HC Deb 13 February 1922 vol 150 cc671-784

I beg to move, at the end of the Question, to add the words but humbly regret that the extravagance of Your Majesty's Ministers has imposed upon the country a crushing burden of taxation, and that they have been unable to make a definite promise that taxation will be reduced so as to stimulate trade and decrease unemployment. I trust that I may ask a little special indulgence of the House, because I am labouring under a certain amount of physical difficulty in standing on both legs at the same time. The discussion and support of the Amendment I have moved has been greatly simplified by the production a few days ago of what are now called the Geddes Reports. As appears on the first page of the first of these two Reports, there can be no attempt to dispute the first proposition in the Amendment; it is proved and admitted out of the mouths of Ministers themselves. As the Chairman of the Committee tells us, the Instruction the Committee received was to propose, in addition to the reductions in expenditure of £75,000,000 already sanctioned by the Departments, a further reduction of £100,000,000. That assumes that, in the opinion of the Government, at the time this Committee was brought into existence there was, without impairing the efficiency and good government of the country, the possibility at any rate of a reduction by £175,000,000 of the burdens on the tax- payer. What does £175,000,000 mean, translated into terms of Income Tax? The Income Tax now, at 6s. in the £, produces every year for each penny a little over £4,000,000—I think £4,200,000. A reduction of £175,000,000 in the total expenditure borne out of taxation would, therefore, be equivalent to a reduction of 40d. in the Income Tax, 3s. 4d. Do not let it be supposed that I suggest for a moment that the Income Tax ought to be reduced by that amount. [HON. MEBERS: "Why not?"] Other considerations must come in: there are other forms of taxation which are equally burdensome. But it is sometimes useful, when you are dealing with expenditure, and particularly with superfluous and unnecessary expenditure, to measure and express it in the terms of the taxation which its continuance involves.

Let me ask the House to look into the history of this matter. More than three years ago, in October, 1919, at a time when I was not a Member of the House, the Government through the mouth of the then Chancellor of the Exchequer adopted the rather unusual course of proposing a Vote of Confidence in themselves. In the Debate which then took place the Chancellor of the Exchequer said he proposed to introduce a series of drastic changes in administration with a view to public economy. He proposed that instead of two joint permanent Secretaries of the Treasury there should be one, with three Controllers. This was to enable the Treasury to "resume the quite sound but long disused control and to apply it effectively to our present condition." Further, there were to be periodical meetings of the Financial Secretary of the Treasury aid the heads of the spending departments, Thirdly, there was to be a Financial Committee of the Cabinet, very strongly constituted, composed of the Prime Minister, the Lord Privy Seal, Lord Milner (who was then a member of the Government), the President of the Board of Trade, and the Chancellor of the Exchequer. The House, upon these assurances, passed by a very large majority the Vote of Confidence which the Government had submitted to them. What was done? What, in particular, was the effect of the resumption of the disused control of the Treasury? Apparently nothing. Two years later, in May of last year, a circular was sent round to the Departments instructing them to make very drastic reductions. Clearly the elaborate machinery set up nearly two years before had totally failed to accomplish anything effective, and when the Departments had done their work the result was, as the Chairman of this Committee says (again on the first page of his Report), so disappointing in character that the Government conceived the idea of appointing what is now known as the Geddes Committee. Let me quote what they say: The reductions proposed by the Departments are automatic, due to the fall of prices and wages, or to windfalls, or to the cessation of special expenditure on services arising out of the War. The reductions in Estimates shown in response to your circular are therefore by no means fully the result of curtailment of activities or of economical administration. This point cannot be too clearly brought out. The Geddes Committee was then appointed. I am far from saying, after the very cursory survey of its Reports which alone has been possible, that it has not done very useful work. But I retain the opinion, which I have previously expressed in this House, that its appointment was unsound in principle and absolutely unjustified by past experience. It amounted to a delegation to an outside and irresponsible authority of the functions which ought to be discharged by the Treasury—as was recognised by the then Chancellor of the Exchequer two years before—subject always to the ultimate control and supervision of the House of Commons. These Reports, after being for two months in the hands of the Government, have now, at last, only two days before this Debate, been given to the House of Commons and to the public. For myself, I am totally unable to understand the course that has been pursued. There were two possible courses, for each of which there was a great deal to be said. The first was the immediate publication of the Report when it was received by the Government, without comment. The second was to withhold the publication of the Report until it had been fully considered by the Government; and then, when it came to be published, to publish it, if it were feasible, with such comments, corrections and readjustments as would help the reader to form an opinion on the matter. Only about a fortnight ago one of the Members of the Cabinet said, Before it is published the Government must reach definite conclusions as to the Estimates. The Government must know its own mind. Are we to assume that they have made up their minds? If they made it up before last Friday, when these Reports were given to the world, we shall expect from the Chancellor of the Exchequer a statement as to what conclusions the Government have arrived at. Neither of these courses was adopted. The Report was kept secret for two months, and then is published to the world as we have it to-day, in its original shape, without any Government guidance.

I was wrong in saying that. There his been one remarkable accompaniment to this publication, a counterblast of the Board of Admiralty, which accuses the authors of the Report of gross negligence and abject incompetence. From the answer which was made just now by the right hon. Gentleman opposite (Mr. Chamberlain) to a question put to him, I assume that this tirade, this counterblast, which proceeds from the Board of Admiralty is the advance guard of a procession of commentaries from various other Departments of the State. In the whole history of Parliament has there ever been such a grotesque spectacle? I wonder what Mr. Gladstone, or what Sir William Harcourt, or Sir Michael Hicks-Beach would have said—they were all masters of strong language, and not the least the third one)—what would any one of them have said of a proceeding of this kind being adopted; the forerunner of a series of Departmental escapades? I should say the officials responsible—unhappy men—would have been inclined to cast themselves, I would not say into the depths of the sea, but at any rate into the ornamental waters of St. James's Park. However, we have this extraordinary situation: this Report, produced under conditions quite unexampled in our administrative history, is now being launched on its voyage across the stormy ocean of Parliamentary and public criticism, with a certificate from the Board of Admiralty that it is a leaking and unseaworthy craft. That is a serious matter, and I think it is one about which we are entitled to ask for an explanation. I suppose none of us have had the time or the leisure to study these Reports in detail. As far as I can see, the facts and figures—I mean the actual, not the estimated or conjectural—are not capable of being seriously impugned. They speak for themselves; they abundantly justify in themselves the proposals contained in this Amendment. Well, I do not in the least associate myself with the Admiralty ebullition; nor do I wish at this stage to commit myself to any expression of belief in the verbal or even arithmetical inspiration of the Reports themselves. But they present some very interesting features, which even at this stage and upon superficial examination are worthy of attention.

One, a comparatively small one in the financial amount with which it deals, is specially noticeable. It is that these two Reports are strewn with what one of my friends has called "the débris of the new Jerusalem." The houses for heroes are going to be sold off at half price. The Ministry of Mines, and other by-product 'of the post-War activities of the Government, are to be scrapped; and last, but not least—it is really almost a matter for tears—the Ministry of Transport. There is a most pathetic correspondence in the second volume. I do not know whether the House has had time to read it. In the second volume of this Report there is a correspondence between the Chairman of the Committee and my right hon. Friend the Chancellor of the Exchequer. The Chairman asks, in accents which one can well understand and sympathise with, to be excused from taking any active part in the obsequies of the Department, of the great thinking Department, over which he presided for two or three years. The Chancellor of the Exchequer is a feeling man, of soft heart, and he was kind enough to write and tell him that he should be excused. He himself did not attend his own funeral. The Ministry of Transport is already buried beyond hope of resurrection, and its epitaph written vicariously by the colleagues of its late head.

I have said that these are interesting facts, although measured in terms of money, that part of the Report does not amount to very much. The real recommendations of this Committee, even at this stage and upon the necessarily imperfect analysis and examination to which they have been subjected, would result in very large savings in public expenditure, and fall under two heads—Defence and Education. Now, I have repeatedly said, both in the House and outside, that it is a great mistake to suppose that the terms "economy" and "saving" are synonymous. They are not. There are some forms of saving which are not only not forms of economy, but are forms of waste, and economy in the only intelligible and practical sense of the term in this department of national finance applies not to reproductive but to unproductive, and therefore superfluous expenditure.

With that preface, let me place before the House these two categories of reduction or proposed reduction. First, the category of National Defence, which includes the Army, the Navy and the Air Force. The economies recommended in the Report under that head amount to £46,500,000, a very large sum. Let me point out, and it is only fair to the Committee that that should be understood, that after making this recommendation, at the end of the first part of the Report (page 172), they put in this paragraph in reference to the precise figures: Navy, £21,000,000; Army, £20.000,000; Air, £5,500,000. "We wish to point out, however, that this Report is both interim and preliminary, and that, as we have stated, no account has been taken of the possible recasting of the Navy Estimates as the result of the Washington Conference, nor of any reductions in the Army Estimates resulting from a review by the Government of our military requirements at home and abroad." It is, therefore, quite clear that the Committee contemplates that if these great, and, I think, much needed, changes of policy took place, the reductions might be considerably larger than those which they recommended.

Now the figures under this head are of a most remarkable character. Our pre-War expenditure for defence purposes—taking the last year before the outbreak of War—was for the Army and Navy—the Air Force was not then in a separate category, although some expenditure for it was included under both Services—our pre-War expenditure for defence purposes amounted to £80,000,000 a year. The Estimates for the present year—the Estimates with which this Committee were dealing—nearly four years after the cessation of hostilities, and the conclusion of the Armistice, or rather, say, three and a half years—the Estimates for 1922–23 in the forthcoming financial year are £170,000,000. £80,000,000 against £170,000,000.

The SECRETARY of STATE for the COLONIES (Mr. Churchill)

indicated dissent.


I am now giving the figures exactly as they are stated in this Report. It may be the right hon. Gentleman thinks that they have ignored elementary facts or factors in the case. I have taken the Report of this Committee appointed by the Government in super-session of the Treasury because presumably they had confidence in their competency. These are the figures which they have presented to the Government, and, through the Government, to the House of Commons and the country. The pre-War expenditure, they say, was £80,000,000; the Estimates for 1922–23 are £170,000,000, or, in other words, £90,000,000 in excess of the pre-War figure. On page 7 of their First Report they summarise their statement on this subject in these words: We must record a very marked impression derived from long conference with the Departmental representatives of the three fighting services. The Estimates provide that in the year 1923, the fifth year after the Armistice was signed, with a broken and exhausted Europe and with no German menace, we are to have a far greater fighting power, with a larger personnel and greater preparations for war than ever before in our history. Additional services, more deadly weapons, additional systems, are added to the old formations or to the old units. That is the conclusion at which the Committee have arrived after conference with all the Departments concerned. I should like to make one or two observations which are, quite independent of changes in the value of money. The Army personnel which was voted in the last year before the War was 181,000. Of course, that is what is borne on the Army Votes here, and does not include that part of the British Army which is paid for out of Indian revenues, for service in India. The Estimate for personnel for the financial year 1922–23 is 210,000, or an increase of 29,000 as compared with the pre-War standard. That has nothing to do with the change in the value of money. I am purposely leaving the Navy for the moment out of account, because I think we ought to have a great deal more information than either this Report or the Admiralty Memorandum gives us—a report based on the naval changes which would result from the adoption of the wise policy which was pressed by this country, as well as by the United States, at Washington. I therefore purposely leave the Navy out of account and deal with the Army alone. Unhappily, at Washington—it is the only thing that mars our gratification at the great results which that most remarkable gathering has produced—unhappily the question of land armaments was excluded from their consideration. Unhappily, also, they did not feel able to deal—as I am glad the chief representative of this country pressed them strongly to deal—with the question of submarines. Those are—if I may say so, with all respect to the eminent men who took part in that most beneficent conference—those are two, I will not say blots on their record, but two results which failed to be achieved.

Coming back to the question of the Army, the Report points out, as I have said, that the personnel is increased by 29,000 as compared with what it was in the year before the War. Moreover, the ratio, as the Committee points out, of officers to men—not an unimportant point—which was then 1 to 17, is now 1 to 14; and, if you take the War Office itself—the central machine which organises and is responsible for the whole force—the cost of the War Office, which in the year before the War was £457,000, is now, according to the Estimates for the forthcoming year, £1,300,000. Those are facts which cannot be gainsaid. What I am about to say is not to be found in the Report of the Geddes Committee, but it must be familiar, and is certainly relevant to the purpose. You have to consider, when dealing with military provision on this scale, the military conditions of the world. What are the armies of the world now? Let us leave out of account the United States of America, and consider Europe. I want the House to realise the difference between the armed camp, which is not at all an exaggerated description of the state of things in Europe before the War, and the condition of things now. There are now, as compared with pre-War standards, only two armies which can be regarded as even considerable—the French army and the army of Poland. [HON. MEMBERS: "Russia!"] We do not know about Russia. I am leaving Russia out, because we do not know what her armed forces are. Excluding Russia, there are in Europe two considerable armies—though not considerable in pro- portion to pre-War dimensions—the army in France of 800,000, and the army in Poland of 600,000. When you have left those two out of account, I think I am right in saying that there is no army in Europe which exceeds 300,000 men. Italy has about 300,000; Greece, I regret to say, has about 250,000 men under arms; and then there are the Czecho-Slovakian and Serbo-Croatian armies of from 200,000 to 250,000. Germany and Austria are reduced to their Treaty limit, and I am assuming that the Treaty limit will be observed and respected. Taking the Europe in which those are now the principal armies, and the only ones which, in the unhappy and, we hope, inconceivable event of the recurrence of war, we should have to consider one way or the other, the situation in that respect must be regarded as totally different from that which presented itself to statesmen before the War broke out. It is absolutely different, as my right hon. Friend agrees.

Let me interpose here another thing on which I hope, and, indeed, am sure, I shall have his assent. You ought to budget—if I may use such an expression—in regard to your military arrangements in the new conditions which have sprung up since the conclusion of the War and the establishment of peace, upon the assumption that you will not have a recurrence of the competitive system of rival armies among the various nations of the world; upon the assumption—it may sound too optimistic, too idealistic, but that is the assumption which ought to guide and govern your policy, subject to proper reserves—that you are, in the future, to have an era of international peace. I do not say that you should disregard contingencies and possibilities. You must not leave your door unlocked on the assumption that there will be no more burglars; that would be a very foolish thing to do, even in the most perfected state of society. But on the whole, taking a large view of European and international policy, what result has the War brought us, with its enormous expenditure of life and wealth and human suffering and heroism, what has the War brought us, if we cannot assume, as one of its permanent results, that Europe, and indeed the world at large, will no longer be divided into an array of rival armed camps? With the development of the League of Nations, peace between the nations must be and ought to be regarded as the normal condition of a affairs. I find, therefore, no justification whatever—as I have said, I am speaking for the moment of the Army alone—no justification whatever for a scale of personnel and of expenditure on the Army which in this, the fourth year after the Armistice, exceeds that which was put forward in the year before the War.

I now pass to the other head, namely, education. The total reduction upon education—and it is the largest reduction next to that on the Army which the Geddes Committee propose—amounts for England and Wales and for Scotland to £18,000,000, namely, £16,000,000 for England and Wales, and £2,000,000 for Scotland. Our expenditure on education is colossal. I do not deny that for a moment. For Great Britain it amounted, last year, to, I think, £60,500,000 out of taxes and £43,300,000 out of rates—a total of £104,000,000 for England and Scotland together. I should be the last person to deny—and I do not deny, but on the contrary I strongly believe—that there is room for economy, and for considerable economy in some branches of our educational expenditure. I will tell the House why, because it is all-important to economise at the right point and not at the wrong point. I am sure that the curious intermixture which we have reached, by a series of more or less haphazard experiments, of central and local control in the matter of education, lends itself to a great deal of leakage and avoidable expenditure. You have two sets of authorities, and you have two sets of funds. You have the Board of Education, and you have the county councils and the other local authorities administering education on the spot. On the other hand, you have the taxes as one source of revenue, and the rates as another. This combination has given rise, I am certain, to a considerable amount of real administrative waste. But just look at the other side. As regards elementary education, is there anyone here who is prepared to deny that in many areas schools are insanitary, overcrowded, and under-staffed? Everyone knows that to he the ease who has any practical acquaintance with the facts. There are 2,000—I am taking the figures from some statement made by the President of the Board of Education—would be teachers who can find no place in train- ing colleges. The number of teachers who are actually required, the annual increment to your total body of teachers, is less than half what it ought to be. I believe I am under-stating the ease—I am certain I am not overstating it. What are the proposals of this Committee? I am going to show the House that I do not regard this in any sense as an inspired document. They are proposing what are called economies, but what are savings, it seems to me almost exactly in the place where they are least needed and will be most harmful. They are proposing to raise the age of the poor little children—the age at which they are to go to school—uniformly all over the country to six. [HON. MEMBERS: "Hear, hear!"] I am sorry to hear that cheer. What is going to happen to them, uncared for and untended in their squalid homes or wandering about the public streets? Is that an economy in the long run? It is no fault of their parents, who have to earn their livelihood by the sweat of their brow. They cannot do what we in what is called a better position in life can do for our children. You have to think of the children themselves, who are, after all, the future reservoir of wealth and wealth production, to put it at the very lowest, of the country at large. That economy, which the Geddes Committee estimates at something like £1,750,000, in my opinion will be very dearly purchased. But what is worse, they propose to raise the number of children per teacher from 32 to 50. I regard that as one of the most uneconomical proposals ever made. It is reducing the efficiency of education under the guise of economy by a most substantial percentage in its real working power. In the new schools I suppose they could net provide the accommodation—and in some of the best schools, too. Anyone who has any practical experience of elementary education knows that to raise the number of scholars per teacher is a retrograde step which may be in the long run most disastrous because it is most uneconomical.

I should like to say one word about secondary and higher education, in which also this Committee proposes to make considerable savings. One of the most disappointing things that has happened to those of us who regard national education as, on the whole, the most important of all our social functions has been that the provisions of my right hon. Friend's Act of 1918 for continuation schools, and particularly for day continuation schools, has been so sparsely applied. I do not think outside London there are more than two or three considerable areas which now have these day continuation schools. In London considerable use has been made of them, but outside London the result is meagre and disappointing to the last degree. I am not speaking for the moment of the evening schools, important as they are. Anything which tends to retard or to sterilise the provision for the continuance of education after the elementary stage is, in my opinion, to be deprecated and to be resisted with all possible force by those who really believe in the future of this country. I will put in a word for the higher stages of education as well—the University colleges and the Universities.

I have been sitting now for two years as chairman of a commission inquiring into the needs and the work of our two ancient Universities, Oxford and Cambridge. We have just completed our report. They, of course, are happy in the possession of old endowments which appear, on paper, of considerable amounts. [An HON. MEMBER: "What about poor children?"] Great provision has been made for poor children. Our Report will completely dispel the notion that the ancient universities are the preserve of the rich and idle. That was perfectly true a hundred years ago, but is absolutely untrue to-day. But even endowed as they happily are with considerable sums by benefactors both past and present, we are satisfied, although we exposed their expenditure to the most searching possible tests, that, on the whole—there are, of course, lapses—it stood that test very well. We are satisfied that those great universities, which are the trustees of the higher culture of the nation, not for a class, but for the whole people, cannot continue their work efficiently unless they receive some substantial addition to the comparatively meagre allowance which the State has made for them. All these things are not good to talk about on the platform. They do not evoke popular applause; they may he even, in a sense, unpopular. At any rate, they do not catch votes, which is a very unimportant consideration from this point of view. Anything in the nature of ill-judged parsimony at any stage of education, elementary, secondary, techni- cal or university, at the stage we have now reached in the evolution of the world, commercial, financial, and still more in the disinterested pursuit of research and of the humanities—anything in the nature of ill-judged parsimony in that respect is not only not economy, it is waste of the resources of the nation.

I have spoken longer than I intended, but I thought both aspects deserved to be considered at one and the same time as part and parcel of different facets of a single problem. I will only say this further in regard to the future. Nothing can give us back the millions which have been wasted since the Armistice—hundreds of millions—in the fitful pursuit of ill-conceived and vacillating policies. That has gone beyond recovery and beyond recall. We must look to the future, and in conjunction with reductions of expenditure on at least as drastic a scale as that proposed by this Committee, and as I think, in some respects, better conceived and better directed, if we are to really get our own country and the other countries with whom our interdependence becomes every year more and more completely united, we must abandon once and for all those liens and charges which, as the result of the various arrangements come to since the War, clog the industrial recovery of most, if not all, of those who were belligerents. If I were Chancellor of the Exchequer, as I never expect to be—I make a present of this suggestion to my right hon. Friend—I should not budget as a potential asset of this country—I am not speaking of others—on any paper liabilities, either of our late enemies or of our Allies. Let us make a clean sweep. There may be windfalls, but I should not treat any of them as potential assets. The past we cannot revise or reverse. The future is in our own hands. On those lines—I am not committing myself or any of my friends to the precise proposals of the Geddes Committee—I take, and the country ought to take, into account what appears to be on their part an impartial and an exhaustive statement of most of the material facts, and on those lines of drastic and well-conceived reduction of expenditure, and upon those lines only can you deal effectively with the problem of unemployment, and bring back that which is the first preliminary and essential condition to a general recovery of prosperity throughout the world; free and open markets, complete and full interchange of commodities and services; and resolute avoidance of any form of national expenditure which is not reproductive, either immediately or in the future.

5.0 P.M.


I cannot claim to have the very long experience of public finance of my right hon. Friend who has just spoken, but I feel quite sure that hon. Members in all parts of the House will wish to hear an expression of the Labour view regarding the Report of the Geddes Committee before the Chancellor of the Exchequer replies. It was suggested in a speech by a very prominent Member of this House, who is not a Member now, in the country during the week end, that Labour had no interest in the reduction of national expenditure, that we have played no conspicuous part in this campaign, and that we have proceeded very largely upon the line that if there was lavish national expenditure some portion of it would trickle down to the working classes, and that they would be assisted to that extent. I need scarcely say that there is no Member on these benches who would commit himself to a fallacy of that kind. We remember that the last Budget which went through the House provided for £1,216,000,000 of revenue, which was, in round figures, six times the whole of the pre-War revenue of this country, and we recognise, in common with hon. Members in all parts of the House, that we cannot expose British industry and commerce to that tremendous burden without its having an adverse reaction on employment and everything else. We are, therefore, strongly in favour of the most drastic economies which can possibly be achieved, provided always that that economy is going to fit in with what we call, and which I think we shall be able to prove to-day are, the admitted needs of the country.

It is quite impossible for any private Member, or for any Member of this House, to attempt to survey the two Reports of the Geddes Committee in detail. We have only been in possession of the two documents for three days. All that we can attempt to do is to take a broad survey of the leading problems, and it will be my purpose, very briefly, to in- dicate our attitude, particularly on the drastic, or, as I should rather think, the not too drastic recommendations regarding armaments on the one hand, and the very severe recommendations regarding education on the other. Let us look, first of all, at the question of expenditure on armaments. If I remember rightly, the last Budget provided in round figures for expenditure of £207,000,000 in that Department, or more than the whole of the pre-War revenue of this country. The Army and Navy in pre-War times cost, in round figures, about £80,000,000 or £90,000,000, but according to the estimate contained in the Report of the Geddes Committee, the sum involved for the coming year, 1922–3, is, in round figures, £175,000,000. I am not quite sure how far that is going to be affected by the reduction recommended by the Geddes Committee, but even if we go on the assumption that the whole of the £44,000,000 of reduction is taken from the £175,000,000, there will be a sum remaining to be expended on armaments of something like £130,000,000.

We on these benches do not forget in any shape or form the very great change which has been introduced by the rise in the cost of commodities, but it is only fair to point out that during 1921 there has been a rapid fall in prices. The retail cost of living—though it is not quite, directly relevant—is now down to 90 or 92 per cent. above the level of July, 1914, and I have no doubt that the tendency must be downwards for some time yet. Therefore, to some extent, that goes to meet the argument of the Secretary of State for the Colonies that, as wholesale and retail prices have fallen, the benefit should enure to the Army, the Navy, and the Air Force as it enures to the other sections of the community. Quite apart from that argument, surely it is good business on our part at the present time to try to secure far more than the £44,000,000 reduction recommended by the Geddes Committee. I do not think that, making all allowance for the increase in the cost of commodities, any Member of this House, on reflection, would say that, in the present condition of national and international finance, this country can afford to spend £130,000,000 on military, naval and air force preparation. We can afford that expenditure all the less when we have regard to the state of affairs in Europe on the one hand, and to the effect that that expenditure must have on quite necessary services like education.

The Reports of the Committee make it perfectly plain that the Committee were to proceed on the assumption that there would be no large war for a period of ten years. I hope that we are not going to see any large or, indeed, any war in the world again. It is surely a reasonable argument to employ this afternoon that, having regard to the existing condition of things in the world, we can make far more drastic reductions with perfect safety, and that there is not likely to be in any great part of Europe any desire to embark on any competition in armaments or any naval preparations in the near future. The one country which in the course of my right hon. Friend's speech raised question in some parts of the House was Russia. Surely no hon. Member familiar with the state of affairs existing in Russia to-day will argue for a moment that that country, now in chaos, in ruin, with transport broken down, with millions of people unable to find employment, and with great distress among, the peasantry, is going to be a serious factor in any problem of armaments in the future.

If we can make the League of Nations a reality rather than a name in Europe there should be an additional safeguard If we can build up a better spirit among the peoples of the world, and better economic relations, we should again strengthen the possibilities of peace. Our conclusion, from the information contained in the two Reports of the Committee', is that the £44,000,000 reduction in armaments is not in any way drastic, but is, in our judgment, quite inadequate to the existing situation. We, therefore, urge very strongly that there should be a further investigation in this sphere, and that we should pursue all possibilities of the severest reductions of expenditure on armaments before we touch, in any shape or form, the admitted necessaries in the realm of education. With respect to the proposals of the Committee regarding education, I note that the expenditure in 1913–14 on education was about £14,000,000. The expenditure has risen, according to the last Estimates, to about £60,000,000 provided by the taxpayers of the country, and about £42,000,000 provided from local rates, or a sum, approximately, of £103,000,000 or £104,000,000 devoted to education. I entirely agree that when hon. Members compare that figure with the pre-War figure, there has been a vast increase, and it is probably true that in some departments of education and its administration there is room for economy, or for at least the elimination of waste at the present time.

We have no desire to defend any waste, either in the education system or elsewhere, and we candidly recognise that you are not going to educate the people of this country by the mere expenditure of public or other funds. Let us get the very best bargain we possibly can for the money which we are expending, but do not let us, in our effort to attain economy, starve necessary parts of the system, and more particularly those parts of the system upon which the Geddes Committee has fastened its attention. Under 3, 4 or 5 heads, what has the Committee recommended? It recommends, in the first place, that we should put the scheme of superannuation on a contributory basis. There may be a great deal to recommend the contributory system in any scheme of superannuation, but in that connection it is only fair to point out that superannuation has always been one attraction for the teaching profession, that in pre-War times the overwhelming majority of the teachers of this country were seriously underpaid, and that, even with the attraction of superannuation and regular employment, it has been very difficult in many parts of the country, and especially in Scotland, to get recruits for the teaching profession.

The Report of the Geddes Committee makes it plain that in secondary education and other departments, and I suppose it is true in a more aggravated form of elementary education, the average salaries of British teachers are comparatively low. It is notorious that the reward for an educated man and woman and for his or her service in that capacity is very much below the reward which in most cases people of similar education or training can obtain outside. If the Government are going to entertain the proposal of the Committee for the placing of superannuation on a contributory basis, I respectfully suggest that they cannot consider teachers' superannuation alone. The truth is that the whole problem of superannuation in this country is very grave. Many schemes of local authorities are practically insolvent and require to be recast. It may be that fuller public provision will be demanded and, perhaps, will be provided. In any case, to those who have studied the general question of superannuation, this at least is plain that we shall require to put the system on a much broader foundation than it now enjoys. In the second place, there must be greater safeguards against grants in the later years of service—this is very often true in regard to local authorities—affecting retirements following later years of service, in which salaries have been artificially and sometimes excessively raised, more particularly where the high officials are concerned.

It has been pointed out that that tendency has done a great deal to undermine the strength of superannuation schemes. My point is that if the Government are going to face a contributory basis in the case of teachers, let them ask the Geddes Committee, or any other committee, or more preferably let them face the problem themselves, to go into the whole question of superannuation and find whether it is possible to relate the schemes to one another, to give them a broader basis, and do not let the many superannuation schemes in the country stand on their own legs and on the too narrow foundations which they now enjoy.

It is also recommended by the Committee that there should be an increase in the number of pupils per teacher. In that connection we have to keep clearly in mind that they are in no kind of way admitting the great deal of alteration in school accommodation which would be necessary if the classes were so enlarged. Many of the class rooms, both before and during the War, were greatly over-crowded. In the more densely populated parts of our larger cities, teachers and pupils carried on work in most disadvantageous conditions, and not only were the teachers breaking down under the strain, but they were getting very little result from the pupils because of the foetid condition of the atmosphere, the congestion of the rooms, and the general disadvantages with which most education and other authorities were familiar.

The tendency in education at present is not to increase the size of classes, whether it is in primary or secondary schools, or more particularly, in adult education; but that there should be more effort to cultivate the soil, more close touch between teacher and taught, and less of that sort of public meeting in the schools at which very little education of the real kind can be carried on. The, proposal now made is in the teeth of the well-marked tendency in educational progress in these matters. Here is solemnly recommended an increase in the size of classes by giving a larger number of pupils to the teachers, and by that fictitious economy we are merely going back to some of the loss and disaster which were true of some of our educational system, perhaps unavoidably, during the War period in particular.

Another recommendation is to cut down or restrict the amount of expenditure on secondary education in this country. Let us examine that problem a little more closely. In a very large proportion of our secondary schools fees are now paid. In addition to those fees, the parents of those pupils have to pay, like all other members of the community, their local rates towards educational development, and their imperial taxes under that head as well. It would be most unfortunate for Great Britain if, just at the moment that we are confronted with an increased demand for secondary education, it became more difficult to provide it. We must also keep clearly in view the fact that it is from the secondary schools we recruit a very large part of the people upon whom we depend for administration, leadership, and what not, in business and commerce, and for the supply of many of our teachers. And there is a very large number of people who depend on the contribution which is made from public funds on their behalf in earlier years.

Then the Committee recommend a reduction in the grants which are given for the highest form of education. Remember in this connection that the Government is only providing in round figures at present, by way of university grants, very little more than £1,000,000 per annum out of the £1,216,000,000 of the last Budget. Under that head it is suggested that we should sweep away altogether the system of free scholarships giving students assistance in entering the universities—a system which was introduced as recently as 1920. This Report is perfectly fair in many of its proposals, but I suggest that it is not fair in its statement as to education. The total number of the free scholarships at present is only 180, and it is the assistance to that small number of people which the Report recommends should be swept away. It is a recommendation of this kind which makes us wonder whether the Committee have really gone to the root of the matter.

On the point of the highest education, I think that it is true to say that there is hardly a university in this country at present that is not in grave difficulty regarding finance. They all require an extension of laboratories for research and other purposes. Students are knocking at their doors in thousands, and they cannot gain admission owing to lack of accommodation. Appeals for voluntary assistance will, in some cases, be largely a failure and, in most cases, altogether a failure, and yet the universities are to struggle on. It would be improper on my part, as a Member of the Royal Commission to which my right hon. Friend the Member for Paisley (Mr. Asquith) has referred, to say anything about its Report which will be issued at a very early date. But I can say this with safety, because it is public property, that the old universities, Oxford and Cambridge, will require sonic larger grants from public funds. After two years' experience on that Commission, I am prepared to say, without the least fear of contradiction, that I do not see how they can carry on their work efficiently unless that assistance is forthcoming. All the other universities in this country are in much the same position, and yet this Report proposes that we are to curtail, and in some Departments to stop, the limited form of aid which we are now giving.

Before the Chancellor of the Exchequer comes to reply, I put this point to the House with all the force I can. Even in present conditions, in the central parts of Europe and in other countries, they are not neglecting technical education or research. With all their financial difficulties, they are finding large sums of money in many cases for these purposes. Their object is not merely to train the individual student in the secondary schools or universities, but to enable them to breed a race of business men, workers and others, with a thorough knowledge of business and economic conditions, who will assist in the economic recovery of the country, and bring it back to its pre- War strength and stability in the councils of the world. Over and over again it has been pointed out that we have lost markets in many places because of a certain deficiency in technical skill. This extends far beyond the school, the college, and the university. Hon. Members who are familiar with the investigations—and this will very soon be a part of the work of the Geddes Committee—into industrial fatigue, industrial processes, and the better conditions in which large masses of the business workers can carry on their work, are aware of the fact that already the very limited application of these principles has led to a saving of hundreds of thousands of pounds and an improvement, in the efficiency of the industry to such an extent that in some cases, including one only a few days ago, the industries have come forward with voluntary grants in recognition of the great benefit conferred on them as a result of the work done in what is one of the most important departments of educational research.

My case is simply this. By all means let us have great reductions of expenditure in the spheres in which we can with perfect safety reduce the expenditure, but in the spheres which I have just described this country can afford no starvation. We cannot at present, therefore, if we are going to recover our markets, penalise education, or starve research, or in any other way make it more difficult to carry them on than it is in the admittedly difficult conditions in which we are now. I hope, therefore, that the Chancellor of the Exchequer will say something of hope to all who are interested in British education. In common with the right hon. Gentleman who last addressed the House, I recognise that that is not in many quarters a popular suggestion. It does not appeal to the gallery. It is regarded with suspicion even among some of the workers themselves, but, in the main, the great body of the people of this country desire a larger and better system of education, and it is in the nation's interest that we should try to provide it at the present time.

There is one other matter in the Report to which I should like to refer. The Report recommends the abolition of the Ministry of Transport as a separate Ministry and the abolition of the Mines Department and other Departments, and the transfer of their present duties to the Board of Trade or some centralised Department. We on these Benches have no wish to plead for any Department in the State as a Department. It is no portion of our business to build up a bureaucracy in Great Britain; but it is a portion of our business to try to ensure that there should be an efficient review of great enterprises in the State in which the public, mainly as consumers, are vitally interested.

Take the proposal to transfer the powers of the Ministry of Transport to the Board of Trade. I take it in substance that that means handing back the whole review of railway operations to the Department of the Board of Trade which was entrusted with the task in pre-War times. From the investigations of the Colwyn Committee, reviewing the agreements entered into between the railway companies and the Government during the War, it is evident that the supervision exercised by the Board of Trade or that Department of the Board of Trade, in the early stages at all events, was inadequate. It had other interests. It was probably grossly overworked. It could not give that close attention that was required to the relation of the Government towards the railway undertakings in this country and the outcome of that was the setting up of a large number of loose and chaotic agreements, in settlement of which it was ultimately necessary for the Chancellor of the Exchequer to find £60,000,000 of public money and to incorporate the settlement in the Railways Act of last year.

I make no comments upon the justice or injustice of that claim. The only thing I will say is that there was clearly left on the minds of the members of the Colwyn Committee the definite impression that there was grave weakness in the review of the matter in the earlier stages, and that it was very important that there should be some thoroughly efficient Department in the State which should take charge of and look after the interests of the British people in railways, transport, and kindred enterprises from time to time. If it can be proved, and I speak here for myself, that that is going to be done with great economy in the future, in some Department other than the Ministry of Transport, then I personally would have no very strong case to make; but this at least is important: the Railways Act of last year has gone through, establishing what I call, at all events, four great railway trusts in this country. No doubt the Act contains certain protections for traders, travelling public, and other members of the community, but it is plain that there must be some Department which from time to time is reviewing matters under electricity, under transport at large, and such heads, and doing what it can not only to protect the nation but to protect the great mass of consumers.

These are the only three points to which I shall devote attention this afternoon. But let me say this in conclusion, that I cordially endorse, if I may say so with respect, what was said by the right hon. Gentleman the Member for Paisley. I think that, subject to the reservations I have made, it is possible to get a reduction of many millions in public expenditure, and I would say it is very important for us as a Labour movement to do everything we can to contribute to that end. What is our position in relation to other countries in Europe, and indeed in the world? Surely, it is true to say, if we look to their financial structure or system of taxation, our position is very much better than theirs? We have come through the War with a stability and strength, with a continued policy in finance which very few other countries can show. If we can substantially reduce our taxation at the present time, we are going to have an immediate advantage, in my judgment, in overseas trade and commerce. We are going to meet to some extent the unfair competition to which we are now exposed, and because of that we are going to make good much sooner than otherwise would be the case the tremendous burden of debt that lies upon the shoulders of the British people. I have made that plain in these final sentences, because I am afraid that both in the House and outside there is a tendency to argue that labour is not interested in these problems. We are very deeply interested in these problems. If we could get that reduction of expenditure, I should put it forward on this ground among others: it would be almost the best service we could render to the 2,000,000 people who are now anxiously seeking work in this country, and to the enormous numbers of people who are very seriously underemployed.

The CHANCELLOR of the EXCHEQUER (Sir Robert Horne)

In intervening in this Debate I confess that the speeches which have been made in support of the Amendment that has been moved leave me somewhat at a loss. The Amendment attacks the Government. It accuses us of extravagance in expenditure; it asserts that the burden of taxation which we have to bear is directly caused by that extravagance in expenditure, and it complains that we have made no definite promise of a reduction of taxation in succeeding years. That is the fulmination of the party who put down this Amendment. I have listened to two speeches. By far the greater part of both these speeches has been taken up in defending one of the large regions of Government expenditure and begging that whatever reductions take place they shall not take place in that quarter. As to the speech of the right hon. Gentleman the Member for Paisley (Mr. Asquith)—whom we are all very glad to see again among us—there were occasional rumblings of discontent at Government extravagance, and, with the plentitude of phraseology to which we are accustomed from him, he occasionally indulged in somewhat magniloquent sentences denouncing extravagance in general, but he only gave one particular instance in the whole course of his speech. He devoted the greater part of it to defending expenditure on education. There is only one thing which I have to complain of in his speech so far as-he dealt with the Amendment, and that is that he entirely ignored the most important factor in public expenditure to-day—I mean the expenditure which is caused by our obligations in the shape of War Debt. I think that the House and the country cannot be too often reminded that, at the present time, the amount we have to pay in interest and minimum Sinking Fund charges in respect of our Debt and for War pensions reaches the very formidable total of £500,000,000 sterling. This represents nearly one-half of the whole expenditure of the year, and so is responsible for nearly one-half of our taxation and in particular for nearly 3s. of the Income Tax. That is a portion of public expenditure which the Government can do little or nothing to lighten.


Does it include redemption of Debt?


It includes a certain amount by way of Sinking Fund charges —not a very considerable amount; I think this last year it probably amounted to between £40,000,000 and £50,000,000. When I say Sinking Fund charges, I include charges such as Depreciation Fund, and also allowances in respect of stocks which have been given up in payment of Death Duties and Excess Profits Duty. This really is the most important factor in our public expenditure to-day, and until people fully realise what that means they will never look with fair minded impartiality at the large amount of expenditure which inevitably takes place every year. In point of fact, if you were to add together what we pay in respect of interest, Sinking Fund charges, pensions and other War commitments, such as the expenditure upon land settlement for ex-soldiers, on training grants for ex-service men, and on the fulfilment of our obligations and our War commitments generally—for example, the Railway Agreement to which the hon. Gentleman who last spoke referred, and which in the present year cost us no less than £75,000,000—if you add all these items together, and, in addition, take the amount of our pre-War expenditure and write it up to its present-day equivalent, you will arrive at a figure which is very near our actual expenditure in the present year. That, I think, will give the House some idea of the fact that whether we are saving all we can or not, we are certainly not erring very greatly on the side of extravagance. After all, we are living in very abnormal times. People find their private expenditure to-day much more difficult to control than in pre-War days. Take an ordinary business man. Can he say he was able immediately the War was over to bring down the rate of his expenditure to the pre-War level?

When you compare our expenditure with that of other countries, you do not find any evidence of extravagance whatsoever. Our expenditure to-day is 5½ times what it was before the War. Let us compare that with the expenditure of our Allies who fought the War alongside us. Take France. Her expenditure during the past year has been 10 times her pre-War expenditure. If you take Italy, who came later into the War, her figure is 9½ times her pre-War expenditure. If you take the case of the United States of America, which, as we all know, was only for a very short time in the War—[An HON. MEMBER: "Does that make allowance for the exchange?"] It is taking expenditure in their own currency, that is, comparing like with like. [HON. MEMBERS: "Oh!"] What other way can you do it? My hon. Friends make the mistake of thinking that the internal value of a currency is always the same as its external value, which is an immense mistake. You can only compare like with like. If you take the United States of America, which was only for a comparatively short time in the War, and which did not accumulate anything like our debt, and- which has never had to make such provision for her wounded soldiers and for the widows of soldiers who were killed as we have done, her expenditure during this last year is five times her pre-War expenditure. When these facts are thoroughly understood, it will be realised that in comparison with others we have done very well in this country. I am not making any claim at this moment that we have saved everything we can. That would be absurd, but I say, Is it not much more likely, when other nations have been going through the same experience, that the truth is that the situation has been too much for us all and that the vast expenditure which we find everywhere is a product of the times in which we find ourselves? I do not put it higher than that.

You would imagine from much that is said that the Government, since the Armistice, has been doing nothing at all to reduce our public expenditure. Of course that is a complete fallacy. The total gross Supply expenditure was reduced in 1919–20 by £1,222,000,000. There was a reduction of £675,000,000 in the following year, and in the year after that there was a reduction of a further £140,000,000, and, as the House is aware, in reply to the Treasury circular, savings were suggested by the Departments amounting to £75,000,000. I am perfectly well aware that, as is stated in the Geddes Report, that £75,000,000 does not arise from the cutting off of services, but in part at least is due to reductions in certain costs. It was at that stage that it became clear to me as Chancellor of the Exchequer that reductions of that kind were not adequate to deal with the position in which we find ourselves. I has issued from the Treasury a circular asking for a reduction of £113,000,000. It was not, as the right hon. Gentleman has suggested, because I realised that we were wasting £113,000,000 in the year, or that the services which were then being carried out by the country could be operated adequately on £113,000,000 less than we were actually spending. That was not the situation at all. I was looking purely to the revenue which we might anticipate in the following year and to expenditure which could be brought within its range. It was not a question, as my right hon. Friend would have the House understand, of saying that these services ought not to be carried on. It was a matter of saying: "We cannot with the money we have expect to carry them out without a huge deficit." There are many things which, in settled times, you would wish to encourage and foster and for which you would spend money, but which in times of privation you feel you are not in a position to afford, and it was entirely from that point of view that I approached the question. The right hon. Gentleman, in the opening of his speech, quoted from the beginning of the Geddes Report a passage which he said was tantamount to a confession by the Government that we were wasting £175,000,000 a year. The passage which he quoted is, in fact from the Report of the Committee to myself as Chancellor of the Exchequer, in which they said: The situation, as explained to the Departments in May, demanded a reduction of £113,000,000, but you have since asked us to aim at economies which in the total would effect a reduction of expenditure of £175,000,000. But the whole point of my request—because it was purely a personal request from me, looking to next year's Budget—was not that the Departments were wasting money upon services which could easily be done without, but that in the present condition of our country's finances we could not afford to meet a bill which was larger than the one I put before them. That was not a confession, in any respect, of waste. It was only a confession of the extremely embarrassing position in which we were going to find ourselves in the following year by reason of the obvious reduction which would take place in the revenue. We were experiencing a year of very great depression. The figures indicated that our revenue would undoubtedly come down to a very much lower figure. Accordingly I put before the Committee that we must have savings to that extent if revenue was to meet expenditure. The right hon. Gentleman has once more deprecated the appointment of any such Committee as the Geddes Committee, and he said it was a surrender of Treasury authority to an irresponsible body. There was no surrender of Treasury authority to any irresponsible body. There was a request by myself as Chancellor of the Exchequer to this Committee to report to me as to what savings they could suggest after investigation into the finances of the country. They have no responsibility for the policy which should be put in force. But when was the precedent first created that the Treasury could no longer summon to its aid expert advice upon matters on which they required it? Why, it is not so long ago that upon a matter in regard to which, much more than this, the Treasury was obviously the proper body to act—namely, the amount of salary which should be paid to certain officials—the right hon. Gentleman himself consented to preside over a Committee which was to give advice to the Treasury. That was on a matter which was much more germane to the Treasury. [An HON. MEMBER:"A Member of the House."]


I was asked to do so by the Chancellor of the Exchequer. I did not want to do it at all.


My right hon. Friend did not decline office on the ground that it was unconstitutional, and if you take the point as to my right hon. Friend being a Member of the House, so is the Chairman of the Geddes Committee. As to the colleagues who sat with him, they were business men, and I gather that my right hon. Friend thinks that they should be Members of this House, but in point of fact on the Committee over which he presided, he had two business men as his colleagues and no Member of the House to sit with him.


I am sorry to interrupt, but I do not think there is any analogy. I was asked by the then Chancellor of the Exchequer to undertake a duty which I did not at all want, that of sitting with two eminent business men to consider the salaries of a very small number of public servants. The only reason why I undertook that was because I felt bound by a sense of duty to do so.


I entirely appreciate what my right hon. Friend says and the Government was most grateful to him for the trouble which he took. Just as he was invited by my right hon. Friend the Lord Privy Seal, so I invited the Chairman of the Geddes Committee to take up this task and to report to me upon what could be suggested in the way of savings in the expenditure of the various Departments. I should like to say two things about the Geddes Committee. First, I was far less concerned about the kind of attack made upon me personally for not discharging a duty which might be said to be mine than I was about getting public expenditure down. I was perfectly convinced, and I am sure those who have read the Report and who see how elaborate it is are also convinced, that no Chancellor of the Exchequer who was performing his other functions could by any chance give the time under modern conditions which was necessary for this task. The Chairman of this Committee has done absolutely nothing else for four and a half months, and in performing his duty as Chairman he has been most ably assisted by some of the most distinguished business men in the whole community. The results, I am certain it will be universally agreed, are very creditable to their skill, their ingenuity and their industry. I personally am very grateful for the very great task they have performed, and the way in which they have done it. I am glad to think that the right hon. Gentleman has himself suggested that there is much which is to be approved of in this Report, and that the Committee deserve many congratulations for the work which they have accomplished. That at least is a change of tone from the references be made to certain members of the Committee in earlier Speeches. I am glad that he now recognises the work which they have succeeded in performing. The other comment I should like to make on the working of the Committee is this. I am perfectly certain that nobody but an outside Committee could have achieved the results which this body has accomplished and for this reason. The Treasury from day to day are contesting with the various Departments as to the sums which shall be spent, and those contests are familiar to everybody. The Departments approached the Geddes Committee in a totally different attitude. I am not say- ing that in any respect as depreciating the Departments or their willingness to find economies, but there is no doubt whatsoever that they were put to a test by that Committee to which they are not ordinarily subjected. The complaint is often made that Government Departments are. not managed as a business man would manage them. In this case they were put to a business man's test, and the result you see in the Report which is before the country and the House to-day.

6.0 P.M.

I have been asked whether the Government is prepared to make a pronouncement as to what it will do upon this Report. To anyone who knows the present financial position of this country it is obvious that large reductions must be made in the services either on the lines of the recommendations now before us or upon some other principle. It is perfectly obvious to everybody's mind, I am sure, that not all these recommendations can be accepted in their entirety. It would be a very remarkable Report of which that could be said. There are, for example, very difficult and grave questions of policy in the Report. The right hon. Gentleman the Member for Paisley has raised one this afternoon in connection with education, and he has been supported by the hon. Member for Central Edinburgh (Mr. W. Graham). The recommendations regarding education are under the consideration of the Government, and our decisions will be revealed when we present our Estimates. On the question of the Navy, it is perfectly obvious that here also are very grave questions of policy. There are questions, for example, which we could not possibly decide without having an opportunity of consulting with the Lord President of the Council and the First Lord of the Admiralty, who are now on their way home from the Washington Conference. I agree with every word which the right hon. Gentleman said with regard to the importance of that Conference, and I am sure that much light will be thrown upon some matters which at the present time are obscure, when we have an opportunity of consulting those distinguished members of the British Delegation. With regard to the Army, I am glad to say the Secretary of State for War and the Army Council have made a very notable contribution to the cause of economy, in the suggestions which they are prepared to make as to their Estimates for next year. As regards to pensions, so far as the expenses of administration are concerned, the Pensions Ministry is prepared to do even better than the recommendations which the Geddes Committee have made. On other matters in regard to which the Cabinet has arrived at a decision, all I need say at this stage is that the House will find that the cuts which have been made in expenditure are indeed of a drastic order. The results will be seen in the Estimates when they are presented, but it will be obviously improper for me at the present time, when matters of very high importance are under consideration and when expenditure is being reviewed as a whole, to give any further indication than I have done of the processes which these recommendations will undergo. My right hon. Friend evidently thought that both reports had been in our hands for two months. As a matter of fact, it is only two or three days ago that we got the second Report. The first, undoubtedly, contains suggestions for the larger amount of reductions, namely, those connected with the defences of the country and education.


Is there to be any reduction in expenditure this year?


As far as the recommendations have been available, we have been putting into force such as commended themselves to us, and which could immediately be made operative, and I think I may say to the House that we shall succeed in bringing down our expenditure below the total of the Estimates for the present year, not entirely as the result. of the investigations of the Committee, but partly as the result of our own investigations, and partly as the result of reductions in costs, by something like £40,000,000 altogether. I hope the House will take that as an earnest of what we are endeavouring to carry out.

I wish now to pass for a moment to a matter which was raised by the right hon. Member for Paisley. He referred to the fact that the original Estimates presented by the Departments for expenditure on the Navy and Army for next year stood at a figure of £160,000,000, as compared with a pre-War figure of £80,000,000. In the first place, the House will find that, when the Estimates come to be presented, they will be considerably less than the figure which the Departments had originally proposed. Secondly, I wish to say that the comparison is not an entirely fair one for the reason that, as the right hon. Gentleman knows, expenses have gone up considerably, as a result of the different value of money at these two periods. For example, the pay of the Navy and the Army is totally different from what it was before the War, and the cost of material is, as everybody who has to buy it knows, for the, most part at least twice as much to-day as it was then. Therefore there is not the great disparity which the right hon. Gentleman supposes between these two figures. But there is another error into which he fell. He drew a contrast between our army and the other armies of Europe. He said, I think, that with the exception of two countries, our army was larger than anything existing in any other country.


I said nothing of the kind.


The suggestion was that our Army, in the present position of Europe, need not be so large as it is. It is a mistake to suppose that the size of the British Army has ever been based upon that of armies in other parts of Europe. It never has been the policy of this country to build its army at any time, in relation to those of other countries. It has always been based upon the necessities of the British Empire. It is perfectly true that we were able to form an Expeditionary Force, but that was not the result of the original basis of calculation. It was a force which we were able to carve out of the units kept here for the interests of the Empire. My right hon. Friend opposite evidently demurs from my description. I think he will find that I am perfectly correct in my statement, and if you look at our Empire to-day, so far from our necessities being less than they were before the War, they are greater to-day than ever they were. What we have to keep in mind is that the world at large is in a more unrestful condition to-day than it was then, and that we have difficulties in many parts of the world which make it at least necessary that we should see that the security of our Empire is preserved.

I think that I have dealt with all the points which have been raised in the course of the Debate, but, before I sit down, I should like to allude to a part of my right hon. Friend's Amendment which he did not refer to at all. The Amendment contains the complaint that we are "unable to make a definite promise that taxation will be reduced so as to stimulate trade and decrease unemployment." I fancy that my right hon. Friend, as an old Chancellor of the Exchequer, was ashamed of that part of his Amendment. I could have brought here, because I took the trouble to look them up, many quotations from my right hon. Friend's speeches as Chancellor of the Exchequer, in which he firmly deprecated questions with regard to a Budget at any date before the Budget was introduced, and on just such a question as this he gave a very definite reply to some anxious inquirer, to the effect that when it became his duty to present his Budget, all curiosity would be satisfied.


There was not an old Chancellor of the Exchequer who did not say that.


In this year more than almost any other, one can conceive that it would be exceedingly rash and audacious for any Chancellor of the Exchequer to say at this stage what he would do next year. The uncertainties of this year have been greater than those of almost any year ever known, and even now everything depends, so far as the revenue of the country is concerned, upon the way Income Tax will come in in the month of March. He would be a very rash man who to-day would predict what the revenue of this year would be, far less to begin prognosticating what he would be able to do in the way of reduction of taxation next year. I readily understand the great difficulty in which the business community finds itself to-day, owing to the heavy burden of taxation. It is undoubtedly true that it is a great impediment to industry and enterprise that taxation should be so high. Sometimes that difficulty is exaggerated. For example, I see speeches made as if all the taxation which was taken at the present time were filched away from the taxpayer, and that he was thereafter deprived entirely of it. That is an erroneous description of what actually takes place. £350,000,000 of the revenue which is taken from the taxpayer to-day is returned to him in the shape of dividends from the Government Stock which he owns. The complaint is made that the amount taken in taxation is lost to trade. That is perfectly true in so far as you use money for building battleships and supplying soldiers, and for all the other services of the country, but it is not true in regard to the portion which is raised for the purpose of paying interest on Government stocks. That interest comes back to the pocket of the taxpayer for the purposes of trade. I am sure that the House will agree with me when it reflects upon the proposition I have made and I will leave the matter there, asking what becomes of that money when it passes back in the shape of dividends on Government stock, if it is not then available for the owner to do what he likes with it? The Government is doing its utmost to relieve this burden of which we are all aware; but whatever we do must be done upon sound lines. British finance has always been the admiration of the world, and to-day, when nearly everything in the world is uncertain, one of the greatest factors in maintaining the civilisation of Europe is the stability and integrity of our financial system. It would be madness to jeopardise that great system. At the same time, the House and the country may be well assured that the Government is using its utmost strength for the purpose of reducing expenditure and taxation to the utmost possible limit consistent with the security and the efficiency of the country.


A considerable part of the speech of the Chancellor of the Exchequer went to show that the expenditure of other countries was more than ours in proportion to pre-War expenditure, and he drew the conclusion that, therefore, there had been no unnecessary expenditure in this country. One asks oneself the question, If there has been no unnecessary expenditure, why, for all these months past, has there been this tremendous campaign in the Government organs as to the enormous economies they were going to effect? Because, unless the need was there, surely all this clamour was uncalled for. My right hon. Friend also complained that the right hon. Gentleman the Member for Paisley (Mr. Asquith) made no point of the great mass of our expenditure which was absorbed in the debt services. It is news to me that anyone had ever challenged that as extravagant. We all recognise that that is necessary and inevitable; but the point is, what is to be done with those expenditures which are not inevitable, and it is there I come to the Treasury Circular referred to by the right hon. Gentleman.

His claim with respect to this circular, in my judgment, is altogether unsound, as unsound as the appointment of the Geddes Committee itself. The Chancellor of the Exchequer said we want a reduction of expenditure of £100,000,000, that is to be effected, and that the individual Departments are to make their several suggestions. But you cannot effect a reduction of expenditure of £100,000,000 without altering policy, and it is not for the Departments to say what the policy has to be. Because the Government or the Chancellor of the Exchequer was not able to give the Departments any guidance as to policy, of course they did not get the response they wanted. The Departments have, as I understand it, to frame their several Budgets to enable them to carry out the policy which the Government instruct them is to be carried out. The fact is, Mr. Speaker, that in this matter of prodigal expenditure the Government has not got a policy. That is why the Departments were circularised, that is why the Geddes Committee was appointed; because the Government had not got a policy, and has not got one now.

The matter has been a subject of discussion for 18 months. I will refer to the largest sums of suggested economies, and some of the points of policy on which the Government have not made up their minds. There are one or two matters in which they clearly have made up their minds. The Geddes Committee, whether we agree or otherwise with its recommendations, has rendered the public an immense service, because what it has done is this: It has put things before the people in their right proportions. They see now perfectly well, which they did not see before, that the saving of a few odd clerks here and there, and all that kind of thing, which entered so largely into the general conversations on the subject of economy, is not going to make any real difference. It is the bulk figure alone which matters, and by which we can really obtain any effective reduction of expenditure. The Geddes Committee has done what, so far as I know, has not been done before—brought before the public in a most dramatic way what really are the figures that matter. It is some of those figures that I should like to examine. It is upon those big expenditures that the Government clearly has not made up its mind. What has been quoted this afternoon by the Lord Privy Seal as to the Admiralty and the other Departments clearly shows that the Government have not made up their minds.

Let us look at the Services apart from the Debt Services with which the Geddes Committee deals. There are the War Services in which they recommend reductions of £46,000,000. But then the Services in the present year, whatever it may be next year, will absorb about £230,000,000 all told. I refer to the Army and Navy, and so on. That includes Mesopotamia, Palestine, etc. The Geddes Committee points out that our expenditure at Constantinople in respect of Army Votes is £3,117,000; in Egypt £4,948,000; Palestine £4,219,000. But these expenditures all depend upon policy. They follow policy. It is not for the Departments to say what policy shall or shall not be adopted; that is the function of the Government. The Government knew 18 months ago, a year ago, 6 months ago, before the Geddes Committee was appointed, what their policy really involved. Unless the Government make up their minds what their policy is to be, it is futile to expect that we shall get any material reduction in these Estimates.

Let us take one or two illustrations. I cannot do better here than take the words of the Chancellor of the Exchequer himself. He said that the Vote was for the British Empire, and that the expenditure was framed not on the state of the other armies in Europe but on the requirements of the British Empire. That is true. But take recent policy in Egypt. There is there estimated expenditure of £4,900,000, but there has been a grave departure in policy with respect to Egypt. Lord Milner's Commission reported, and, in the main, it was understood that his recommendations would be adopted. That would have made a substantial reduction in the expenditure, and all that it necessarily involved in the matter of stores, equipment, residences, and so on. That policy has been fundamentally altered. I will not go into it, but we seem now to have adopted that policy which in classical language is known as the "mailed fist." If you have the policy of the "mailed fist" in Cairo, you will not reduce expenditure in Egypt. You will never reduce expenditure in Egypt unless you alter your policy. It is not the function of Sir Eric Geddes' Committee to decide what is to be the policy in Egypt, and they have not decided it. As a. matter of fact, even before the Geddes Committee reported there was a Supplementary Estimate presented for £6,000,000, including £1,737,000 for the Middle East. Included in the Middle East is Mesopotamia and Palestine, costing us this year £26,000,000. There has been another Estimate for another £1,000,000 for Mesopotamia. I do not know what it will cost next year. I suppose we shall see, but the cost depends entirely upon the policy pursued, and, in my judgment—and on many occasions I have said this before—if we adhered to the Milner policy in Egypt we might reduce our commitments both there and in Palestine and Mesopotamia, if for no other reason than that at present we cannot afford it. The fact cannot be escaped from by any observations of the Chancellor of the Exchequer that this expenditure depends on the British Government making up its own mind what it wants to do. It depends upon that.

I give another illustration. There is the expenditure in Constantinople. That, as we are well aware, is connected with our Moslem policy. We may be committed to an extension of expenditure before the Government makes up its mind as to whether they will pursue a policy of reducing the cost. The fact, of course, is that the Government have not made up their minds on the different questions, and, therefore, we have this extraordinary and novel procedure being adopted in regard to the publication of Departmental criticisms. It is the business of the Government, as I understand it, to decide policy, to receive advice upon what is involved in policy, and then to require the Departments to adjust their Estimates and say what will be necessary to carry out that policy. The present proceeding is quite new, so far as I know, in British constitutional practice—of Departmental rejoinders on very highly and important obligations of State or that their proposals being published in the Press, I suppose that the Stationery Office, the Patent Office, and the other offices, great and small, will be entitled to have a rejoinder in the Press, and, therefore, of course the public will very soon be hopelessly confused. Memorandum will probably follow memorandum from the Departments, and as they may be highly technical documents it will be quite impossible—as in the Admiralty case—for the public to follow the controversy. It is for the Government to receive these documents, to consider them and to make up their minds as to what policy is to be pursued, and the advice they need on the subject. This is direct action on the part of the Admiralty and direct action of the most extraordinary kind.

At all events, the Government in reference to the £233,000,000 I have mentioned, expect to make reductions, and in this matter the Geddes Committee makes big recommendations. I want to say one thing that occurs to me, and that is in respect to the result of our war experience on education. We shall see what the Government propose in respect to their own recommendations, but let them not make an economy which will be uneconomical, for if there is one thing the War taught us from the beginning, it was our lack of trained people. Following on our war experience, when we found ourselves deficient in trained men, in industry and other departments, administrative, technical experimental work, and so on, business men and supporters of industry encouraged us, after the War, to improve the training of our people. As a matter of fact, it is impossible to conceive that this country can recover from its war losses unless we improve our efficiency. There is one other direction in which efficiency has been improved more than any other, and it is by the encouragement of the higher type of education. I do not know what the Minister of Agriculture has experienced just lately, but no doubt he has had to cut down his Department, and possibly he has had to scrutinise his expenditure on agricultural research, and upon the Veterinary Department.

During the War we found ourselves in great difficulty owing to our inability to produce the glass required for optical instruments, and if we had been spending the larger sum upon research in this direction we should not have found ourselves in that position. If any further short-sighted policy in the direction of a diminution of research work is pursued, we may find ourselves paying very dearly for another outbreak of foot-and-mouth disease. What we require is the encouragement of systematic and well-organised research. At all events, we may satisfy ourselves that, although the Government has not made up its mind in respect to the big bulk expenditure such as war services, education, and so on, which really matters, and it really will enable us to save the £100,000,000 required to balance our account, it has made up its mind as to the future in regard to dealing with slum improvements, and they are going to diminish the amount of milk allowed to necessitous mothers. They are also going to make them attend five days a week in open procession to receive their allowance.

Some economies of that kind have been carried out and a large number of people have been dismissed, but with regard to the higher staffs and the questions of policy which are involved in the big savings the Government has not made up its mind. It is easy for the Government to make up its mind in regard to such things as poorhouses and in regard to the unfortunate mothers who have had a little milk distributed to them by an enlightened local authority. It is quite easy for the Government to deal with these matters, but when you have done all this you have not saved much, although we are spending on every inhabitant of Mesopotamia and Palestine as much as £7 10s. per head. It is not considered extravagant to continue an expenditure of that kind although the Government are ready to deprive a few poor women of this milk supply. I would rather see the mothers of Britain supplied with milk than I would see the children of Zion catered for at £7 10s. per head. The Government has not made up its mind to face the real issue, and that is why I am supporting this Resolution. The poor and the needy in our own land have been sacrificed from the start. The people who form the foundation of the British Empire have to go first, and their children will have to run about the streets for a year longer. One thing the Geddes Committee has done. It has shown us where you can obtain the economies which will really help the Chancellor of the Exchequer to balance his Budget, and I think myself that the exhibition of helplessness we have had in the way of waiting for these matters to be considered by the various Departments, instead of the Government making decisions upon policies, which they themselves have full information about, is cowardly, and it is not worthy of the British Government nor worthy of our Parliament.


The speeches we have heard from the other side of the House in support of this Amendment make it exceedingly difficult for some of us to vote for it, because those speeches have concentrated almost entirely on a single topic: on what may be described as social service. There are a number of Amendments of which this is one placed on the Order Paper, one from this angle and another from that, one by this party and another by that, but all expressing condemnation of the public expenditure of this country, and it is the concurrency of these Amendments in regard to which I want to say a word or two to the House. Before I pass to the substance of this Amendment I want to submit to the House a preliminary question. The Amendment condemns the extravagance of His Majesty's Ministers in set terms. I think I have in my own feeble way been doing very much the same thing for a good many years in this House, and by a series of reports in which I have had some hand, I and many of my hon. Friends have been doing our utmost to restrain this extravagance. I was long ago forced to the conclusion that this House never could and never would restrain that extravagance or regain its control over public expenditure by the existing methods of financial procedure.

I believe that there is among the private Members of this House and among a very large number of exMinisters—it rarely exists amongst Ministers for the time being—and ex-officers of this House a very general opinion that our present procedure is wholly inadequate for the effective examination of the Estimates, or for the restraining of expenditure based upon those Estimates. This is not only the opinion of indivi- duals; it is the deliberately expressed opinion of the Committee on National Expenditure which was set up in 1917 on the initiative of the hon. Member for Greenock (Sir G. Collins) and myself. That Committee was specially charged not only to recommend economies in current expenditure, but also to make recommendations in regard to the procedure of this House in relation to supply and appropriation so as to secure more effective control by Parliament over public expenditure.

We did that to the best of our ability, and the results were presented to this House in the Ninth Report of that Committee for the year 1918. What was the pith of those recommendations? It was concentrated in the suggestion that in this House there should be set up very early in each Session one or more Committees of the House on the Estimates. I had a question down on the Paper on Thursday last asking whether the Estimates Committee was to be set up in the present Session of Parliament, and that question has been postponed until tomorrow. I was rather hoping that the Chancellor of the Exchequer might have been able to say something to set our minds at rest on that matter to-night, but perhaps some other member of the Government may be able to anticipate my question to-morrow. About this time last year some of us made an identical suggestion in regard to the setting up of this Committee on Estimates, in accordance with the terms of the recommendations of the Report to which I have alluded. The Estimates Committee was set up, but it was set up at the very end of June or the beginning of July, long after it could be of any possible utility for the purpose for which it was set up, namely, for a detailed examination of the Estimates. What was the reference? It was: to examine such of the Estimates presented to this House as may seem fit to the Committee, and to report what, if any, economies consistent with the policy comprised in those Estimates may be effected therein. The House will observe that the Estimates before examination by this Committee were to have been presented to the House—presented to; but not, of course, passed by it. Hon. Members will observe, in the second place, that our recommendations were to be con- sistent with the policy employed in those Estimates. In the third place, no officer was attached to that Committee in a parallel position to the officer who acts in connection with the Committee on Public Accounts. Many of us hold that it is futile to set up that Committee unless we have the services of the officer who acts for the Committee on Public Accounts, namely, the Comptroller and Auditor-General. I want the House to contrast the powers entrusted to a non-Parliamentary Committee with those which were entrusted to the Estimates Committee of last year, and which I hope may be entrusted to another Committee with larger powers during the coming Session. In the reference to the Geddes Committee, questions of policy were reserved for the exclusive consideration of the Cabinet. Yes: but what follows? "It will be open to the Committee to review the expenditure and to indicate economies which might be effected if particular policies were either adopted or abandoned or modified." No such function was permitted to the Committee on National Expenditure or to the Committee on Estimates which consisted of Members of this House.

Let me now pass to consider the question how far the Geddes Report, which many of us passed our week-end in studying, sustains the charge which is embodied in this Amendment. No one who has made even a cursory examination of that Report will deny that it is a very remarkable State document for which this House and the country ought to be profoundly grateful to the authors. I say, further, that the value of this document will be most appreciated by those who have devoted a good deal of their Parliamentary time and labour to an attempt to achieve similar results. Many of the recommendations which are embodied in the Geddes Report are identical with those which have been pressed on the Government time after time by the Committees to which I have referred. But while everyone will concur, and concur cordially, in a general commendation of the Report, I see signs that agreement is likely to evaporate when we come to consider its detailed recommendations. My own belief is this: That substantially the recommendations of this Committee will either have to be accepted in, toto or rejected as a whole. Once you begin picking and choosing, nothing whatever will be effected by the Report of the Committee. That process, as we have seen in the Debate to-night—that process of picking and choosing—has begun, and it is certain to be carried a great deal further. I think the true method of reduction was indicated in the Treasury Circular to which the Chancellor of the Exchequer has already referred—the Circular issued by the Treasury on the 13th May last year. Perhaps I may recall to the recollection of the House one sentence from that Circular, and I am glad the Financial Secretary is here now, as he was the author of the Circular. The sentence reads: My Lords earnestly trust that all Departments will co-operate in effecting the maximum reductions possible in their own expenditure. A reduction of expenditure upon the requisite scale can only be effected by a common effort entailing heavy and general sacrifices of services which are in themselves desirable. That seems to me a most excellent maxim for an economically-minded Government. But what was the result of this admonition? The Circular indicated that the ordinary Supply expenditure would have to he reduced from £603,000,000 a year to £490,000,000 a year. That was the suggestion in the Treasury Circular. In other words, there would have to be, if their purpose were carried out, an all-round reduction of 20 per cent. in the Estimates for the coming year. What has been the result? As we learn from the Geddes Report, the result is so far that instead of the £113,000,000 which the Department were asked to cut down in the first instance, they have reduced their Estimates by only £75,000,000. Meanwhile the financial situation grew steadily worse, and so the Geddes Committee was appointed to find another £100,000,000 of reduction in order to make a total reduction of £175,000,000. The exhortations to economy in the Treasury Circular were admirable, but I submit that the method adopted by the Treasury was absolutely futile for the purpose of carrying out the scheme which they themselves desired. There is only one possible way of effecting a real reduction in expenditure, and that way is one which was indicated by the right hon. Member for South Molton (Mr. Lambert) in the Resolution which he and I submitted to this House in December, 1920. The method is this: You must define the maximum figure which you can afford to spend. It is no use talking in generali- ties. You must not only define your maximum aggregate, but you must definitely ration each Department. That principle is put by the Geddes Committee in the very forefront of their Report. They say, and I ask the attention of the House to this sentence, because it seems to me it is the very pith of the Report: In our opinion the time has come when the Government must say to these Departments how much money they can have, and look to them to frame their proposals accordingly. believe that that is the only sound principle on which you can proceed. And now I want to say one word, if I may, on the topic which has, so far, engaged the exclusive attention of right hon. and hon. Members who have addressed us from the other side of the House. I select this topic because I want to give the House the strongest practical evidence of my own personal zeal in the cause of national economy. I want to say a word about education. The whole Report of the Geddes Committee on this question raises, as everyone will admit, an exceedingly difficult and delicate question—a very difficult question for all who are amenable to public pressure. Many of us have received in the course of the last few weeks a very strong appeal from the teachers of this country not to curtail the expenditure on education. Not less does the Report raise a difficult question for those who, like myself, are very deeply concerned as to the future of national education. I know that this is a question on which hon. Members on the Labour Benches feel very keenly indeed. I heard Lord Haldane in another place last week say, and I believe it to be true, that the Labour party, of all parties in this country and at the present moment, are keenest with regard to education, and I should like to add my testimony to their anxiety in that regard. I know it to be true that they are keenly anxious on that question; but having said that, I would venture to make an appeal to those who sit on the Labour Benches to consider what I have to say on this matter at any rate with patience. I do not ask for more. They must know that I, at any rate, have spent the best years of my life in an attempt to bring the highest University teaching within the reach of all classes of my fellow-countrymen. I mention that fact reluctantly and only to remind hon. Members opposite that there is no Member of this House who can be less justly charged with indifference to the cause of national education than myself.

Having said that, there are three points which I want very respectfully to submit: First of all, I agree with the Geddes Committee that whatever the merits of the system known as the system of percentage grants, this was not the moment to introduce it. I do not deny, and no one who knows anything of national education can deny, that there are some districts in this country that, very badly need the stimulus which that system undoubtedly gives. But generally speaking, I submit this was not the moment for that stimulus to local expenditure. The whole effect of that system of percentage grants is to stimulate, I will not say local extravagance, but certainly very heavy expenditure. I agree; and I concur in the recommendation of the Geddes Report, that at any rate for the time being we must get rid of what they describe as the vicious system of the percentage grants. It had led to a great deal of local extravagance in educational administration. My second point is this: That this is not the moment for embarking on a fresh development in the way of day continuation schools. Those who were members of the last Parliament will, I think, remember that I was one of those who, throughout the passage of the Education Bill, 1918, most strongly supported the proposals of the President of the Board of Education. But equally strongly, I now insist on the necessity for postponing some of the Clauses of that scheme to-day. We are told with perfect truth that there is no waste comparable with the waste of brains. I agree. But in this time of national poverty, we must be content with the selection of the best brains and enable their possessors, by means of scholarships, to pass from one range of education to another.

7.0 P.M.

Thirdly, I think we shall have to make an appeal to the patriotism of the teachers—I know this is a dangerous thing to say—to forgo some portion of the advances which they have secured under the Burnham scale of remuneration. I know that before that scale was introduced many of the teachers in all grades of education were grossly underpaid. I admit that to the fullest possible extent. The teaching profession, as I have every reason to know, has never been a well-paid profession, but the increment under the Burnham scale was, in my opinion, in some cases too sudden and in some cases too great. When I appeal to the patriotism of the teachers I do it for a reason to which I think they will not demur. I do it because I do not at this moment of national pressure want to create a further prejudice against education. If the teachers in this country, who are very strongly organised, offer an obstinate resistance to a temporary cut of the Education Estimates I believe they will be doing a real disservice to the permanent cause of education in this country. [HON. MEMBERS: "Oh!"] Hon. Members opposite may scoff, but, at any rate, I have a right to speak on this particular question. It is my deliberate opinion that those who are most concerned for the future of education in this country will be the most careful how they raise a prejudice against our educational system. That is my point. Of course I do not suggest or desire that the sacrifice should fall mainly, still less exclusively, upon teachers; but I submit that quite apart from the remuneration of teachers of every grade there is room for very real economies in educational administration, and particularly in Whitehall itself. Just look at the figures. Twenty years ago the cost to the Exchequer of our national system of education was £12,795,000—that was in the year 1901–2. In 1913–14, the year before the War, it had risen to £17,000,000. This is the cost to the Exchequer and is quite exclusive of local expenditure. For the coming year it is estimated, according to the Geddes Report, at £59,300,000. I have already recalled to the remembrance of the House the fact that by the Treasury Circular of last May every Department—and not one only—was expected to cut down its Estimates by 20 per cent. The Estimate I am now giving from the Geddes Report in respect to the ordinary services of the Board of Education shows an increase of £744,000 over the Estimate for last year. Where is the 20 per cent. cut in the Department? The total cost of education, and I am here putting together the local expenditure and the cost to the Exchequer, is estimated by the Geddes Committee to reach next year the sum of £103,880,000. Education is one of the social services in regard to which we cannot afford parsimony, it is also one in regard to which we cannot afford extravagance. Nor am I clear that economy would mean any real loss to education itself. Only this morning I received this letter from a woman who has had a life-long knowledge and experience of secondary education, and who is at this present moment serving in one of our provincial cities—not in Oxford—on an educational authority—the Education Committee for the city: She writes: I do not think that true education would suffer from the Geddes cut. On the whole it might even benefit. I do not think we get our money's worth now. Apparatus and class rooms and fads are getting to be looked upon as too essential. It cannot be said that the public girls' schools and boys' schools do not turn out fine characters and educate, yet compare often the class rooms, requirements and apparatus with what is now thought necessary for the elementary and secondary school. It would be a real gain to education if education were simplified. Teachers are trusting more and more to the perfection of surroundings, and they and inspectors and the Board of Education really make most absurd demands. In my humble opinion if the Geddes recommendations were carried out to the letter it would be a benefit, not a loss to education, quite apart from economy. That is a very remarkable testimony coming from a person in the very midst of educational administration in one of our great cities.

I had desired to say a word or two in regard to another Department with which the Geddes Committee proposed drastic dealings, I mean the Labour Department. I wanted to say a word on that because of a sentence in one of the Reports of the Committee on National Expenditure, a Sub-Committee over which I presided. This was in the year 1919. It concluded with these sentences: Your Committee recommend that in the interests of national economy the operations of the several Departments of the Ministry of Labour should be carefully and continuously watched, that some of them should he closed down at the earliest possible moment, and that the expenditure of the Ministry should be carefully scrutinised from time to time by a Select Committee or other similar body reporting periodically to the House of Commons. Every public Department naturally deems itself indispensable, and this is not less true of the newer than of the older Departments. On the other hand, the newer Departments lack the traditions which have imposed upon the older some measure of economy. Your Committee have therefore thought it the more incum- bent upon them to draw the attention of the House of Commons to the work of the Ministry of Labour and to recommend continued scrutiny into its operations. The Geddes Report bears out to the letter the suggestions that were contained in that Report of the Committee on National Expenditure.

I will, if I may, conclude by addressing to such of His Majesty's Ministers as are present, and through them to the rest, one question, a very reasonable question, which goes to the heart of this matter. What are they going to do in regard to the recommendations of the Geddes Committee? Are they going to treat that Report as they have almost uniformly treated the Reports of the Committee on National Expenditure? They have invited some of the most eminent business men in this country to spend, as the Chancellor of the Exchequer told us, months in continuous study of this question. Are they going to treat the Geddes Committee as if they were merely a Select Committee of the House of Commons? If that is in their minds I venture to suggest that they should remember that the Geddes Committee is, for the most part, composed of men who have some knowledge of the art of publicity and propaganda.


And have the country behind them


They are not mere innocents like those people who have served on Committees of the House of Commons, and I do not think they will allow their Report to be treated as we have allowed ours to be treated.

Rear-Admiral SUETER

Nor will the public.


Nor, I think, will the public. If they are not going to reject this Report, are they going to accept it in tato? I do not mean in every detail, but in its broad aspects as a considered and coherent whole. The tenor of this Report seems to be this. It has gone thoroughly into every Department of the State, not this or that, but to all Departments; and on a review of the Departments is presented a Report. Whether you like it or whether you do not like it, it is, at any rate, a coherent and a consistent whole. There is a third alternative: to pick and choose, to accept some parts of it and to reject others? I should not wonder if that were the ultimate result. Allow me to say, however, that if that is the intention of the Government they will enter on a path beset with very grave difficulties and leading to the land of Do Nothing. The choice for His Majesty's Ministers and for this House and the country lies, I am convinced, between the first and the second of the alternative courses which I have indicated. The Report, in the main, will have to be rejected as a whole or accepted as a whole. If you accept it you will make plenty of enemies. You may lose some votes, you may even have to shed some valued colleagues. Of course, I should shudder at that awful possibility; but I am not sure that the country would not regard it with a certain amount of equanimity. The financial situation is to-day so exceedingly grave that you must take some risks in regard to financial readjustments. In some departments of administration you can for a time dwell happy and secure in the realms of make believe. It is not so in the department of finance. There you are all the time up against hard realities and confronted with stubborn facts. I am not quite sure whether stubborn facts and hard realities suit the characteristic genius of the present administration. You have got in regard to finance into a vicious circle. I said some years ago in this House that if you did not break that circle then that vicious circle would break you, and that is my concluding remark to-night.


I listened very attentively to the speech of the Chancellor of the Exchequer, and I did not think a very great deal of his reply to the terms of the Amendment. He stated that the expenditure of this country is five and a half times what it was before the War, and that in France it is 10 times what it was before the War. He did not state, however, that the taxation in this country is roughly twice the taxation in France at the present time, and that the French people in comparison with ourselves pay practically no taxation at all. He stated what the Budget was two or three years ago and what it was last year and this year, showing the great reduction that has been made in the Budget. Three years ago the Budget was over £2,000,000,000; to-day it is only over £1,000,000,000. It is a fact that war expenditure has been got rid of—the national war expenditure—but what we have got to get rid of now is what is left of the Departments dealing with war expenditure and the various schemes that the Government has embarked on since the War period.

You must, in dealing with this subject, take the thought of "cutting your coat according to your cloth." We have had a speech from the right hon. Gentleman the Member for Paisley (Mr. Asquith), a very admirable speech except in one particular: he advocated economy, but he made one exception. If every Member of every party or group of this House is to get up and advocate economy except in one Department, there will be no single Department of State left in which the Government can economise. I appreciate his remarks regarding economy by the Board of Education. I agree with him in everything he said as regards education itself, the desirability of education, but great economies can take place in the education scheme, which is proposed by the Minister of Education, in Whitehall, and economies can be effected by the inspectors that tour the country. There are a great many economies that can be effected, and it is essential that we look upon the position—that the teachers themselves, and everybody should look upon the position—as a whole in order to realise how much money we can afford to spend and allow every Department of State to spend, to do the best it can on the money that it is safe to use in the country at the present time.

The Amendment is a very drastic one, and so far there has been, with the exception of the last speaker (Mr. Marriott) very little said upon it. The Debate has turned more or less upon what is in the Geddes Report, and I think it is essential that we should consider the Amendment itself, and decide whether the allegation that the Ministers of the Crown have been extravagant is true or untrue. We had the Geddes Committee Report presented during the week-end, also a counter-report issued by the Board of Admiralty. We find to-day that it is expected that every Department will also issue a counter-report, and that these counter-reports will also be considered by the Cabinet while they are considering the Geddes Report. My only objection to the original appointment of the Geddes Committee was the fact that it was bound to put off economy for another 6 months, and if you are going to wait for the reports of the various Departments you are going to put off economy for another 3, 4 or 5 months, and every week and every month that passes without economies being effected is making the position of the country more dangerous than it is to-day.

As regards the Amendment itself, I agree with every word of it. I consider the Government absolutely culpable in extravagance and its over-taxation of the country, which is doing a great deal to kill trade, and also to bring thousands and millions of people into penury. After the War there is no question that one of the objects of the Government should have been retrenchment, and they should have looked askance at those who wished to advocate militarism, and also those who advocated various social reforms. They should have said to every single group or Department that wished to spend more money that they could not do so. It they had done that we should never have had the tremendous expenditure at the present day. It is necessary to go back practically to 2½ years ago, when first of all this question of economy was raised in the country. We had various speeches and promises by Members of the Government, and it seems now the Geddes Committee has reported that there will be the cry that "All is well," and the House of Commons need not take any more trouble, or worry anything more about economy, because the whole thing is going to be done for them.

Two and a half years ago the Government said precisely the same thing as to-day; they were promising economy, talking about the economy in precisely the same way as to-day, but until they got up and said, "We have economised," and until they can point out that they have economised sufficiently to bring this country back into a proper financial position, no one in this House can believe them when they say that they are going to economise.

On 7th August, 1919, in reply to what was called the "irresponsible clamour of the Press," the Prime Minister sent his first letter to the Departments. He requested That a Report should be prepared by each Department before the re-assembling of Parliament showing what steps had been taken to this end. The Prime Minister said that: Ministers who could not economise would have to make room for others who could. I am giving this extract to the House so that they should judge for themselves and take the speeches of the Ministers at their face value. On 15th September, 1919, the Treasury issued a circular to Departments urging that staffs should be reduced and enlarging upon the undesirability of Supplementary Estimates. I believe we are still to have Supplementary Estimates presented this year. On 17th October, 1919, the Prime Minister said: And as the Government is naturally the most conspicuous spender it should set an example. The place to examine public expenditure is primarily the House of Commons. All words to deceive the public. Nothing was done. In November and December, 1919, I myself fought a bye-election and came into the House of Commons on the cry of economy. Directly after that, during the ensuing year, we had speech after speech by both the Chancellor of the Exchequer and the Prime Minister assuring the Government and the House of Commons that everything was being done; no one need worry. On 16th February, 1920, the Chancellor of the Exchequer said: It is therefore urgent that the Government … should check extravagance in all forms and wherever possible reduce unnecessary expenditure. On 19th April, 1920, the Chancellor of the Exchequer said: Our object has been to rise to the level of our great responsibility so that when we surrender the seals of office, we may leave to our successors an ample revenue and to our country a natural credit second to none. Before that, on 10th February, the Prime Minister said: We are all alive to the absolute need for economy in all services. We have devoted a good deal of time and pressure to that end. … We are effecting the strictest and most relentless economy in every Department of the State. I am reading these extracts merely to prove that the Government were taking these steps to economise, and they were talking two years ago just as they are talking to-day about the economies which they are going to effect. On 18th April, 1920, came the second letter from the Treasury about Supplementary Estimates, and pointing out that they were purely a War-time measure because of the expenditure during the War and could not be prophesied at the beginning of the year, and that the time was now coming when normal expenditure might be established. On 23rd June, 1920, the Prime Minister said: The state of national finances was such that only what was indispensable ought to be maintained. Everything in excess must be ruthlessly cut down. Words again, words the whole time, but nothing was ever done. All that was done in the whole course of 1920 was we had a costly Education Act which was not carried into force, and during the whole coin so of that year the Government staffs were only decreased by 3,500, or less than 1 per cent. of the total. Although we had all these words, actually nothing was done in regard to economies.

So the whole of the Government's intention apparently has been during the last 2½ years to deceive and bluff the country in saying to the country that all was well, but it did nothing to effect real economy. On 13th May, 1921, they sent out the third Treasury circular, which called for a reduction of 20 per cent., and we are supposed to believe that this last Treasury letter is going to effect economies of something like £75,000,000. We have seen no evidence that these economies are going to be effected. Until the Government come down and point out exactly where economies have been effected we, judging by the other Treasury circulars and Treasury letters we have had before, must take it for granted that the Government policy is precisely as it was before, to tell the country that all is well, and in the end to come to the House of Commons having done nothing whatever.

Then came the Geddes Committee, and the Report recommends cuts amounting to £73,000,000. Reading the Geddes Report, it seems to me that they did not set, out to recommend all the economies that could be recommended. They appear only to set out to gain the minimum economies which were absolutely essential, and they seem to have made £100,000,000 their object, and did not seriously go beyond that. The Geddes Committee is the most striking indictment of the Government yet published in this country. Exactly what I and others have been saying for the last two years is now proved on unimpeachable authority to be absolutely true. When the Government state that they are going to economise, and at other times have said that this crisis is. exaggerated, and so on, it is now proved that what was said was absolutely true, that the Government was grossly extravagant, as the Geddes Committee more or less indirectly states. The total cut recommended will amount to £100,000,000, and with the Treasury Circular we shall have a total economy of £175,000,000; that is to say, if the economies proposed are not to be put down. Supposing the whole of the economies are effected, they will only amount to £175,000,000. The expenditure for this year will be £1,159,000,000, and with next year, with a proposal to pay the interest on the American debt of £50,000,000,.I presume we shall have £1,209,000,000 to spend during the course of next year. So that with all the economies of £175,000,000 we shall still next year raise £1,034,000,000. The Chancellor of the Exchequer himself, in November last, said: Undoubtedly the revenue of next year will be much less than the revenue of the present year"; and anyone who studies the figures will see that the revenue is decreasing extremely fast, and that it would be utterly impossible for us to raise anything like £1,034,000,000 during the course of next year. How are we going to meet our expenditure during the course of next year if we do not borrow? As far as I can see, and as far as anyone can judge, the Geddes Report itself is not drastic enough. Far greater economies are necessary. If in this country we are to continue to carry on our back 1 in every 5 men unemployed, what is the future going to bring us? How long are we to go on carrying that burden? How tong can we continue in the present state of the country's finances? There must come an end to it, and it is for us to consider how long we can continue if we are to go, on year by year with the present taxation, of which, apparently, there is no prospect of any reduction without tremendous borrowings by the Government. I see no possible solution unless the Prime Minister carries out what we originally said. If these Ministers cannot do it, they must make room for others who can. It is not as if the Government had not had plenty of warning. They have had plenty of warning, both in this House and outside, of the financial position that was coming about, and, as I have shown to-night, they themselves have realised the position for 2½ years, and have done absolutely nothing.

It is obvious, as I said a year ago, that the revenue is bound to decrease so long as the wealth of the country is depreciated. An interesting reply was given not so long ago by the Chancellor of the Exchequer, in which he said that the total gross income of this country was £3,000,000,000. The total taxation of this country, both national and local is, roughly, £1,500,000,000, or 50 per cent. of the total income of the whole country. How long can this country pay, in order to keep up both national and local Government, 50 per cent. of its total income before any reductions whatsoever are made of the amounts upon which Income Tax is raised? With these figures before us, it is essential, as I have said, that every party and every group should realise the position and should not advocate any expenditure which is not absolutely necessary. In the whole Empire at the present day there is unrest, and in some parts in the near future there may be trouble. Where is the money that has been put aside in ease of any trouble during the year? Supposing that next year is a normal year, you will not balance your Budget; you cannot possibly hope to do so even with the present taxation. What will happen supposing—and it is quite within the bounds of possibility—that you have one of three things happening, either separately or even at the same time? You may have a Republic declared in Southern Ireland; you may have independence declared in Egypt; and you may have a mutiny in India. Taking the financial position of the country at the present day, how are the Government going to deal with any or all of these should they happen? Where is the money that has been put aside in case any of these events should come about? With the whole Empire at the present time in a state approaching upheaval, it is most essential that all finances should be saved, because finance is at the back of any projects you put in force. You may be able to send the men, should that policy be decided upon, to Egypt or India or back into Ireland, but have you the money behind you with which to back those men should they be sent there? At the present day we have doles and free education, and I believe it appeared the other day that we are to have free theatrical performances for children. We have newly acquired lands in the East on which we are spending money recklessly, and from which, as far as I can see, there is going to be no return whatever. All the cranks and faddists of the country appear to be concentrated in the present Government. [An HON. MEMBER: "There is another outside!"] There is unrest in different parts of the Empire, and you have what seem to me to be all the symptoms of an Empire that is starting, like the Roman Empire, on its decline.


We have heard that before to-day.


I do not wish to be pessimistic; I only wish to point out that if these things happen, you have got to have sufficient money to finance anything with which to meet them, and no Member of this House can say for certain that any of the things which I have suggested will not happen. You cannot tax any more, because you have already overtaxed; how are you going to get the money with which to meet any of these possibilities? I have been watching the whole position for 2½ years, and I can see nothing in the attitude of the Government but pure humbug. The Chancellor of the Exchequer may think I am a crank on this question, but everything I have said in this House regarding economy has come true. I have advocated economy before the Geddes Committee ever sat; I have advocated economies, in front of an entirely hostile House of Commons, which, now that the Geddes Committee has suggested them, the House is prepared to put under review. The whole policy of the Government from start to finish has been one of sham. You have a sham settlement in Ireland; you have a sham Royal Commission sitting; you have sham economy. It is my considered opinion that an end must be put to this Government, which is purely one of sham.


One sentence which the Chancellor of the Exchequer used in his speech will, I think, have touched the hearts of all of us. He said that the situation was too much for us all. There is a note of despair in a pathetic remark of that kind, and I think it really typifies the position of the Government at the present time. As far as one can see, they have rather thrown their hands in on this question of economy. We have the Reports of the Geddes Committee, and a little while ago the hon. Member for the City of Oxford (Mr. Marriott) pictured a great propaganda and publicity campaign during the next month or two, on the one hand by the members of the Geddes Committee, and, I suppose, on the other by the Departments; and the Government and the House during that month or two will, I suppose, stand by as spectators and see how the fight develops, and come in, if possible, on the winning side. I rather wondered, as I listened to the Chancellor of the Exchequer's speech, just in what sort of relationship the Geddes Committee stood to the Government. On the one side it has been represented as though it had been selected for the purpose of advising the Government—as a sort of tribunal to whom they were going to refer this matter of economy, and whose decision they were going to accept. But in the Chancellor of the Exchequer's speech this afternoon there was a suggestion as to another kind of relationship in which they might stand, and I am not sure that this is not the truer one. One gets a picture, in the record that has been put before the House this afternoon, of a sort of desperate fight that the Government have been making for economy during the past two or three years. It has not been very apparent, perhaps, to the external world, but inside the Government, inside the Cabinet, great efforts seem to have been made. For example, in October, 1919, the then Chancellor of the Exchequer said that they were setting up a sort of "Big Five"—a Committee consisting of the Prime Minister and other great officers of State, who were really going to attack this economy question. Then we had that famous letter from the Prime Minister, in which he said that if men could not make economies they must make room for those who could. Those were very fine, brave words, and, if they were applied to the top as well as to the bottom, it looks as though all the occupants of the Government Bench would vanish, including the Chancellor of the Exchequer, and the bench would be rather more sparsely filled with the five gentlemen who have been sitting on this Committee.

Then there has evidently been a struggle between the Cabinet and the Departments. There was the Treasuary Circular of May, and there must have been a lot of consideration going on between the Government and the Departments, in order to get the cut of £75,000,000. What happened, when they came to that conclusion, that made it necessary to call in the Geddes Committee? Was it that the Departments were getting too much for the Ministers, or was it that the Ministers were not willing to go any further in the direction of a cut? It must have been something of the kind, for then it was decided to call in this Committee, and, as I understood the Chancellor of the Exchequer, he put it rather as though they said, "Well, we have done our best to wrestle with these Departments and get all we can out of them. Those fellows down in the City are always talking about what they can do; let them see if they can make anything better out of them than we can." So they looked around for someone who should go to the slaughter, and selected the Minister of Transport, invited these other four gentlemen, and set them on to the Departments; and in due course we have their Report. Now they seem to be reversing the process, and setting the Departments on to them, and they have started with the Admiralty. I suppose nearly everyone in the country must have been fairly well amazed last week when that Memorandum came out. Most people will have remarked, "What an extraordinary thing; what a departure from discipline!" One read in the paper that someone in the Lobby hurriedly raced to the Colonial Secretary, and asked him, "Have you seen this?" He replied, "No, I have not. I do not know anything about it." It all looked as though there had been some very great breach of discipline. But we learn to-day from the Leader of the House that that is not so at all, that this Memorandum issued in that way has really the sanction of the Government behind it, and they are going to publish it as a Parliamentary Paper.


Put and take!


Other Departments are to be encouraged to do the same, and so it looks as though we were really in for quite a good, healthy scrap between the Departments and the Geddes Committee, the Government looking on with a more or less detached and impartial air until they find out which is going to win. It is very interesting as a spectacle. We all like a good fight, and they are a fairly hefty crowd on the Geddes Committee and will put up a good fight. But the fact remains that the Government is not in a very dignified position as a Government, and I do not think we as Members of this House are in a very dignified position. After all, the function of the Government is to govern, to control expenditure, to decide on financial policy, and the function of this House is to criticise expenditure and, if we possibly can, to control the Government. It looks as if both the Government and the House are going to be out of the picture and the stage is going to be taken up during the next two or three months by a Committee of very distinguished men who are not in any sort of way related to the Government of this country and the servants of the State. I cannot believe that Members in the House can regard that situation with very much satisfaction. Then, again, we are being placed in the position of having to make up our minds to economise in directions where we do not want to economise. Every Member of this House has got his temperament and his disposition, and will view the suggestions in the Geddes Report in a different way. My disposition is to welcome the economies in the Army and the Navy and to resist the economies in the direction of education. Other Members welcome economies in the direction of education and will resist them in the direction of the Army and the Navy. We are all in the position to-day that we have to make up our minds on this thing. Why are we in that position? Was it an inevitable position?




The right hon. Gentleman thinks nothing could have been different. When he was speaking, he reminded me of a very famous character in a very famous book, Dr. Pangloss in Voltaire's Candide. No matter what he suffered from, what tribulations he passed through, even to physical amputation, he always came to the conclusion that all was for the best in the best of all possible worlds. That is the right hon. Gentleman's view. Nothing has happened since the Armistice about which any complaint could be made. There has been no extravagance, there has been no waste. It is really amazing that the King's Speech should be simply littered with Amendments on economy, if the Chancellor's view is right. There is no reason for it at all. He says, with regard to his desire that the Estimates should be cut down by £113,000,000, it was not because he thought there was any waste. Not at all. It was not because he thought there were any services which were getting more than was adequate for them. It was merely a question that there was not the money. All the services were required, all the money which was being spent was required, and if he had the money he would go on spending it. That is the view he put. It really seems unkind to suggest to anyone in such a contented frame of mind that there had been one or two things done during the last three years which have tended to place us in the financial difficulty in which we stand. One hesitates to mention Russia. The £100,000,000 would have been very useful to-day which was spent there. Mesopotamia, Ireland, these are old and stale things, and one is almost ashamed to mention them, but the fact remains that the policy of the Government in those three places, a policy which has been reversed and rejected, cost the country £300,000,000. If we had that £300,000,000 to-day, would it have been necessary to take those £18,000,000 off education? If we had the money that was thrown away on these adventures, would it have been necessary to cut down the health services? There is not quite room for the absolute content which fills the right hon. Gentleman's mind. I am not questioning the policies, as to whether they were right or wrong. I am not questioning the ethics of them at all. It is the calculation and the judgment of the Government which has been proved to be in fault. If they had carried through their Russian, Mesopotamian and Irish policy to a successful conclusion there might have been something to be said for it, but those £300,000,000 have gone, and there is nothing to show for them at all, and if we had had them to-day neither the Government nor this House would have been forced into the position in which they stand of having to cut down services which some of us think are absolutely essential to the welfare of the country.

But that is not the whole tale. That is the tale of their foreign policy. What about the home policy? What about coal, over which the Government lost £40,000,000 of public money? What about agriculture, which resulted in a throwaway of £20,000,000? What about housing, which has left the country burdened with £10,000,000 a year, equal to something like £300,000,000? Some of this money would have been very useful at present, and there is not room for entire satisfaction with what has passed. We can complain of the Government, not only for having dissipated the revenues of the country during the last three years, but they have impaired the estate. They have reduced the revenue earning capacity of the country. I want to take two instances. Two of the great staple trades of the country are mining and shipbuilding. Let me tell the House what has been the action of the Government with regard to those two trades. Both of them are in a very serious financial situation. Up and down the country hundreds of thousands of miners are working for a barely living wage. Shipbuilding yards are closed. All that means loss to the country. It means loss of revenue. If the mining industry had been flourishing and shipbuilding had been flourishing, revenue would have been coming from these sources which would have obviated the course the Government feels obliged to take now. What has the Government done during the last three years, not only in the direction of throwing away the revenue of the country but of actually impairing its revenue-producing sources? Look at the story of coal. What took place at one of these famous conferences, of which the Government is so fond, at Spa? An agreement was come to under which the Germans had to hand over 2,000,000 tons of coal per month to the Allies. We in Northumberland and Durham found our market in those quarters of the world to which those 2,000,000 tons a month were to go. We were prospering on that trade. At the Spa Conference the Chancellor lends himself to the policy of sending German coal into the markets where British coal had been going. There is something more than that. When this was pressed upon the Germans they said, "We cannot do this under these terms," which were that the French should have the coal at the German inland price. They said, "We cannot get the German miner to work and turn out this coal unless we can give him better food, unless we can make some provision for him. That we must have or we cannot do it at the price." Then the Government, I have no doubt with the approval and consent of the Chancellor, said, "We will get over that difficulty. If you want to fatten the German miner up in order that he can displace the British miner, we will lend you the money to do it," and they lent the German Government between £5,000,000 and £6,000,000 for the purpose of helping the German Government to displace, through their miners, the British miner.


I know the hon. and gallant Gentleman does not want to represent things unfairly. I ask him to remember that the markets in France used to be supplied also by the areas of coal in the devastated regions. The reason why the German supplies were to go to France was that Germany had rendered derelict the whole of the French coalfields, and the amount which was to be supplied was supposed to be something equivalent to the amount of output that used to come from these French mines. Obviously British coal had to compete with French coal which was mined on that site, and therefore Great Britain was not being put under any disability in the process.


I had anticipated the interruption, and I am obliged for it, because it draws more attention to the point I am making, which is really worth some attention. This arrangement was made in August, 1920, and it was an arrangement for 6 months, which brought it to an end in January, 1921. The coal stoppage took place in March, 1921, 2 months after the end of this agreement, when this country had felt the effect of it. In Northumberland and Durham we were not under any delusion as to what would happen. We realised that our markets were being cut off and that the export trade on which we were flourishing was leaving us, and it was no satisfaction to the miner of Northumberland and Durham to know that he was being taxed in order to find money to lend to the German miner to put him out of work. That is the sort of way in which this Government has been helping the great industries of the country.

Let me turn from coal to shipping and see what has taken place. On the Clyde, on the Tyne, and on the Wear the shipyards are idle. Men are out of work and the workers in those shipyards are being faced to-day with a claim for a reduction of 26s. 6d. a week. How has that situation been brought about? The Government, in the course of their negotiations, took over a large part of the German mercantile marine, and sold them in this country at prices something like £11 10s. per gross ton. Some of the later ships were sold at a very much less figure than that. The result of that was to depress the whole value of the shipping in this country. What followed on that? The men who owned shipping and were thinking of placing orders for new shipping, and had placed orders, were obliged to cancel them, and the cancellation of the orders led to the cutting down of British shipyards. The Chancellor then goes to Paris to another Conference and agrees to the figure at which these ships shall be paid over to the German Government. The figure is not £11 10s., but £20 a ton, so that we are selling ships at £11 10s. a ton and crediting Germany with them at £20 a ton. What happens? These ships do not belong to the German Government. They belong to private citizens. In Germany they get £20 a ton. So what the Chancellor is doing is buying ships from the Germans at the top price and selling them here, with the effect of shutting down the British shipyards. The German is left with the money. He has placed his orders in Germany, and the German shipyards are busy while the British shipyards are closed. The German miner is busy. The miners in Northumberland and Durham in many cases were working for a wage that is not sufficient to give them a livelihood. And that is the financial policy of this Government.


I do not wish to interrupt the hon. and gallant Gentleman, but it is quite obvious that he is elaborating a very considerable argument on this point. I suggest that this Debate is not the proper occasion on which to raise it. I shall be very glad to reply to him, and there is a complete reply, but this has nothing to do with Government extravagance nor with the Amendment before the House. I regret very much that the hon. and gallant Gentleman should have taken this opportunity, because obviously no reply is possible.

8.0 P.M.


I think the right hon. Gentleman is correct. It appears to me that this interesting speech should have come last Thursday. It would have been more pertinent to the subject then before the House than to the question before the House to-day. I do not see any reference to trade in the present Amendment.


On a point of Order. If a speaker can show where, by Government policy, this country is paying an excessive price for articles which it has sold in this country, and which were sold at a lower price, does not that come properly within the scope of a Debate on economy? I raise this point because other hon. Members may desire to raise a similar question.


I do not wish to pursue the matter if you do not think it is directly relevant, Mr. Speaker. My point is that the Government has not only dissipated the revenues of this country in the many adventures they have undertaken, but they have impaired the revenue-producing resources of the country. Perhaps I was developing it at too great length, and I will not go on with it. It is very clear that it is a matter which the Government feels to be very pertinent. They will have an opportunity in the Debate to reply. The Financial Secretary to the Treasury has not yet spoken, and, as he is perfectly conversant with everything that I have said, he is quite competent to make a reply if the Government wish an answer to be made.


With respect to the point raised by the hon. Member for Govan (Mr. N. Maclean), I do not think it would be in order, on this occasion, to deal with the question of trade or employment, which we were discussing last Thursday. We must keep more or less to finance. It is true that they are closely connected, but having had one Debate last week on unemployment, we should try to keep more specially to the financial side on this occasion.


I do not wish to pursue the matter, although the Amendment does say stimulate trade and decrease unemployment. I will leave it with this concluding remark, that the comedy of the whole thing is made complete by the fact that after having disposed of the German ships and shut up the British shipyards, it was actually the £6,000,000 which they got for the sale of the ships that they lent to the German Government in order to put the British miner out of work. That is the situation in which we find ourselves today; a very difficult situation, and a situation in which we have to make a very disagreeable choice. I suggest that the Government should realise its position and realise the position of the House. We all want to see this country placed in a position of financial security and stability. We have before us the Report of the Geddes Committee. It is perfectly clear that as it stands it is not a document upon which a decision can be come to. We have not the evidence upon which the Report has been made. It is clear from what the Government has said that they believe that there are statements which can be made against it, and ought to be made against it. The proper course for them to follow is to let us and to let the public have, as speedily as possible, any answers which the Departments may have to make against the Report. Let us have the whole thing in our hands—the Report and any counter-statements against it, and then let the Government make up their minds what they are going to do, produce their estimates as soon as possible, and, in the present unexampled and unprecedented position of finance, extend the time for considering the estimates. Twenty days are all too short for the task that lies before us. Having placed the House and the country in possession of all the information that they can give, and having made up their minds as to their own position, let them give the House proper time for discussion.


The. Debate has covered very largely the Geddes Report, and experienced Parliamentarians, well acquainted with procedure in this House, have admitted that the time between the publication of that Report and this Debate has been too short to give proper facilities for analysing and digesting it. I am not an experienced Parliamentarian, but I should like to deal with some aspects covered by the Report. The Report covers two important questions—education and finance. I am not an educationist, nor am I a financier. My remarks refer specially to the question of education. A few nights ago in this House reference was made to the condition of the country, and it was said that it was not in such a bad position, so far as unemployment was concerned, as after the Napoleonic Wars. Let me remind the House that after the Napoleonic Wars in 1818 a Conference was held at Aix-la-Chapelle, and three famous Englishmen—one was a Welshman—attended the Conference. Each of the three pleaded the cause of an oppressed class. Thomas Clarkson pleaded for the negro slaves; Louis Wade pleaded for the Jews in Europe; and Robert Owen pleaded for the working classes in the factories. He had been making experiments at New Lanark and was convinced as to the necessity for improving the conditions of the working class. He discussed this question of education with the Secretary of the Congress, and the Secretary is reported to have said: We know that very well, but we do not want the masses to become intelligent, and independent of us. How could we govern them if they were? I suppose we have travelled a long way since that time, and everyone in this House will be bound to admit that it is much easier to govern an intelligent, well-educated people than it is to govern a people who are ignorant and have not the advantage of education. My purpose in raising the question of education is not so much in its relation to the Geddes Report, but because of an unwarranted attack, and the foreshadowing to some extent the proposed cut in education, by the hon. Member for the Spring-burn Division (Mr. Macquisten). He stated that since the passing of the Education Act of 1872 the teachers have largely used that Act for their own purposes. I want to put in a word for the teachers, because their patriotism has been appealed to to-night. I can look back to the time when I went to school in 1872, and remember with pleasure the self-sacrificing nature of the teachers' duty. When I had left school and had gone to work in a coal mine at a very tender age, I am glad to say that the teachers, without fee or reward, were prepared at any time and without any payment to give me all the advantages that I claimed in connection with attending the schools.

At the present time I have very intimate association with many teachers, and they are teaching under considerable disadvantages. They find it very hard to impart education to hungry and naked children, and the teachers in many cases are not only feeding some children, but clothing them, in order that they may get a little advantage from their education. That is why I am very jealous about this question of education for the child of the worker. It is the only chance that the worker's child gets. If you cut down the expenditure on education for one generation, then you have a generation whose chance has been lost, because you only pass through this world once. No one can tell but those who have their childhood blighted by unfit and bad surroundings how much they suffer through education being denied to them. Whatever may be said against the Labour party, I sincerely hope that when it comes to this fight far education for the worker's child, we will have our backs to the wall. We may not be able to convert the economists in this House, but we shall be able, probably, to convert the people outside to elect a different House of Commons, who will give the worker's child a better opportunity than it has had in the past. I was very pleased to hear I hat the hon. Member who represents the Isle of Thanet (Mr. E. Harmsworth) has had his chance in life. Nothing delights me more than to find youth having its chance in life. I am pleading here tonight for the class to which I belong, and that they shall have their chance in life, and, at least, shall be given a sound elementary education.

It is proposed that the classes in the elementary schools shall be larger than they are at the present time. I do not believe that anyone who has had experience of elementary schools would say that teaching of real value can be given to the individual scholar in larger classes than exist to-day. If you compare the classe4 in the elementary schools with the classes provided for the children of the well-to-do, you will find that the worker's child starts under a considerable disadvantage. I believe that the appeal to the patriotism of the teacher will not be in vain; but all citizens should be asked to sacrifice to some extent alike. When that is done, you will have very little complaint from any section of the community. The hon. Member for Spring-burn went on to criticise what is being done for the children of the workers. Many of those children are the children of men who went through hell in France to save this country. He went on to prejudice the House of Commons about an education authority which had £700 worth of boots sent down to them without making any claim. I can claim acquaintance with one of the largest education authorities in Scotland, and the closest scrutiny is made, and very often we have considerable difficulty in getting the necessary boots for the children.

I listened to this Debate with considerable interest. It may be an accident that the Government, in arranging the personnel for this Report, selected a brawny man, and a real live baronet from Yorkshire came down and presented him with a big axe, symbolical of the cut in expenditure which he was going to make. We heard from the Prime Minister in this House about root pruning. The root pruning took place, and the tree since then has been more unhealthy than it was before. Any one who knows anything about arboriculture knows that brain is required as well as brawn for pruning, and in the pruning of national expenditure we want brain also as well as brawn. The question which arises in this Debate, as to whether this is a good Government or a bad Government, depends on the point of view of the class to which you happen to belong. It is a good Government for the country if you approach the question from the standpoint of the landlord, the capitalist, the railway shareholder, the large iron steel master, or the banker. It does not matter from which angle you approach it, if you represent one of the large moneyed corporations it has been a good Government, but if you approach it from the standpoint of the worker or the low-paid professional man then it has been a very bad Government indeed.

I cannot approach it from the standpoint of the financier because I know nothing about finance except the want of it. I know very little about education except the want of it, though they say knowing the want of it is the first step towards education. But when you come down to bedrock the very people to whom appeals are being made to sacrifice are the people by whom very largely all the sacrifice has been made up to the present time, and to-night we have had an appeal to the teachers. I cannot agree with the course which the Debate has taken with regard to economy. I want to be frank with you. We are in this position financially to-day because, as has already been said, of the spending of money by the Government on unworthy objects. The Government returns like the prodigal son. We have not quite gathered from them to-night whether they are prepared to repent of having spent the nation's resources on their many adventures. There is a fatted calf, but not for the class to which I have been referring. I am prepared to admit that the finances of the nation are in a very bad way. I am one of those who believe at all times in economy. I learned, as a very young lad, from Ruskin that there was nothing so wasteful as to waste the labour of men. But the appeals to-night on this question of economy have been only to one class, and have not touched every other class in the nation that might make a considerable contribution by sacrifice towards taking the nation out of its present financial position.

When I turn to the Budget of 1921–22 and look at the figures and the manipulation of finance and War Bonds, and so on, from one loan to another, the sum total of the whole position is that in the long run the nation, out of the wealth that is being produced from year to year, has to pay to the bond holders close upon £400,000,000. I have never had an opportunity of getting instruction in political economy. I do not know whether my political economy is sound or not, but that £400,000,000 has to come out of the wealth that is produced. It can come from nowhere else. What I do complain about is that an appeal is being made to the nation for sacrifices, if the expenditure is to be cut down. In my opinion, the first step which ought to have been taken, which would have given us all the money asked for in the Geddes Report, would be to take 1½ or 2 per cent. off the rate of interest which the bond holders are getting at the present time.


They would say that it would be a breach of faith.


I do not know what they would consider a breach of faith.


They have done it before.


I am not concerned with that. These bonds arise out of war expenditure, and the Government made certain promises of payment to the bond holders. I believe in honouring a bond, but are the Government honouring their bond to all classes of the community who took part in the War? When I go to Labour Exchanges, when I see the men standing outside, who are they and what are they? Many of them, if not most of them, in the district from which I come, are men who fought in the Great War, who left everything behind them. I would be the last in the world to ask any Government to break its bond or to ask any man to break his word, but if the choice is the only one, I would then ten thousand times over rather break my bond with the bond holders and give succour to the men who fought in the Great War from 1914 to 1918. In the eyes of the world, from the standpoint of morality, yes, and in the light of history, the nation which cuts the bond holders will be considered a greater nation than the nation which starved its heroes who fought through the Great War because it refused to touch the money of the bond holders. In the Gracious Speech from the Throne reference was made to economy for all. The Geddes axe does not mean economy for all. It only means economy for a section. In the financial straits we are in at the present time. when we are asking sacrifices to be made in the interest of the nation, my opinion is no section of the community should escape making these sacrifices. No individual, no matter how highly placed he may be, should be allowed to escape. I would begin, and I do not say it with any disrespect, at the very top. There are more empty thrones to-day in Europe because of the flatterers and satellites that surrounded these thrones than because of the want of wisdom on the part of those who were dethroned. I repeat I would begin at the very top.


Buckingham Palace.


Yes, at Buckingham Palace, and go right down through the nation. If you w ant the average wage-earner to make a sacrifice you will only get him to do it when it is shown there is a Government in power that is prepared to ask every individual section of the community to sacrifice something in the national interests. Human needs are pretty much alike. No man or woman requires much more than another for a healthy and happy human existence. When you get beyond a certain stage it is luxuriousness that is not to be imitated or desired. What do we find? We find one member of the Royal Family—and I believe if it were left to the Royal Family they would be prepared to make sacrifices—receiving £80,000. I consider I am a friend of the Royal Family, under the circumstance of the country at the present time, in asking them to make sacrifices in the interest of the nation. What does £80,000 mean? A short time ago the Minister of Health came before this House. He was making a cut in expenditure in regard to the milk supply for infants belonging to a certain section of the community. The cut was exactly £80,000. If you ask me again whether I would rather cut £80,000 away from the infants in the poorer districts of the country or whether I would cut £80,000 away from the higher placed section of the community, then 10,000 times over I would say cut it away from the luxurious and give it to the boys and girls that are to be the future citizens of this country.

We have evidences of extravagance on every hand. I am not speaking disrespectfully of the. Prince of Wales. He is having a tour in India. How much will that cost the nation? He had a tour in Canada. We have half a dozen Royal yachts; and all this luxurious expenditure at a time when many men, women and children are dying of starvation. I say, shame on the Government, that has the power to cut down expenditure of that kind and does not cut it down to save the future citizens of this Empire. I want to see a cut all round. We have 42 individuals, ex-Lord Chancellors, Lords of Appeal, retired Judges, and so on, who take between them £100,000 a year. I say again that it is nothing short of a scandal that these men, who are paid fat salaries during the time they are in office, should be allowed to draw that amount of money under the existing circumstances. I understand the Lord Chancellor has £10,000 a year. I think you could get a Lord Chancellor that would abuse the Labour party with his choicest Billingsgate for much less than £10,000 a year. When I turn to the Estimates I find Royal Palaces costing about £150,000 a year. A man who has fought through the Great War and was living in the yard of one of our workhouses is evicted and crowded into a single apartment with another family. And we call ourselves civilised! I find that a "Grade A" director at the War Office gets £4 15s. per day. He is allowed 2s. ld. for rations, 4s. for a servant, 11s. for lodging, 2s. 7d. for fuel and light. If he is a married man he gets all together £2,110 and if he is unmarried £2,092. Evidently the individual who fixed these salaries puts very little on the value of a wife suitable for that class of man. Appeals have been made to the patriotism of the teachers. There is no war on at the present time. These men, therefore, should be unemployed. If there is no work for the miner he is unemployed. If there is no work for the engineer he is unemployed. If there is no work for the artisan of any kind he is unemployed, but there is full pay for these people whether they are employed or not.

All I want to say is, if you want the nation to be contented, if you want the nation to face the present situation, if you want the nation to so operate the industrial concerns of this country as to bring us back to a sound financial position again, then if the Government is not above taking advice from one whose early education was in the coal mine, I say make your cuts at the top. Why did the lads fight so gallantly together on the battlefield? Because there was a common sacrifice. Let us have a common sacrifice. If there is a common sacrifice I believe every section of the community will make that common sacrifice in the interest of the nation. The hon. Member for Springburn (Mr. Macquisten) would be happy if the Education Act were abolished altogether, and the hon. Baronet who represents Dumbartonshire (Sir W. Raeburn) believes all would be well if trade unions were abolished. As a matter of fact, the electors of Springburn and Dumbarton have sent these two Gentlemen to the wrong place. Instead of sending them to the British House of Commons, they ought to have sent them to the British Museum. Why was this Geddes Committee not selected from Members of this House? I want to be charitable, but I believe the reason they were not selected from the House of Commons was that the Government did not want us to get a peep into the accounts and see how the money is spent. Sometimes we do get a peep. For instance, two and a half years ago Lord Northcliffe instructed the Government that they were to get rid of the luxurious motor cars used in connection with the various Departments, and one was sold belonging to the then War Minister, now Secretary for the Colonies. I did not see the car, and I would not have been able to judge it supposing I had, but I read a description of it in the Press, and the only thing I could liken it unto was part of Solomon's temple—the only difference, of course, being that the car was not intended for a Solomon. You can take that whatever way you like. When the auctioneer came to sell the car he said it was the last word in luxury.

We have had some talk about Rosyth, and about the admiral there. I am not acquainted with nautical terms. I am more acquainted with naughty terms, but seafaring terms are not familiar to me. I gather, however, that there was an admiral there, and it has been stated in the public Press—in the "Glasgow Herald" of a fortnight ago—that he had been there for three years doing nothing but had been drawing full pay, that he had several hundred men, and that there were five motor cars in the garage for his use. I wish the hon. and gallant Member for Central Hull (Lieut. - Commander Kenworthy) were here, and perhaps he would be able to tell us whether five motor cars form a necessary part. of the equipment of a warship. I suppose the admiral would want the five motor cars when he went to "see"—spelt with two "e's," and not the other sea. I sincerely hope the Government will face this question of effecting real economy. We in the Labour party are concerned about the welfare of our nation outside, and if any Government happens to be in power which is prepared to make a cut all round, and bring about something like a common sacrifice, then there will be no section of the community more ready to respond than the industrial section and the low paid professional men. Just asin1914they responded to the call to cross the sea to France and go elsewhere into "the far-flung battle line," so you will find them ready to sacrifice again under those conditions. Otherwise, you will have discontent and disturbance, and no one can tell what the future of this nation may be. if the Government are not wise in their day and generation and cut down the luxurious living which exists at the present time in the quarters I have named.


My hon. Friend who has just sat down made a very eloquent appeal, and I appreciate very much his eloquence on behalf of the Education Estimates. I can assure him I am not going to attack in any way the Education Estimates, for the time being. I think, as a matter of fact, far and away the most serious part of the Geddes Report is the part which deals with the fighting services. I am very sorry that this Report was not issued a good deal earlier. After all, it was presented to the Cabinet on 14th December—about two months ago—and as, presumably, the Government had made up its mind to publish the Report, I cannot see why on earth they should have waited for two months before giving it to the House of Commons and the public. It has been extremely difficult for all of us to master this Report. during the week-end. I personally have read it through, and it would take weeks to master thoroughly. I do not think it was quite fair to the House of Commons that it should have been published just before an important Debate of this kind. One thing emerges after a more or less hasty perusal of this Report—that it is one of the greatest exposures of unnecessary spending the Government has ever had to face. More than that, it justifies everything that has been said in this House with regard to Government extravagance for the past 2 years, and it justifies absolutely the agitation against Government extravagance in the country outside. The Government, time and again, made fun of the criticisms from various parts of the House in regard to their expenditure, but now they are condemned by the very Committee which they themselves set up to examine into the question. Not so long ago, the Secretary of State for the Colonies made a speech in which he used the celebrated phrase that the Labour party were not fit to govern. I wonder if the people outside are not now asking themselves whether the present Government are fit to govern? People will begin to ask whether a set of Ministers who, practically on their own showing, are unnecessarily spending between £100,000,000 and £200,000,000 every year, and who have had to appoint an outside Committee of business men to give them the details of their own waste and extravagance, are really fit to govern?

Another thing which the Report makes quite clear is that until we get some rationing system we shall never get proper economy. The hon. Member for Oxford (Mr. Marriott) quoted that portion of the Report, but we have been saying this for the last two years. I believe until we arrive at some definite principle of expenditure we shall never get proper economy. After all, the cuts recommended by the Geddes Committee are merely temporary expedients. Next year, or the year after, it may be necessary to go further, and in the year after that again it may be necessary to make still further economies. The cuts recommended by this Committee are merely in order to meet the urgent necessities of the hour. They are intended to make the Budget balance for the financial year 1922–23. We must go further than that. It is absolutely essential, if we are to put our finance on a sound basis, that we should arrive at some kind of principle of public expenditure, in relation to the capacity of the nation to pay. Until we do so we shall always be in danger of the nation living beyond its means. It is not enough merely to make the Budget balance in the coming financial year. We shall have to get taxation down, and I was delighted to hear the hon. Member for Central Edinburgh (Mr. W. Graham) say that in his belief—and I am sure he is right—the present taxation is very largely responsible for the enormous increase in unemployment. There is not the slightest doubt that industry at the present moment is most cruelly overtaxed. Trade cannot go ahead and employment must suffer. On this question of the reduction of taxation, I wish we could get something a little more clear from the Government. They seem to speak with two voices. The other day the Attorney-General, speaking, I believe, in the Wesleyan Hall, used these words: We may confidently look forward to an early reduction of taxation. On the same day almost the Colonial Secretary said: The trader and the manufacturer must feel assured that the evils of expenditure and the burdens of taxation will be reduced and speedily reduced. Then comes the Prime Minister, also, I think, at the Wesleyan Hall. He said: It is essential to reduce the burden of the taxpayer to the greatest extent consistent with national security. Then the Lord Privy Seal comes along. He went to Scotland, and he used these words within a few days of those other speeches: The task before the Government is to reduce expenditure by something between £150,000,000 and £200,000,000 in order, not, as we could wish, to reduce taxation, but to make both ends meet. What really is the intention of the Government in this respect? Are they going to economise merely with a. view of balancing the Budget, or do they intend to reduce taxation in the near future? It is an absolutely vital question, and I think it is more important than any other question at the present moment. The Government have been very slow in this matter of economy. They have at last been frightened into it, and nobody can deny that. Does anybody suppose for a moment that they would have made these cuts of their own accord? Does anybody suppose that they would for a moment have appointed the Geddes Committee in the first instance if it had not been for the terrific agitation in this House and outside? Now I am only afraid that, having been scared into economy, they are going to be frightened back into expense by Departmental pressure. Already these Departments have begun to bring pressure on the Government. We have had this amazing document issued by the Parliamentary Secretary to the Admiralty, I should think an unprecedented breach of discipline, and the only course the Government really had to follow in the present case was to adopt it as its own. In this document—it is the most extraordinary thing to have done—the Parliamentary Secretary said that the Geddes Committee deliberately suggested a £6,000,000 cut, not to secure economy, but to create an impression. What sort of example is that going to be to the other Departments of State? Therefore, I do very much hope that hon. Members will maintain a continuous vigilance upon the Government, and upon the Departments in this respect, and I very much hope that they will not take any reductions up to £150,000,000, or whatever it may be, as final reductions. Over and over again in this Report, the Committee point out that these are only preliminary reductions, and that a great many other economies could very likely be found. I said just now I thought the Government had been very slow. Let me explain what I mean. We all remember that famous Treasury Circular, which was signed by the Financial Secretary to the Department, on 31st May. Hon. Members may remember that it ended with these words It need scarcely be added that it is highly desirable that any economies which examination shows to be possible should be brought into operation, if practicable, at the earliest possible date within the current financial year. The Departments were told to report by 31st July. On 16th August, nearly three weeks after the Department had reported, the Chancellor of the Exchequer gave the economies sent in by the Departments at £70,000,000. It seems to me that many of those economies were probably discovered before the Treasury circular was received Why should not they have put those economies into force at once? It is quite certain, if they had taken the trouble, they could have put a great many of those economies into force during the present financial year. That is to say, they had 8 months in which they could economise in the present financial year, or say, £50,000,000 of economy. I should have thought they could quite easily have made that in the 8 months of the existing financial year, but on 9th November the Chancellor of the Exchequer told the House that the savings would only be £20,000,000, and now we are told that as a result of the Geddes recommendations additional economies to the tune of £20,000,000 will be possible, bringing the amount up to £40,000,000, but I still think, instead of £40,000,000, the Government ought to have saved about £70,000,000 within the present financial year including the £20,000,000 of the Geddes cut. Everyone must recognise that this Committee have done immense service in at last opening the eyes of the public, but why really was it necessary to appoint the Committee at all? The Committee are merely reminding the Ministers of what they ought to have known all along, and a large part of these economies should have been made, I am quite certain, over a year ago.

I should like to mention one or two items which I cannot understand. You find that the staffs of the Government Departments are still 350,000 as against 277,000 before the War. That is to say, the staffs of Government Departments to-day are over 70,000, or 27 per cent. more than before the War. Take the Admiralty. After all, I do not see why we should not discuss the Admiralty tonight, although the Parliamentary Secretary has issued a Memorandum. You will find that in the Admiralty to-day there are 925 more executive officers than in 1914, although the Navy is smaller by 21,000, and the German Navy is at the bottom of the sea. How on earth can you explain those figures unless you have been grossly extravagant? There are 9,000 more men employed in the Royal Dockyards than in 1914 although there are fewer fighting ships. How can you explain that? The actual Admiralty office staff was 2,072 in 1914; they are now 4,500, or more than double, although the German Navy is at the bottom of the sea. There is a staff at Dartmouth of 529 to look after 445 cadets. The actual War Office staff was 1,878 before the War. It is now 4,114, and, if you eliminate all the people who are dealing with War medals, you will still find 1,676 more War officials than before the War, although we have beaten Germany. I do not care what the Government say in their defence. I say that, in the face of those figures, they must have been grossly extravagant with the public funds. I could find throughout this Geddes Report on every page all kinds of unnecessaryy expenditure. Take one instance. The Government brought in a Peace Pensions Bill in 1921. They did not call in any actuarial advice to show how that Bill ought to be brought in, and the pensions paid, and this has let the country in for several millions of money which they need not have expended. That is pointed out.

After all, as I say, I do not see why it was necessary to appoint this Committee. It is the business of the Government to keep their house in order, and to see that the taxpayers' money is not flung about unnecessarily. Now, however, you have got the Report, it is our duty, the duty of the Government, to see that this great public expenditure is attended to immediately. I do not say carry out every detail of the Report. It may be that the Committee recommends too much to be cut off in some cases and not enough in others. But it has got to be taken as a whole, and it is the bounden duty of the Government to cut their expenditure to the full amount. It is not sufficient, as I said before, merely to make the Budget of the forthcoming year balance; that is not sufficient. We really must cut taxation down, because present taxation is crippling industry and causing unemployment. The whole business world is in agreement about this. More than any other people in the world, I suppose, we depend upon our overseas trade. We have staked practically everything on the ability of our merchants and manufacturers to hold their own in the markets of the world. Yet at the same time we are the most heavily taxed people in the world. Therefore, our manufacturers are compelled to load their prices with a far higher percentage of costs, and that cannot go on. We must try to get a definite proportion of expenditure to our taxable capacity. No mere attempt to make the Budget balance in the coming financial year will meet the case. We must really go far deeper than that, and I believe that until the Government tackle that particular problem we shall not get back that proper revival of our trade and commerce for which we look.


Like the hon. Member who has just spoken, I feel that there are some matters on which I am not quite clear. To the cynic it might appear to be a fair inference that six months ago the Government, as the Prime Minister said, having "used such brains as they have to the best of their abilities," came to the conclusion that those brains—either in quality or in quantity, or possibly in both—were unequal to the tasks which confronted them. Accordingly the Government handed over their duties to an outside body. I object, on constitutional grounds, to a body of this sort being set up even with a suspicion of authority as to suggesting policy, which is a thing that should be left entirely to this House. I object on another ground; that is the setting up of a body to create great expectations, just as the promises and actions of the Government have done more than once in the last three years. It was, of course, quite open to the Chancellor of the Exchequer to take advice in matters that he wished advice upon, but I think it would have been a public advantage if the matter had been done very much more quietly than it was done. I am not sure that the Chancellor of the Exchequer, for his own sake, was wise in the step he took. It is quite possible that he has put up a Frankenstein of which he will not get rid in a hurry. At any rate, as one who had great admiration for the Chancellor of the Exchequer in his student days, and who speaks now, not only as a Member of this House, but as one of the constituents of the Chancellor, I hope he will not have cause to regret setting up this Committee. The purpose of the Chancellor was to set up an ideal of economical administration. So far good, but I am certain that the ideal, such as it is, is quite impossible for attainment. However that may be, the result of the Committee is now before us, and it would be very ungracious if we did not admit that they have put into their work a very great deal of thought and a very great deal of self-sacrificing labour.

9.0 P.M.

Considerations of national expenditure are of course of urgent importance. It ought not to be forgotten on an occasion like this from what this stringency in financial matters has arisen. Mainly, I think, from three things. The first is the wastage caused by the War. The second is the failure to create new wealth since the War ended. The third is the fact that during the War much wealth passed into the hands of a few people, not through any exertions of their own, but really as a result of the War. Personally, I have always greatly regretted that it was not possible to get for the community a goodly proportion of what is commonly known as "war-wealth." The fact that it was impossible to recover some of that wealth has caused a good deal of unrest in the country. Of that there is no question. Some words, uttered two years ago, of the Noble Lord who represents Horsham (Earl Winterton) were to the effect that it was a scandal that any man should have made money out of the War. He might have gone further than that, and said it would be a double scandal if any person, to use a phrase which is almost an insult to our patriotism, should "do well" out of the War and be found preaching, through reports to this House or otherwise, economy to others. Therefore, I think that it should be made quite clear to the public outside—because questions are being asked—that no one having any part whatever in the recommendations of this Report has himself or herself made anything out of the War.

I put that forward for two reasons. First because the Prime Minister in his speech stated that the economies which the Government were recommending would undoubtedly cause great hardship, and secondly because to-day the Chancellor of the Exchequer stated that many of our difficulties were caused by the sum required to pay the interest on the money borrowed during the War. In regard to the personnel of what is known as the Geddes Committee we are all, I think, agreed that the five are men of great distinction in their particular lines of business. They may or may not be qualified to adjudicate upon matters connected with the Admiralty. I know nothing of their qualifications in that respect. So far, however, as I know—I may be wrong—so far as I have been able to learn, they have no qualifications for dealing with education: neither have they had any administrative experience of it nor have they engaged in it practically. As to the methods pursued in their enquiry, I understand that so far as regards the subject of education their enquiry was conducted at Whitehall and very little can be learned of the state of education in this country by such an enquiry. Had that Committee known how to get at the true facts of the case they would have visited the schools and other educational institutions throughout the country and would have seen what was actually being done.

What would they have found? They would have found many insanitary schools, overcrowded classrooms, poor equipment, children poorly fed and the like. They would have found at our central institutions and technical schools numbers of students unable to obtain admission. They would have found our universities cramped for want of means. Those things actually exist, and that is the condition of affairs in the country to which the Geddes recommendations are meant to be applied. There were not many hon. Members in the House one night last week when the hon. Member for Durham (Mr. R. Richardson) gave an account of the state of matters in the county which he represents. He told us that there children actually were sitting in the class-rooms with the rain coming down upon them, that the winds were cutting through broken windows, and that the teachers were suffering in health in consequence; that is the actual state of matters in many districts in the country just now. We have to keep that in mind when we take into consideration the recommendations made by the Geddes Report.

May I glance for a moment at each of those specific recommendations? I was very glad to hear the Chancellor of the Exchequer say that those recommendations had not yet been adopted by the Cabinet. Not only had they not been adopted by the Cabinet, but the Cabinet had still an open mind as to what its official recommendation might be. The first recommendation is that the compulsory age for school attendance should be raised from 5 to 6 years. Do the members of the Geddes Committee understand what that means? Do they know that for tens of thousands of children between 5 and 6 years of age the happiest hours of their lives are spent in schools? Do they know that for these tens of thousands of children the cutting off of school attendance means that they will not be properly cleaned, clothed, or fed? Do they know that medical authorities are unanimous on the point that preventible diseases have become chronic in thousands of instances during the first 5 years of a child's life which might have been easily prevented during the earlier years of childhood? Have they visited our crowded industrial cities in England and Scotland where the mothers have to go out to work to get a livelihood? Who is going to look after the children when the parents are so engaged I am sure the representative of the Government present will take this into his sympathetic consideration, because I know that he has been a good friend of education.

I should like to whether the Government Departments are to be allowed to make recommendations themselves? Would the Cabinet be ready to give to some bodies outside the right to make recommendations on this subject? If they are, I will guarantee that they will get a unanimous protest against this first recommendation applying to school children. In a line or two the Committee are going to sweep away the policy which has been adopted for the last 50 years, the wisdom of which has never been questioned.

There is the recommendation that classes, especially in the towns, be raised to 50, the average being much lower than that. Apart altogether from the considerations put forward here to-day that that is a retrograde step, I believe that to try and carry it into effect would cost two or three times more than the amount that would be saved, because it would lead to considerable reconstruction of school buildings. On educational grounds this recommendation stands condemned.

I ask the special attention of the House to my next point which involves a very far-reaching principle—it is the recommendation that parents are to pay for the Secondary education of their children if they are considered able to do so. It is thought that a sum of money will be saved by this method, although in fact it cannot amount to much. What does this proposal mean? We have in England and Scotland great endowed schools to which the wealthiest people in England and Scotland are glad and proud to send their children. Those great endowed schools are not kept up by the contribution of the fees of those who attend them. The children of the well-to-do in England and Scotland, perhaps more in England than in Scotland, are reaping the benefits of education provided by philanthropic people in the past who gave their wealth for the purpose of educating the children of the poor. Does the Geddes Committee mean to carry its recommendation to its logical conclusion, so that in all the great public schools of England and Scotland every student is to pay fees if the parents are considered able to pay them? This would set up another bureaucratic department to look into the private affairs of people. I think it is a very dangerous recommendation, and there is more savouring of class legislation in it than perhaps appears on the face of it. I would warn the Government against even considering its adoption.

The fourth recommendation is that the country is paying more than it can afford for higher education. I venture to say, and I am restraining my language to the utmost extent, that a more absurd, a more unwarranted, and a more unsupported statement was never made in a public document. To say that this country, which has been meagre to the last degree in its encouragement of higher education, which has left it to private enterprise and private benevolence, is spending too much money on higher education is a travesty of the real position of affairs. I need not say more, seeing that the right hon. Gentleman the Member for Paisley (Mr. Asquith) has exposed so many of the fallacies of the Report. I do not wish to weary the House. I should just like to say that the statement made by more than one Member of the Government that this Report, when issued, would be found to be a remarkable document, has been proved right up to the hilt. It is, indeed, a remarkable document, and so far as education is concerned, it might well be termed the Magna Charta of Reaction. It would in application largely destroy a system which it has taken decades of endeavour on our part to build up.

I would therefore make an appeal to the Prime Minister and his Government that they will not be led away by any false cries to tamper with the provision already made for the education and welfare of the children of this country. I would call their attention to the fact that already education has been subjected to an attack. In the course of the War, this House passed two great Education Acts, one for England and one for Scotland. When you pass an Act of Parliament, you practically promise that it shall be carried into effect. That was the promise which was given to the children of this country, that an endeavour would be made to give them a better chance than their parents had enjoyed. What has been done under those Acts? Almost nothing. Is that not a sufficient attack on education already? Education in its widest sense of knowledge and culture should be a unifying influence, but if suspicion is aroused that any Government or any class of the community is endeavouring to deprive others of the full fruit of such knowledge as they are capable of acquiring, it will arouse a feeling in this country, the depth of which may not be quite appreciated. I am not giving my own personal opinion. The Prime Minister has stated, both inside and outside this House, that we dare not save on education. He said more, for he attributed much of the horror of what was going on in Ireland to the fact that the Irish teachers were poorly paid and discontented and that the children were not sufficiently cared for. If any suspicion of class legislation attaches to our system of education, it will be a serious danger to the country and to the Empire, and therefore, while willing to recognise that in Educational Administration, as well as in other State activities, there may be opportunities for saving something here and there, I do ask this House to be very chary of touching education. It is an easy matter to compute what the cost of education is. To compute the cost of ignorance is a matter beyond any man's power.


I do not propose to follow the last speaker in dealing with details of the Geddes Report. I think we should confine ourselves more particularly to the precise terms of the Amendment regretting that the extravagance of His Majesty's Ministers has imposed upon this country a crushing burden of taxation with disastrous effects on the industries of this country and on employment. We have listened to a good many speeches in the course of the last week on the subject of economy and expenditure, but there have been very few speeches delivered in this House which in my opinion, and in the opinion of many people in this country, have attempted in any way to get down to the root causes of the vast amount of trouble with which we are confronted in regard, not only to industry, but to employment. The question of taxation is a very pressing question, but it has been glossed over both in public and in private in a manner staggering to those of us engaged in industry who are brought face to face with these difficulties. My hon. Friend the Member for the Bothwell Division of Glasgow (Mr. Robertson) in the course of his speech made references to the sacrifices which had been made. He stated that those sacrifices had been made by only one class, and that only one class was being to-day asked to make them. I wonder if the hon. Member has the slightest conception of the difficulties which are confronting those who to-day are engaged in a great attempt to build up and maintain the industries of this country. My hon. Friend made a most admirable electioneering speech, almost as good as the election speeches made by some of the occupants of the Treasury Bench. He talked about sacrifices. He talked about cancelling War Loans. He never uttered a single word about the credit or reputation of this Empire, and he quite forgot, and never attempted to remember the fact, that the whole of the War Loans and War borrowings of this country had been practically invested either in this country or in our Colonies. He quite forgets that it has been pledged as security, that there has been depreciation and an unprecedented slump brought about by conditions, with which I am going to deal in a few moments, but which have not been wholly attributable to lack of foresight on the part of the Government. They have been attributable very largely to the conditions which his own party have imposed on industry. My hon. Friends above the Gangway know full well that I do not shirk or birk in discussing these matters the point which they bring up. At the same time, before I come to that phase of it, I have to remember that industry has had imposed upon it during the past two years taxation which has to a very great measure been responsible for the slump. As we follow the speeches of the Lord Privy Seal, the Chancellor of the Exchequer and the Minister of Labour we find that all through the last two years they have been preaching to us a spirit of optimism in industry. Two years ago, speaking in the House of Commons, the Lord Privy Seal in dealing with the Budget. pointed out that he was increasing the Excess Profits Duty from 40 per cent. to 60 per cent. because of the unparalleled prosperity of industry, because he was certain there was going to be an increase in trade, because manufacturers were stocked with orders and there was every prospect of a continued demand for our products, and therefore the Government should have a portion of the profits. Long before the Chancellor of the Exchequer made up his mind with regard to the Excess Profits Duty and its continuance, he had been advised, and my hon. Friend the Financial. Secretary to the Treasury is perfectly well aware of this, that the slump was coming, that orders were scarce and that there were stormy times ahead. Not for one single, solitary week since the day the Lord Privy Seal made that speech has there been anything but a downward tendency and increasing unemployment in this country.

I will follow that argument out. As a result of the imposition of the Excess Profits Duty and the infliction on the industries of this country of an intolerable burden which they are not able to meet, we find to-day we have arrears in our Estimates of last year of £200;000,000 in Excess Profits Duty which people cannot meet, and for which the Government cannot possibly get the money from the public. That money is needed and is essential and desirable in their businesses, for the purpose of developing the business and of finding employment. We find to-day that people, with all this money owing, are not in a position to pay it. Appeal after appeal has been made to the Chancellor of the Exchequer to modify the conditions and to do something to help industry and create employment. What do we find the Chancellor of the Exchequer does? In a very generous moment he gives to firms who owe Excess Profits arrears a period of five years in which to meet their payments. He says he is perfectly willing to do this at a rate of interest of 5 per cent., without allowance of Income Tax, as from 1st January, 1922. That offer is given, I presume, based upon the assumption that during the period of the War when the Excess Profits Duty was being collected the sum of probably from £50,000,000 to £60,000,000 in taxation was due from those who owed Excess Profits Duty as a result of deferring their payment. In actual fact this works out to-day in this way. There are no excess profits, and there is not sufficient revenue to meet current taxation. No industry is making excess profits to-day, and the suggestion of deferred payment, provided that the Treasury intend at the present moment to let the Super-tax follow the Income Tax, works out at a net tax to the borrower of 7.1 per cent. in the case of a corporation. If the Corporation Tax is going to be made to follow the Income Tax and the Super-tax it works out at 7.68 per cent. In the case of a private concern owing Excess Profits Duty it works out at 12½ per cent.

The Government which is paying away £100,000,000 a year in unemployment pay is going to strangle industry at a time when it needs help. At a time when every man is striving, for the sake of his name and reputation, to keep his business afloat, and when he is confronted with every possible kind of difficulty, he is offered the tempting and alluring proposition of receiving assistance from the Government at the rate of 7¼ per cent., at the very lowest. Is this the idea which the Government have; is this the policy of their advisers? We, as business men, know that we have to-day in South Wales a whole coalfield absolutely bankrupt. Only three colliery companies in South Wales are making money; 50,000 odd colliers are out of work, and there is no prospect of getting them back. 7,000 people are out of work in my town alone, and there is no earthly chance, as far as we can see, of getting them employment. Industries are absolutely staggering under the burden of taxation, yet the Department for which my hon. Friend is responsible issues to-day in South Wales, to the bankrupt colliery companies, whose whole reserves have been dissipated and whose men are working for a starvation wage and for less than a subsistence wage, writs for the payment of the coal levy and the payment of their Income Tax. This matter is serious, and we cannot afford to see a whole section of the country pushed down. The manufacturers and the workpeople of that particular part of the country are quite determined that they will not go under without a protest.

Take the engineering and shipbuilding trades. Six or eight months ago the Minister of Labour, in discussing the question of unemployment, referred to the fact that at the end of the coal strike something like 1,700,000 people were out of work and registered as unemployed. He said that immediately after the strike was settled he expected the number would be reduced by some 200,000. In the engineering and shipbuilding trades we are faced with the position—unless we are unduly optimistic, and I see noreason for that—in which we are probably going to have another 500,000 men thrown out of work in the course of the next six months. What are you going to do about it? It is all very well talking of doles and taxes, and for the Government to hold out the hope which they do at times, and for three Members of the Government to make speeches and say, "We hope and expect to see a reduction of taxation," when those of us who go into figures and see the liabilities with which the country is confronted realise full well that there is not the slightest possibility, as things are to-day, of taxation being reduced. It is no use kidding ourselves and believing all we are told simply because there is a possibility that some of us may go to the country, and others of us may not come back. Taxation is based to-day on the assumption that on Income Tax and similar duties we are going to get approximately £470,000,000, and on the assumption in the Estimates that the revenue capacity of this country is £2,400,000,000. We are going to be assessed in the 1922–23 Budget on approximately the same figures. If I ask any intelligent business man in this country, or any banker, what he thinks the actual revenue of this country is going to be in 1922–23, not one single man would tell you, even if he had the greatest optimism, that the revenue would be in excess of £1,200,000,000. It is impossible under any circumstances, even assuming that the whole of the recommendations of the Geddes Report and also those economies authorised by the Treasury are put into effect, that the public expenditure of the country will he less than £950,000,000. I feel that business cannot stand it. Just so long as we are going to be placed in that position we are going to have unemployment, not only as it is to-day, but increasing very rapidly. My hon. Friends perhaps do not realise the gravity, but it is the gravity of the situation with which industry is confronted. Take Lancashire, Yorkshire, South Wales, the Clyde, the North-East Coast—on every hand there is the spectacle of unemployment, there is a total lack of confidence in industry.

It is known to many that scores of concerns are practically on the verge of bankruptcy. There is no desire to attempt to obtain orders under any circumstances until people are reasonably sure that there is going to be a decrease in expenditure. We have to cut our coat according to our cloth. We have an expenditure of £1,100,000,000. We have an export. trade which is only 63 per cent. of our pre-War export trade, and our imports are going up every month. The adverse trade balance against us is increasing all the time, and month by month we see the policy of dear money being persisted in by the Government, which has put up the cost of borrowing, and which is still further keeping money from moving actively in the industrial world. We see on every hand attempts being made at the present moment to discredit the Geddes Report—attempts to belittle and disregard it. As a matter of fact, the Government expenditure is over four times in excess of what it was before the War, even when one makes allowances for interest on War loan and pensions.

Long before the natural increase of salaries the industries were in a worse position than they were before, and people were going out by their thousands every week. The total number of people registered as unemployed is by no means a fair indication of those who are actually out of work; and when we see on every band, with the possible exception of the Post Office, whose staff of people is more or less the same as it was before the War—when we see on every hand the vast increase of officials—and we know ourselves when we go into Government Departments and compare the manner in which these people are carrying out their work, and the zeal which they display in private offices—we do not wonder so much that expenditure and extravagance is going on.

I am at issue with the hon. Member for the Scottish Universities (Mr. D. M. Cowan). He made a reference to the composition of the body who signed the Geddes Report, and I take issue with him at once. It was an innuendo undeserved, and certainly ungracious and unkind. He suggested that some people had been querying the capabilities of those Gentlemen to make such a Report, and when it came to a question of economy, one should consider whether or not these Gentlemen made any money out of the War. That is the direct suggestion which the hon. Member made. I say at once I had the honour of knowing at least three Members of that Committee. One of them at any rate occupied a very high position in the Admiralty; and if after the years he spent there he is incapable, after having direct knowledge of that Department, then I am sorry to say I feel it may apply to any and every Minister who occupies a Government position, because if a man cannot sign a Report and have knowledge of the Department over which he once ruled, then the same thing applies to any other occupying office. That is the first point.

I also know Sir Joseph Maclay. He presided most ably over perhaps the most profitable Department the Government controlled during the War. He presided in a most able and efficient manner, and no one would impugn either Lord Inch-cape or Lord Faringdon and the other member of the Committee. It was a most unfair reference and innuendo to make and I take issue with it at once, and I think the House should do the same. Beyond that I have very little to say, but I am very glad that the Leader of the House is here, and I hope he will deal with this question of arrears of Excess Profits. I have pointed out, as the House knows, how this scheme will work, and what little hope it has given to companies throughout the country whose assets are less than the amount of their obligations to the Government. Unless something is done which is going to relieve the burden of taxation, both directly and indirectly with regard to these companies, we must look in the near future for a considerable smash in the industrial world.


I have a great deal of sympathy with the hon. Gentleman who has just addressed the House, and I need no more underline the picture which he has drawn of the state of gloom prevailing in the country generally, and particularly in the large industrial centres. I should prefer, however, my hon. Friend and those who evidently share his views, to do something more on these matters than merely deliver their speeches. I am not sure that the same sort of speeches are delivered on the platforms in the country when they are addressing their supporters, but whether they are or not, I know by the real indignation in respect to the results produced by several years of the policy of this Government, that they ought to carry their views further; and I suggest they ought to carry them out to-night to the length of supporting in the Lobby the Amendment now before the House. What is the good of telling us how the Government's financial policy has ruined trade, produced unemployment, made companies bankrupt, made it impossible to secure money, or to use it if it could be secured—what is the good of saying that is all due to the Government policy during the last few years, and then tamely walking into the Lobby on each occasion in support of the Government? I think that a protest might well be registered in the proper quarter. I daresay my right hon. Friends opposite would suspect that, when in due course a Labour Government comes into power, it would make some new departures in methods of administration; but I doubt whether it would go so far as to govern, not on the basis of experience, but very frequently on the basis of experiment. That clearly is what the Government has done in relation to what we know as the Geddes Report, and, so far as I know the history of Parliamentary Government, I doubt whether there is any instance in history where a procedure of this sort has been followed. It is really nothing more or less than a device to meet a most disturbing clamour for economy, a clamour which the Government could only meet by taking some steps to do some-thing—


We cannot hear you.


I am very sorry; I am doing my best to make myself heard. The Report will give rise to a great deal of trouble, but I doubt whether it will give rise to any real economy which could not be effected by other means. There was a frenzied demand for saving anyhow on something, which clearly followed upon the most reckless outlay of public money, the spending of which could have been avoided by a different policy. The Report, although a novelty, was less of a novelty than a concession to a certain clamour; but we must not treat it lightly as a novelty. Ministers have a great responsibility. I conceive it to be the duty of a Minister, if he has been long and well established in his Department, to understand a great deal, if not all, of the internal conditions of his office. Hence there can be no economy for which a Cabinet can collectively be responsible. The right hon. Gentleman who moved this Amendment put a point which, I think, is deserving of an answer, and trust that some reply will be given to it. It was that some months ago the right hon. Gentleman the Colonial Secretary announced that this Report would not be published until the Government had been able to consider and determine its policy upon it. I repeat the question, which has been put from other quarters, as to why the Report has been published now, and why, further, we have been told today by the Chancellor of the Exchequer that certain decisions have been reached by the Cabinet, but that they cannot be revealed until the Estimates are placed before the House. How can we discuss a question of this kind with such material as the Cabinet has placed before us, or, rather, withheld from us?

This Debate will conclude without any particular merit of advantage to the country. I say that because the House is not put in possession of information to which it is entitled. It does not know the mind of the Cabinet in respect either to what is in the Report or what is not. The House to-day has been told that it can be informed of the decisions which the Chancellor of the Exchequer said had been reached when the Estimates are placed before it. That is not treating the House of Commons fairly on great questions of public policy and public expenditure. It is not enough that the Cabinet primarily should register certain decisions, and then, later on, call upon the House loyally to go into the Lobby to approve those decisions. Either this place is a place for discussing the merits of saving public money, or it is not, and if there is really to be a curtailment of public expenditure on certain services, the House should be treated more fairly than it is being treated by the process so far followed by the Government. The Government cannot congratulate itself, either, upon the picture drawn by the Chancellor of the Exchequer, who said that the world now is in a more unrestful state than ever before. Either policy has or has not something to do with that condition. If it has, the Government is responsible for giving an answer on its policy, which it withholds. We have had, as I have said, extravagance followed by frantic efforts at retrenchment. That is not Government, and no Labour party, if returned to power, could revolutionise the constitutional practice and the long established procedure of this House as it has been revolutionised by the appointment of a number of men outside the Government altogether, with power to go round and inspect the structure of finance and of expenditure, and lay down definite recommendations as to how and where they thought large sums might be saved.

The view of my hon. Friends for whom I can speak upon this side of the House—and it is a view which we do not utter now for the first time—is that large sums of money could have been saved, and ought long ago to have been saved, which have been spent on totally unnecessary purposes, either from the national or the international standpoint—on armaments and upon costly forms of Government. Even apart from the Army and Navy, vast sums could have been saved which the Government spent, at a time, perhaps, when they did not consider that financial difficulties would be as serious as they have become. We have paid for idleness in the case both of the rich and of the poor. In the case of the poor, we on this side have said that nothing should have been paid without something in return, and some sort of service o value could have been organised at no cost whatever to the Government or the country if new steps of organisation had been pursued. The Report, at least, does reveal the fact that a large number of highly salaried men are secure in their posts, whose services, if dispensed with, would not be missed in the least. The Report clearly shows that what might very well have been done by, say, five men, is now being done by some 10 or 15, at an enormous cost in salaries. There are hon. Gentlemen in this House who sometimes complain that we working men want three men to be employed on a job that two might perform, and they point out that that is a delusion, and is a damage to industry. There is a great deal of truth in that, so far as there are really instances to sustain it. We do not desire that there should be waste and extravagance in the physical labour of manual workers, and, as we do not desire that, we will not consent to the enormous waste incurred in having in the higher reaches of Government men whose services can be dispensed with without any loss whatever to the country. On the other hand, there are proposals in this Report which, if carried out, would smash completely the very last promises which the Government made prior to the last election, and even since, in relation to social, educational and labour conditions. The curtailment of payments for health, for education, for pensions and their administration, would ultimately not be a saving at all. We can spend, and yet we can gain if the money is properly spent. We can save, and yet we can lose if the money is not properly spent.

I should like to follow up one or two of the instances which hon. Members have already put before the House. There is the case of the children who, according to this Report, are not to be permitted to go to school until 6 years of age. I have some personal knowledge, sustained by continued observation, of what that means in thickly populated working-class districts, and I can bring myself to believe that the Government can apply any one of their proposals in this respect except that. I cannot imagine that it will go so far. To prevent children in crowded areas going to school before they are 6 years of age is absolute cruelty, not only to the children but to their parents. I should like to know—I daresay hereafter the figures can be supplied—how many such children there are attending ordinary day schools now—infant schools, and so on. There are very many children going to school below the age of 5. I have heard, indeed, of a great many going below the age of 4. What are the conditions of the homes of these children? If they had nurseries, playgrounds, even if they only had a few yards of space for recreation purposes in the immediate neighbourhood of their homes, something might be said for this cruel suggestion. As it is, some are locked in cellars or garrets or hemmed in overcrowded tenements and slums out of which it is only a mere act of humanity to take them as early as you possibly can. There is, I think, a great deal in the point of view put by an hon. Member a moment ago that this has its effect upon the health and upon the later physical development of the children, and I do not think anything can be saved by this course if, unhappily, the Government should feel themselves driven to it. The homes of this class of worker will, I suppose, remain as they are for very many years to come. It may be that we shall save more upon a further abandonment of the housing schemes, already largely abandoned. Let us not commit the dual cruelty of refusing to allow the entry into school of children whose only joy, whose only opportunity of living the life of a youngster, of being with its kind and having some chance of play and change, is afforded now by the hours during which it can escape from its home and get into the school.

10.0 P.M.

Another instance of there being no gain but ultimately loss would arise if we tried to save on any enlargement of the numbers in a class. This is an old subject of dispute and I thought we were getting nearer some higher level of efficiency in the general uplift of our system of education, and I trust that the Minister of Education will not lend any attentive ear to the suggestion that these classes should be enlarged. It will be a punishment of the teacher and it will be an added waste in the process of educational expenditure because of the decreased quality and efficiency of the educational effort itself. We might in other respects, without doing any material harm to education, review the structure of the schools and various educational establishments as we have them. I do not know whether it is proved that we can do with less pretentious and less costly buildings and offices, and whether we can in that way simplify administration and reduce the general outlay involved in the upkeep of our educational system. I know, however, that we might have saved a lot of money if the State, in the development of our educational system in the last generation, could have got cheaper land for the schools and educational buildings.

The Chancellor of the Exchequer gave, towards the close of his speech, a most extraordinary reason for keeping on the present scale the enormous sums of interest which have been piled up because of the financial policy pursued by the Government during the years of the War. That was a policy which we on the Labour Benches persistently resisted and we warned the country what the conditions of the country would be after the close of the War by that unrestrained process of borrowing upon which the War was fought. Now it seems to be the view of the Chancellor of the Exchequer that after all what we pay in interest goes to those who receive it, enabling them in turn to invest it again in trade expansion and to stimulate the industries of the country. That would appear to be a process of reasoning driving us to the conclusion that it is a very good thing for a nation to be greatly in debt because the interest you have to pay on what you have borrowed can be used by those who receive it in the stimulation of trade and industry. That is not a Labour argument. It is a revelation from the Chancellor of the Exchequer. The usefulness of State indebtedness was part of the theme of the Chancellor of the Exchequer. It would be well for those who claim to have a monopoly in the art of government to have some regard to established practice and not set too great and too frequent an example in the matter of revolution in management. Efficiency in the management of State affairs, the avoid- ance of waste, the saving of public money, wherever it is wise and proper to save, are the tests of competence in State Departments. Two-and-a-half years ago the Prime Minister fervently appealed to the Departments to cut down expenditure by process of examination and review and to find out what could be done without. In that regard at least they appear to have turned a deaf ear to their chief, but that deafness does not justify this new procedure, and when later we have been favoured with some information as to what is in the mind of the Government, when even they deign to tell us which of these particular recommendations they favour and which they reject, the House with its fuller knowledge might have a better opportunity of being able to debate the merits of the question embodied in the Report.


My right hon. Friend made a brief reference to the speech of the Chancellor of the Exchequer and particularly drew our attention to the remarkable excursion in high finance on the subject of the beneficial uses of interest on the National Debt. I suggest to my right hon. Friends opposite that the next time they talk about Poplar finance they might take as a guide, if not as a corrective, some of the remarks made by the Chancellor of the Exchequer this evening. I shall meet the wishes of the House by making as brief reference as I possibly can to what is known as the Geddes Report, and to turn my attention more particularly to the Amendment which stands in our name upon the Paper. I will, however, permit myself one reference to the Report or, rather, to a bye-product of it, namely, the remarkable intervention of the Admiralty in the discussion which that Report has produced. That intervention is unprecedented, and it is most unconstitutional. [HON. MEMBERS: "No!"] I say so. That is my submission. When a Department speaks it speaks, or ought to speak, for the Government through its Minister in this House. We have heard that the Cabinet as a whole do not take any objection to the remarkable step taken by the Admiralty, but they one and all carefully refrain from saying whether they agree or disagree with it. What a state of affairs! It is a case of the Government certainly breaking up departmentally. It may not inaptly be described before many days are over as a fortuitous collection of discordant Departments. I enter my protest very strongly as a House of Commons man, and if my right hon. Friend the Leader of the House were here, I would challenge him en this point, as to whether he agrees with the action of the Admiralty in this matter as a man who, ever since I have known him in this House, has taken a special interest in the preservation of those forms so vital to the development and maintenance of Parliamentary Government. After all, the House of Commons is the master, and if it allows this sort of thing to go unchecked we might as well hand over all the keys to the care of the. Departments and all the Parliamentary powers to the Executive and to Departments, apparently, that rule. The terms of the Amendment are: But humbly regret that the extravagance of Your Majesty's Ministers has imposed upon the country a crushing burden of taxation, and that they have been unable to make a definite promise that taxation will be reduced so as to stimulate trade and decrease unemployment. Does the Leader of the House agree or disagree with the plain statement that the burden of taxation is crushing at the present time? There is no man of ordinary common knowledge but who must agree with that. Professor Cramond, in 1913, estimated the yearly income of this country, in round figures, at £2,400,000,000, and the Income Tax, then at 1s. 3d. in the £, produced £44,000,000. He calculates that in the year 1921 the income of the country was £2,800,000,000, and the Income Tax, at the rate of Os. in the £, raised £410,500,000, with this country £8,000,000,000 poorer than in 1913. In the loss of life and in material it suffered greater loss than that.

With regard to food taxes, at least five times more has been collected this year than in 1913. Need I argue the matter any further? The burden of taxation is indeed crushing, so crushing that the incidence is so overwhelming that thousands of business men, not the great corporations—men with £400 or £500 a year, men in the little shops, as well as the great manufacturers, have to find the money for the payment of their taxes out of their capital. There is a limit and a very narrow limit to the time when that must come to an end. The bankers say so and the manufacturers say so. They admit, as we all admit, the consequences of the War and, of course, we must make the best out of it, but there is not a single business man of any importance, and there is not a banker who does not in the same breath say that one of the main factors of our present sad financial position is the gross extravagance of the Government. They one and all say that. It is not a matter of party politics. These men, especially so far as the heads of the banks are concerned, are men whose party politics are almost unknown. They do not take part in politics, although there may be one or two exceptions. There is unanimous condemnation of the Government on the question of extravagance. The extravagance of the Government has a predominant share in the crushing burden of taxation under which the country is staggering. In the three years to be completed on the 1st April next the Army will have spent £860,000,000, the Navy £384,000,000:HA the Civil Service £1,871,000,000. The. Army, the Navy, the Air Force and the Civil Service have in these three years spent no less a sum than £3,216,000,000. They pile up the millions not only in the hundreds but in the thousands of millions, and it means that our grasp of them is almost impossible. However high in finance a man may be placed, he has very little real knowledge what these vast figures mean to him.

There are one or two instances which show, not only the slackness, but the gross carelessness of the Government in the management of finance. Let me recall to some Members who were with us about a year ago an incident that occurred when the Supplementary Estimates were being taken. One night we were faced with a Supplementary Estimate for £9,000,000 for Civil Service bonus. That had never been before the House of Commons. It was the outcome of a Committee—I think one of the Whitley Committees—sitting privately. They produced this vast addition to the national burden. I am not arguing as to its reasonableness or its unreasonableness, but that is the position in which we were placed. As we now know, that vast burden would have produced very acute criticism, possibly amounting to defeat, if it had been brought out as it ought to have been in the light of day, instead of between 12 and 1 o'clock in the morning. We have heard of the wicked baronet in Ruddigore who had to commit a crime once a day sometimes got it over first thing in the morning. This Government apparently is bound to commit a crime of a financial kind once every day, and tries to do it about 1 o'clock in the morning. Take the case of pensions. Many retiring civil servants, after the bonus was received, took it after they got their salary with an addition of 75 per cent. bonus, so that, taking a man with £800 a year who normally would retire at £400 a year, he would be a permanent charge on this country of about £600, We challenged that over and over again from these Benches. Whoever are to blame for lack of criticism that blame does not fall upon the shoulders of some of us who, in season and out of season, have urged these matters upon the. Government.

Take another matter, just by way of passing illustration—the proceedings on the Corn Production Act of 1917. Again it was brought up as Supplementary Estimate. Some Gentlemen got a fright and thought that there was going to be a tremendous rise or a tremendous fall in prices—I forget which—but they rushed out and appointed a thousand inspectors. The result was a charge of £130,000 when every agriculturist with the slightest knowledge was urging that it was perfectly unnecessary. These are actual instances of things which were passed, mostly in the small hours of the morning, when we attempt to deal with these matters. I give another figure showing the mismanagement of the Government on the Supplementary Estimate which are always a good test of sound Estimates and good management. Every Session we have had to deal with vast Supplementary Estimates. It is difficult to find out the exact amount, but I calculate that by the end of this financitl year there will have been voted as Supplementary Estimates alone no less than £450,000,000 during the three years in which this Parliament has been sitting. I grant at once that, in regard to some of those very large amounts, it would be impossible to foresee, but, taking the whole range of them, it shows not only the tremendous size of the figure but also the gross extravagance and carelessness with which our finance has been conducted. We did not know, when we- started, that all these things were going to happen. I remember the other night I twitted the Chancellor of the Exchequer. He said across the Floor of the House that he could see no way of saving even £500,000, but that cannot be charged against the Prime Minister, because he foresaw it all. He said in the House on 19th October last year: Every war has been followed by periods of depression, and the depression has been in proportion to the magnitude of the war. … The Napoleonic Wars produced exactly the same symptoms, and it is worth everyone's while to refresh his memory of what happened on these occasions, because it will explain all the phenomena. There were the same symptoms—crushing taxation and all our customers were very much poorer."—[OFFICIAL REPORT, 19th October, 1921; col. 76, Vol. 147.] Then he goes on in the same strain to show how it was inevitable after a great war. It was inevitable that there should be a boom period to be followed speedily by depths of depression. Well, what preparations did they make, for it? With all this knowledge in the bosom of the Prime Minister, which presumably he imparted to the whole of his colleagues, did the Government say, "This is not a real boom at all; this is just a symptom, a phenomenon. Let us prepare for the bad years which are swiftly to come along"? What did the Government do? 'They leapt from extravagance to extravagance. Time and again Members were offered opportunities to vote against this Estimate and that Estimate, and Ministers sat back with an air of complete confidence, in which they were fully justified, because when the Division bells rang the majorities trooped into the Lobby.


And you went into the Lobby with them


The only objection to that interruption is that it is entirely inaccurate. I never supported the Government on any one of these occasions, and that my hon. Friend knows very well. It is only his way of having a little bit of a joke. I say the Government should have foreseen it. It was not that they did not know, but they did not care enough. Otherwise their policy would have been completely different. What were the opportunities of the Government for saving? What about War stores? They realised a sum of not less than £660,000,000 for War stores. That was capital expenditure which should have been placed to the reduction of the nation's indebtedness. It passed into revenue. It is no outside figure to mention that; as the result they have added permanently, as far as I can see, no less than £75,000,000 to the annual national burden of taxation. I pass to the last part. of the Amendment which regrets that taxation will not be reduced, that there is no hope or promise that it will be reduced, so as to stimulate trade and increase employment. Everybody agrees that if taxation is reduced it will be one of the most potent factors in the revival of trade and consequently in the reduction of unemployment. They could have done it. What is the latest witness to that? The Geddes Report. Its criticisms, especially on the fighting forces, show the basis on which the Government should have acted the whole time. The Committee quote the basis on which the Government asked the fighting services to proceed, and it was this—that for ten years they need have no fear of any great war, and that their estimates should be shaped accordingly. That goes right through the Report like a repeated chorus. "For ten years you need not fear a great war." They might have added, "In three years you will have bad trade; prepare for that also," and if the Government had taken that step, the Chancellor of the Exchequer might have been in a position—ought to have been in a position—to have declared in this coming Budget a substantial reduction, not only in the Income Tax, but in the food taxes as well.

The opportunity was theirs, and they have neglected it—thrown it away. They should have settled down to the main business, which is the care of the nation's finances. There is no good in dreaming dreams of social reform or holding out vain hopes of what one party will do or another party will do if returned to power. You cannot get sound social reform until the country's finances are placed upon a sound, efficient, economic basis. As far as I am concerned, I will be no party, in any election, to tempting anybody into voting for me by promises of that kind which I know never can be fulfilled, until this menace, this national danger, is removed from our midst. What is the remedy? Sir, I believe it is a change of Govern- ment. This House has lent itself to a spirit of expenditure; I do not expect it will lend itself to a spirit of economy, and the sooner the nation turns out the present Government and sends back another one, the better for the country.

The LEADER of the HOUSE (Mr. Chamberlain)

The right hon. Gentleman the Member for Platting (Mr. Clynes) made one observation with which I cordially agree. He said it was apparent that this Debate would conclude without any real advantage to the public service. I doubt, indeed, whether the advantage of the public service was the object of the Mover of this Amendment, and it certainly was very far from the mind of the right hon. Gentleman who has last spoken. He is preparing for that opportunity of putting out the Government, which he so earnestly desires, and is practising the platform speech which he thinks will be attractive to the electors. Far be it from such a stern public moralist as the right hon. Gentleman to suggest that you can have any social reform, but let him convey, as plainly as he can, that if they only entrust power to him, all their taxes shall come off, or, at least, all their taxes shall come down. I should very much enjoy seeing the right hon. Gentleman here, and taking my place once more on that bench where I should be in a position of greater freedom and less responsibility, able to indulge in criticism, without having to find the constructive methods by which the nation's needs could be met.

The two right hon. Gentlemen have asked me some questions which I will endeavour to answer. The right hon. Member for Platting inquired why we published the Geddes Reports before we ourselves had had time to come to final decisions upon them, and were in a position to announce those decisions to the House? The answer is quite simple. If we had had the various Reports—not all of which have been presented—in time to complete our inquiry, and to come to our decisions before the House met, we could have published the Reports and our decisions together, but that was not possible. Therefore, we had to withhold the Reports until after the House met, or to give the Reports without our conclusions. We thought it more respectful to the House that the Reports should be made available at once, and we so made them available. The right hon. Gentleman who has just spoken, challenged me to say whether I approved the action of the Admiralty in publishing a Memorandum in regard to that portion of the Geddes Report which deals with Admiralty Estimates. I have already stated earlier to-day that that Memorandum was issued in pursuance of a general decision of the Government that certain Departmental memoranda, or Ministerial statements, would be necessary for the full information of the House, and should be given to the House. I do not say that some of these undoubtedly would best be given when the Estimates for the. new year are discussed and defended. Some of them it might be necessary, as in the case of the Admiralty, to lay in advance.


Does it represent the view of the Government? That is the question.


I understood that the question was whether we agreed with the action of the Admiralty in publishing the Memorandum, but I am anxious to give the right hon. Gentleman all the satisfaction that I can, since all is not likely to he much. The views expressed in the Admiralty Memorandum are not to be taken as the considered decision of the Government upon the whole question. That decision has not yet Leon given, and when it is reached, it will be given in the House.

Then the right hon. Gentleman proceeded to deal with the burden of our debt, and with our taxation. He challenged me to say whether I thought the burden was crushing. I am not a great artist in adjectives myself. I am quite content to say that it is a burden, which it is the business of everybody to help us reduce, and I hope we shall have the help of the right hon. Gentleman. [HON. MEMBERS: "You have had it!"] No, we have never had it. The right hon. Gentleman himself, in words which I think I took down, said that he had never taken any part in these matters. That is true. Whenever there was some expenditure which was popular to be opposed, or to be originated, the right hon. Gentleman either voted against the Government in favour of the expenditure, or abstained from voting at all. [HON. MEMBERS: "When?"] Cases, no doubt, can be recalled. The right hon. Gentleman adverted to the statement made earlier in the evening by my right hon. Friend the Chancellor of the Exchequer. He objected to the statement which he said had been made that we were not £8,000,000,000 poorer than before the War—poorer by the whole amount of the National Debt—in that the greater portion of it was held by individuals in this country. [HON. MEMBERS: "No!"] He objected to that statement of the Chancellor of the Exchequer as being a pronouncement of the beneficial uses of debt. But my right hon. Friend used no such silly argument as that. What he did say was that, in calculating the national wealth, you could not deduct from it all that was spent on paying the interest on the debt, because a great deal of that, though abstracted from the pockets of one section, went back as part of the income of another section, and in the hands of the citizen who received it was available, with other resources, to meet his expenditure, and then for investment just as it would have been available for investment in the hands of the original taxpayer. That is an elementary economic fact. The failure to observe it impairs a good many calculations which have been made in respect of the capacity of the country to pay. Particular attention has been drawn to it by a man who is, I suppose, the highest authority we have on questions such as this at the present time, namely, Sir Josiah Stamp, formerly an official of the Inland Revenue, who left the Government service for private employment.

I am not here, and have never been, to say that the Government have made no mistakes, or to say that there has been no expenditure which could not have been better avoided, or that there has been no waste. The right hon. Gentleman the Member for Shoreditch (Dr. Addison) suggested that it would be said on our part, and was said, that there had been no extravagance on the part of this Government. No, Sir; no Government of which my right hon. Friend was for so long a trusted member would venture to present that claim.


That was the argument of the Chancellor of the Exchequer, but I did not agree with it.


If the right hon. Gentleman attributed that argument to the Chancellor of the Exchequer, he attributed to him a bad thing, which was not my right hon. Friend's. On the other hand, no man presents a true picture of the case who talks, as not a few hon. Members have done, as if the Government had made no reductions in expenditure, whereas we have made immense reductions. The nearer you get to the bone, the more difficult becomes your task. Even in the current year we have made reductions on the Estimates of something like £40,000,000.

I turn now to say something about the Geddes Report. I must say that I have been entertained by the gingerly approach of right hon. Gentlemen opposite to the Geddes Report. They want to use it to attack the Government, but they do not want to give it a testimonial, for fear that it should be used against them, and that they should be held to its recommendations. Take the right hon. Gentleman the Member for Paisley (Mr. Asquith). He is very angry that the Government should have thought of appointing such a Committee. He is almost equally angry that the Admiralty should think of criticising any of those recommendations. Whether the Government follow the recommendations of the Geddes Committee, or reject them, right hon. Gentlemen opposite have carefully kept themselves free to take the opposite course to that which the Government take. I did think that when the great. attack on Government extravagance came in this Session, after being tried and practised so often by manœuvres in previous years, each side of the Opposition would have had a definite programme of retrenchment as distinguished from the ineffectual efforts of the Government upon which they would have been prepared to take the judgment of the House and the country.

What suggestions have we got? The right hon. Gentleman the Member for Platting said that economy could be secured in our education by building less ornamental schools in the future, and that economy could be secured by paying less for the sites on which the schools stand. May I point out that more than half the sites of the schools of the country cost the ratepayers and the taxpayers nothing? In fact, I would undertake to say that the charge in respect of the sites is not one penny per annum per child in any school in the country. [An HON. MEMBER: "Nonsense!"] That is not a very helpful suggestion.

The right hon. Gentleman's speech is less illuminating and significant than his silence, The hon. Member for Bothwell (Mr. Robertson) had a definite remedy, but is that the remedy of the Labour party? It was loudly cheered from the benches opposite (Labour), and if it be their remedy, why do not the right hon. Gentlemen opposite espouse it, and adopt it when speaking at that box? What was it? It was quite a simple thing, but not quite honest. It was to break your contract with people from whom you had borrowed during the War.


On a point of Order—


There is no point of Order.


The Government broke their contract with the ex-service men.


I invite the House to consider what the Geddes Committee has done, and what guidance it gave. The hon. Member for Oxford said there were only two practicable courses of policy.




Two practicable, and one impracticable. The two practicable ones were—one to reject the Geddes Report as the whole, and the other to accept it as a whole. I venture to say that no Government could do either. What did we ask the Geddes Committee to do? The Chancellor of the Exchequer asked them to advise him by what means it was possible to secure a cut of another £100,000,000 roughly, on top of the £75,000,000 which the Departments had already suggested. Hon. Gentlemen suggest that, because we asked for a cut of that kind, and because the Committee report on the particular lines, and under what conditions such a cut could be made, it is proof that that amount of money has been wasted for the last three years? Was there ever anything more absurd? Take first the Geddes Committee itself. They did not pretend—they would not pretend that the reductions which they now recommend might have been made 1, 2 or 3 years ago. They are looking to the future. They say, "If you want that money, this is how you can get it."

There has been a great deal of talk about the possibility of reducing expenditure to the point at which the House wishes to see it, without giving up anything which parties in the House or sections in the House wish to keep. The Geddes Committee has shown, as plainly as everyone knew they must show, that that is absolutely impossible. The amount you can save by dispensing with officials, and by similar reforms, is a very limited amount. If you want to secure a reduction to anything like that extent, you have to cut deep into that which you would in good times have desired to enjoy and to continue. In saying these things, I beg that it be understood that I am not criticising the Geddes Committee, or their Report, in any hostile spirit. I repeat gladly, on behalf of the Government, our sense of the great obligations that we owe them. These busy gentlemen have sat day after day, for weeks and even months, going into this question thoroughly, with a real desire to serve their country, and to respond to the appeal which the Government had made. What I am saying is in no sense derogatory to the merit of their work, though it does affect to some extent the power of this House or this Government to carry out their recommendations.

The Geddes Committee has been like a Nasmyth hammer, it has been like an elephant's trunk; nothing has been too large for it to lift, and nothing has been too small for it to pick up. Here it recommends a reduction measured in millions, there it picks up an odd £10,000 or £20,000, or less. But when it has made every specific saving which it is prepared to recommend, it has been the custom again and again to add a sum wholly unexplained, to be taken out of items wholly unspecified, to add it to everything which they have specified, and save it in addition. If my hon. Friends will try and work out the sum of these additions, they will see they are a very large percentage, and they will have some measure of the difficulty of applying the Report in full.

There are other questions in respect of which the Government bears a responsibility—and after the Government this House—that do not attach, and cannot attach to an advisory Committee like the Geddes Committee. It is, after all, the Government primarily, and this House, as accepting or rejecting the proposals of the Government, which is responsible for security in this country and peace throughout the Empire; and though we may be glad of their advice, it cannot devolve upon anybody else to fix the standard of naval strength which this country ought to have, or to tell us with what number of troops we can efficiently discharge our duty of watch and ward throughout the Empire. When you come to the civilian side of the estimate—it is true also of the military side—there are questions of public faith which, I think, have not been present to the minds of the Geddes Committee, and of that public faith the Government is bound to be the guardian.

I make these qualifications because, starting out as I start, with every desire to accept and to find a reason and a justification—that is my attitude and the attitude of the Government—with every desire to find a reason for the acceptance of the recommendations of the Geddes Committee, there are considerations on which they could not be the judges, and there are considerations which, I think, they had not. in mind, and perhaps would have thought irrelevant to their particular task even had they been present in their minds. But when all is said and done, what contribution are the Opposition going to make to this real campaign for economy? More than half of the speeches of the right hon. Gentlemen who opened the Debate were not directed to carrying out the Geddes recommendations, but to defeating them. Look at the right hon. Gentleman the Member for Paisley.


Look at him!


Look at his speech. We all know why he is not here. I am very sorry for the cause. I sympathise very much with him in his accident. Take his comments on education. You are not to raise the age of

entry, not to raise the number in the class rooms. You are not to reduce the number of teachers. You are to go full steam ahead with the uninterrupted policy of continuations. The only things with which Geddes Committee dealt, and which he did not even mention, were reduction of salaries, or the reduction of contributions to their pensions. I should be very interested to know what line he takes on those subjects.

I think the Geddes Committee have made recommendations in respect of certain matters with regard to education that this House cannot carry out without one of those breaches of public faith of which I have spoken. But I do not want to go into details of that kind. My point in drawing attention to this is to show that those men who stand at that box, and drape themselves in economic platitudes—that they and they alone are the Simon Pures of finance, and fit to take the country through its present difficulties, are nevertheless not ready to take the measures by which efficiency and the necessary economies are effected, namely, to reduce expenditure everywhere and in every Department. They are ill-fitted to be the moral or political censors of the gentlemen whose places they are so anxiously awaiting.


I shall not detain the House more than a minute—[HON MEMBERS: "Divide, divide!"]


rose in his place, and claimed to move, "That the Question he now put."

Question put accordingly, "That those words be there added."

The House divided: Ayes, 92; Noes, 241.

Division No. 2.] AYES. [11.0 p m.
Acland, Rt. Hon. Francis D. Collins, Sir Godfrey (Greenock) Hall, F. (York, W.R., Normanton)
Addison, Rt. Hon. Dr. Christopher Cooper, Sir Richard Ashmole Hall, Rr-Adml Sir W. (Llv'p'l.W.D'by)
Banbury, Rt. Hon. Sir Frederick G. Davies, Evan (Ebbw Vale) Harmsworth, Hon. E. C. (Kent)
Barker, G. (Monmouth, Abertillery) Davies, Rhys John (Westhoughton) Harmsworth, Sir R. L. (Caithness)
Barnes, Rt. Hon. G. (Glas., Gorbals) Davison, Sir w. H. (Kensington, S.) Hayday, Arthur
Barnes, Major H. (Newcastle, E) Edwards, C. (Monmouth, Bedwellty) Hayward, Evan
Benn, Captain Wedgwood (Leith) Entwistle, Major C. F. Henderson, Rt. Hon. A. (Widnes)
Bird, Sir William B. M. (Chichester) Erskine, James Malcolm Monteith Herbert, Col. Hon. A. (Yeovil)
Bowerman, Rt. Hon. Charles W. Finney, Samuel Hirst, G. H.
Bramsdon, Sir Thomas Galbraith, Samuel Holmes, J. Stanley
Briant, Frank Gillis, William Hopkinson, A. (Lancaster, Mossley)
Brown, James (Ayr and Bute) Glanville, Harold James Irving, Dan
Cairns, John Gould, James C. John, William (Rhondda, West)
Cape, Thomas Graham, W. (Edinburgh, Central) Johnstone, Joseph
Cecil, Rt. Hon. Lord H. (Ox. Univ.) Gretton, Colonel John Jones, Henry Haydn (Merioneth)
Cecil, Rt. Hon. Lord R. (Hitchin) Griffiths, T. (Monmouth, Pontypool) Jones, J. J. (West Ham, Slivertown)
Clynes, Rt. Hon. John R. Grundy, T. W. Jones, Morgan (Caerphilly)
Kennedy, Thomas O'Grady, Captain James Thomas, Rt. Hon. James H. (Derby,)
Klley, James Daniel Poison, Sir Thomas A. Thomson, T. (Middlesbrough, West)
Locker-Lampson, G. (Wood Green) Rendall, Athelstan Tillett, Benjamin
Lunn, William Richardson, R. (Houghton-le-Spring) White, Charles F. (Derby, Western)
Maclean, Neil (Glasgow, Govan) Robertson, John Wignall, James
Maclean, Rt. Hon. Sir D. (Midlothian) Robinson, S. (Brecon and Radnor) Williams, Aneurin (Durham, Consett)
Mallalieu, Frederick William Rose, Frank H. Williams, Col. P. (Middlesbrough, E.)
Marriott, John Arthur Ransome Royce, William Stapleton Wilson, James (Dudley)
Mosley, Oswald Sexton, James Wilson, Rt. Hon. J. W. (Stourbridge)
Murray, Hon. A. C. (Aberdeen) Shaw, Thomas (Preston) Wintringham, Margaret
Murray, Dr. D. (Inverness & Ross) Short, Alfred (Wednesbury) Wood, Major M. M. (Aberdeen, C.)
Myers, Thomas Sitch, Charles H. Young, Robert (Lancaster, Newton)
Nall, Major Joseph Smith, W. R. (Wellingborough)
Nayler, Thomas Ellis Sueter, Rear-Admiral Murray Fraser TELLERS FOR THE AYES.—Mr.
Newbould, Alfred Ernest Swan, J. E. Hogge and Mr. G. Thorne.
Adair, Rear-Admiral Thomas B. S. Elliott, Lt.-Col. Sir G. (Islington, W.) Mackinder, Sir H. J. (Camlachle)
Adkins, Sir William Ryland Dent Evans, Ernest McLaren, Hon. H. D. (Leicester)
Agg-Gardner, Sir James Tynte Falcon, Captain Michael M'Lean, Lieut.-Col. Charles W. W.
Amery, Leopold C. M. S, Fisher, Rt. Hon. Herbert A. L. McMicking, Major Gilbert
Armstrong, Henry Bruce FitzRoy, Captain Hon. Edward A. Macnamara, Rt. Hon. Dr. T. J.
Astor, Viscountess Flannery, Sir James Fortescue Malone, Major p. B. (Tottenham, S.)
Atkey, A. R. Ford, Patrick Johnston Manville, Edward
Bagley, Captain E. Ashton Fraser, Major Sir Keith Middlebrook, Sir William
Baldwin, Rt. Hon. Stanley Fremantle, Lieut.-Colonel Francis E. Mildmay, Colonel Rt. Hon. F. B.
Balfour, George (Hampstead) Gange, E. Stanley Mitchell, Sir William Lane
Barlow, Sir Montague Gardner, Ernest Molson, Major John Elsdale
Barnett, Major Richard W. Gibbs, Colonel George Abraham Mond, Rt. Hon. Sir Alfred Moritz
Barnston, Major Harry Gilmour, Lieut.-Colonel Sir John Montagu, Rt. Hon. E. S.
Barrand, A. R. Glyn, Major Ralph Moore-Brabazon, Lieut.-Col. J. T. C.
Beckett, Hon. Gervase Green, Joseph F. (Leicester, W.) Morden, Col. W. Grant
Bell, Lieut.-Col. W. C. H. (Devizes) Greene, Lt.-Col. Sir W. (Hack'y, N.) Morris, Richard
Benn, Sir A. S. (Plymouth, Drake) Gregory, Holman Morrison-Bell, Major A. C.
Benn, Capt. Sir I. H., Part (Gr'nw'h) Greig, Colonel Sir James William Munro, Rt. Hon. Robert
Betterton, Henry B. Guest, Capt. Rt. Hon. Frederick E. Murchison, C. K.
Birchall, J. Dearman Hacking, Captain Douglas H. Murray, John (Leeds, West)
Bird, Sir William B. M. (Chichester) Hall, Lieut.-Col. Sir F. (Dulwich) Murray, William (Dumfries)
Blades, Sir George Rowland Hamilton, Major C. G. C. Neal, Arthur
Blair, Sir Reginald Hannon, Patrick Joseph Henry Newman, Colonel J. R. P. (Finchley)
Blake, Sir Francis Douglas Harmsworth, C. B. (Bedford, Luton) Newman, Sir R. H. S. D. L. (Exeter)
Blane, T. A. Haslam, Lewis Nicholson, Brig.-Gen. J. (Westminster)
Borwick, Major G. O. Henderson, Lt.-Col. V. L. (Tradeston) Nicholson, William G. (Petersfield)
Boscawen, Rt. Hon. Sir A. Griffith Hennessy, Major J. R. G. Norman, Major Rt. Hon. Sir Henry
Bowles, Colonel H. F. Herbert, Dennis (Hertford, Watford) Norton-Griffiths, Lieut. Col. Sir John
Bowyer, Captain G. W. E. Hickman, Brig.-General Thomas E. O'Neill, Rt. Hon. Hugh
Brassey, H. L. C. Higham, Charles Frederick Palmer, Major Godfrey Mark
Breese, Major Charles E. Hilder, Lieut.-Colonel Frank Parker, James
Bridgeman, Rt. Hon. William Clive Hills, Major John Waller Parry, Lieut.-Colonel Thomas Henry
Broad, Thomas Tucker Hohler, Gerald Fitzroy Pearce, Sir William
Buckley, Lieut.-Colonel A. Hood, Sir Joseph Pease, Rt. Hon. Herbert Pike
Burdon, Colonel Rowland Hope, Sir H.(Stirling & Cl'ckm'nn'n,W.) Peel, Col. Hn. S. (Uxbridge, Mddx.)
Burgoyne, Lt.-Col. Alan Hughes Hope, J. D. (Berwick & Haddington) Perkins, Walter Frank
Burn, Col. C. R. (Devon, Torquay) Hopkins. John W. W. Pollock, Rt. Hon. Sir Ernest Murray
Campion, Lieut.-Colonel W. R. Horne, Sir R. S. (Glasgow, Hillhead) Pownall, Lieut.-Colonel Assheton
Carr, W. Theodore Hotchkin, Captain Stafford Vere Pratt, John William
Casey, F. W. Howard, Major S. G. Pretyman, Rt. Hon. Ernest G.
Cecil, Rt. Hon. Evelyn (Birm, Aston) Hunter, General Sir A. (Lancaster) Purchase, H. G.
Chadwick, Sir Robert Burton Hurd, Percy A. Randles, Sir John Scurrah
Chamberlain, Rt. Hn. J. A. (Birm. W.) Hurst, Lieut.-Colonel Gerald B. Rankin, Captain James Stuart
Chamberlain, N. (Birm., Ladywood) Inskip, Thomas Walker H. Raper, A. Baldwin
Clay, Lieut.-Colonel H. H. Spender Jackson, Lieut.-Colonel Hon. F. S. Raw, Lieutenant-Colonel Dr. N.
Clough, sir Robert James, Lieut.-Colonel Hon. Cuthbert Rees, Sir J. D. (Nottingham, East)
Coats, Sir Stuart Jodrell, Neville Paul Reid, D. D.
Cobb, Sir Cyril Johnson, Sir Stanley Remer, J. R.
Cockerill, Brigadier-General G. K. Jones, Sir Edgar R. (Merthyr Tydvil) Richardson, Sir Alex. (Gravesend)
Colfox, Major Wm. Phillips Jones, Sir Evan (Pembroke) Roberts, Rt. Hon. G. H. (Norwich)
Colvin, Brig.-General Richard Beale Jones, G. W. H. (Stoke Newington) Roberts, Sir S. (Sheffield, Ecclesall)
Conway, Sir W. Martin Jones, J. T. (Carmarthen, Llanelly) Robinson, Sir T. (Lanes., Stretford)
Coote, Colin Reith (Isle of Ely) Kellaway, Rt. Hon. Fredk. George Rodger, A. K.
Courthope, Lieut.-Col. George L. Kelley, Major Fred (Rotherham) Roundell, Colonel R. F.
Cowan, Sir H. (Aberdeen and Kinc.) King, Captain Henry Douglas Royds, Lieut.-Colonel Edmund
Cralk, Rt. Hon. Sir Henry Law, Alfred J. (Rochdale) Rutherford, Colonel Sir J. (Darwen)
Dalziel, Sir D (Lambeth, Brixton) Lewis, Rt. Hon. J. H. (Univ., Wales) Rutherford, Sir W. W. (Edge Hill)
Davidson, J. C. C. (Hemel Hempstead) Lewis, T. A. (Glam., Pontypridd) Samuel, A. M. (Surrey, Farnham)
Davies, Alfred Thomas (Lincoln) Lindsay, William Arthur Samuel, Samuel (W'dsworth, Putney)
Davies, Sir Joseph (Chester, Crewe) Lloyd-Greame, Sir P. Sanders, Colonel Sir Robert Arthur
Dawson, Sir Philip Locker-Lampson, Com. O. (H'tingd'n) Sassoon, Sir Philip Albert Gustave D.
Dockrell, Sir Maurice Lorden, John William Scott, A. M. (Glasgow, Bridgeton)
Edgar, Clifford B. Lowe, Sir Francis William Scott, Leslie (Liverpool, Exchange)
Ednam, Viscount Lowther, Major C. (Cumberland, N.) Scott, Sir Samuel (St. Marylebone)
Edwards, Major J. (Aberavon) Lowther, Maj.-Gen. Sir C. (Penrith) Shaw, William T. (Forfar)
Edwards, Hugh (Glam., Neath) Loyd, Arthur Thomas (Abingdon) Shortt, Rt. Hon. E. (N'castle-on-T.)
Elliot, Capt. Walter E. (Lanark) Lyle, C. E. Leonard Smith, Sir Harold (Warrington)
Smithers, Sir Alfred W. Townshend, Sir Charles Vere Ferrers Wilson, Lt.-Col. Sir M. (Bethnal Gn.)
Sprot, Colonel Sir Alexander Tryon, Major George Clement Windsor, Viscount
Stanley, Major Hon. G. (Preston) Turton, Edmund Russborough Winfrey, Sir Richard
Starkey, Captain John Ralph Vickers, Douglas Winterton, Earl
Steel, Major S. Strang Wallace, J. Wise, Frederick
Stephenson, Lieut-Colonel H. K. Walters, Ht. Hon. Sir John Tudor Worsfold, T. Cato
Strauss, Edward Anthony Ward, Col. J. (Stoke-upon-Trent) Worthington-Evans, Rt. Hon. Sir L.
Sturrock, J. Leng Ward, Col. L. (Kingston-upon-Hull) Young, E. H. (Norwich)
Sugden, W. H. Warner. Sir T. Courtenay T. Young, Sir Frederick W. (Swindon)
Sutherland, Sir William Weston, Colonel John Wakefield Younger, Sir George
Sykes, Sir Charles (Huddersfield) Wheler, Col. Granville C. H.
Taylor, J. Wild, Sir Ernest Edward TELLERS FOR THE NOES.—
Thomson, F. C. (Aberdeen, South) Willey, Lieut.-Colonel F. V. Colonel Leslie Wilson and Mr.
Thomson, Sir W. Mitchell- (Maryhill) Williams, Col. Sir R. (Dorset, W.) Dudley Ward.
Thorpe, Captain John Henry Willoughby, Lieut. Col. Hon. Claud Dudley Ward.

Question, "That the Question be now put," put, and agreed to.

Main Question again proposed.

It being after Eleven of the Clock, and objection being taken to further Proceeding, the Debate stood adjourned.

Debate to be resumed To-morrow.

The remaining Orders were read, and postponed.

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