HC Deb 09 December 1920 vol 135 cc2473-587

I beg to move, That this House will not sanction Expenditure for 1921–22 in excess of £808,000,000, the amount estimated as being necessary for a normal year by the Chancellor of the Exchequer on the 23rd October, 1919. Let me, in the first place, express my appreciation that the Leader of the House has given us this opportunity for a Debate on expenditure. I hope that it will not partake of a party character. If this were a game of ordinary party politics, I should not be playing it. It must be apparent to every reflective mind that we must, if we are to avoid disaster, have a sharp reversal in our financial policy. The war habit of freely spending—I might say recklessly and extravagantly spending—must be ruthlessly broken. As far as I can judge, the situation has got out of hand. The House last October, at the insitgation of my right hon. Friend the Chancellor of the Exchequer, passed a Resolution promising its hearty support to the Government in all reasonable proposals, however drastic, for the reduction of expenditure and the diminution of debt. That Resolution, up till now, appears to me to have been, more or less, a pious platitude. The expenditure tap is still running, and running to waste. My right hon. Friend the Chancellor of the Exchequer introduced a Budget that hoped to raise a revenue of £1,400,000,000, and he included in that Budget something like £198,000,000 new taxation, which was about our pre-war expenditure. I do not think, if the present expenditure is to go on, that it was anything too much, but I do say that, since the Chancellor introduced his Budget, there has been a creeping paralysis in the industry of the country. There are men to-day who want work and cannot get it, and the man who wants work and cannot get it is not only a pathetic spectacle, but he may be a great danger in the community. Even law-abiding men, when they are hungry, and especially if they have families at home who are hungry, will do deeds which they would not do in calmer moments. It is a truism to say that we have had Europe wasted with war, and, if I may be allowed to do so, I would quote a resolution which was passed by the International Financial Conference of the League of Nations some two months ago. This is what they said: The statements presented to the Conference show that on an average some 20 per cent, of the national expenditure is still being devoted to the maintenance of armaments and the preparations for war. The Conference desires to affirm with the utmost emphasis that the world cannot afford this expenditure. Our expenditure on armaments this year was budgeted at £230,000,000 for the fighting forces, and there are Supplementary Estimates. The pre-War expenditure was something like £85,000,000. If I talk about my own Department, the Admiralty, let it not be thought that I am not one who believes that we owe an undying debt of gratitude to the Navy. But for the Navy our troops could not have been conveyed abroad; but for the Navy that blockade which broke the Hun could never have taken place. Therefore, if I criticise my own Department, it will not be in the smallest degree to belittle the enormous efforts of the Navy during the late War. What, however, has the Admiralty done? It is two years since the Armistice took place. How has the Admiralty gone to work to reduce expenditure? I have here an answer given to a question a day or two ago with regard to the personnel in the dockyards and at the Admiralty itself. In the out-port establishments—that means the dockyards—in July, 1914, when, I will not say we were preparing for war, but when we had to take precautions against the German menace, and against the German fleet which was in full being, but to-day is at the bottom of the sea-at that time in the dockyards there were 58,000 men. To-day there are 77,000 men. Can any hon. or right hon. Gentleman on that Bench opposite give me any real explanation why 20,000 more men should be maintained in the dockyards than there were prior to the War in 1914? Take the numbers engaged at the Admiralty. In July, 1914, the staff numbered 2,072. On the 1st November, 1920, it was three times as many, namely, 6,918. I would ask my right hon. Friend the Chancellor of the Exchequer is he satisfied with the Admiralty in this respect? The wages paid in the dockyards in July, 1914, amounted to £5,000,000 per annum. To-day they represent £16,500,000 per annum. True there has been a rise in wages, but there must be a reduction in personnel later on. At the Admiralty in July, 1914, salaries were paid at the rate of £514,000 per annum. To-day they amount to £1,944,000, or nearly four times as much. So far as the Admiralty is concerned, therefore, they have not taken to heart the Resolution which the House of Commons passed last year. I say frankly there must now in the out-port establishments and at the Admiralty, be a large amount of work being undertaken for giving men employment.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)

Hear, hear.


I cannot help feeling myself that if you are giving men employment for employment sake, it is better to give them the unemployment dole. [HON. MEMBERS: "No, no."] Wait until I have finished my sentence. Let us know what we are to pay. If you are giving men employment for employment sake, surely they are using up raw material and all sorts of machinery which would be better employed elsewhere? I want to know what we are spending for the purpose of giving men employment for employment sake. Let us know what the facts are. I am sorry to have to say it, but I distrust the vision or the courage of the present Board of Admiralty. We have had a revolution in naval warfare. Aircraft have come in, and yet, for all that, the Board of Admiralty at the present moment has allowed the aircraft to be under the Secretary for War. To my mind that is a very humiliating position, from an Admiralty point of view. I am going to ask, and I hope I may get a reply, what is the policy of the Government with regard to the future of naval expenditure? Is it their policy to build against America? To my mind it would be unthinkable. Despite the views of some people in this country, we, I think, owe a great debt of gratitude to the Americans for coming into the War. Apart from that, does it enter the mind of any responsible man that America is going to attack us? For one thing, we owe America about a thousand millions of money, and I presume, therefore, it would not be in the interests of America to attack a debtor nation. Let us have a definition of the Government's policy. Do they propose to build ships against America?

Let me say a word about the War Office. I have maintained all through the War that the Secretary for War is the right man in the wrong place. He is active, imaginary, and adventurous. As an Admiralty clerk said to me when I was serving at the Admiralty, "It is never dull when Winston is about." I really want the War Office to-day not to be humming, but rather to hide itself. £146,000,000 was the Estimate for the Army and the Air Service. There are Supplementary Estimates. I say we cannot afford this great expenditure. It is very painful to talk about these matters. We had great hopes of the League of Nations. I trust the League of Nations may be able to take such steps as to give Europe an illuminating ray and hope of peace. I ask the Government to make the League of Nations not a scrap of paper, but a solemn pact between nations.

I must say a few words about the domestic policy of the Government. I think they misread the situation last year. There was a feverish rush of Bills through this House which all cost money. They were trying to burn the candle at both ends. That was not a favourable time for passing Bills through this House, and it would have been far better if the Government at that time had really taken count of the situation created by the War, and had endeavoured to garner the rewards of the sacrifices made by our troops. To-day we have men all over the Turkish Empire. We have large numbers of troops in the East. I have a list of them here. There are no fewer than 170,000 of them. There are 101,000 in Mesopotamia, costing us £2,500,000 per month. We have troops in Constantinople, Egypt, and Palestine; in all there are 170,000 men costing £4,410,000 per month, or £53,000,000 annually, excluding capital expenditure. I think it would have been far better if the Minister of Health and the Minister of Transport had been sent to Mesopotamia to settle matters there, instead of passing their Bills through this House. They would have been a very interesting pair. Let me ask the Government, do they propose to withdraw their troops from Mesopotamia, Palestine, Egypt, and Constantinople, or do they propose to go on keeping there these large numbers of men at this huge expense to the British tax- payer? If they do, I say the British taxpayer cannot afford it.

I want also to ask what is the policy of the Government in regard to industry in this country. Are we to have freedom from bureaucratic control? If we are, why do not the Government dismiss their officials from Whitehall? It is not merely a question of saving a few millions. The activities of these officials are in most cases mischievous. It is their activities that I fear. Their activities cost money; it is not only their salaries, it is what they are responsible for expending. I am one of those who believe that Britons can carry on their own business far better than Government officials or bureaucrats in Whitehall. We have had too much in the last year of this kind of sloppy socialism. The Government Departments are digging themselves in. The other day, the First Commissioner of Works—I do not see him in his place—presented some Estimates. He has a huge staff swollen by the War. He covered the parks with buildings. He commandeered hotels, and then finding there was nothing for the staff to do, he suddenly, without a word to Parliament, launched out into a great house-building scheme. I cannot understand why the Chancellor of the Exchequer consented to it. I see the Minister of Food is in his place. I understand his Ministry is being wound up. If that is not the case, may I say at any rate it has outlived its usefulness. As regards the Transport Ministry, transport in this country has never been so bad, and never so inefficient. [An HON. MEMBER: "It ought to be scrapped, and the Minister as well!"] Then there is the Ministry of Labour. That is another War creation. I say with the utmost deference to my hon. Friends on the Labour Benches, there has been too much meddling by the Government with labour. In the old days we had far fewer strikes; the Government appointed an arbitrator when asked to do so. Now questions art; asked here. Labour Members are continually running in and out of Downing Street at a time when, in my judgment, the Prime Minister and the Government have other and more important matters to attend to. The latest development of Government activity is a Mines Department. I have a strong complaint against the Mines Department inasmuch as it seduced from these Benches the most picturesque figure that adorned them.

I do not like these Government Departments. The greatest social reform that can be undertaken in this country is to reduce the cost of living, to reduce the taxes, and to reduce the rates. The housing policy of the Government is founded upon an entirely false basis. It has killed private enterprise. You cannot kill a thing twice. It has prevented private enterprise from again raising its head. Houses are built regardless of expense. Before the War a house cost from £200 to £250; to-day the cost is five times as much. These houses are costing £1,000, or £1,250. They cannot be let at economic rents. No workman can pay the rent. Where is the balance to come from? It is to come from the taxpayer. When you have burdened the taxpayers, as they have been burdened during the last five years, it is no wonder that a collapse has come in regard to Housing Bonds. A day or two ago seven towns asked for £4,000,000. The public subscribed £371,000. The public have not the money. You are taxing them too high. You are rating them too high. What to me is a grave matter, industry has to compete with municipalities in paying high rates of interest before they can get money to carry on their work. It is a very serious thing for industry that they have to offer such high interest for accommodation at the present time. What can you expect if the Government is on all hands offering new security. The Health Minister is undismayed. He goes on. He brings in another Bill. He brings in the Ministry of Health Bill, which we are to discuss in a few days, and against which I shall vote. [HON. MEMBERS: "You are too late."] Well, I do not think the Bill was worth sitting up all night for.


Why were you not here to vote against it?


I voted on the Second Reading.


The acid test of economy is to be here to vote.


I should like to call attention to a memorandum issued by the League of Nations. They say: Nearly every Government is being pressed to incur fresh expenditure daily on palliatives which aggravate the very evils against which they are directed. That is a true statement of the case. When we are endeavouring to palliate these evils or to carry out these schemes of social reform we are inflicting more hardship upon the population than we cure. There is another matter to which, from the financial point of view, I take strongest exception, and that is the indefinite liabilities caused by these efforts at Government legislation. Take the housing question. Can the Chancellor of the Exchequer or any Minister tell us what the housing question is going to cost the country 2 Have they any idea at all? Take the Agriculture Bill. Here you have a perfectly indefinite liability. Three commissioners are to be appointed, and at their fiat the Chancellor of the Exchequer may have to pay millions of pounds. Assuming that corn goes down Is. per quarter below the minimum price fixed by these commissioners, the Chancellor of the Exchequer has to pay £1,750,000 a year. It can easily go down 10s. Where would my right hon. Friend's Budget be if he had to find something like £17,500,000 for this purpose as a subsidy for wheat, etc.?


Raise it by the Excess Profits Duty.


Take Ireland. In Ireland they grew 1,500,000 quarters of oats. If the price of oats goes down Is. per quarter you will have to pay the Irish farmer £375,000 a year. If the price goes down 10s. a quarter you will have to pay £3,750,000. How many officials do you think you will have to appoint in order to check these returns? Has anybody any idea of it? These are the reasons why I object to this finance, against which, I am perfectly certain, the soul of Mr. Gladstone and former financiers would have revolted. We have no definite end to our liability.


What about education?


Everything in its turn. So far from this large Government expenditure relieving the food position it aggravates it. We have to import an enormous quantity of food every year or we starve. This year probably we shall have to import 80 per cent, of the bread we eat. Eighty loaves out of every 100 will have to come from abroad. That wheat that comes from the foreign far- mer will have to be paid for, and it can only be paid for with British goods. It is no use offering them Bradburys. This enormous taxation that you are putting on is actually crippling the manufacturer, who would be prepared in other events to export British goods to pay for the wheat which we must have. This taxation is a potent ingredient in the cost of every article. The Chancellor of the Exchequer is a sleeping partner in every business. He is a sleeping partner for profits, but he is not a sharer of losses. Every business man has to make an estimate, and, of course, he must take taxation into account in running his business. If he cannot put the taxation on to the product then he will not produce. Taxation to-day is threatening to ruin industry. By this taxation the Chancellor of the Exchequer—I do not speak of him personally; I have very great respect for my right hon. Friend—is really hindering development. Every business man knows that if you want successfully to develop your business you must put part of your profits back into your business every year. It cannot be done to-day. The tax collector is too hard on them. The Government factor is usually sterile in production. There is hardly a single man or woman engaged by the Government, paid by the Government, who is producing a single article that can be exchanged for the wheat which we must have. Therefore, I ask for a stringent reduction of expenditure. When I advocate a reduction it is not to spare the pockets of the rich, but really it is to prevent the poor from hunger. It is a working man's question, for if capital is not available employment cannot be obtained.

Do not let the House disguise from themselves that there will be great difficulties in effecting economy. The Government will require all the support that the House can give them. The Government officials are in their dug outs, and they are not coming out easily. It will require a great deal of high explosives to get them out. I hope we shall apply some of that this evening. I hope I am not infringing the Official Secrets Act when I say that I remember the time when we were pressed to reduce expenditure at the Admiralty. I remember Mr. Runciman and Mr. McKenna coming over to the Board and they proceeded to go into figures. They had not been there five minutes before they got mountains of figures, under which they were practically smothered. The Prime Minister is a much more astute diplomatist. He came over to the Admiralty and addressed the Board. He said, "Will you be good enough to reduce your expenditure; you alone can do it." We did it. The House of Commons cannot reduce the expenditure. It must be done by the Departments themselves. It can only be done in the Departments by rationing them and telling them how much they can spend. A good deal of criticism has been levelled at the figure in my Motion. It is not my figure. We have had several figures of expenditure. The first was given by the present Leader of the House at £650,000,000. The Chancellor of the Exchequer in April, 1919, estimated the expenditure at £766,000,000 for a normal Budget. In October the figure which I have taken a year after the Armistice was estimated at £808,000,000. Last June he made another estimate of £1,029,000,000. The unfortunate part of these estimates is that they are always rising. I have taken the middle one. What does £808,000,000 mean? Debt reduction and interest will cost £360,000,000, pensions another £120,000,000, making £480,000,000. That leaves £328,000,000 for running the country, which cost before the War just under £200,000,000. The £200,000,000 included the debt, therefore that is all to my advantage. Here you have the debt and pensions paid for and you are left with £328,000,000 with which to run the country, whereas before the War it cost less than £200,000,000, including provision for debt reduction and interest.

I have a letter here, a very able letter indeed, from Mr. Edgar Crammond, who wrote to the "Times" on 13th November. He said: I am convinced that this country cannot afford to spend more than £800,000,000 on Imperial services in the coming year, and every possible effort should be made during the next five months to compel the Government to recognise this fact. That is the opinion of a distinguished economist. Let me take the latest Estimate of my right hon. Friend the Chancellor of the Exchequer, namely, £1,025,000,000. Does he think that the taxation he imposed this year will bring in so much revenue in future years as he has estimated for this year? I think it is quite impossible. Let me give the House some figures. In 1913–14 Customs and Excise, that is, the taxation of beer, spirits, and cigars, brought in £75,000,000. This year the Chancellor expects to get from it £350,000,000. Does he really believe that when the taxation is five times heavier he is likely to get that revenue during the lean years that must come? Take Income Tax, Death Duties, and Corporations Tax. Before the War there was, of course, no Corporations Tax. From Inland Revenue, before the War, that is, Income Tax and Death Duties, there was received £88,000,000. The Chancellor of the Exchequer anticipates the receipt this year of £590,000,000. In other words, from the two sources I have named, the revenue before the War was £163,000,000, and today the Chancellor of the Exchequer expects to get £940,000,000. I do not believe it is possible. Hon. Members say to me, "But suppose there is an emergency?" I reply, "Yes, suppose there is an emergency and that you have spent up to the hilt in the time of peace?" I am not a pessimist. I believe that Englishmen never do better than when they have to face facts. I believe that £808,000,000 is all that the country can afford. My object in moving the Motion is to show that the House of Commons must not nibble at a reduction of expenditure by thousands or hundreds of thousands; the expenditure must come off in chunks of tens of millions; and it is because I think we must set some limit to the expenditure of the Government and the Departments that I bring my Motion forward.


I beg to second the Motion. We have heard from my right hon. Friend a very exhilarating speech. I second the Motion as one of the two Members associated with my hon. and gallant Friend the Member for Greenock ^Colonel Sir G. Collins) some four years ago, and was responsible with him for the appointment of the Committee on National Expenditure, on which I have had the honour to serve continuously from that day to this. I understand that this Motion has in some quarters been interpreted as a vote of censure on the Government, and more particularly as a personal and political attack on my right hon. Friend the Chancellor of the Exchequer. I desire to repudiate that with all the vehemence I can command. I believe it is intended, I hope it is intended, I cer- tainly mean to speak to it as though it was intended, not to weaken but to strengthen the hands of the Government; and more particularly do I want to repudiate any suggestion of a personal attack on the Chancellor of the Exchequer, whom I have always regarded as a very good man struggling with adversity. I will not particularise who the adversity may be, but he has struggled very hard. I will go a great deal further than that. If this Motion were to be interpreted at all as a vote of censure, I consider that it would be a vote of censure less on the Government than on the House of Commons itself. As a fact, we are suggesting nothing of the kind. This Motion is the outcome and expression of an overwhelming and insistent public sentiment, which is deeply aroused to-day and very gravely alarmed at the position of our national finance. That alarm, as I have reason to know, is most acute in quarters that are best informed. It is only the ignorant who are careless in this matter. Those who know the facts most intimately have uttered the most grave warnings again and again. This House would be quite unworthy of its traditions and of its place in the national economy if it refused to heed those warnings and to reiterate and emphasise and endorse them.

What is the real source of these alarms? I think I can put it in a sentence. It is falling trade and diminishing production. That is the portent which inspires this widespread and deep-seated alarm. Most Members of this House, or many of them, are business men, and they are quite as familiar with the facts as I am, but there are many outside the House who are not familiar with them. Let me call attention to the very serious figures of our falling export trade, on which, as my right hon. Friend has truly said, the whole internal prosperity of this country very largely depends. I have here a long list of exports, but I will not trouble the House with it in extenso. The cumulative evidence of these figures is overwhelming. Contrast not the values, which are misleading, but the quantities of goods exported in 1913 and 1919 respectively. The exports of pig-iron fell from 1,124,000 tons in 1913 to 356,985 tons in 1919. The exports of galvanised sheets also fell greatly during the same period. The total exports of iron and steel, and manu- factures thereof, fell from nearly 5,000,000 tons in 1913 to 2,223,000 tons in 1919. Machinery fell from 746,000 tons in 1913 to a little more than 303,000 tons in 1919. Hardware fell from 1,000,000 cwts. in 1913 to 285,000 cwts. in 1919. I might go through the whole list, which shows the same sort of reduction. I submit that though the figures of one trade here or there may mean little, yet the force of this cumulative evidence is simply overwhelming.

What does this decline in our export trade portend? It portends three things. In the first place, perpetuation of inflated prices and the high cost of living, and on that point I desire to associate myself with every word that fell from the Mover of this Motion. It portends, in the second place, a very grave depression of home industries and above all a growing volume of unemployment. I am certain that we shall have no real settling down in our social affairs in this country until we get a very substantial reduction in the cost of living. That is a matter which affects all classes and every individual. It affects more particularly the sort of folk for whom I am particularly privileged to speak in this House If you take a community like that which I have the honour to represent, a community which in the strictly economic sense is not a productive community-I hope and believe that we do make a modest contribution to a commodity which possesses some value though it cannot be measured in a material sense-you will find that for the most part the citizens of a city like Oxford are people of very modest means, living on incomes which if not actually fixed are not elastic. But in this respect all consumers are in the same boat, and nobody in any class is not a consumer. We shall never get a real settlement until we get prices down, and we shall never get prices down until we get the level of production up. Until we get production up we cannot deal in any way drastically or radically with the problem of unemployment. It is impossible to increase production so long as that production is hampered and borne down by the present level of expenditure.

I venture to bring to the attention of the House a passage in a resolution which, I believe, has been already forwarded to the Government, from the executive of the Imperial Commercial Association, a very representative body, closely in touch with the facts of the economic situation. The resolution says:— The present financial position is wholly due to the over-expenditure of public money, both on the part of His Majesty's Government and by local authorities throughout the country. Our industries are being slowly but surely incapacitated, and in many cases destroyed, owing to the extreme measures which restrict credit and render the financing of large enterprises impracticable. This policy is followed by unemployment and acute industrial distress. 5.0 P.M.

I think there is some exaggeration in the terms of that resolution, and I want frankly to say so, but I hold also that there is sufficient truth in it to justify the Motion which is now before the House. The Motion asserts the necessity of restricting our annual national expenditure to a definite sum. The sum which we have taken is the sum calculated by the Chancellor of the Exchequer, and set forth in detail in a White Paper issued in October, 1919. It is only fair to the Chancellor to say that that Paper only professed to contain a very tentative Estimate. It was an Estimate of a normal year, and we were warned very definitely and very explicitly that the year 1920–21 would not be, and could not be, such a normal year. Further, we were told that a normal year would be one in which the following conditions were fulfilled, and it is only right to recall those conditions: (a) That all war services will have ceased and that trading departments (such as food and shipping, etc.) will have been wound up; (b) that all subsidies (bread, railways, unemployment donation, etc.) will have been withdrawn; (c) that no further loans will be made to Allies and Dominions; (d) that the training schemes for ex-soldiers will have been completed and nothing new arisen in their place; and (e) that the cost of labour and materials will not have differed materially from that now obtaining. Those are the conditions laid down by the Chancellor himself, but he himself, despite those very cautious limitations, issued a further Estimate in June, 1920.


And that no further expenditure would be sanctioned by the House.


I am quoting from the printed Paper issued by the Chancellor himself, and that is not specified in it. He said it, I think, in a speech. Then we had a revised Estimate in June, 1920, of this very tentative Estimate issued six months earlier. That revised Estimate was based on precisely the same assumption as the earlier one, and the House will remember that there was substituted for the figure of £808,000,000 the figure of £1,029,000,000. I venture to recall to the remembrance of the House those two Estimates with a difference of £200,000,000 between them. I prefer the earlier one of £808,000,000, but I wish to say very emphatically, and, of course, I am speaking only for myself, in my opinion, the real point of importance and the principle which I hope the House tonight will affirm is that, whatever may be the sum, we should have a specific sum. Speaking for myself, I am not particularly wedded to the sum actually mentioned in the Resolution. In other Resolutions other sums are mentioned, and they may be nearer to the mark, but the essential point is that the House should give the Treasury a specific line to work to, and that the business community outside the House should know what that line is and should lay their plans accordingly. What really is alarming, and, I venture to say, paralysing, the whole business community to-day is the uncertainty of the immediate future. They see the Chancellor of the Exchequer, with all the expert advice and knowledge at his command, in October, 1919, putting his figure at £808,000,000, and they see him six months later putting the figure at over £1,000,000,000. What will the figure be in April, 1921? They want some security and some certainty.

How are we to get the reduction recommended in our resolution? There are two schools among the critics of swollen Estimates. There are those who say that economies must be effected in detail by the saving of a shilling here and a sixpence there. On the other hand, there are those who say, with my right hon. Friend who moved, that nothing can be done unless you are prepared to reduce the big items of expenditure, and that this attacking of the big items is not a departmental matter, that it is not even a Treasury matter, that it is not even a Cabinet matter, and that it can only be done, and I believe it can only be done, by a deliberate policy sanctioned and sustained by the House of Commons. I believe at the present juncture both those schools are right. I believe also that the first course will prove insufficient for our necessities, not that I am disposed to under-rate what are called petty economies. I remember very well, and I have often recalled, the words of Mr. Gladstone, which were spoken on this matter, appropriately enough to a Scottish audience. He said: The Chancellor of the Exchequer should boldly uphold economy in detail. It is a mark of a chicken-hearted Chancellor when he shrinks from upholding economy in detail. He is ridiculed, no doubt, for what is called candle ends and cheese parings, but lie is not worth his salt if he is not ready to save candle ends and cheese parings in the cause of economy. I think there has been too little regard to candle ends and cheese parings in public Departments during the last few years. It so happens that it has been my business to scrutinise very closely and continuously the expenditure of our public Departments, and I think, and I state my conviction deliberately, that there has been a great deal too little regard paid to these candle ends and cheese parings. For example, it seems to me the scale of war bonuses at present being paid is ridiculously and extravagantly high. Boys of 16 to 17 who go into the Civil Service at what I should regard at an adequate salary of £60 per year are receiving a war bonus of £93 per year, or a total of £153. Young men of 18 and IP who go in with the salary of £100 are receiving a war bonus of £148, a total of £248. I do not know whether the House saw the other day a letter from an old friend of mine, now chairman of one of the most important insurance companies in London, in which he pointed out that no bank and no insurance company would offer salaries to boys and girls and youths on that sort of scale. If they do not do so, why should the Civil Service? Then another point is the travelling and subsistence allowance. It is a point which I am always inquiring into in Departments It is not a very large item, but it is one of those candle ends. I understand that the rule of the Civil Service is that first-class fare shall be paid to anyone whose salary is or will vise to £600 per year. I put it to the House, is there anybody else with a salary of £600 per year who travels about the country first-class? I say these sort of allowances for travelling and subsistence are on a scale unreasonably generous. But it is my deliberate conviction after four years' pretty hard work in the detailed investigation of departmental expenditure that many of the charges which we see brought against public Departments are not warranted, and particularly not warranted as regards the older Departments of the State where the older and better Civil Service traditions survive. It is the new Departments which are in a new and less enviable category.

I have, however, arrived at the conclusion that whatever you do about these petty economies, which are not to be despised, they will not suffice and that you have got to attack not merely current expenditure, but the whole basis of expenditure. The great weakness of the Select Committee on national expenditure has been that over and over again we are brought up not against expenditure, but against policy into which we are not entitled to inquire. But what we cannot do and what we are not permitted to do this House can do and I submit this House ought to do. I fear I have already strained the patience of the House, but I do desire to ask the House to give their very grave consideration to this Motion before they decide to reject it. During these last two years we have been talking a great deal and we have been doing something with regard to what is called social reconstruction. I believe that the conviction is very fast forcing itself on most thoughtful people that in this matter of reconstruction we began at the wrong end, and that the basic foundation of all genuine reconstruction must be financial recuperation. You cannot have financial recuperation without very strict curtailment of public expenditure, but it seems to me that general professions, either on the part of individuals or on the part of this House in the cause of economy, are of very little use. Let me take one concrete illustration and I select it for a reason which I think the House will- appreciate, and partly in consequence of an interruption from an hon. Member, I believe the situation at which we have arrived is so incomparably grave that we have all got to be prepared to postpone the achievement of the objects for which we care most. I compare the very tentative Estimate of October, 1919, with the revised and still tentative Estimate, of June, 1920, and what is the largest single item of increased expenditure revealed by those two Papers. It is the cost of education which in the first Paper is put down at £47,800,000 (it cost about £19,000,000 before the War) and in the second Paper is put down at what I can only describe as the colossal sum of £73,000,000. Members of the last Parliament will, I think, remember that there was no private Member in the House who did more to facilitate the passage of the Bill of 1918, I venture to claim, than I did myself. I believed in the Act of 1918 and I believe in it still and I hope to see it carried out in its fullest implications, but I am so convinced of the gravity of our financial situation to-day that I say, and say deliberately, that the more elaborate provisions of that Act ought to be not abandoned, but postponed, for a period of years, at any rate, until we have reached financial equilibrium.

I am fortified in this opinion by a remarkable pamphlet by one whose opinion on matters of education will not be questioned—Mr. Sydney Webb. He was estimating whether we could pay our way after the War and he said in effect that there was one thing in which we could not economise, that was education, but he put the total cost of education at a sum of £50,000,000 which is £23,000,000 below the figure estimated for the future normal year by the Chancellor of the Exchequer. Much as I believe in the social value of education, I do not think that we can afford to spend a sum like that in our present financial position. The house will agree that I, at any rate, cannot personally give a stronger proof of my sincerity and earnestness on this question of national economy than by my selection of this particular item. But what I am prepared to do in the matter of education I expect that other hon. Members will do in other items of policy or reconstruction in which they may be interested and I commend to their favourable consideration the Ministry of Health and the Ministry of Labour. I hope earnestly that the House will assent to the Motion proposed by my right hon. Friend, and I hope further that the Government will not resist it, or if not this particular Motion then some amended Motion which will not be confined to pious hopes and evaporate in vague generalities but will really give to the harassed producer and the long-suffering consumer some definite and conclusive sign that at last in this matter of immediate and insistent importance this House is in real and deadly earnest.

  2. cc2491-3
  3. EXPENDITURE. 840 words
  4. cc2493-7
  5. REVENUE. 1,434 words
  6. cc2497-504
  8. cc2504-87
  9. FUTURE POLICY. 35,069 words, 2 divisions