§ 69. Sir R. COOPERasked the Chancellor of the Exchequer what special steps he is taking to reduce the expenditure of the State as rapidly as possible?
Mr. CHAMBERLAINThe Government is constantly engaged in examining the expenditure of the State with a view to effecting all reductions that are possible consistently with the adequate performance of the functions which Parliament has entrusted to it, and with the policies which it is called upon by Parliament to undertake.
Though it is concerned rather with prevention of increased expenditure than with effecting reductions in existing expenditure, the recently-issued Treasury Circular of the 28th April regarding Supplementary Estimates which I am circulating with this answer may be of interest to my hon. Friend and to the House as a specific instance of the Government's efforts to keep down expenditure.
§ The following is the Circular referred to:—
§ "No. 23/20.
§ Treasury Chambers,
§ 28th April, 1920.
§ SIR,
§ Supplementary Estimates.
§ I am directed by the Lords Commissioners of His Majesty's Treasury to advert to Treasury Circular (32652/19) of the 15th September last relative to the undesirability of Supplementary Estimates. Their Lordships have already had laid before them in the current year several proposals involving expenditure additional to the provision which Parliament is being asked to make for the year 1920–21, and they consider that it is of immediate importance that there should be a correct understanding of the place of Supplementary Estimates in the general scheme of National Finance.
§ The essence of the financial system of this country is that the Chancellor of the Exchequer should be enabled to place before Parliament the finances of the year as a whole in his Budget statement. It is practically impossible for him to propose in- 2235 creased taxation except at the time when he opens his Budget, and he can have no certainty that his forecast of revenue is sufficient to meet expenditure if material increases in expenditure not provided for in his Budget are made the subject of Supplementary Votes in the course of the financial year.
§ The presentation of Supplementary Estimates can, therefore, be justified only in exceptional circumstances. During the War and the initial period of post-War reconstruction the difficulty of making accurate estimates of expenditure covering the whole financial year was sometimes insurmountable. This condition no longer exists and the time has now come when the normal procedure must be re-established. Before proposals for new services requiring Supplementary Estimates can be considered it must be clearly established not merely that such new services are desirable, but that it is impossible to postpone expenditure until Parliamentary authority can be obtained in ordinary course in the original Estimates for the next financial year.
§ As regards excess cost of already existing services, where such is unavoidable, every effort must be made to reduce the volume of expenditure in other directions with a view to avoiding a Supplementary Estimate.
§ The purpose of Supplementary Estimates is not to supply a convenience to Departments which desire that larger sums may be placed at their disposal, but to afford a means whereby Parliamentary sanction may be sought for unavoidable excesses over the provision made in the original Estimate.
§ It should be added that it is the elementary duty of the Head of a Department, with the assistance of the Accounting Officer, if this Officer is not also the Head of the Department, to ensure not only that no expenditure is incurred without the prior sanction of the House of Commons, but also that the requirements of services shall be planned on such a scale that existing provision for expenditure will not be exceeded. Where exceptional circumstances make a Supplementary Estimate necessary or probable the earliest possible intimation of the likelihood of an excess must be sent to the Treasury.
§ I am,
§ Sir,
§ Your obedient Servant,
§ STANLEY BALDWIN.
§ The Accounting Officer."
§ Sir R. COOPERHas not the Treasury at its disposal information which indicates that, speaking generally, this country will not be able to support general taxation of over £800,000,000 without serious effects upon the general prosperity?
§ Mr. BILLINGIn the present Budget has the right hon. Gentleman made pro- 2236 vision for further or less expenditure of the various Government Departments for the forthcoming year?
Mr. CHAMBERLAINI do not understand what the right hon. Member means. I have made provision to the extent that I stated in my Budget statement, that is, for the expenditure included in the Estimates, charges on the Consolidated Fund, and a margin of £20,000,000 to provide for expenditure not yet included in the Estimates, but already foreseen.
Sir F. HALLIf the right hon. Gentleman anticipates that this country will be able to bear taxation to the extent of £800,000,000 in normal times, are we to understand that the present high rate of taxation is to be considered a sort of normal basis, and likely to continue?
Mr. CHAMBERLAINIf my hon. Friend supposes that, after a great War like this, we can go back to the old basis of taxation, he is unduly sanguine.
§ Brigadier-General CROFTHas the right hon. Gentleman made a demand for the instant demobilisation of the Minister of Munitions, the Disposal Board and the Land Valuation Department?