. Instead of the Chancellor of the Exchequer saying, "I cannot fight my colleagues, I will take the old Treasury way," the time has come for the Government to say, "the country can find a certain amount of money and no more, and the Departments must frame their Estimates according to the general position by which we intend to stand." Until that is done I am convinced that there will be no real general beneficial change in the Estimates which are submitted. So long as Departments can be reasonably sure that the necessary pressure shall be put upon the Chancellor of the Exchequer and that there will be a never failing majority in this House so long shall we have swollen Estimates and reckless Supplementary Estimates. The 2572 only use of spilt milk is the lesson which it gives us not to spill it again. I think that the House of Commons can do a great deal next Session and I invite hon Members to do a great deal on the Supple-tary Estimates this Session. But next Session what can it do? With a Budget which is seven times as large as it was in 1914, for we are spending over £1,400,000,000 now against £200,000,000 then, we are going to-
Mr. CHAMBERLAINI beg my right hon. Friend's pardon for interrupting him. He is a very fair controversialist, but when he makes that simple comparison, repeated constantly, that our expenditure this year is seven times, or whatever it may be, more than our pre-War expenditure, will he consider what the pre-War debt was and what is the present charged? It vitiates his whole case.
§ Sir D. MACLEANI said seven times, but I will say five times, if my right hon. Friend wishes. Whatever it is, we are going to devote for the Estimates the usual 20 days. How utterly impossible that will be. What I suggest to my right hon. Friend is this—and it is a practical suggestion—that next year we should shut down as far as possible all proposals for fresh legislation. I make that statement knowing that I shall not get the agreement of many people who often agree with me, but subject to absolutely vital legislation, I think we should shut down all fresh legislation next year, and let this House fling itself upon the financial situation as revealed by the Budget and the Estimates. Let us double the number of days; instead of 20 days, let us have 40 days for the Estimates next year. I am not arguing that that should be a permanent alteration in the rules of procedure, but we are face to face with a wholly exceptional position. If this House really means business, that is a feasible, practical suggestion, and it is only in and through this House that the financial situation can be really, fundamentally stabilised again. There can be no mistake about that. It can be done, if the Members of this House will realise what is their primary function. The foundation of this House and all its liberties and powers to-day is finance. They got them through fighting the Kings in the past, and they must use them in fighting the Executive now, no matter by whom the Treasury bench may be occu- 2573 pied, whatever Government is there. It is the duty of the House as a whole, and the Opposition in particular, to criticise, to bend all its energies to see that the finance of this country is put on a sound and stable basis, and as my last sentence I w ill use a well-known saying: "A sound system of economy is in itself a great revenue."
§ The PRIME MINISTER (Mr. Lloyd George)I quite agree with what my right hon. Friend said in his concluding sentences, that it is the primary duty of the House of Commons to exercise control over finance. It is the duty, not merely of the Opposition, but of every Member of the House, and certainly it is supremely the duty of the Government of the day. It is in that spirit that I wish to-night to approach the consideration of the very important problem which we have been examining in the course of this evening's Debate. It has been a very fruitful, and, if I may say so, a very sug-fruitful, and, if I may say so, a very suggestive Debate. Those who have taken part in it have taken care not to confine themselves merely to denunciation and condemnation, but each speaker in his turn has realised the responsibility that is cast upon a Member of this great assembly, which is the historic guardian of the revenues of the country, and has made his contribution and his suggestion. We have had but a very faint echo of the savage music of the jazz band outside. Although the chief performers in that band are Members of one or other House, I believe they have never yet performed within the walls of either this or the other historic assembly, where they could be answered.
We are all anxious for economy. It is a reflection upon Parliament to imagine that there is any section of it that is not anxious to economise in public expenditure. The Government have certainly every reason in the world to cut down needless expenditure, for there is no part of the population of this country which suffers so severely from heavy taxation as that which at the last election undoubtedly gave us overwhelming support. Even from a purely selfish point of view, therefore, apart from the recognition of a duty that is cast upon us, we should certainly do all in our power to cut down needless expenditure. But may I say that one of the evils of unfair, disproportionate and unintelligent 2574 criticism is that it diverts attention from criticism that is helpful. There is criticism that is helpful; there is criticism which I am not going to say is not necessary, but which if it causes the attention of the House of Commons and of the public to be concentrated upon something which is not fruitful, diverts attention from what is really fruitful. That is why I deprecate a good deal of the criticism that is passed outside. It is right that attention should be drawn to the gigantic expenditure which is such a burden upon the taxpayers of this country. Not merely is it right, but it is incumbent upon all of us to give our constant thought and best mind to it and if anybody has any criticism to pass upon any Government Department it is absolutely right he should do so, but the situation is far too grave to convert that into a mere sort of ragging conspiracy. It is a matter for grave, solemn and careful examination by everybody throughout the whole of the community, for we sink or swim together.
For that reason, I regret that an impression has been sought to be created that the gigantic expenditure of the country is attributable, in the main, to three causes. Take the Ministry of Transport. [HON. MEMBERS: "Hear, hear!"] Well, there are apparently followers of that theory here. There is the Education Act of 1918. [HON. MEMBERS: "Hear, Hear!"] The next is health. [HON. MEMBERS: "The Minister of War."] I am coming to that. I am just dealing with these three matters upon which the most of the criticism has been directed outside. I am dealing with facts. It really is no use when you are approaching a problem of this kind with a view to affecting improvements to get hold of wrong ideas. Take the three things I have mentioned. The total cost of the Ministry of Transport is £300,000. [HON. MEMBERS: "Too much!"] It may be, but at any rate it is not £1,400,000,000. It is a very small proportion of the larger sums, and if you were to cut it out to-marrow you would not solve your problem. You would not make an appreciable approach to it. I am not going into the question now, but my right hon. Friend has pointed out that you may lose a good deal more if you withdraw the supervision that is exercised. [HON. MEMBERS: "No!"] But let us assume for a moment that the 2575 criticism is right, and that it would be much better to have a small, inefficient, inadequate branch of the Board of Trade, rather than a Ministry of Transport, and that you would scrap. the whole of it, the saving would be £1300,000!
I come now to the second subject, the Education Act, 1918. Lot us get to the facts about it. The increase in the education burdens is not attributable in the least to the Act of 1918. I will tell the House to what it is due. It is due, first of all, to the enormous increase in salaries and cost of the materials. That is the main cost. That has nothing to do with the Act of 1918. We were confronted with the question of whether we were going to starve our teachers or dismiss them! I cannot think of anything more, dangerous—I will not say unjust—to society than to starve the teachers. Half-starved teachers have a good deal to do with Sinn Fein in Ireland. My hon. Friends from the North of Ireland, I think, will confirm that. It may have a mood deal to do with revolutionary doctrines here. That is the bulk of the increase. Somebody gave a very curious illustration in this connection. Salaries have gone up. School cleaning in the London area, which in 1913 cost £155,000, last year cost £574,000. This was for exactly the same services. If you raise salaries on the lower rungs of the ladder you are bound to do it all round. There is also a charge for demobilised officers in connection with education, but nobody would begrudge the payment to teachers who are demobilised officers. How does this affect the Exchequer? Before the War the Exchequer bore 45 per cent. of the burden of education and the rates 55 per cent. The burden became so heavy on the rates that appeals were made to the Exchequer, and now the figures are reversed. The Exchequer bears now 55 per cent. and the cost to the rates is 45 per cent. In the whole of that there is no increased charge from the Act of 1918. The total of that runs to £400,000 or £500,000 for continuation schools. The whole increase—I am taking England—running to some tens of millions, is attributable to the increased cost of materials and to the increased charges in respect of the salaries of teachers, and to the fact that we are contributing 55 per cent. of the cost of education from 2576 the Exchequer whilst 45 per cent. comes from the rates. Before the House can apply itself intelligently to the examination of this. problem it is essential that the facts should be known. Otherwise criticism is directed into the wrong channel, and is bound to be unfruitful.
When you come to the main charge, there is building, and that is a question of policy. The very people who have been charging us with wasting money are also the people who used to have headlines, asking "Where are the houses; why don't you build? We cannot find them anywhere; press along." The House can, if it choose, say we are not going to build houses until material comes down and we can build them more cheaply. That is a question of policy, and it is a very serious question of policy whether we are going to run the risks, and they are grave risks, of the discontent which comes from overcrowding and, what is still worse, from the difficulty of finding houses at all, a difficulty which increases every year. It is only those who have been running a Government who know the anxieties there are as to what may happen here and there. It is part of the duty of the Government to see that the population is contented, and anything which provokes discontent or intensifies or continues discontent is a serious peril to good government. What I want to point out is that in trade, in business, in prosperity, security is the essential factor, and contentment is an essential element in security; and the Government has to consider all these things when dealing with the finances of the nation. Do not let us run into assumptions which are false and based upon facts which are inaccurate. If we are going to cut down expenditure let us find out where the expenditure is.
§ Lieut.-Commander KENWORTHYThe War Office.
§ The PRIME MINISTERYou can cut down education. How? There are two ways you can do it. One I have already pointed out. You can cut down salaries, and get a formidable discontented class. I should be sorry to accept that responsibility, in the interests of good government as well as of fair play. The second thing you can do is to cut down the schools, extensions, improvements, new schemes, and not have this gigantic development. Those are the only things you can do. 2577 May I, when I am on this, say one word about the lessons of the War. We must not forget them. We fought the best educated democracy in Europe, and those who know the difficulties know how much of those difficulties arose from the fact that we were fighting a highly-trained population. Nor must we forget when we deal with health, that we had the largest percentage of unlit men of any population in Europe. That is a reflection upon Governments. I am bound to give these facts to the House of Commons. It might be better for the moment if I got up and denounced all educational projects and everything of that sort, but I should not be doing my duty to the House of Commons and the country unless I pointed out these facts.
I want to say one thing to the House of Commons. This is not a difficulty which is confined to this country. It is a difficulty which is experienced by every great country that has been engaged in this War. My right hon. Friend I will not say taunted us—but it was part of his criticism—that the expenditure of this country is seven times what it was before the War. It is six times without the £200,000,000 devoted to redemption of debt. Let us look at other countries. The Italian Budget is nine times what it was before the War. In the United States of America, which had nothing like the burden we had, it is nine times. In France, which had undoubtedly the heaviest burden, it is ten times. The other countries, whether allied or enemy countries, are meeting their difficulties by one or other process of borrowing. It is not merely that they are not paying their debt. They are increasing it. We are the only country that is paying its way. We are doing more than that; we are not only paying our way, but are reducing our debt. We are naturally anxious, and worried, and apprehensive, but there is not a country in Europe that is not full of admiration for the way in which we are facing our difficulties.
My right hon. Friend complained of Supplementary Estimates, but there is not a country in the world that is not getting Supplementary Estimates. Why? The world has not settled down. It is no use comparing the pre-War period with the present period. It is quite impossible. There is unsettlement in the world; you are not dealing with settled conditions. If we had the highest rank of 2578 statesmanship that my right hon. Friend can think of, drawn from the benches opposite—
§ Lieut.-Commander KENWORTHYHear, hear.
§ The PRIME MINISTERThere, at any rate, is one hon. Member who thinks he could do it. I have no doubt at all that he would print roubles! He would save the whole of the National Debt—he would pay it off—the whole thing would be liquidated! That is a very easy way of doing it, but at the same time I do not think it commends itself to the House of Commons. There are too many people like that outside. That is the real reason why there are Supplementary Estimates in France, Italy, the United States of America, as well as here. In the present unsettled state of the political and international atmosphere, you cannot quite forecast, at the beginning of the year, what the weather is going to be, and therefore it is quite impossible for you to plan your voyage and to say how much coal you are going to require before you will get through to the end. Supplementary Estimates are, therefore, inevitable until the world has settled down. I agree that the only expenditure where, as my right hon. Friend said in the course of his powerful statement, there is an opportunity of limiting the amount substantially, is War expenditure. Upon that the Government have stated their policy quite clearly and definitely to the House of Commons. My right hon. Friend stated what is the considered policy of the Cabinet. I listened to a good many of the speeches, and I never heard that any questions were asked from that bench. If there had been I should certainly have been very happy to answer them. With regard to naval expenditure, we have stated quite clearly what our policy is, and, as I understand, it is a policy which a good many hon. Members had in their minds beforehand, and which they suggested in their-speeches. Upon that there is agreement.
With regard to the East, where our expenditure has been heavy, I am quite prepared to defend the past, but what the House is concerned with is the future. I would only say this with regard to the past. We were in Mesopotamia when the present Government came into power. We 'might have cleared out immediately the War was over, and left that country for anyone to pick up; but that would 2579 have been the most grievous folly on our part. Do not let us make the mistake in a moment of depression, in a moment of very natural apprehension, in consequence of the heaviness of our taxation, giving up control which has been assigned to us by the Powers of the world with the full consent of the inhabitants of that part of the country, of a land which may be of the greatest value in the developments of the future. It has been one of the richest lands under the sun. It is a country of infinite possibilities. All it needs is wise direction, careful management, and that country may yet be a country that will fully requite us for all expenditure which has been put upon it. What is the policy which the Government is pursuing in the future? The policy we are pursuing in the future is the policy which we promised the Arabs to pursue-to set up an Arab State under a British mandate, with an Arab Police, an Arab Army, with a nucleus British Force; and gradually the resources of that country-I have no doubt carefully managed and developed-will be more than ample to maintain the whole of the expenditure, and it will be of value to the whole civilised world, and to no one less than to those who have undertaken the responsibility for the sake of civilisation. That is our policy. The rebellion is being crushed. The Arab State is being set up. I am very hopeful that next year will show a complete development along those lines. Not only can the forces be reduced, but they can be compressed to dimensions which I have indicated. That will be to remove it as a permanent charge upon the expenditure of this country.
§ Mr. BILLINGBefore the right hon. Gentleman sits down-
§ The PRIME MINISTERI have only five minutes. With regard to Palestine, there the forces have been reduced very substantially. There is a very able Governor there, and under his wise guidance I hope Palestine will soon cease to be a burden on the British taxpayer. These are the points upon which there is a possibility of reducing expenditure in the course of the current year. We propose to make it quite clear that with bad trade in front of us-
§ Mr. BILLINGCaused by Excess Profits Dusty!
§ The PRIME MINISTERIt does not matter for this purpose what it is caused by-I am dealing with expenditure. With bad trade in front of us, which is not confined to European countries-it is general throughout the world-with additional expenditure on the Exchequer due to unemployment-having regard to all these difficulties, this is not the time for developing even the most beneficent schemes, whether for education or health. Until the country has recovered strength, and until it has bridged over this period of exceptional difficulty, we will have to do much more marking time than any of us would really like to do. Then we propose to cut down our expenditure in the East by the processes I have indicated. We propose beyond that to very carefully the lessons of the War in relation to naval construction and the most efficient method of developing our naval strength. Finally, we shall go on scrutinising with the greatest care, the most relentless care, the estimates of every Department. We are doing so. We are devoting considerable time to that purpose, and I hope by this means, that we shall be able to reduce our expenditure to the lowest possible limits compatible with national security and efficiency. We are now examining the definite problem of expenditure. I am applying myself to that problem. I am quite willing to answer any questions which hon. Members may put to me, but my last point is this: we are exceedingly anxious to cut down general taxation where it can be done, not merely taxation that bears heavily upon industry and which must necessarily hamper industry, but we have every sympathy with the middle classes who not only made nothing out of the War, but many of whom have lost much, and to whom taxation means not only deprivation of luxuries, but actual deprivation of comfort and the essentials of life. One knows a good many of them. We are anxious, in the interests of all these classes, to do our best to cut down expenditure. We invite every suggestion that can be offered us. Many have been offered in some very able speeches by men who thoroughly understand the problem from a business point of view, and from Labour as well. We are anxious to welcome every suggestion and every assistance that can be given us, and I can assure the House, after sitting down 2581 with my right hon. Friends to go through these Estimates one by one carefully, it is a difficult problem-it is an almost overwhelming problem-and any assistance we can receive will be of the greatest value, not merely to the Government, but to the country as a whole.
§ Question put, "That the words proposed to be left out stand part of the Question."
§ The House divided: Ayes, 66; Noes, 321.
2583| Division No. 398.] | AYES. | [10.59 p.m. |
| Acland, Rt. Hon. F. D. | Gwynne, Rupert S. | Norris, Colonel Sir Henry G. |
| Ashley, Colonel Wilfrid W. | Hall, Rr-Adml Sir W.(Liv'p'I,W.D'by) | Rattan, Peter Wilson |
| Atkey, A. R. | Harmsworth, Hon. E. C. (Kent) | Rees, Capt. J. Tudor- (Barnstaple) |
| Banbury, Rt. Hon. Sir Frederick G. | Hayward, Major Evan | Remnant, Sir James |
| Barnes, Major H. (Newcastle, E.) | Herbert, Hon. A. (Somerset, Yeovil) | Kendall, Athelstan |
| Bentinck, Lord Henry Cavendish | Hoare, Lieut.-Colonel Sir S. J. G. | Rose, Frank H. |
| Billing, Noel Pemberton- | Hogge, James Myles | Roundell, Colonel R. F. |
| Birchall, Major J. Dearman | Holmes, J. Stanley | Stephenson, Lieut.-Colonel H. K. |
| Bottomley, Horatio W. | Hopkinson, A. (Lancaster, Mossley) | Thomas, Brig.-Gen. Sir O. (Anglesey) |
| Briant, Frank | Hotchkin, Captain Stafford Vere | Thorne, G. R. (Wolverhampton, E.) |
| Brittain, Sir Harry | Inskip, Thomas Walker H. | Townshend, Sir Charles Vere Ferrers |
| Burn, Col. C. R. (Devon, Torquay) | Joynson-Hicks, Sir William | Ward, Col. L. (Kingston-upon-Hull) |
| Cecil, Rt. Hon. Lord H. (Ox. Univ.) | Kenworthy, Lieut.-Commander J. M. | White, Charles F. (Derby, Western) |
| Curzon, Commander Viscount | Kenyon, Barnet | Williams, Aneurin (Durham, Consett) |
| Davidson, Major-General sir J. H. | Locker-Lampson, G. (Wood Green) | Williams, Col. P. (Middlesbrough, E.) |
| Davies, Major D. (Montgomery) | Maclean, Rt. Hn. Sir D. (Midlothian) | Wilson, Rt. Hon. J. W. (Stourbridge) |
| Davison, Sir W. H. (Kensington, S.) | Marks, Sir George Croydon | Winterton, Major Earl |
| Entwistle, Major C. F. | Martin, Captain A. E. | Wintringham, T. |
| France, Gerald Ashburner | Mosley, Oswald | Wood, Major M. M. (Aberdeen, C.) |
| Glanville, Harold James | Murray, Lieut.-Colonel A. (Aberdeen) | Young, W. (Perth & Kinross, Perth) |
| Gretton, Colonel John | Murray, Dr. D. (Inverness & Ross) | |
| Gritten, W. G. Howard | Newbould, Alfred Ernest | TELLERS FOR THE AYES.— |
| Guinness, Lieut Col. Hon. W. E. | Newman, Colonel J. R. P. (Finchley) | Mr. Lambert and Mr. Marriott. |
| NOES. | ||
| Adair, Rear-Admiral Thomas B. S. | Burdett-Coutts, William | Elveden, Viscount |
| Adamson, Rt. Hon. William | Burgoyne, Lieut.-Colonel A. H. | Eyres-Monsell, Commander B. M. |
| Addison, Rt. Hon. Dr. C. | Burn, T. H. (Belfast, St. Anne's) | Falcon, Captain Michael |
| Allen, Lieut.-Colonel William James | Butcher, Sir John George | Falle, Major Sir Bertram G. |
| Amery, Lieut.-Col. Leopold C. M. S. | Cairns, John | Farquharson, Major A. C. |
| Archer-Shee, Lieut.-Colonel Martin | Cape, Thomas | Fildes, Henry |
| Austin, Sir Herbert | Carew, Charles Robert S. | Finney, Samuel |
| Bagley, Captain E. Ashton | Carr, W. Theodore | Flannery, Sir James Fortescue |
| Baird, Sir John Lawrence | Carter, W. (Nottingham, Mansfield) | Foreman, Henry |
| Baldwin, Rt. Hon. Stanley | Casey, T. W. | Forrest, Walter |
| Balfour, George (Hampstead) | Cecil, Rt. Hon. Evelyn (Birm., Aston) | Foxcroft, Captain Charles Talbot |
| Balfour, Sir R. (Glasgow, Particle) | Chamberlain, Rt. Ho. J. A. (Birm., W.) | Fremantle, Lieut.-Colonel Francis E. |
| Banner, Sir John S. Harmood | Chilcot, Lieut.-Com. Harry W. | Gange, E. Stanley |
| Barlow, Sir Montague | Child, Brigadier-General Sir Hill | Ganzoni, Captain Francis John C. |
| Barnett, Major R. W. | Churchill, Rt. Hon. Winston S. | Geddes, Rt. Hon. Sir E. (Camb'dge) |
| Barnston, Major Harry | Churchman, Sir Arthur | George, Rt. Hon. David Lloyd |
| Barrand, A. R. | Clay, Lieut.-Colonel H. H. Spender | Gibbs, Colonel George Abraham |
| Barton, Sir William (Oldham) | Coates, Major Sir Edward F. | Gilbert, James Daniel |
| Beauchamp, Sir Edward | Coats, Sir Stuart | Gould, James C. |
| Beck, Sir C. (Essex, Saffron Walden) | Cobb, Sir Cyril | Goulding, Rt. Hon. Sir Edward A. |
| Beckett, Hon. Gervase | Cohen, Major J. Brunel | Graham, D. M. (Lanark, Hamilton) |
| Bell, James (Lancaster, Ormskirk) | Collins, Sir G. P. (Greenock) | Graham, R. (Nelson and Coine) |
| Bell, Lieut.-Col. W. C. H. (Devizes) | Colvin, Brig.-General Richard Beale | Grant, James A. |
| Bellairs, Commander Carlyon W. | Conway, Sir W. Martin | Grayson, Lieut.-Colonel Sir Henry |
| Benn, Sir A. S. (Plymouth, Drake) | Coote, Colin Reith (Isle of Ely) | Green, Joseph F. (Leicester, W.) |
| Bennett, Thomas Jewell | Coyote, William (Tyrone, South) | Greene, Lt.-Col. Sir W. (Hack'y, N.) |
| Bethell, Sir John Henry | Cory, Sir J. H. (Cardiff, South) | Greer, Harry |
| Bigland, Alfred | Courthope, Major George L. | Gregory, Holman |
| Bird, Sir A. (Wolverhampton, West) | Cowan, D. M. (Scottish Universities) | Guest, J. (York, W. R., Hemsworth) |
| Blades, Capt. Sir George Rowland | Craig, Colonel Sir J. (Down, Mid) | Guest, Major O. (Leic., Loughboro') |
| Blair, Reginald | Craik, Rt. Hon. Sir Henry | Hacking, Captain Douglas H. |
| Blake, Sir Francis Douglas | Dalziel, Sir D. (Lambeth, Brixton) | Hallwood, Augustine |
| Boscawen, Rt. Hon. Sir A. Griffith- | Davidson, J. C. C. (Hemel Hempstead) | Hall, Lieut.-Col. Sir F. (Dulwich) |
| Bowerman, Rt. Hon. Charles W. | Davies, A. (Lancaster, Clitheroe) | Hambro, Captain Angus Valdemar |
| Bowles, Colonel H. F. | Davies, Thomas (Cirencester) | Hamilton, Major C. G. C. |
| Bowyer, Captain G. E. W. | Davies, Sir William H. (Bristol, S.) | Harmoworth, C. B. (Bedford, Luton) |
| Boyd-Carpenter, Major A. | Dean, Lieut.-Commander P. T. | Harris, Sir Henry Percy |
| Brassey, Major H. L. C. | Denison-Pender, John C. | Hayday, Arthur |
| Breese, Major Charles E. | Dennis, J. W. (Birmingham, Deritend) | Henderson, Major V. L. (Tradeston) |
| Bridgeman, William Clive | Denniss, Edmund R. B. (Oldham) | Hennessy, Major J. R. G. |
| Britton, G. B. | Dewhurst, Lieut.-Commander Harry | Henry, Denis S. (Londonderry, S.) |
| Broad, Thomas Tucker | Dixon, Captain Herbert | Herbert, Dennis (Hertford, Watford) |
| Bromfield, William | Du Pre, Colonel William Baring | Hewart, Rt. Hon. Sir Gordon |
| Brown, Captain D. C. | Edge, Captain William | Higham, Charles Frederick |
| Bruton, Sir James | Edwards, C. (Monmouth, Bedwellty) | Hilder, Lieut.-Colonel Frank |
| Buchanan, Lieut.-Colonel A. L. H. | Edwards. G. (Norfolk, South) | Hohler, Gerald Fitzroy |
| Buckley, Lieut.-Colonel A. | Elliot, Capt. Walter E. (Lanark) | Hood, Joseph |
| Bull, Rt. Hon. Sir William James | Elliott, Lt.-Col. Sir G. (Islington, W.) | Hope, James F. (Sheffield, Central) |
| Hopkins, John W. W. | Murray, C. D. (Edinburgh) | Shaw, Hon. Alex. (Kilmarnock) |
| Horne, Edgar (Surrey, Guildford) | Murray, John (Leeds, West) | Shaw, Thomas (Preston) |
| Horne, Sir R. S. (Glasgow, Hillhead) | Myers, Thomas | Shaw, William T. (Forfar) |
| Hume-Williams, Sir W. Ellis | Nall, Major Joseph | Short, Alfred (Wednesbury) |
| Hunter-Weston, Lieut.-Gen. Sir A. G. | Neal, Arthur | Shortt, Rt. Hon. E. (N'castle-T.) |
| Hurd, Percy A. | Newman, Sir R. H. S. D. L. (Exeter) | Simm, M. T. |
| Hurst, Lieut.-Colonel Gerald B. | Nicholson, Reginald (Doncaster) | Sikh, Charles H. |
| Illingworth, Rt. Hon. A. H. | Nicholson, William G. (Petersfield) | Smith, Harold (Warrington) |
| Irving, Dan | Nield, Sir Herbert | Smith, W. R. (Wellingborough) |
| James, Lieut.-Colonel Hon. Cuthbert | Norman, Major Rt. Hon. Sir Henry | Spencer, George A. |
| Jephcott, A. R. | Norton-Griffiths, Lieut.-Col. Sir John | Stanley, Major Hon. G. (Preston) |
| Jesson, C. | O'Grady, Captain James | Stanton, Charles B. |
| Johnson, Sir Stanley | Oman, Sir Charles William C. | Starkey, Captain John R. |
| Johnstone, Joseph | O'Neill, Major Hon. Robert W. H. | Steel, Major S. Strang |
| Jones, Sir Edgar R. (Merthyr Tydvil) | Palmer, Major Godfrey Mark | Stevens, Marshall |
| Jones, G. W. H. (Stoke Newington) | Palmer, Brigadier-General G. L. | Stewart, Gershom |
| Jones, J. T. (Carmarthen, Lianelly) | Parker, James | Strauss, Edward Anthony |
| Kellaway, Rt. Hon. Fredk. George | Parry, Lieut.-Colonel Thomas Henry | Sugden, W. H. |
| Kelley, Major Fred (Rotherham) | Pearce, Sir William | Surtees, Brigadier-General H. C. |
| Kerr-Smiley, Major Peter Kerr | Pease, Rt. Hon. Herbert Pike | Swan, J. E. |
| King, Captain Henry Douglas | Peel, Col. Hon. S. (Uxbridge, Mddx.) | Taylor, J. |
| Kinloch-Cooke, Sir Clement | Pennefather, De Fonblanque | Thomas-Stanford, Charles |
| Knight, Major E. A. (Kidderminster) | Perkins, Walter Frank | Thomson, F. C. (Aberdeen, South) |
| Lane-Fox, G. R. | Perring, William George | Thomson, Sir W. Mitchell- (Maryhill) |
| Lewis, Rt. Hon. J. H. (Univ., Wales) | Philipps, Gen. Sir I. (Southampton) | Thorpe, Captain John Henry |
| Lindsay, William Arthur | Philipps, Sir Owen C. (Chester, City) | Townley, Maximilian G. |
| Lloyd, George Butler | Pilditch, Sir Philip | Tryon, Major George Clement |
| Lloyd-Greame, Major Sir P. | Pinkham, Lieut.-Colonel Charles | Ward-Jackson, Major C. L. |
| Locker-Lampson, Com. O. (H'tingd'n) | Pollock, Sir Ernest M. | Ward, Col. J. (Stoke-upon-Trent) |
| Lonsdale, James Rolston | Pownall, Lieut.-Colonel Assheton | Ward, William Dudley (Southampton) |
| Lorden, John William | Pratt, John William | Warren, Lieut.-Col. Sir Alfred H. |
| Lort-Williams, J. | Preston, W. R. | Waterson, A. E. |
| Loseby, Captain C. E. | Prescott, Major W. H. | Watson, Captain John Bertrand |
| Lowther, Lt.-Col. Claude (Lancaster) | Pretyman, Rt. Hon. Ernest G. | Weston, Colonel John W. |
| Lyle, C. E. Leonard | Purchase, H. G. | White, Lieut.-Col. G. D. (Southport) |
| Lyle-Samuel, Alexander | Raeburs, Sir William H. | Whitla, Sir William |
| Lynn, R. J. | Randles, Sir John S. | Wigan, Brig.-Gen. John Tyson |
| M'Curdy, Rt. Hon. C. A. | Raw, Lieutenant-Colonel N | Wild, Sir Ernest Edward |
| M'Guffin, Samuel | Rees, Sir J. D. (Nottingham, East) | Willey, Lieut.-Colonel F. V. |
| Mackinder, Sir H. J. (Camlachie) | Reid, D. D. | Williams, Lt.-Col. Sir R. (Banbury) |
| McLaren, Robert (Lanark, Northern) | Remer, J. R. | Williams, Col. Sir R. (Dorset, W.) |
| M'Lean, Lieut.-Col. Charles W. W. | Richardson, R. (Houghton-le-Spring) | Williamson, Rt. Hon. Sir Archibald |
| McMicking, Major Gilbert | Roberts, Rt. Hon. G. H. (Norwich) | Wills, Lieut.-Colonel Sir Gilbert |
| McNeill, Ronald (Kent, Canterbury) | Roberts, Sir S. (Sheffield, Ecclesall) | Wilson, Daniel M. (Down, West) |
| Macpherson, Rt. Hon. James I. | Robinson, Sir T. (Lanes, Stretford) | Wilson, Colonel Leslie O. (Reading) |
| Maddocks, Henry | Rogers, Sir Hallowell | Wilson, Lt.-Col. Sir M. (Bethnal Gn.) |
| Malone, Major P. B. (Tottenham, S.) | Rothschild, Lionel de | Wilson, W. Tyson (Westhoughton) |
| Matthews, David | Royden, Sir Thomas | Wise, Frederick |
| Mildmay, Colonel Rt. Hon. F B. | Royds, Lieut.-Colonel Edmund | Wood, Sir H. K. (Woolwich, West) |
| Mitchell, William Lane | Rutherford, Colonel Sir J. (Darwen) | Wood, Major S. H III- (High Peak) |
| Moles, Thomas | Samuel, A. M. (Surrey, Farnham) | Woolcock, William James U. |
| Mond, Rt. Hon. Sir Alfred M. | Samuel, Samuel (W'dsworth, Putney) | Worsfold, Dr. T. Cato |
| Montagu, Rt. Hon. E. S. | Sanders, Colonel Sir Robert A. | Worthington-Evans, Rt. Hon. Sir L. |
| Moore, Major-General Sir Newton J. | Sassoon, Sir Philip Albert Gustave D. | Yate, Colonel Charles Edward |
| Moore-Brabazon, Lieut.-Col. J. T. C. | Scott, A. M. (Glasgow, Bridgeton) | Yeo, Sir Alfred William |
| Moreing, Captain Algernon H. | Scott, Leslie (Liverpool Exchange) | Young, Lieut.-Com. E. H. (Norwich) |
| Morris, Richard | Scott, Sir Samuel (St. Marylebone) | Young, Robert (Lancaster, Newton) |
| Morrison-Bell, Major A. C. | Seager, Sir William | Younger, Sir George |
| Munro, Rt. Hon. Robert | Seddon, J. A. | |
| Murchison, C. K. | Sexton, James | TELLERS FOR THE NOES.— |
| Lord E. Talbot and Captain Guest. |
§ Question put, "That the words,
§ realising that the reduction of national expenditure will tend to a diminution of the necessarily high cost of living and in order to secure a sound financial position with reduced taxation in the future, urges His Majesty's Government in preparing the
2584§ Estimates for the coming year to reduce to the utmost extent possible the expenditure in all public services,'
§ be there inserted."
§ The House divided: Ayes, 307; Noes, 30.
2587| Division No. 399.] | AYES. | [11.12 p.m. |
| Adair, Rear-Admiral Thomas B. S. | Balfour, Sir R. (Glasgow, Partick) | Bean, Sir A. S. (Plymouth, Drake) |
| Addison, Rt. Hon. Dr. C. | Banner, Sir John S. Hardwood- | Bennett, Thomas Jewell |
| Allen, Lieut.-Colonel William James | Barlow, Sir Montague | Bethell, Sir John Henry |
| Amery, Lieut.-Col. Leopold C. M. S. | Barnett, Major R. W. | Bigland, Alfred |
| Archer-Shee, Lieut.-Colonel Martin | Barnstorm, Major Harry | Bird, Sir A. (Wolverhampton, West) |
| Ashley, Colonel Wilfrid W. | Barrand, A. R. | Blades, Capt. Sir George Rowland |
| Austin, Sir Herbert | Barton, Sir William (Oldham) | Blair, Reginald |
| Bagley, Captain E. Ashton | Beauchamp, Sir Edward | Blake, Sir Francis Douglas |
| Baird, Sir John Lawrence | Beck, Sir C. (Essex, Saffron Walden) | Boscawen, Rt. Hon. Sir A. Griffith- |
| Baldwin, Rt. Hon. Stanley | Beckett, Hon. Gervase | Bottomley, Horatio W. |
| Balfour, George (Hampstead) | Bellairs, Commander Carryon W. | Bowyer, Captain G. E. W. |
| Boyd Carpenter, Major A. | Hambro, Captain Angus Valdemar | Nicholson, Reginald (Doncaster) |
| Brassey, Major H. L. C. | Hamilton, Major C. G C. | Nicholson, William G (Petersfieid) |
| Breese, Major Charles E. | Harmsworth, C. B. (Bedford, Luton) | Field, Sir Herbert |
| Bridgeman, William Clive | Harmsworth, Hon. E. C. (Kent) | Norris, Colonel Sir Henry G. |
| Britton, G. B. | Harris, Sir Henry Percy | Norton-Griffiths, Lieut.-Co). Sir John |
| Broad, Thomas Tucker | Henderson, Major W. L. (Tradeston) | Oman, Sir Charles William C. |
| Brown, Captain D. C. | Hennessy, Major J. R. G. | O'Neill, Major Hon. Robert W. H. |
| Bruton, Sir James | Henry, Denis S. (Londonderry, S.) | Palmer, Major Godfrey Mark |
| Buchanan, Lieut.-Colonel A. L. H. | Herbert, Dennis (Hertford, Watford) | Palmer, Brigadier-General G. L. |
| Buckley, Lieut.-Colonel A. | Hewart, Rt. Hon. Sir Gordon | Parker, James |
| Bull, Rt. Hon. Sir William James | Higham, Charles Frederick | Parry, Lieut.-Colonel Thomas Henry |
| Burdetts-Coutts, William | Hilder, Lieut.-Colonel Frank | Pease, Rt. Hon. Herbert Pike |
| Burgoyne, Lieut.-Colonel A. H. | Hinds, John | Peel, Col. Hn. S. (Uxbridge, Mddx.) |
| Burn, T. H. (Belfast, St. Anne's) | Hohler, Gerald Fitzroy | Pennefather, De Fonblanque |
| Butcher, Sir John George | Holmes, J. Stanley | Perkins, Walter Frank |
| Carew, Charles Robert S. | Hood, Joseph | Perring, William George |
| Carr, W. Theodore | Hope, James F. (Sheffield, Central) | Philipps, Gen. Sir I. (Southampton) |
| Casey, T. W. | Hopkins, John W. W. | Philipps, Sir Owen C. (Chester, City) |
| Cecil, Rt. Hon. Evelyn (Birm., Aston) | Hopkinson. A (Lancaster, Mossley) | Pilditch, Sir Philip |
| Cecil, Rt. Hon. Lord H. (Ox. Univ.) | Horne, Edgar (Surrey, Guildford) | Pinkham, Lieut.-Colonel Charles |
| Chamberlain, Rt. Hn. J. A. (Birm.,W.) | Horne, Sir R. S. (Glasgow, Hillhead) | Pollock, Sir Ernest M. |
| Chilcot, Lieut.-Com. Harry W. | Hume-Williams, Sir W. Ellis | Pownall, Lieut. Colonel. Assheton |
| Child, Brigadier-General Sir Hill | Hunter-Weston, Lieut.-Gen. Sir A. G. | Pratt, John William |
| Churchill, Rt. Hon. Winston S. | Hurd, Percy A. | Preston, W. R. |
| Churchman, Sir Arthur | Hurst, Lieut.-Colonel Gerald B. | Prescott, Major W. H. |
| Clay, Lieut.-Colonel H. H. Spender | Illingworth, Rt. Hon. A. H. | Pretyman, Rt. Hon. Ernest G. |
| Coates, Major Sir Edward F. | Instep, Thomas Walker H. | Purchase, H. G. |
| Coats, Sir Stuart | James, Lieut.-Colonel Hon. Cuthbert | Raeburn, Sir William H. |
| Cobb, Sir Cyril | Jephcott, A. R. | Randles, Sir John S. |
| Cohen, Major J. Brunel | Johnson, Sir Stanley | Raw, Lieutenant-Colonel N. |
| Collins, Sir G. P. (Greenock) | Johnstone, Joseph | Rees, Sir J. D. (Nottingham, East) |
| Colvin, Brig.-General Richard Beale | Jones, Sir Edgar R. (Merthyr Tydvil) | Reid, D. D. |
| Conway. Sir W. Martin | Jones, G. W. H. (Stoke Newington) | Remer, J. R. |
| Coote, Colin Reith (Isle of Ely) | Jones, J. T. (Carmarthen, Lianelly) | Roberts, Rt. Hon. G. H. (Norwich) |
| Coote, William (Tyrone, South) | Kellaway, Rt. Hon. Fredk. George | Roberts, Sir S. (Sheffield, Ecclesall) |
| Cory, Sir J. H. (Cardiff, South) | Kelley, Major Fred (Rotherham) | Robinson, Sir T. (Lance, Stretford) |
| Courthope, Major George L. | Kerr-Smiley, Major Peter Kerr | Rogers, Sir Hallewell |
| Cowan. D. M. (Scottish Universities) | King, Captain Henry Douglas | Rothschild, Lionel de |
| Craig, Colonel Sir J. (Down, Mid) | Kinloch-Cooke, Sir Clement | Roundell, Colonel R. F. |
| Craik, Rt. Hon. Sir Henry | Knight, Major E. A. (Kidderminster) | Royden, Sir Thomas |
| Daiziel, Sir D. (Lambeth, Brixton) | Lane-Fox, G. R. | Royds, Lieut.-Colonel Edmund |
| Davidson, J. C. C. (Hemel Hempstead) | Lewis, Rt. Hon. J. H. (Univ., Wales) | Rutherford, Colonel Sir J. (Darwen) |
| Davidson, Major-General Sir J. H. | Lindsay, William Arthur | Samuel, A. M. (Surrey, Farnham) |
| Davies, Thomas (Cirencester) | Lloyd, George Butler | Samuel, Samuel (W'dsworth, Putney) |
| Davies, Sir William H. (Bristol, S.) | Lloyd-Greame, Major Sir P | Sanders, Colonel Sir Robert A. |
| Davison, Sir W. H. (Kensington, S.) | Locker-Lampson, Corn. O. (H'tingd'n) | Sassoon, Sir Philip Albert Gustave D. |
| Dean, Lieut.-Commander P. T. | Lonsdale, James Rolston | Scott, A. M. (Glasgow, Bridgeton) |
| Denison-Pender, John C. | Lorden, John William | Scott, Leslie (Liverpool, Exchange) |
| Dennis, J. W. (Birmingham, Deritend) | Loseby, Captain C. E. | Scott, Sir Samuel (St. Marylebone) |
| Denniss, Edmund R. B. (Oldham) | Lowther, Lt.-Col. Claude (Lancaster) | Seager, Sir William |
| Dewhurst, Lieut.-Commander Harry | Lyle, C. E. Leonard | Seddon, J. A. |
| Dixon, Captain Herbert | Lyle-Samuel, Alexander | Shaw, Hon. Alex. (Kilmarnock) |
| Du Pre, Colonel William Baring | Lynn, R. J. | Shaw, William T. (Forfar) |
| Edge, Captain William | M'Curdy, Rt. Hon. C. A. | Shortt, Rt. Hon. E. (N'castle-on-T.) |
| Elliot. Capt. Walter E. (Lanark) | M'Guffin, Samuel | Simm, M. T. |
| Elliott, Lt.-Col. Sir G. (Islington, W.) | Mackinder, Sir H. J. (Camlachie) | Smith, Harold (Warrington) |
| Elveden, Viscount | McLaren, Robert (Lanark, Northern) | Stanley, Major Hon. G. (Preston) |
| Entwistle, Major C. F. | M'Lean, Lieut.-Col. Charles W. W. | Stanton, Charles B. |
| Eyres-Monsell, Commander B. M. | McMicking, Major Gilbert | Starkey, Captain John R. |
| Falcon, Captain Michael | M'Neill, Ronald (Kent, Canterbury) | Steel, Major S. Strang |
| Falle, Major Sir Bertram G. | Macpherson. Rt. Hon. James I. | Stephenson, Lieut-Colonel H. K. |
| Farquharson, Major A. C. | Maddocks, Henry | Stewart, Gershom |
| Flannery, Sir James Fortescue | Malone, Major P. B. (Tottenham, S.) | Strauss, Edward Anthony |
| Foreman, Henry | Marks, Sir George Croydon | Sugden, W. H. |
| Forrest, Walter | Martin, Captain A. E. | Surtees, Brigadier-General H. C. |
| Foxcroft, Captain Charles Talbot | Matthews, David | Taylor, J. |
| Fremantle, Lieut.-Colonel Francis E. | Mildmay, Colonel Rt. Hon. F. B. | Thomas-Stanford, Charles |
| Gange, E. Stanley | Mitchell, William Lane | Thomson, F. C. (Aberdeen, South) |
| Ganzoni, Captain Francis John C. | Moles, Thomas | Thomson, Sir W. Mitchell- (Maryhill) |
| Geddes, Rt. Hon. Sir E. (Camb'dge) | Molson, Major John Elsdale | Thorpe, Captain John Henry |
| George, Rt. Hon. David Lloyd | Mond, Rt. Hon. Sir Alfred M. | Townley, Maximilian G. |
| Gibbs, Colonel George Abraham | Montagu, Rt. Hon. E. S. | Townshead, Sir Charles Were Ferrers |
| Gilbert, James Daniel | Moore, Major-General Sir Newton J | Tryon, Major George Clement |
| Gould, James C. | Moore-Brabazon, Lieut.-Col. J. T. C. | Ward-Jackson, Major C. L. |
| Grant, James A. | Moreing, Captain Algernon H. | Ward, Col. J. (Stoke-upon-Trent) |
| Grayson, Lieut.-Colonel Sir Henry | Morris, Richard | Ward, Col. L. (Kingston-upon-Hull) |
| Green, Joseph F. (Leicester, W.) | Morrison, Hugh | Ward, William Dudley (Southampton) |
| Greene, Lt.-Col. Sir W. | (Hack'y, N.) Morrison-Bell, Major A. C. | Warren, Lieut.-Col. Sir Alfred H. |
| Greer, Harry | Munro, Rt. Hon. Robert | Watson, Captain John Bertrand |
| Gregory, Holman | Murchison, C. K. | Weston, Colonel John W. |
| Gretton, Colonel John | Murray, Lieut.-Colonel A. (Aberdeen) | White, Lieut.-Col. G. D. (Southport) |
| Guest, Major O. (Leic., Loughboro') | Murray, John (Leeds, West) | Whitla, Sir William |
| Gwynne, Rupert S. | Nall, Major Joseph | Wigan, Brig.-Gen. John Tyson |
| Hacking, Captain Douglas H. | Neal, Arthur | Wild, Sir Ernest Edward |
| Hall, Lieut.-Col. Sir F. (Dulwich) | Newman, Colonel J. R. P. (Finchley) | Willey, Lieut-Colonel F. V. |
| Hall, Rr-Adml Sir W.(Liv'p'l,W.D'by) | Newman, Sir R. H. S. D. L. (Exeter) | Williams, Lt-Col. Sir R. (Banbury) |
| Williams, Col. Sir R. (Dorset, W.) | Wise, Frederick | Yate, Colonel Charles Edward |
| Williamson, Rt. Hon. Sir Archibald | Wood, Sir H. K. (Woolwich, West) | Yeo, Sir Alfred William |
| Wills, Lieut.-Colonel Sir Gilbert | Wood, Major S. Hill- (High Peak) | Young, Lieut.-Com. E. H. (Norwich) |
| Wilson, Daniel M. (Down, West) | Woolcock, William James U. | Younger, Sir George |
| Wilson, Colonel Leslie O. (Reading) | Worsfold, Dr. T. Cato | TELLERS FOR THE AYES.— |
| Wilson, Lt.-Col. Sir M. (Bethnal Gn.) | Worthington-Evans, Rt. Hon. Sir L. | Captain Guest and Lord E. Talbot. |
| NOES. | ||
| Adamson, Rt. Hon. William | Graham, D. M. (Lanark, Hamilton) | Short, Alfred (Wednesbury) |
| Bell, James (Lancaster, Ormskirk) | Graham, R. (Nelson and Coine) | Sitch, Charles H. |
| Bowerman, Rt. Hon. Charles W. | Guest, J. (York, W. R., Hemsworth) | Smith, W. R. (Wellingborough) |
| Bromfield, William | Hayday, Arthur | Spencer, George A. |
| Cairns, John | Irving, Dan | Swan, J. E. |
| Cape, Thomas | Kenyon, Barnet | Waterson, A. E. |
| Carter, W. (Nottingham, Mansfield) | Myers, Thomas | Wilson, W. Tyson (Westhoughton) |
| Davies, Alfred Thomas (Lincoln) | O'Grady, Captain James | Young, Robert (Lancaster, Newton) |
| Edwards, C. (Monmouth, Bedwellty) | Rees, Capt. J. Tudor- (Barnstaple) | |
| Edwards, O. (Norfolk, South) | Richardson, R. (Houghton-le-Spring) | TELLERS FOR THE NOES.— |
| Finney, Samuel | Sexton, James | Mr. T. Shaw and Mr. Mills. |
Main Question, as amended, put, and agreed to.
§
Resolved,
That this House, realising that the reduction of national expenditure will tend to a diminution of the necessarily high cost of living and in order to secure a sound financial position with reduced taxation in the future, urges His Majesty's Government in preparing the Estimates for the coming year to reduce to the utmost extent possible the expenditure in all public services.