NAVY (EXCESSES), 1920–21.

HC Deb 24 March 1922 vol 152 cc831-97

3. "That a sum, not exceeding £1,632,990 8s. 6d., be granted to His Majesty, to make good Excesses of Navy Expenditure beyond the Grants, for the year ended on the 31st day of March, 1921."

First Resolution read a Second time.

Lieut.-Commander KENWORTHY

I have an Amendment on the Paper to reduce this Vote by 100 men, but, before I move it, I think it right to say how much I agree with what was said last night by the hon. and gallant Gentleman the Civil Lord of the Admiralty with regard to the loss of H42. As one who knows a great many officers now serving in submarines, and who has served for a great many years in destroyers, I think I can say with some degree of confidence that such an accident would only have this effect on the Navy, that the officers serving in destroyers and submarines will be stirred so to perfect their training and co-ordination that accidents of this terrible character will become impossible.

With regard to the Amendment which I have on the Paper, I desire to make it clear that I consider trained seamen and officers to be the last department on which we can really economise in the Navy, but I am constrained to move a reduction, partly because it is on Vote A on which we can discuss general policy, and also because the detailed Estimates are not in our hands.

Mr. SPEAKER

It is quite true that in Committee on Vote A general policy can be discussed, but not on Report. The Report stage is quite different, and we must deal solely with each Vote as it comes along.

Lieut.-Commander KENWORTHY

Thank you, Sir. I will attempt to confine my remarks to the question of men only. In the first place, large reductions of officers and men are, of course, inevitable, and I think it is very necessary that the Admiralty should have some clearly defined scheme for making the lot of these officers and men easier when they are thrown on to the labour market. In particular, I think some training during the last six months before they go should be offered to these officers and men, or possibly after their services have been dispensed with. During the Committee stage I mentioned a proposal that I desired to put forward for giving officers an opportunity of taking a commercial course in one of our great industrial and commercial centres, in order that their abilities and education might be so rounded off that they would have an opportunity of finding a place in the commercial life of the country. These are a picked body of men of wide experience and broad training, but they have not any knowledge of commercial procedure, of finance, company law, and so on, and a few months at Liverpool or Glasgow—

Mr. SUGDEN

Or Manchester.

Lieut.-Commander KENWORTHY

—would be invaluable to give them that training and much enhance their value in the labour market. Secondly, with regard to the men, I should like to know if any approach has been made to the great Trade Unions of the country, with a view to sounding them as to whether they would fall in with the scheme for allowing some degree of skilled training to be given to these men in callings—

Mr. SPEAKER

I can see that the hon. and gallant Member will be in difficulties in getting to the subject which he desires to raise, but on this Vote A, on Report, we are confined solely to the question whether the number of men is adequate or inadequate. When, however, we come to the Vote on Account, that will open a discussion, if it be desired, on all the heads of the Navy—training, education, and so on. Perhaps the hon. and gallant Member might prefer to move his reduction on that Vote, and so obtain full scope.

Lieut.-Commander KENWORTHY

I did not intend to speak for long in any case, so that, if I can catch your eye on that Vote, it will serve my purpose.

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."

Sir DONALD MACLEAN

I do not wish to make any comment on the actual Vote itself, but I thought that perhaps I might, speaking from this Bench, express, on behalf of this side of the House as a whole, our deep sympathy in the loss which the Navy and the nation has sustained in the lamentable occurrence which happened a day or two ago. The daily risk which these men run is known only in the full sense to those who are adequately acquainted with the Service of which they are so honourable a part, and the nation cannot too fully or deeply sympathise with the relatives of those brave men who are to-day sorrowing for the loss of those who have died in the service of their country. Words are of little avail, but I am quite certain that from the House of Commons as a whole, and from the nation in every class, the deepest possible sympathy goes out to those who are sorrowing to-day, and a feeling of pride also that we have men ready and qualified at this very moment to step into the places of those who have passed away, to discharge with equal ardour, zeal and efficiency the service of those who have lost their lives in the nation's cause.

Captain Viscount CURZON

I should like to associate myself, if I may, with the remarks which have fallen from the right hon. Gentleman who has just spoken, and from my hon. and gallant Friend the Member for Central Hull (Lieut.-Commander Kenworthy), with regard to the terrible disaster to H42. It only serves to remind us that, even in peace time, the Navy is serving under war conditions.

With regard to this Vote, I should like to draw attention in particular to the numbers provided for coastguards, and to ask the hon. Gentleman who is replying for the Admiralty whether he can give us any idea of what the policy of the Admiralty and the Government with regard to coastguards is going to be. The coastguards, as constituted at present, are, I believe, with the exception of a few hundred of them, of very little use to the Navy at all. They are not a Naval Force, but are merely employed on duties in connection with Customs and Excise, in connection with the Board of Trade, coast-watching, and so on; and I think it is rather unfair, in view of the great stringency for money which exists all round, that, if these men are not wanted, their numbers should be borne on a Navy Vote. I believe that the number of men in the Coastguard Service actually required by the Admiralty does not in any event exceed 400, and, if that be so, there is, on the numbers provided for here, a balance of no less than 2,500 men on a Navy Vote who are discharging duties which are not required by the Navy, but are for other Departments. It is important, for the Admiralty at any rate, that, if possible, the Navy Votes should be relieved of this charge. I am not sure whether I am allowed to discuss questions affecting the distribution of personnel on this Vote, and I would ask your ruling, Mr. Speaker, as to that.

Mr. SPEAKER

The number recited in the Vote as to whether they should be more or fewer in a particular class.

Viscount CURZON

During the debate the other day the right hon. Member for South Molton (Mr. Lambert) criticised the Admiralty very severely on the number of men employed in shore establishments and I am wondering whether I should be entitled to refer to that. In the Report on National Expenditure the Geddes Committee criticise the Admiralty for the number of men they allege they are keeping on shore, and this was followed up by the right hon. Gentleman last week when he said: What the Geddes Committee complain of, and I think justly if their figures are right, is that you are keeping up an enormous Navy on shore to the detriment of the fighting men. I do not think the right hon Gentleman spoke in real appreciation of the facts. I do not think he can have realised the necessity there is for the Admiralty, with every advance of modern invention, to establish what is practically an entirely new school on shore in order to deal with it. Nowadays there are such things to be learnt about as hydrophones, elaborate schools of mining, elaborate schools for the development of gunnery and fire control, and all these things necessitate extra schools and establishments on shore. Another very important point is that the Navy Torpedo School at Portsmouth is to be transferred from the "Vernon," a floating establishment in Portsmouth Harbour, to the shore, and it is very unfair to criticise the Admiralty for this policy which they are quite unable to avoid. There is another point to be remembered in connection with this. During the war a great deal of training in gunnery and torpedo and mining and so on had to be diverted, necessarily, because it was not possible to spare the men of the Fleet to go through the lengthened course necessary, and all this leeway has to be made up at the first possible opportunity. Therefore I maintain this is a reason why the Admiralty are compelled to somewhat increase the numbers employed on shore. Another point that arises out of the recommendations of the Geddes Committee refers to the proportion of officers and men. The Geddes Committee criticise the Admiralty and say the proportion of officers to men has gone up. To a certain extent their criticism is justified, but not quite entirely. The Geddes Committee make no mention in their Report—and it is an important point for us to remember—that in 1914 we had for the most part a coal-burning Navy, necessitating the employment of a very large number of men in the stokehole. Nowadays the Navy is an oil fuel Navy, and with oil fuel the same numbers of men in the stokehole are not required, but you require exactly the same number of officers. You cannot reduce your engine-room watchkeepers. You can reduce largely the number of men in the stokehole. Nowadays every ship in the First Fleet is an oil-burning ship, and it is obvious that it is not exactly the proportion of officers to men which has gone up, but the proportion of men to officers which has gone down. This point seems to have escaped the notice of the Geddes Committee.

I noticed the other day in the "Times" an article written by their very expert naval correspondent drawing attention to the number of flag officers now employed. It would be a very good thing if the Admiralty could give some sort of figure to show the number of flag officers employed to-day and the number of flag officers employed in 1914, and also the number of flag officers on half pay. We do not want to have an undue flag list, and, moreover, there is great stagnation in promotion at present. I therefore wonder whether the Admiralty could not at some future date make a further appeal to the patriotism of the senior officers of the Navy as far as is possible to make way for the promotion of more junior officers. We must not forget that on 1st January last no officers of Lieut.-Commander rank were promoted at all, and very few Commanders to Captains. This is a very great blow indeed to the officers of that rank. It is true they have been told they will not thereby suffer as far as their prospects are concerned, for they are to be dated back, I understand, but at the same time nothing can be worse from the point of view of the Navy than stagnation in the junior ranks. You must hold out an opportunity for the junior officers to get on. Everyone who knows the Navy will realise the extremely patriotic action among the senior officers who have already given way in a public spirited way in order to facilitate promotion of the more junior officers. I am of opinion that the Admiralty should make a yet further appeal to the senior ranks of the Navy to remember the best interests of the Service, and how serious it would be for the Navy if all avenues of promotion are blocked. I am certain that if this appeal is made in the right spirit by the Admiralty to the more senior ranks it will not fall on deaf ears.

Sir C. KINLOCH-COOKE

The Noble Lord has very properly called attention to grave errors into which the right hon. Member for South Molton (Mr. Lambert) fell on the occasion of the Navy Estimates. I might call attention to other grave errors, but I do not propose to do so. I much regret that so important a critic has found himself unable to attend the Report stage of the Navy Estimates. There is only one question I have to ask the Parliamentary Secretary, and it is one which he was unable to answer the other day. He gave us the number of officers and men borne in our Navy. I should like to know, seeing that we are to be a one power standard, what is the number of officers and men borne in the American and the Japanese Navies and how these numbers compare with our own service.

Captain Sir HAMILTON BENN

I should not like this Vote to pass without giving some expression to the feeling which is held in this House by many Members, and in the country, in regard to the reduction in the personnel of the Navy. I believe there is a very strong feeling of anxiety about this reduction. It would be voiced very strongly if it was not for the confidence which is felt by people like myself in the present Board of Admiralty. We feel that while we dislike more than we can express the idea of this reduction in the personnel of the Navy, if the present Board has agreed to it under the pressure which is put upon them in the financial condition of the country it is not beyond what may be risked. I think that is the only way you can put it. I am confident that they feel the anxiety that many of us feel about this reduction, but they are taking risks which they think may possibly be taken in the special circumstances of the case. Of course, they are influenced by the feeling they know there is in this House, having regard to the Geddes Report on men. The Parliamentary Secretary pointed out very clearly that there was an entire mistake on the part of the Committee about the men in question. I can only suppose that the Committee fell into that error through some misunderstanding between the commercial working of ships and the naval manning of ships, and the naval work that has to be done. When a steamer comes in from a commercial voyage, as soon as she arrives, if there is any work to be done on the ship, the whole of the crew is discharged, and the ship is turned over to the dockyard, where she is entirely repaired and turned out again ready for sea by the dockyard hands. That is not the case in regard to naval ships. A very large proportion of the crew is always retained for essential work during the time that the ship is in the dockyard hands, and thereby a considerable saving is effected in the cost of the repairs. My object in rising is to say that it should not be allowed to go out that we are all in agreement with this reduction in the personnel of the Navy. We accept it, but with profound reluctance.

Major Sir BERTRAM FALLE

With respect to the loss of submarine H42, I should like to know if the Financial Secretary can inform us whether any special compensation or any compensation at all is to be paid to the widows of the men. Are the men to be regarded as having been on active war service, or on active service at all?

Rear-Admiral ADAIR

I have no such fears as those expressed by the hon. Member for Greenwich (Sir Hamilton Benn), but I think it would reassure the public enormously if the Admiralty would publish their latest information as to the numbers of men in the American Navy and the Japanese Navy for the coming year. There was a statement in the press a few days ago that the American numbers were to be limited to about 55,000 men.

Mr. G. LOCKER-LAMPSON

I do not know whether the House thinks that hon. Members not versed in naval affairs ought not to speak. If so, I will sit down. There are several points which I should like to raise, but I do not know whether I can keep in order. Various hon. Members have expressed apprehension about the reduction in the personnel of the Navy. I would point out that when the Admiralty met the Geddes Committee in November they gave in their sketch Estimate the total numbers of men as 121,600. In December they knew the very drastic cuts that the Committee had proposed, and now they ask for 121,400. That is to say, although the Geddes Committee proposed very drastic cuts, the Admiralty are only reducing their sketch Estimate by 200 personnel. Therefore, I do not think there is any cause for complaint on the part of hon. Members who know a great deal about the Navy than the Admiralty, in view of what the Geddes Committee's recommendation, have cut down the personnel too much. In White Paper, No. 36 the Admiralty say that they intend to reduce the numbers to 98,000 as soon as practicable. Even if you take the numbers as 100,000 we find that the average wage will be £158 per year per man, compared with an average wage of only £57 a year pre-war, so that the cost has gone up three times, the amount per man pre-War. That is a very grave matter and surely those amounts could be cut down.

I want to draw attention to a passage which appeared in the Memorandum issued by the Parliamentary Secretary in reply to the Geddes Committee, with regard to the personnel of shore establishments and harbour establishments. The Admiralty admit that they have a reduction in the fighting force of 37 per cent of what they had before the War, in 1914. As against 109,500 they have now 71,170 fighting, force. I do not understand although I suppose it is a technical matter, why the shore and harbour establishments should not be reduced in some kind of proportion to the fighting forces. The Committee made their calculations on that basis. In the Memorandum it was said that the Committee made a very serious error and that instead of reducing by 37 per cent., by an oversight they actually made a 63 per cent. reduction. I have looked into the figures very carefully, not from the naval point of view, but from the point of view of arithmetic, and I think my hon. Friend the Parliamentary Secretary is entirely wrong. I do not believe it was an oversight in the least I belive the inaccuracy is on the part of my hon. Friend. The Geddes Committee took 37 per cent. of 22,700 men in groups 2 and 3, minus the coast guards, and that works out at 8,399. If you take 8,399 from 22,700 it leaves 14,301, which is exactly the figure mentioned by the Geddes Committee on page 16 of their Report. I think the oversight was on the part of my hon. Friend, because he took 37 per cent. not of the pre-war groups 2 and 3, but 37 per cent. of the sketch Estimate before the Geddes Committee, and that led him into the error of supposing that the Geddes Committee had made a cut of 63 per cent. instead of a cut of 37 per cent. Even if the cut of the Geddes Committee was too great, I think from the point of view of the man in the street some reduction far heavier ought to be made in the personnel of the shore and harbour establishments, considering the great reductions that are being made in the fighting force.

My hon. Friend was very scornful about the remarks made by the Committee in regard to the personnel of officers' stewards and cooks. So far as I know he has not made any answer to that criticism, and I do not think there is any answer. Before the War, these servants cost £255,000 and they are now costing £733,000. The number of officers in receipt of servants allowances has risen from 110 before the War to 1,500. The number of officers now in receipt of servants allowances are 14 times what they were before the War. I think that that is preposterous. I have been reluctant to get up in such a Debate as this, but looking at it purely from the point of view of the taxpayer, I do not understand these increases, and I am certain that with goodwill the Admiralty could reduce figures of this sort by large amounts.

Sir F. BANBURY

I would like to know the number of men who were in the Navy in the year 1914, before the War Is it a fact that the number of men in the American Navy at present is somewhere about 130,000? Is it a fact that the Washington Agreement has not yet been confirmed, and what are we going to do if the Washington Agreement is not confirmed, and no reduction takes place in the number of men in the American Navy? I understood from my hon. Friend that the salaries and wages of the officers and men in the Navy to-day are three times what they were before the War. That seems to be a very great increase. I understand that the men are clothed and fed and therefore there can be no question of the increased cost of living, because that is found for them. Why, then, is it necessary to treble the money which they are being paid.

Mr. SPEAKER

That point will come up on the next Vote. We are not now under this Vote dealing with the pay or with anything except the numbers and personnel.

Sir F. BANBURY

Then I will leave that to the next Vote. I presume, therefore, that the non-effective services cannot be raised now?

Mr. SPEAKER

No, not until the next Vote.

Lieut.-Colonel ASHLEY

In justice to the Admiralty, it is right to point out that they have had a very difficult task. They have had to reduce the offensive force enormously during the last two or three years. They have had to fight the Treasury to get money to carry on. I do not think that the Treasury in the Estimate of the coming financial year are cutting the allowance very short. But, as an ordinary man in the street and as a taxpayer, I think that the Admiralty, so far as an outsider can judge, have hit the happy mean in the Estimates presented to-day. The Geddes Committee advise that in the year 1922–23 there should be voted for the service of the Navy roughly 88,000. We see from the Paper in our hands that we are asked to vote 118,000. As soon as possible in the next financial year the Admiralty mean to reduce this number to 98,000, but we all know that it is impossible to reduce the numbers so quickly. We have got to reduce our commitments. Therefore the Admiralty, in their wisdom and under expert advice, have come to the conclusion that 10,000 men are needed in excess of the number which the Committee of eminent business men advise. In doing so, I think that they have hit the happy mean. The Geddes Committee consisted of sound business men, and one of them was an Irishman, and they asked for more economies than they thought they would get. Therefore, we may presume that the number which the Admiralty ask for is what the Geddes Committee thought would be reasonable in the circumstances. The right hon. Baronet, when he asked as to the numbers in the American Navy, perhaps did not realise that though the numbers voted are larger than the numbers which we have voted, yet the numbers serving in the American Navy are very much smaller than the numbers voted by Congress for the service of that arm. It is very difficult indeed for the United States to get sufficient voluntarily enlisted men in their Navy and it is very probable that we have as many fighting men in our Navy as the Americans have and that we shall have as many in future.

Sir F. BANBURY

I was not in any way criticising the Admiralty, because I have an admiration for my hon. Friend for having stuck up for the Admiralty, but I was endeavouring to support them in trying not to cut down the Navy too much.

Lieut.-Colonel ASHLEY

Then you are a big navyite?

Sir F. BANBURY

Certainly.

Lieut.-Colonel ASHLEY

And an economist?

Sir F. BANBURY

Certainly.

Lieut.-Colonel ASHLEY

That is a happy combination. Let us be frank as to the position of this country. Before the War the country insisted that the Government of the day should have a two-power standard, as this was absolutely necessary for the safety of the country because the German Navy was in being. We had also the money in those days to keep up the two-power standard. The two-power standard was kept up. It saved this country when the Great War broke out, and the policy of my right hon. Friend the present Secretary of State for the Colonies was ultimately vindicated. But conditions have changed. We have got to cut out our clothes according to our cloth. I would like to have a two-power standard, or I would like to have a three-power standard—I would like to see the whole world red, because the British Government is the best form of Government ever invented by man. But we must come down to realities. We must realise that we have got to cut down our Navy, and that probably the one-power standard is the best which we can have considering the state of our finances. May I say how deeply I admire the wise statesmanship of the right hon. Gentleman the Lord President of the Council, who, at the Washington Conference, not only did magnificent service for this country, but by his labours enabled us, who are financially poorer, to have a Navy equal to that of the Americans, who have got all the money in the world. I think that these Estimates do secure that we have a one-power standard. Therefore, I support cordially the policy outlined by the hon. Gentleman.

The PARLIAMENTARY SECRETARY to the ADMIRALTY (Mr. Amery)

The House will probably wish to know at once the answer to the question asked by my hon. Friend the Member for North Portsmouth (Sir B. Falle) as to the dependants of the gallant officers and men whose lives were lost in the submarine disaster. I can allay his anxiety at once by assuring him that officers and men will be treated as having lost their lives on active service, and their widows will receive pensions accordingly. As to that very sad incident, I do not think I can add a word to what was said with so much feeling by the right hon. Member for Peebles (Sir D. Maclean), except to say on behalf of the Admiralty and the whole Service that I thank him most sincerely for what he said and for words which, I believe, express the feeling of the whole House. I come now to the important question of manning. I should like at once to answer the question put by the right hon. Member for the City of London (Sir F. Banbury) as to our position in relation to the Naval Treaty reached at Washington. All the reductions we have made in the Estimates presented to this House are made on the assumption—events, I believe, will prove it to be a justified assumption—that the Naval Treaty will be finally ratified by the Powers. But if by any grave mischance, grave to us and to the whole world, that were not to ensue, then, of course, the whole of these Estimates would be subject to revision, and the reductions and economies we contemplate now would to a very large extent be impossible. As to the actual number of men and the comparison with other great Powers, the position is this: I will take the United States first. The actual number voted by the United States as their establishment till next July is 139,000 men. The Committee of their Lower House has made suggestions which, when you include all the different items comparable with the items which come under our Vote A, would reduce the total to something over 99,000 men, or a figure very slightly in excess of our own. The figure put forward by the Secretary to the Navy is 115,000 men. The actual figure has not yet been settled, but it will no doubt be somewhere between those totals.

Rear-Admiral ADAIR

Is that since the Washington Conference?

Mr. AMERY

Yes, the American Navy, following the same policy as ourselves in reducing strength, proposes to reduce from 139,000 to 115,000, that is to say, to a strength slightly above ours. The position of the Japanese Navy is that their figure stood at 82,000. The latest figures are 80,000. I am not aware of any suggestion for still further reduction. The Japanese keep the whole of their Fleet in active commission, and I do not think there is much likelihood of the Japanese figure being reduced beyond that point. My Noble and gallant Friend the Member for South Battersea (Viscount Curzon) asked one or two questions. As to the Coastguard, it is quite true that from the purely naval point of view only a very small proportion of the Coastguard are what we would consider an essential service. The total number of men whom we consider essential for purely naval purposes is round about 350. I do not mean that we should not want a number of men round the coast when war had broken out, but we could rely largely on ex-service men and temporary improvisations. The rest of the Coastguard as constituted is a force that is really kept in being mainly for the purpose of other Departments, the Board of Customs and the Board of Trade. It has been impossible in the short time at our disposal to secure a final adjudication on this matter as between the Navy and the other Departments, but I hope that in the course of the next few months it may be possible to go into the numbers of the Coastguard from the point of view of the real requirements of other Departments and to see if we cannot get substantial further reductions, and also to make arrangements by which the financial effect and responsibility as between the different Departments shall be clearly shown and the House understand for what purpose they are required.

My Noble Friend drew attention to a point raised by the Geddes Committee as to the increased proportion of officers to men. Part of that increase is due to the fact that we are still bearing a surplus of officers whom we are endeavouring as fast as possible to get rid of by reasonable inducements, and in the coming year we shall have to take still further steps to effect this. We are devoting our attention to clearing the Flag Officers' lists as well as the juniors. We realise the importance of clearing the flag list, which affects promotion lower down. What has happened, however, is not so much that the proportion of officers has gone up as that the proportion of men has gone down. We have effected certain economies as the result of the introduction of oil fuel. That has meant a reduction of 20,000 stoker ratings. The introduction of oil fuel means an enormous reduction in the unskilled side of the Navy without our being able to make any corresponding reductions in the skilled and directing staff, and, of course, owing to the new inventions that are becoming more and more an integral part of the Navy, the skilled and directing staff plays an increasing part. In any factory or business that would be regarded as a sign of progress and true economy. I am a little surprised that a Committee of business men should have taken the opposite view. A question was asked about officers drawing servants' allowances. The number of officers in that position has not increased. On the contrary, it has diminished. What has happened is that we have put an end to a large number of officers drawing consolidated pay. I can assure my hon. Friend that there has been no increase, as would be suggested by a reading of the Report of the Geddes Committee, in the number of officers drawing the allowance. There will be a further reduction with the general reduction in the strength of the Navy.

The question of shore establishments was raised by the right hon. Member for South Molton (Mr. Lambert) and by the hon. Member for Wood Green (Mr. G. Locker-Lampson). I agree that a reduction in the strength of the Navy at sea should naturally be accompanied to a certain extent by a reduction in the shore establishments, training establishments and so forth, always subject to the vital consideration that the lessons of the War compelled us to institute certain new schools of training in matters which were not considered of sufficient importance for training before the War. We have largely increased the scientific side of the "Vernon." We have had to establish certain absolutely essential schools of training in connection with mining, signalling, periscope work and so on, the total staff of which is about 1,500. Also, as an aftermath of the War, we have had temporarily to keep open certain extra gunnery establishments to pass through officers and men who through the later stages of the War had no opportunity for taking these courses.

But all that is not responsible for anything like the increase which the right hon. Member for South Molton seemed to have imagined had taken place. The actual increase as between 1914 and 1921 is not as the right hon. Member for South Molton suggested, from 6,700 to 16,000, but is an increase from 13,850 to 14,250—an increase of about 400. By the policy of reduction which we are carrying out we shall, of course, get these staffs down below that. The misunderstanding in this matter arises, as I have attempted to explain both in a certain Memorandum and again in these Debates, from the fact that the Geddes Committee, instead, of taking the actual strength, have taken quite a different figure, namely, the war allocation which is simply an indication of the purposes for which you will use your men on the actual day of mobilisation. In 1914 only 6,700 were to be assigned to coastguard and harbour ships and so on. The 16,000 figure in 1921 does not mean that such an enormously increased number of men was paid and kept in those establishments. All it means is that in 1914, when we had an immense reserve fleet, we filled it up in the expectation of great battles in the first week of the War and completely cleared out the whole shore establishments, leaving only 2,400 for care and maintenance parties. That was found, by the experience of the War, to be a great mistake. We found we needed these more than ever, when war started. Under the mobilisation scheme of 1921–22 when we had a very small reserve, when we had not to man the same reserve, we were able to assign as an allocation—a purely provisional war allocation—16,000 men to these various establishments for the first week of war. That does not mean that they would be there for longer than a few weeks. As soon as new formations were required, as soon as casualties took place, these men would be rapidly drafted away and it was only for the actual opening moment of mobilisation that these relatively high figures were earmarked to remain in the schools on the day war was declared.

12 N.

It is most unfortunate that the impression should have been created that those figures represent the way in which we distribute the Navy for which we are paying in time of peace. I do not wish to enter into further controversy and I fear it would only weary the House if I were to go into the detailed figures referred to by the hon. Member for Wood Green, but I should be delighted to go into the matter in private with him, and I can convince him quite clearly that, as a result of the complete original misunderstanding, the detailed figures by the Geddes Committee were wrong—based on a mistaken interpretation. I omitted to answer the question put by the right hon. Gentleman the Member for the City of London as to the numbers in the Navy in 1914. The figure is 150,300, which we are now reducing to 98,000. I am afraid I am rather discur- sive in answering these points and I must go back for a moment to another question put by the hon. Member for Wood Green. He asked why we are only reducing Vote A to 121,400. I would remind him that Vote A is the Parliamentary sanction for keeping men under arms under discipline and indicates the maximum number of men which the Government are entitled to keep under discipline. It represents the fact that we must have the authority of this House to exercise our authority over 121,400 men on the 1st April next. It does not mean that we are going to have that number during the year. On the contrary every measure will be taken to reduce the numbers during the year as quickly as possible to the minimum figure of 98,900. On a point which was touched upon by the hon. Member for Greenwich (Sir Hamilton Benn) we do hope to carry out this reduction with every reasonable consideration for the interests of the men affected whose careers in many cases will be materially prejudiced in consequence of our national policy. We must give fair consideration to these men. We must try, as far as possible, to make it easy for those who have a chance on shore to get out rather than to force out those whose position is most difficult. I quite agree with the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) that our duty does not end merely with paying, but that we should take measures by negotiating with employers and trade unions to make it easy for these men to tide over the transition to ordinary civilian employment. It certainly will be our duty to do what we can to help them in that matter. I do not think there are any other points in connection with Vote A that have been touched upon in this discussion, and I hope it may now be possible to take this Vote and let the naval discussion pass on to the more general matters comprised in the Vote on Account.

Rear-Admiral ADAIR

Is it not a fact that though this number 139,000 was voted to the American Navy in the past year, they never approached it, in fact, and is it not further the case that we have an enormous advantage in this country in respect of reserves ready to be drawn upon?

Question, "That this House doth agree with the Committee in the said Resolution," put, and agreed to.

Second Resolution read a Second time.

Lieut.-Commander KENWORTHY

I beg to move to leave out "£12,000,000" and to insert instead thereof "£11,900,000."

I wish to draw attention to a few points in connection with this Vote, and as time is short I am going to break into rapid fire as soon as possible. First, with regard to Washington, I congratulate the Admiralty on the great attempt they have made to have the submarine abolished. I think it is a tremendous pity the submarine was not abolished, and I hope the Admiralty will keep hammering at this point if the opportunity arises in the discussions at the League of Nations or at Genoa. I hope the Admiralty will return to the charge on this point with regard to the submarine, which is a barbaric instrument, which cannot be used with humanity and which is only fit for the worst type of Hun. In passing may I refer to the question of the clearing of the lists in order to say that there is an impression abroad in the Navy that the Admiralty are reverting to the very corrupt and shameful system of giving preference nowadays to officers serving at the Admiralty. I hope they will take steps to remove that impression from the Fleet. First preference should be given to sea service and not to shore service in selecting officers for promotion. I can assure the hon. Gentleman that a great many officers wonder at the preference being given to certain spoiled favourites who seem to spend all their time in shore appointments and in easy billets before promotion.

I want to take this opportunity of complaining about the lack of protection afforded to our fishermen by the Navy. We have a number of fishery protection craft, but they are slow trawlers or other equally slow craft, and they do not carry out their duties with sufficient dignity to do their work properly, nor do they go to outlying fishing grounds, where our fishermen are very frequently treated harshly by the local authorities. Particularly in Iceland and North Russia, our fishermen have been harshly used in recent times, and it is high time the Navy went there and showed the flag; and the same applies to all other distant fishing grounds, where our men are being driven more and more in order to be able to get good catches. Might I suggest that when the Admiralty talk about scraping the Navy to the bone, they said exactly the same thing last year, and with great respect to the hon. Gentleman who represents the Admiralty, there are a great many luxuries which may still be cut off. We must have a Navy, in the present state of affairs, until the nations of the world agree to international peace and general disarmament, but while things are as they are, I want an efficient Navy. We are, however, too poor to afford luxuries, and in this respect, as I have said, it is very difficult to carry on a discussion without the full Estimates in our hands. Were there any subsidies for armament firms this year? If so, that is absolutely indefensible. We paid £50,000 last year, and it is contrary to the whole spirit of the Peace Treaty and the League of Nations Covenant, and is altogether a waste of money that ought not to be tolerated. I believe in the year before last it was £150,000. I do not want to enter into the question of shore establishments now, but there are far too many shore appointments in the Navy. If the hon. Gentleman will take the Navy List for 1914, March or April, and look at the shore appointments, he will see that a number of billets have been created which did not exist before the War. Let him not mind about his naval advisers. There are a lot of appointments on shore that do not add one iota to the efficiency of the Navy.

The hon. Gentleman might cut down a great deal of expenditure on motor cars for these people on shore, and steamboats, and bands. On the admission of the Admiralty we are taking risks with the fighting force at sea, and we cannot afford luxuries like musicians and motor cars, and things of that sort. There is a system growing in the Navy of using trawlers and drifters in harbour, instead of their own boats, and the result is that you have less boat work for the men—work which is very fine training. You do the work now by trawlers, at much greater expense, and this luxury could well be done away with. When I was with the Channel Fleet, only one steamboat was allowed to be used for the whole Fleet. We were made to sail and row our boats, and we got fine training and saved money, and we saved wear and tear of machinery at the same time. That was a very sound scheme, which, in my opinion, ought not to be departed from. In regard to dockyards, this is a growing scandal. The Admiralty are simply being swayed by political pressure into keeping going establishments that the Navy does not need, and the greatest scandal of all is Pembroke. I see the hon. Member for Pembroke opposite (Sir Evan Jones), and as he is not standing again for that Division, he will know that I am not making a personal attack on him in this connection. The Admiralty, I believe, have reported to the Cabinet that Pembroke is not required for the Navy, but Cabinet pressure has been put upon them to keep Pembroke on. It is stated openly in the Service clubs and elsewhere, and in the Navy, that the Admiralty were told that if they did not insist on abolishing Pembroke the Cabinet would not be so hard on them in other directions. [HON. MEMBERS: "Oh, oh!"] That is the general impression; that is what is going about; and why is Pembroke being kept on if not for the sake of the shopkeepers in Pembroke? [HON. MEMBERS: "It is in Wales!"] Yes, I am coming to that. The son of the Prime Minister himself has been adopted as the candidate to follow the hon. Member opposite, and when the Liberal Association met, the Chairman stated that this was their one chance—to adopt a Coalition Liberal—of keeping Pembroke in being. The hon. Member on the Front Bench opposite had better look into the matter very closely. In regard to Rosyth, the Admiralty should, of course, behave decently to the men who are to be displaced, but Rosyth is now unnecessary, and the same thing applies to Chatham and Sheerness. I know the feelings of the Staff on this matter even before the War. Chatham is unsuited for modern ships; both dockyards are strategically badly placed, and money spent on them is being wasted.

Sir C. KINLOCH-COOKE

No.

Lieut.-Commander KENWORTHY

I am not talking about Devonport. The Navy does not exist for the dockyards, but the dockyards for the Navy.

Sir C. KINLOCH-COOKE

How can you have a Navy without a dockyard?

Lieut.-Commander KENWORTHY

I say we want dockyards for the Navy, but dockyards in the right places and nowhere else. The suggestion made that we should disfranchise the dockyards for the next five years would be an excellent thing, and I know the Navy would like it. There are two foreign dockyards which are also strategically badly placed and, I believe, unnecessary. The first is Wei-hai-wei. I know it is only a health resort, but money is being spent on it, and it ought not to be spent. The second is Jamaica. We are keeping up a one-Power standard. Suppose the worst happened and we found ourselves at loggerheads with the United States. Jamaica is so far inside that supposed enemy's sphere of shore action that we could not hold it. We either could not hold it, or we should make the most costly and desperate attempt to hold it and so compromise our whole strategical position. Let the hon. Member who represents the Admiralty go to Greenwich and play a strategical war game and try and hold Jamaica against the American Fleet. He can play the war game as well as anybody else, and he will see that what I am saying is true. Money spent on Jamaica to-day is utterly wasted, and the dismantling of it would be in addition a great proof of our sincerity when we say we wish to live on terms of naval friendliness and co-operation with the United States of America. If we are really going to spend money on foreign dockyards, the most important strategical point in the world to-day is Singapore, and that is the place where this money that is being saved on other dockyards should be expended, if anywhere. I do not want to press for secrets to be divulged, but I should like to know whether we really are considering the preparations for an Admiralty base, if necessary, in Northern Australia. The only likely war would be in the Pacific, and we must have a base there for our cruiser warfare, which, I believe, would bear the main brunt of such a struggle. I do not press for any naval secrets, but knowing none myself I think it right to make that observation.

I wish to draw attention to the great possibility of an economy, without any loss of efficiency, in the remodelling of our training of officers? The Dartmouth system of taking boys at 13, and training them at great expense, as I believe the great majority of naval officers will tell the hon. Gentleman, has been proved rather a failure, and we can get lads just as good at a much cheaper cost by direct entry either from public schools, or grammar schools, or any other schools which can send up suitable boys to pass the examination. During the War those boys who came in by direct entry were, after six months at school, as good as, and often better than, the officers who had been Dartmouth cadets. That is the general opinion throughout the Navy. You take boys at 13, and teach them history and mathematics when they ought to be at school at the expense of the ratepayers or their own parents. We ought not to train them at Dartmouth at great expense, and then, when they reach 15, find that they are not suitable for naval officers. We ought to take them at 15 or 16, and, after six months' training, send them to sea. At Dartmouth, in spite of the reduction of cadets from 1,034 to 651, the staff is bigger than ever. At Dartmouth we have a captain, commander, lieut.-commander, 12 lieutenants, an engineer commander, seven engineer lieut.-commanders, an engineer lieutenant, two chaplains—I suppose they take it in turns—two surgeon commanders, two instructor commanders and a paymaster commander. That is the naval staff. In addition, there is a scholastic staff of 48 schoolmasters, in addition to all these naval officers. And this for 651 cadets! Of course, Dartmouth is being run on most extravagant lines. It would be much better to get the pick of our great schools and the pick of boys from all classes, let them sit for competitive examination, and take them in at 15 or 16, and then begin to train them for naval officers.

The next economy I suggest is that we cannot afford two battle squadrons today. We did without a battle squadron before the War, in spite of the Austrian and Italian menace—for we had an Italian menace. We did not have a Mediterranean Fleet, and did not lose the Empire, in spite of what the hon. Member for Devonport said. He was always pessimistic about the Navy, and he was utterly wrong. It is much better to have one efficient battle squadron of eight ships and three battle cruisers, which can go to the Mediterranean or be kept in the Atlantic, as required. By training in smaller ships, and keeping many de- stroyers and submarines for the purpose, you would turn out better officers. I think the day of the great battleship in the Pacific and Atlantic is over, and I would ask the hon. Gentleman to play a strategic game of Atlantic or Pacific warfare to see where and how he is going to use battleships. I cannot see where the battleships are going to be used. We still keep a number of useless ships on the Navy List at great expense. The "Antrim" is still in commission, an obsolete cruiser quite unsuitable for war, which was recommissioned on the 3rd March, 1920, employing 800 men at great expense and quite useless for modern naval warfare. We have large sloops on the Navy List which are slow, weakly armed, un-armoured, and only of use in the peculiar circumstances of the last War, when there were no surface enemy ships on the sea. These ships are scattered to-day all over the world. We have 18 on foreign stations. They cannot fight, and they cannot run away. They are cheap, but inefficient. They are of no use for war. It is much better to employ a few light cruisers, which are better for training at sea. By the same token, I cannot understand why there are 15 river gunboats in China. China is a Republic. Surely we can leave some of these Republics in the world alone, or is that why we have got these gunboats?

I will just run over a few of the points on which, I believe, economies could be effected. I have only touched the subject. Without reducing efficiency, I do maintain that we should do away with a great many luxuries, and, if the Admiralty would be a little more ruthless, they could save a good deal of money without any loss of fighting power, which is the only thing that matters. That is what we pay for, and that is what the people of this country want. We want an efficient sea force until we can all disarm, and have an international police on the ocean. Until that time comes, we have got to be efficient, but we cannot afford waste and luxuries.

Mr. FOOT

I beg to second the Amendment.

Rear-Admiral SUETER

I should like to review the 1922–23 Naval Estimates from the point of view of the taxpayer. I would first, however, congratulate the Parliamentary Secretary on the First Lord's explanatory statement, as it is a great improvement on last year's and shows the value of a little criticism. The Parliamentary Secretary's speech on the Vote on Account—and I mean no offence to him personally—was the same old dope that has been served up in this House for many years. Let me compare the figures for the Navy Estimates. In 1920–21 they stood at 90¾ millions; in 1921–22, 82½ millions; and this year, 1922–23, 64¾ millions. That is, for the two years since the Armistice and next year, we are spending an average of nearly 80 millions. For what is this excessive expenditure? Whom are we going to fight? We are not going to fight our cousins across the Atlantic, the United States, or our gallant ally, Japan. We have no justification, in my opinion, for these very excessive Estimates. The gallant Field Marshal, the Member for North Down (Sir H. Wilson) made a very interesting speech, and, as a sailor, I would like to congratulate him upon it. He pointed out the additional responsibilities of the Army. I wish to ask the Parliamentary Secretary whether we have any additional responsibilities for the Navy since the War? I do not think we have. I think our responsibilities have lessened. The German Fleet no longer exists, and we have not got any extra responsibilities unless the Parliamentary Secretary can point them out. I do not know of any. The Admiralty tell us that these Estimates are based upon the probability of no war within the next 10 years. If that is so, why do we want to build two battleships in 1923? I understand from the Parliamentary Secretary that we are going to vote £721,000 in 1923 for starting these two battleships. If we start them in 1923, they will be obsolete in 10 years' time. What is the sense of starting them? Even if they are any good at all, it is no good starting them in 1923, because they will be obsolete in 10 years, and it would be much better to lay down their keels nine years from now, even if we have to build them at all—which I very much doubt.

I want to deal with capital ships, and their value. Opinions are gradually being formed from the United States' experiments, and the experiments in France that the capital ship is of little or no value. I myself think that the capital ship is practically obsolete, though it may still have a potential value. We all remember that Sir Percy Scott started a correspondence in the "Times" on the value of capital ships, and the matter was thrashed out very carefully. There are other admirals who have certain opinions on capital ships. The first one I should quote is Admiral Sir William Lowther Grant. He writes: By most people who have studied the subject, and by most naval officers the usefulness of capital ships is regarded as problematical under existing naval and international conditions, and as still more problematical 10 years hence. Their retention appears to be due to a sort of megalomania and desire for window-dressing. Therefore, if they are retained at all, a fixed ratio based on the relative wealth and building capacity of the nations is logical. Why the tonnage accepted has been fixed upon is not clear, double or half the amount would be just as logical, and none at all, to my mind, most logical of all. That is the opinion of an admiral. Whether he commanded a fleet in the War or not I do not know; but I should like to give an opinion of another admiral, a man well known in the world, who did command fleets in the War. See what he says. I refer to Admiral Sims of the United States Navy, a very great scientific naval man, who, addressing a meeting at Yonkers City on 2nd March of this year, declared that Battleships are now obsolete, and only submarines and aeroplanes can be regarded as proper weapons of defence. That is the opinion of a very well-known admiral. What is France doing in this respect? France has abandoned the construction of five ships of the "Normandie" type and is providing for the construction of light cruisers, mine-layers, destroyers, submarines and aircraft carriers. These are the units which we should develop.

I want to say one word about the Battle of Jutland, and inquire why did not our Grand Fleet do all they might have done? It was because the Admiralty had not developed aircraft. Had we had a few Zeppelins in the air, and seaplanes, we would have been able to get every ship of the enemy on the morning after Jutland. We were deprived of the fruits of the victory of Jutland because of the short-sightedness and stupidity of the Boards of Admiralty in not developing—

Rear-Admiral Sir R. HALL

Why did not the Germans do this with their Zeppelins?

Rear-Admiral SUETER

They had Zeppelins there the morning after. What I say is, that if we had had a few Zeppelins and torpedo aircraft the morning after Jutland, we would have got every ship, and it was due to the stupidity of the Admiralty in not developing aircraft. Their policy was against the advice of naval airmen. I challenge the Parliamentary Secretary to dispute these points.

I want now to deal with torpedo aircraft in relation to battleships. In 1914 we sent four torpedo seaplanes out to Mudros and told them to torpedo any enemy vessels they could find in the Dardanelles. They found three targets and they got three hits. That was a very fine attack. A little later in the War we sent two torpedo seaplanes from Taranto to Mudros to endeavour to attack the "Goeben." Those torpedo seaplanes found the "Goeben," arriving three days before the "Goeben" was floated off. I should like to ask the Parliamentary Secretary to say why a torpedo attack was not delivered on the "Goeben"?

I want now to turn to submarines, and in doing so may I be allowed to express my deep sympathy as an old submarine pioneer with the Admiralty in the loss of H42. The hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) has an extraordinary idea of the value of submarines. There are many people, including the Noble Lord the Member for South Battersea (Viscount Curzon) who get up and say the submarines never sunk a capital ship. But they always omit to state that a submarine sunk the "Aboukir," the "Cressy," and the "Hogue." The submarine was shown its way to these cruisers by a Zeppelin. They were 12,000-ton cruisers, and a submarine sunk the three of them.

Viscount CURZON

Will the hon. and gallant Gentleman say whether these three ships were screened by destroyers or not?

Rear-Admiral SUETER

Anyhow the submarine sunk them.

Sir C. KINLOCH-COOKE

What speed were they going?

Rear-Admiral SUETER

Hon. Members who speak about submarines in this House never seem to understand what the Germans did. The Germans concentrated on our mercantile marine. Why? Because it was our most vulnerable point, and they nearly succeeded—as everybody knows—in achieving the starvation of this country at a certain period in the War. They concentrated, as I say, and can any Member of this House say that, had the German submarines concentrated in the North Sea, they could not have sunk other capital ships exactly as they got the "Aboukir," the "Cressy," and the "Hogue"? Of course they could. I would just like to say a word about seaplane carriers and aircraft carriers. There is a criticism made in this House that the Admiralty did not know what airmen put into the carriers. There is a remedy for that. In the early part of the War we put in young flying officers in command of our aircraft carriers, and the hon. and gallant Member for East Leyton (Mr. L. Malone), I think was in command of these air carriers, and did most useful work. I suggest that the remedy for that criticism is to put airmen in command of the carriers.

Sir R. HALL

Naval airmen?

Rear-Admiral SUETER

Yes, young naval airmen in command of the carriers. I come to one criticism which may be a little out of order, but somebody has to do it, because it meant the loss of valuable lives and of money to the taxpayer. I refer to the loss of R.38, when we lost Commodore Maitland, a gallant officer, and many of his crew, as well as some very brave American airmen. The Aeronautical Research Committee state: It is dearly established that the airship had an insufficient margin of strength to withstand the stresses due to manœuvres which might occur during normal flight, or due to bad weather. As the Admiralty are responsible for this design, I ask why the officers who got out the specification and the design for No. 9 Rigid were not used to check the design, because No. 9 Rigid did not break in the air. The hon. and gallant Member for the West Derby Division of Liverpool (Sir R. Hall) the other day made a very interesting speech on the Navy taking over the Air Service. He had a weak case, but he put his arguments very ably. He said that the admirals who commanded the Fleet in the War have had experience of aircraft, and they now want a separate Naval Air Service. I now ask if any of those Admirals who commanded fleets in the War assisted the Naval airmen in any way to develop the Air Service. I know that from 1909 to 1919 the First Sea Lord did nothing whatever to assist the naval airmen.

There is one criticism I want to make. The Parliamentary Secretary to the Admiralty spoke about the Admiralty Memorandum. The Geddes Report was issued on the Friday and on the following Sunday we were bombarded in the Press with such headlines as: "The Admiralty torpedo the Geddes Report," and "Lord Beatty fires into the Report of the Geddes Committee." That was most unpatriotic procedure, and the Admiralty were very ill-advised in issuing that Memorandum. If the Admiralty think fit to send such a Memorandum to the Press over the heads of Parliament and the Cabinet—I understand that the Lord Privy Seal said he had never seen that Memorandum until it was in the Press, and I believe the late Secretary for India also said it was not before the Cabinet—the Admiralty, which appealed to the public over the heads of Parliament and the Cabinet, have no right to break their own officers for appealing to Cæsar. I ask that those officers who have been broken should have their cases reconsidered, and if not, I submit that the Parliamentary Secretary should follow the steps of the Secretary of State for India. I want to deal with waste at the Admiralty or waste under the Admiralty administration, and I will read an extract from a letter which an admiral sent to me a short time ago. I have his permission to read it. He says: I wish there was a strong enough Government in power to make the Navy carry out the Geddes Report as it stands, and a jolly sight more than that The waste in the Navy is a scandal, and it is all kept going so that a few exalted people can live in pomp.

Sir R. HALL

On a point of Order. I wish to ask if it is not the rule that when a letter of that kind is read it should be laid on the Table?

Mr. SPEAKER

The hon. Member is entitled to withhold the name if he likes. The House will put its own value on the letter.

Rear-Admiral SUETER

I understand that there is no necessity for me to give the name. I will show the letter to Mr. Speaker if he desires to see it, as some hon. Members do not appear to like the opinion of an Admiral. I will now give the House the opinion of a judge. There are so many legal Members in this House that I know they will appreciate the opinion of a judge on this question. I will call him Mr. Justice "B." He observed: There were many Departments in the Admiralty. They seem to be largely watertight Departments having no connection with one another. One Department did not know what the other Department was doing, and that was one of the reasons why the mistake arose. The mistake alluded to was paying twice over for the same work. What is the remedy for the waste that goes on, and the maladministration of the Admiralty? It is to carry out the recommendation on page 8 of the Geddes Committee Report, and that is to set up a Ministry of Defence that will have control over the Admiralty. That is the only way to stop this waste, and the autocratic stupidity of Admiralty administration which has prevailed for the last few years. If we set up a Ministry of Defence with an Under-Secretary of State to run the Admiralty, the War Office, and the Air Office, I am certain that great economies can be made. We certainly should not want three staff colleges, but one. We should only require one system of recruiting instead of three, and we should have one system for ordering guns, munitions, stores, rations, medical comforts, and dealing with the hospital cases of the three fighting Services. Great economies could be made, amounting to millions of the taxpayers' money, and the staff could be formed at once. It is absurd to say that the men who were so largely responsible for winning the War could not be found to provide a staff for running a Ministry of Defence. The other day the Leader of the House rather jeered at this suggestion, and said you would want a super-Minister to do it. I think it is perfect nonsense for the Leader of the House to try and obstruct creative administration of this nature. I ask all the Members of this House to back up the suggestion for a Ministry of Defence. It is no good going to the constituencies talking about preventing war and promoting economy without pressing forward this suggestion. The Geddes Committee advocated a Ministry of Defence, and I think the whole House should press the Government to set it up at once.

Mr. AMERY

As the speech of the hon. and gallant Member who has just sat down is the first speech in which the whole policy of the Admiralty has been directly challenged, I think it is as well that I should get up at once to reply. The hon. and gallant Member began straight away by questioning the whole policy of maintaining a one-standard Power at all. He asks whether we are going to fight anybody, whether we are going to fight our American friends across the Atlantic or our faithful Allies of long standing in the Pacific? To that question I should like to give a perfectly direct answer. We do not contemplate war with either of them, and, if we did contemplate war with either of them, we should be mad if we relied on merely a one-Power standard. If we were contemplating war with anyone, it would be our duty to this country to come to the House and ask for a measure of naval provision which would make the situation really secure. We depend absolutely for our life as a country and for our existence as an Empire on being able to hold the scas, and, if we thought of a war in the near future at all, mere equality would be folly.

As a matter of fact, we are not contemplating war with either of those great and friendly Powers. We contemplate and believe that there is no reasonable probability of a great war for at least 10 years to come, and, in view of that fact, we are interpreting even the one-Power standard with a latitude which we certainly should not do if we thought that war within that period was at all likely. It is a one-Power standard keyed down in all sorts of respects, and, certainly, if we were thinking that either of those great Powers cherished any designs against us there are many important measures we should have to take. I might mention only one, namely, the provision of oil fuel bases all over the world. We should come at once to this House and ask for many millions to complete immediately measures as regards which we are only making leisurely provision spread over a number of years. Therefore, I am not in the least perturbed by that charge.

I come back to what I believe is fundamental to the existence of this country even in times of peace, even when the horizon is fair and there is no immediate trouble in contemplation. We can never run a risk so great as that of being obviously and demonstrably weaker at sea than any other Power. After all, the world of polities is uncertain. Storms break out suddenly, and it would be a crime against the past of this country and against its future if at any moment an unforeseen cataclysm found us helpless.

Rear-Admiral SUETER

All I question is the building of battleships. You can leave the safety of this Empire to submarines, mines, and airmen with a few light cruisers for convoy work, mine layers, destroyers, and aircraft carriers. There is no question whatever of weakening the naval power of this country when you give up battleships.

Mr. AMERY

Of course, I was not unaware of that aspect of the hon. and gallant Member's argument, and I was, in fact, just going to address myself to it. The hon. and gallant Member, very naturally, has a high opinion of the possibilities of the Air Service, in which I think he is entirely justified, but he has too low an opinion of the offensive and defensive strength of surface battleships. The whole matter was gone into with immense care by several Committees, and these Committees realised the progress that the Air Service had made during the War. I am entirely with my hon. and gallant Friend in wishing that we had made greater progress before the War and had been equipped at the time of the battle of Jutland with the kind of air equipment that we have to-day. Admitting all that and admitting that the power of the Air Service is likely to increase as the years go on, we yet came quite definitely to the conclusion that the increase of strength in the great battleship was more than sufficient during the years immediately ahead of us to be a match for those developments. My right hon. Friend the Secretary of State for Air the other day referred to the effect upon "Dreadnoughts" of bombs dropped close by in the water. It is perfectly true that they will have the same effect as a torpedo striking them, but the modern post-Jutland battleship would be equal to coping with either of those dangers. The result of Jutland has been such that the battle- ships constructed since Jutland are overwhelmingly superior in their offensive and defensive armament to any other ship of the pre-Jutland period.

The position is going to be this: Until those two ships are completed we shall have only one partially post-Jutland ship as compared with three post-Jutlands on the part of the United States and two on the part of Japan; in ships over 30,000 tons the United States have ten and Japan six compared with our one. Therefore, without any thought of immediate competition or without contemplating war with those two great nations, I contend that the maintenance in any sense of the one-Power standard makes it necessary for us not to be hopelessly inferior in the type of vessel which is still the kernel and pivot of the naval battle. I quite admit the increasing importance of the air. Nowhere is that importance more fully and clearly recognised than at the Admiralty. We are only too anxious to lift the Navy more and more out of the water into the air, and we are convinced that we want the utmost freedom to be able to develop our strength in the air on these lines.

The hon. and gallant Member incidentally raised a personal matter on which, however reluctantly, I wish to say just one more word. He said that, acting unpatriotically and appealing to the public over the heads of the Cabinet, I was responsible for the issue of a certain Memorandum criticising certain arguments and statements of fact in the Geddes Report. I will only repeat what I said the other day. This Memorandum was issued in pursuance of a general Cabinet authority given to Ministers to deal as they thought might be required with criticisms upon their Departments contained in the Report, and, as this Memorandum dealt with no question of policy which had yet to come before the Cabinet, but only with matters of fact on which I was convinced that it would be gravely to the detriment of the Service and of the public generally that these misunderstandings or mis-statements should go abroad and sink into the mind of the public, acting entirely within the responsibility given me by the Cabinet, I issued the necessary Memorandum to correct those errors. I think that is quite sufficient, and I hope that it need not be necessary for me to recur to that point.

I will now come to the very interesting quick-fire of my hon. and gallant Friend the Member for Central Hull (Lieut.-Commander Kenworthy), who, in a comparatively short time, compressed a wonderful amount of criticism on the Navy. I am delighted to find that on certain points I agree largely with my hon. and gallant Friend. He wants the flag flown everywhere where there are British interests to defend, interests of British fishermen and interests of British subjects generally. He wants to be able to protect our fishermen in Icelandic waters or Russian waters, or anywhere else with fast and powerful ships. I wish that we could afford more powerful and faster ships, but, as a matter of fact, in the present financial position, we have to accommodate ourselves to the necessities of the situation, and, although it is possible that on one or two occasions we may have suffered by not having quite as fast a vessel to overtake someone who has interfered with our fisheries as we would have liked, we have on the whole found that the sloops and trawlers that we have used have met the necessities of the case at far lower cost than would have been involved in the use of cruisers. I think it was a little bit inconsistent on the part of the hon. and gallant Gentleman when with one breath he asked for larger and more powerful ships to protect the interests of our fishermen in Northern waters and in the next he complained of the gunboats which we keep in Chinese rivers to protect our trade from the inevitable confusion arising from the setting up of the form of Government with which he has such special sympathy.

1.0 P.M.

The hon. and gallant Member referred also to the question of Pembroke Dockyard. I should like to put that matter before the House from the purely naval point of view, from the point of view of economy in the Votes for which I am responsible. It would undoubtedly be a greater economy to concentrate the work of the small yards in the large yards. It is not that the work done at Pembroke itself is inferior, but it is a small dockyard which has overhead charges that are undoubtedly greater than would exist if the yard were amalgamated with a big one. That is the point of view of the Admiralty, but, as I said at the close of the discussion on the Committee stage in regard to the arguments which had been adduced, there is undoubtedly a liability on the other side involving the expenditure of the taxpayers' or ratepayers' money in connection with compensation and unemployment relief. The view of the Cabinet was that in this particular instance of Pembroke, where you have a community far removed from all other centres of industry, a community entirely and absolutely dependent upon this one dockyard, a community by which vast sums of money have been spent in equipping the town with electric light, and waterworks and similar undertakings—the view of the Cabinet was that the national loss from the scrapping of the yard would exceed the Admiralty gain and economy in regard to establishment charges, and, on the balance, it was their view, not on consideration of politics, but from the point of view of the national Exchequer as apart from the view of the Admiralty exchequer, that, it was economy to keep the in being. The hon. and gallant Member spoke of Rosyth, Chatham and Sheerness. There is a great difference, I would suggest to the House, between saying that a great naval establishment is strategically unnecessary when you are starting with an absolutely clear field to say how many dockyards you shall establish. Every one of these dockyards represents an immense capital expenditure which is already locked up there. It also represents a very large amount of capital expenditure not included in the Estimates, on the part of the population which has grown up around the dockyard, the naval population which lives in the vicinity, and whose whole existence is connected with it. In a time of financial depression you cannot scrap an immense amount of capital like that in order to suddenly start a new yard in an ideally situated centre. You have to carry on as best you can with the greatest economy, and under the circumstances you cannot indulge in heavy capital expenditure in order to establish a yard in an ideal situation. As to other yards mentioned by the hon. and gallant Member, I entirely agree with him in what he said as to Wei-Hai-Wei. I hope that one result of the Washington Agreement will be that we may be able to dispense with that yard in a few weeks' time. The hon. and gallant Member mentioned another dockyard, that at Jamaica, and suggested that, as evidence of our good feeling towards the United States, we should close it down. Not only do I agree with him, but I would like to point out that the Admiralty is so whole-heartedly in agreement that it actually closed the yard down in 1904, so that I hope that the hon. and gallant Member will be satisfied with the measure of foresight thus displayed.

Lieut. - Commander KENWORTHY

Provision is made in the Estimate for oil-fuel tanks, and for a Naval establishment at Jamaica.

Mr. AMERY

Oil tanks are necessary for the replenishing of our Fleet in North American and West Indian waters. There were one or two other points to which the hon. and gallant Member referred. One was the expense incurred at Dartmouth. I may say at once we are not satisfied with the position there, and we have a Committee inquiring very closely into the question. Dartmouth is a peculiar institution. We have to give both a naval and a general education. For the latter we require a scholastic staff, and for the naval education of course we have to have a naval staff. The institution therefore is bound to be more expensive on that account. With regard to the question of direct entry, although we are entirely in favour of it I may say that those we got during the War were absolutely the pick of our public schools. We are getting now nothing like as many applicants or so fine a type of boy.

Other matters have been raised in the Debate, including the question of battle squadrons. In view of the high importance of maintaining British interests, I do not see how we could do without the Mediterranean squadron or with a smaller squadron in the very anxious and uncertain situation in the East. When the day comes for universal peace we may consider a reduction, but in the present international situation and from the point of view of the efficient training of our men, I do not see how we can make any further reduction. As there are other Votes to come before the House to-day on which hon. Members will have opportunity of discussing these questions, I hope it may be possible to give me this Vote either now or within the next few minutes.

Rear-Admiral ADAIR

No one can accuse me of any desire to build battle- ships, because I may claim, more than a year ago, almost to have forestalled Washington, and, if the Admiralty had taken my advice then, perhaps there need not have been any Washington Conference. [HON. MEMBERS: "Oh!"] The result would have been the same. We have so much in our minds the maritime war in the North Sea that we cannot get away from it, but we have to consider the Pacific, the Atlantic, the China Sea, the Indian Ocean—thousands of miles of waterway, where during the last War we were dealing with hundreds. I said in that connection the other night, with regard to aircraft, that their radius of action is very small, and they will not in our time be able to cover those waters to which I have referred. They have to be taken there in carriers, and a carrier may be attacked by a much smaller but better armed ship. That smaller but better armed ship is liable to be attacked by a rather larger ship, and that larger ship by a larger ship still, if one be there. Ultimately, therefore, we come back to the capital ship, whatever the capital ship may be, and I do not say that it is a battleship of the present day.

More than a year ago, when I was speaking on this subject of forestalling Washington, I observed that the Japanese were building as many battle cruisers as they were battleships, and for that very reason, that, although the battleships may not be suitable for traversing these thousands of miles of waterways far from their bases, battle cruisers are. Later on, on the Navy Estimates, I said that, although I was not advocating building any battleships last year, we must follow the other great nations who are building battle fleets. We cannot, as the Parliamentary Secretary said, be weaker than they. The Americans have their three post-war battleships. We cannot afford to be behind them. So that these two I consider essential, but I agree with what my hon. and gallant Friend the Member for Central Hull has said as to battle cruisers; and I think they will be more cruisers than battleships, from the little that I know about them. There is one other point which is always overlooked, and to which I am glad the Parliamentary Secretary drew attention. It is the power of defence of these great ships against aircraft and submarines. People talk about torpedoing battleships and so on, but they forget that that was not done in the last war, except in the three cases which have been mentioned, and which were at a very early stage of the proceedings and due to an appalling blunder on the part of the Admiralty. No such thing occurred later, nor is it likely to occur in the future. As to attack by aircraft with 3,000 lbs of explosives coming down and blowing them to smithereens, possibly the aircraft would come down before the bomb did.

Viscount CURZON

I have not had a chance of getting into the general discussion on the Navy yet, and there are one or two remarks that I want to make. First of all, as regards the large reductions that have been made in the Estimates, as set forth in the explanatory statement of the First Lord, one which I take to be most serious, and which I know will be taken to be most serious by the Navy, is the reduction in the complements of first-line ships. That is a direct blow to efficiency. It is a reduction of 15 per cent., and I should like to ask from what Department can these men possibly be taken? These complements were fixed in the light of the lessons learned in the War. The only directions in which the complements of first-line ships can be reduced are in regard to supply parties, and in the shell-rooms and magazines. I cannot see where else they can be got from.

Mr. AMERY

Those reductions are only to be made in peace time. We are not reducing the war complements, but are providing for men in time of war.

Viscount CURZON

At the outbreak of war those men will not be there and will not be trained, and some time will have to elapse while the men whom you put in to bring the complements up to strength are shaking down. In all these questions of naval reductions, however well-justified and grounded they may be, have the Dominions had their full say? Have all the considerations been fully taken into account? I do not know whether matters of this kind come before the Committee of Imperial Defence; I do not know whether this is the view of the Naval Staff. I should like to know, and I think it would reassure quite a large number of people in this country to know, whether these reductions are dictated by reasons of economy only, or whether they are the deliberate considered opinion of the Naval Staff. I think we really ought to know that in order to get at the true facts.

It must be remembered that in 1914 we had a strong Navy, but we always justified our strong Navy on the ground that we had a very small Army. We said that if we did not have an Army, at any rate, we must have a Navy, just to keep our end up. In 1922 we have a weaker Navy in many ways; we are not even up to a one-power standard. At the same time we have a weak Army. I beg the Government not to forget the speech made by the hon. and gallant Field Marshal the Member for North Down (Sir H. Wilson) on the Army Estimates the other day. The analogy holds good in naval as well as in land work, and the worst form of Navy I can think of is a Navy just too small to win any war in which you are engaged. There is one point in which a weak Navy might make up for its weakness, and that is in increased mobility, but there again you are economising. You are economising in oil. You are not having the fuel stations that the Admiralty and the staff consider necessary. You are cutting down in the interests of economy, but that is a most serious economy to make. It may be quite right, but I do hope that it is not only the financial situation that has been taken into consideration. Have the Dominions been consulted? Do they concur in the reductions that are being made? It is they who will suffer in the first instance in a war in the Pacific. Think of Australia; think of New Zealand. Do they concur?

I want to make one or two remarks with regard to the speech of the hon. and gallant Member for Hertford (Rear-Admiral Sueter). He first of all laid it down that capital ships were no good, in spite of the fact that an inquiry has been held in this country which has decided to the contrary, and in spite of the fact that every other nation with the exception of France and Italy—who cannot afford to build any more—in spite of the fact that other first-class Powers like America and Japan have gone in for building first-class ships, and would have gone in for a much larger programme had they not been stopped by the Washington Conference. It was not that the capital ship was no good; it was the Washington Conference.

When the hon. and gallant Member says that they are no good, he quite leaves out of account the facts as we knew them during the War. He turned round and accused me of having said that submarines had not torpedoed any capital ship. As a matter of fact I never made such a statement in this House. It was made by the hon. and gallant Member for Shettleston (Rear-Admiral Adair), but I believe it to be an absolutely true statement. During the War, and more than ever towards the end of the War, in spite of what the hon. and gallant Member for Hertford says, and in spite of what was said by the right hon. Gentleman the Member for South Molton (Mr. Lambert), the Grand Fleet was able to move about in the North Sea with absolute impunity, and pretty well absolutely unhampered in its operations by submarines or mines. I can give a particular case. On the 19th August, 1918, just after the Battle of Jutland, a most elaborate trap was set by the German Fleet for our Fleet. The German Fleet came out. It was a weak force, and our Fleet went out and tried to catch it and cut it off. They were deliberately drawn over two lines of German submarines which were waiting for them, one off Newcastle and one a little further down. Torpedoes were fired, but all those torpedoes missed, owing to the very good screening of the destroyers and frequent alterations of course on the part of the Fleet. It is the most difficult thing in the world, and I say so without fear of contradiction from a submarine officer like the hon. and gallant Member for Hertford, for a submarine to attack a big fleet that is well screened by destroyers and is making frequent alterations in its course. It was not successful during the War.

Rear-Admiral SUETER

There were very good reasons for that. It was because the Germans concentrated their U-boats on our mercantile marine, and deliberately left our battleships alone.

Viscount CURZON

That was a case of deliberate concentration of submarines against our Fleet. I will put another point to the House. Submarines cannot operate in mass formation. They have to have something like six miles between submarines operating against the Fleet. Even if you concentrate all the sub- marines, as the Germans did in the North Sea, you could not possibly employ more than 20 or 30 against a fleet in a limited area. There were several instances in the War. There was one when the "Warspite" was returning from Jutland. There was a concentration of submarines outside Rosyth, but she eluded them by means of high speed. The submarine menace is an exploded one so far as the Fleet is concerned. It can operate against merchant ships, and in that case it is an instrument of murder and nothing else; but so far as fighting ships are concerned it is of very little use. The hon. and gallant Admiral also asked what has the First Sea Lord done for air power in the Navy between 1909 and 1918. I was very much surprised at his saying that. From the moment the present First Sea Lord took over command of the Grand Fleet air power began to be developed in the Fleet to an extent it never had before. Every battleship at the end of the War was carrying at least two aeroplanes.

Rear-Admiral SUETER

May I submit that it was then too late.

Viscount CURZON

I agree, but the hon. and gallant Gentleman said: "What has the First Sea Lord ever done?" The First Sea Lord had never had a chance before. Aircraft carriers were being employed to an extent they never had been. Air reconnaissance was being undertaken and the air was being employed in every direction it could. It is a most unjust charge to make. He never got a chance of it before, and as soon as he did, a great deal was done. I agree that a great deal may be done by the use of aircraft, and had the Commander-in-Chief at Jutland been in an aeroplane instead of on his ship the result of the battle would probably have been very different.

The hon. and gallant Member for Central Hull (Lieut.-Commander Ken-worthy) has advocated a reduction in the number of cruisers in squadrons abroad. Trade follows the flag, and I should like to ask whether the Admiralty were really wise in the interests of economy to withdraw the squadron from the south-east coast of America. I am told by officers who were in that squadron that British trade went ahead from the moment it appeared at that station, and was going ahead with in- creasing momentum all the time. Englishmen who had obviously forgotten that they were Englishmen at all used to go on board the ships and a very great blow was struck at British trade in that part of the world when the squadron was withdrawn. It is a very great pity that it was withdrawn, and I hope if it becomes possible at some future date it will be replaced on that station.

I quite concur in what the hon. and gallant Gentleman said about Pembroke dockyard. I am not in the least convinced by the explanation of the Admiralty. I think that dockyard is quite useless for naval purposes. It is not required, it is waste, and I think in the interests of economy it should be done away with. It may be that hardship will be inflicted, but hardship is being inflicted in every Service owing to the necessity for economy, and I am not in the least impressed by that. Suppose the Admiralty were rationed and told they had so much money to spend, would they keep Pembroke dockyard going? I am sure they would not. It spells a very great loss of money. The Government ought to give a further explanation of what their policy really is with regard to dockyards. A small dockyard like Pembroke is of no use whatever. The great yards of Devonport, Portsmouth, and Rosyth will always be wanted, but a small yard like Pembroke should certainly be brought to an end.

I hope the Admiralty will keep a careful eye on the destroyer question. We talk in the Navy about capital ships and we get lost in talking about whether we should build them or not. I really urge the Admiralty not to be in too much of a hurry to build these two capital ships. You would be able to incorporate many more of the results of the experiments of the late War if you were to delay the laying down of those ships or, at any rate, one of them. Of course the armament firms want them laid down now, but go as easy as you can with the building of them. Do not let us think only in terms of capital ships. Do not forget the destroyer position. America has nearly twice as many destroyers as we have, and the destroyer was proved to be of importance in the late War, and I hope the Admiralty in future will keep a very careful eye upon the destroyer question, which is very important indeed.

Sir H. BENN

We have heard so much to-day on the subject of air power in substitution of capital ships, and generally of the Navy, that I think it will not be out of place to say something about our experience during the late War. I know what was attempted and what was done in the matter of destruction on the Belgian coast. Day by day air squadrons went out from Dunkirk to try to destroy the batteries and to put Zeebrugge out of action. I have yet to learn that they succeeded in destroying one battery. The Tirpitz and other batteries bombarded us day by day, and their positions were exactly known. Dunkirk was bombarded from time to time with 15-inch shells, but the Dunkirk Air Force could not destroy the gun. In the same way, our own patrol went up and down the Belgian coast every day off Ostend and off Zeebrugge. For three years they kept up that patrol. Day by day the Germans tried to interfere with it, but not one naval ship was sunk by German aircraft. Some minor damages were done, but they entirely failed to stop or to interfere with us at all. I do not mean to say that aircraft are not improving rapidly. They may in the future do what they have failed to do in the past, but up to the present they have not been effective against fleets or as against batteries. We had a most interesting and useful speech from the hon. and gallant Member for Central Hull (Lieut.-Commander Ken-worthy). I am glad that for once I am in sympathy with what he says. I do not agree in every particular with the references to the dockyards or to the slips or the gunboats in China, but in the main his speech was most useful.

I should like to ask the Parliamentary Secretary whether any steps are being taken to re-organise the work in our dockyards; to re-organise the business side of our dockyards. Speaking from personal observation during the War, there is a very large amount of money to be saved if those dockyards were run on thoroughly businesslike lines. There are too many watertight compartments even in the dockyards, and the naval superintendent in charge of the dockyard tries his best to get those departments working to gether, but very often he is not able to manage it. In the Service, among the fighting Fleet, they look upon the dockyard Member of Parliament as the worst enemy to the fighting Service. They do not mean it personally, and certainly it is not directed against the hon. Member for Devonport (Sir C. Kinloch-Cooke), but the effect of the questions continually asked in this House in regard to minor dockyard matters has a very bad effect upon the organisation and work in the dockyards. That, I can assure the hon. Member for Devonport, has been my personal observation.

There is another small point in which a considerable amount of waste might be saved, and that is in the supply of stores. The stores supply during the War was magnificent, admirable, in connection with all naval matters, but there were great waste of stores at sea. A very much tighter hand might be put upon the use of stores at sea. If the Parliamentary Secretary is going to make a further reply, I should be much obliged if he would throw some further light upon the rates of pay set out in the Geddes Report, 3rd volume, on page 149, where it is definitely stated that a sub-lieutenant has total pay of £514, and a lieut.-commander £899. It is a case of don't-they-wish-they-might-get-it, and that there are other emoluments in the one case of £331 and in the other of £352. Many of us would like to be informed on this matter.

Dr. MURRAY

I should like to ask a question about the prize money. Some hon. Members may think that that is a matter only for the naval ships, but I would remind them that from my constituency during the War there was a bigger proportion of men who went into the Navy than even from Devonport. A large number of these men were Royal Naval Reserves, and they were engaged as gunners on merchant ships during the War. I do not see, except for some red-tape Regulation, any justice or equity in saying that men who worked as gunners on merchant ships are not entitled to prize money as well as the men who were on board battleships, and who very often spend most of their time in waters at home. Because they were technically on sea-going ships, namely, battleships, these men get the prize money, but gunners on board sea-going merchant ships all over the world do not get a penny of this prize money. That is not fair, and I do not think that any Regulation of the Admiralty should stand in the way of an equitable arrangement being come to with regard to the distribution of the prize money. If there is no Regulation of the Admiralty to prevent it, these men ought to receive a share of this money, and if there is any such Regulation, steps ought to be taken to modify it in the interests of justice to these men. Scores of these men in my constituency see their neighbours who were on board battleships, most of the time in Rosyth or in Scapa Flow, getting prize money, while they get no share, although they manned the guns of merchant ships which roamed all over the seven seas. It will be a stigma upon the Admiralty if they allow that state of things to remain. They should reconsider the whole matter of prize money, and see that it is distributed in as fair a manner as possible. I admit that you must draw the line somewhere, but these men who manned the guns on the merchant ships ought not to be forgotten. I hope the Admiralty will take their case into consideration and see that justice is done.

Sir C. KINLOCH-COOKE

I am very glad that hon. Members have given me a good reception, because it shows that they have anticipated somewhat what I am going to say. There is no doubt that before I sit down I should lay out three or four hon. Members who have endeavoured to say things which they should not say in regard to the Royal Dockyards. The hon. Member for Greenwich (Sir Hamilton Benn) has taken refuge in flight. That is hardly like him, but I hope that he will come back before I have finished. The House would hardly suppose after hearing his tirade against the dockyards and against the officers who administer those yards that he was himself a member of the Dockyard Members Committee, and that he has signed during the last three years every letter that has been written referring to matters connected with the dockyards and with the lower deck, and yet he has the effrontery to get up and say that the sending of those letters, and the deputations which we have received, is against discipline in the yards, and opposed both by the Navy and the dockyards. It is nothing of the kind. The officers in the yards welcome the opportunity that is given them to hear the views expressed by the men to the Dockyard Members Committee, and through that Committee to the Admiralty, on matters which concern the inside work of the dockyards, because they themselves are unable very often to put their hands on the very spot which we as Members of Parliament are so often able to do. The hon. Member for Greenwich went further. Not only did he attack dockyards themselves, but he attacked the Admiralty superintendents. I think that that is going rather too far.

Sir H. BENN

I did not attack them. On the contrary, my sympathy is always with the Admiralty superintendents.

Sir C. KINLOCH-COOKE

I am glad to hear that I was mistaken. Certainly I was under the impression that the hon. Member said something that was not altogether in favour of the Admiralty superintendents. At any rate, his experience of them and of the dockyards, I venture to think, is not so great as mine. I have known a great number of Admiralty superintendents, and all I can say is that they manage the dockyards admirably. We do not want any change or any views on this subject from the hon. Member for Greenwich. I was equally surprised to hear the Member for South Battersea (Viscount Curzon) say that we do not want Pembroke Dockyard. I think that we do. It may be, as we often hear from the right hon. Member for South Molton (Mr. Lambert), that the German fleet is at the bottom of the sea, but there are dangers on the other side. Of course, with the present Government, we all hope for peace in Ireland, but there is a possibility that in years to come, even in the near future, there may be a necessity for Pembroke Dockyard or for some dockyard on that coast, and therefore, why close down this dockyard altogether? The hon. Member for Central Hull (Lieut. -Commander Kenworthy) of course moved a reduction. He always does on every Vote. It is not only a habit with him, but it is a religion. When he entered the House, the first thing he did was to shock the whole House by not only voting for a reduction but actually telling in the Division Lobby. That anyone who served his country so well as he has done in the Navy should celebrate his entering the House by moving a reduction in the Naval Estimates was, to my mind, appalling.

Mr. DEPUTY-SPEAKER (Mr. James Hope)

The hon. Member cannot go into the antecedents of the hon. and gallant Member for Central Hull.

Sir C. KINLOCH-COOKE

At any rate, his example was followed to-day by the hon. Member for the Bodmin Division of Cornwall (Mr. Foot). That he should celebrate his arrival in the House by supporting a reduction in the Navy Votes is, to my mind, very surprising, especially as the hon. and gallant Member for Central Hull included in the reduction a reduction of His Majesty's Dockyards. The speech which was made by the hon. and gallant Member for Hertford (Rear-Admiral Sueter), who has gone away, was a deplorable speech. When he told us that we should not lay down the two ships now, he must have forgotten that the only reason why we are laying down the two ships now is in order to be up to the one-Power standard. If we did not lay down the two ships we should not have the one-Power standard. Therefore it becomes necessary to lay down those ships. That is my answer to the Noble Lord the Member for South Battersea. I believe that it would be Very much better to postpone the laying down of these ships if possible, but it is not possible, because if we did postpone it we should not have the one-Power standard. In conclusion, may I remind the Parliamentary Secretary of the importance of railway fares for officers and men? In the memorandum to the White Paper it is stated that the First Lord had made recommendations to the railway companies to allow these reduced fares. The other day he had to tell me that the railway companies had refused to give the reduced fares. I would ask him once more to make another appeal to the railway companies in order that these reduced fares may be restored.

Sir B. FALLE

I thought the hon. and gallant Member for Hertford (Rear-Admiral Sueter) a little unfair to his own Service when he told us that, if the Germans had concentrated on His Majesty's ships as they concentrated on the mercantile marine, they could have sunk a larger number of them. He reinforced his argument by telling us of the loss of the "Cressy," the "Aboukir," and the "Hogue." He did not tell us that these ships had no torpedo screen, as is usual, that they were moving slowly and, perhaps most important of all, that British officers at that moment had not yet learned the very important fact that in the case of these attacks you cannot always observe the principle that you must not desert your friends. When the first of these ships was torpedoed the two others went to its assistance and laid themselves open to the shots of succeeding torpedoes. I deprecate very strongly also the allusions which the hon. and gallant Member made to fighting with A or B and to the risks which we should run with such and such Powers and the risks that those Powers presumably would run from us. I think that it is a great mistake for nations to be taught that there is one nation or a second or a third nation from which they may run serious risks. If you were to continue this sufficiently long the peoples themselves of the different nations would very easily grow to the belief that war had become a certainty. Prophecy of that kind to my mind is very mistaken. I can remember reading, as a boy, that Lorn Granville, who was then our Foreign Secretary, only one fortnight before the outbreak of the Franco-German war in 1870, declared that there was not so much as a cloud on the horizon. Yet within a fortnight of this prophecy, by the man who had the advantage of reading all the official correspondence and therefore knew more than anybody else in the country, that war broke out.

Coming to the question of the 75 per cent. bonus which is given to men in the dockyards, may I point out that it is given to the established men practically from the moment the bonus begins, but it is not given to the hired men in the dockyard except after the 1st of March, 1920. The hired men look on this as unfair. All these matters have two sides, and a great deal may be said on each, but the fact remains that many of these men who left the dockyard before 1920 have, by a mistake of the accountants, been given the 75 per cent. People unfortunately are in these matters animated to a certain extent by jealousies, and it is looked upon by the excluded men as extremely unfair, as they have done the same work in the same yard, that they should not receive the 75. per cent. just as their established friends have done. So far we have not yet been able to get any reason—we have had excuses made—as to why these men should not receive the 75 per cent. The fact is that, owing to a mistake, some of them have. I have three friends who left the dockyard on the same day in November, 1919. Two were fortunate enough to receive the 75 per cent. but, in the case of the third, they did not make any mistake, and he has got only 40 per cent., and it is easily understood that he is a little sore. Among all classes in this country the difference between 75 per cent. and 40 per cent. is a very serious one.

My hon. Friend the Member for Devonport (Sir C. Kinloch-Cooke) has spoken about the railway fares for officers and men, and I would like again to press this subject on the attention of my hon. Friend. Then in reference to His Majesty's ship "Thunderer," may I point out that it is a Portsmouth ship with Portsmouth men. For some reason of red tape she has been sent to a Western port to be refitted. That means that the officers, cadets and men must lose two days of their leave in travelling and that they must pay costly railway fares from the refit port to their own port. If the refitting of this ship in a Western port is absolutely necessary cannot the officers, cadets and men be treated exceptionally by being allowed to travel at half fare, or, better still, by being allowed free passes from the refit port to their own port?

Sir F. BANBURY

Why is it that it is necessary to give to the officers, seamen and boys of the Navy three times the wages that they received in 1914? The seamen and boys are boarded and lodged and clothed. Therefore the increased cost of living does not affect them. But even if the increased cost of living did affect them, it is only about 88 per cent. now above the pre-war level, and yet the Admiralty are giving an increase of 200 per cent. in the wages that the men and boys are paid. I do not blame the Admiralty for it. It is no doubt the effect of the mad race to raise everybody's wages and salaries which took place under the auspices of the Prime Minister two or three years ago, when we thought we were to have a new world or millennium. We might have a far stronger Navy, which is absolutely necessary, and we might have less unemployment, if we gave lower wages to these men and boys, for we should then have a large sum available for increasing the number of men engaged. Take the case of the agricultural labourer. He is receiving about double what he had before the War. The railwaymen's basic wage is double what it was before the War. They are getting rather more now, but in the case of the cost of living coming down they will get double what they had before the War. Why give seamen three times what they had before the War? It seems incomprehensible.

Sir B. FALLE

The seaman received very little before the War.

Sir F. BANBURY

But he had a very fair and comfortable job. He is serving his country and has everything provided for him. We have not got the money to pay these excessive wages. It is the same all through the Civil Service. The idea in all Government Departments has been to advance wages utterly irrespective of whether we could not get the work done for much less. It is no use telling me that we could not get men into the Navy, where they are lodged

and fed and clothed, for very much less than we are paying now.

Sir B. FALLE

The sailor before the War did not get sufficient food to keep him. He did not get all his kits, and he received about 11s. a week.

Sir F. BANBURY

We shall all have to go back to our position before the War. I am getting about half what I had before the War. Why should these people get more? If we can get men at a lower rate why should we not do it? We must act in a business-like way in this matter. How is it that we are spending £3,648,000 on non-effective service for the officers and £5,326,000 on non-effective service for the men?

Question put, "That '£12,000,000' stand part of the Resolution."

The House divided: Ayes, 121; Noes, 42.

Division No. 64.]	AYES.	[1.52 p.m.
Adair, Rear-Admiral Thomas B. S.	Fraser, Major Sir Keith	Murchison, C. K.
Amery, Leopold C. M. S.	Ganzoni, Sir John	Murray, William (Dumfries)
Armstrong, Henry Bruce	Gardiner, James	Neal, Arthur
Ashley, Colonel Wilfrid W.	Gardner, Ernest	Newman, Colonel J. R. P. (Finchley)
Atkey, A. R.	Gibbs, Colonel George Abraham	Newton, Sir D. G. C. (Cambridge)
Baird, Sir John Lawrence	Gilmour. Lieut.-Colonel Sir John	Norman, Major Rt. Hon. Sir Henry
Banbury, Rt. Hon. Sir Frederick G.	Goff, Sir B. Park	Norton-Griffiths, Lieut.-Col. Sir John
Barnett, Major Richard W.	Grant, James Augustus	Parry, Lieut.-Colonel Thomas Henry
Barnston, Major Harry	Green, Joseph F. (Leicester, W.)	Percy, Lord Eustace (Hastings)
Bartley-Denniss, Sir Edmund Robert	Greenwood, Rt. Hon. Sir Hamar	Perkins, Waiter Frank
Benn, Capt. Sir I. H., Bart. (Gr'nw'h)	Greig, Colonel Sir James William	Pollock, Rt. Hon. Sir Ernest Murray
Bennett, Sir Thomas Jewell	Hacking, Captain Douglas H.	Pratt, John William
Betterton, Henry B.	Hamilton, Major C. G. C.	Preston, Sir W. R.
Bowyer, Captain G. W. E.	Hannon, Patrick Joseph Henry	Pretyman, Rt. Hon. Ernest G.
Boyd-Carpenter, Major A.	Harmsworth, C. B. (Bedford, Luton)	Raeburn, Sir William H.
Bramsdon, Sir Thomas	Harris, Sir Henry Percy	Renwick, Sir George
Brassey, H. L. C.	Haslam, Lewis	Richardson, Sir Alex. (Gravesend)
Breese, Major Charles E.	Henderson, Lt.-Col. V. L. (Tradeston)	Roberts, Rt. Hon. G. H. (Norwich)
Bruton, Sir James	Hennessy, Major J. R. G.	Roberts, Samuel (Hereford, Hereford)
Buckley, Lieut.-Colonel A.	Hinds, John	Samuel, A. M. (Surrey, Farnham)
Bull, Rt. Hon. Sir William James	Holbrook, Sir Arthur Richard	Seager, Sir William
Burdon, Colonel Rowland	Hood, Sir Joseph	Seddon, J. A.
Carew, Charles Robert S.	Hopkins John W. W.	Shaw, William T. (Forfar)
Chamberlain, Rt. Hn. J. A. (Birm. W.)	Hurd, Percy A.	Shortt, Rt. Hon. E. (N'castle-on-T.)
Cheyne, Sir William Watson	Inskip, Thomas Walker H.	Stanley, Major Hon. G. (Preston)
Colfox, Major Wm. Phillips	James, Lieut.-Colonel Hon. Cuthbert	Steel, Major S. Strang
Conway, Sir W. Martin	Jameson, John Gordon	Sugden, W. H.
Curzon, Captain Viscount	Johnstone, Joseph	Taylor, J.
Davies, Sir David Sanders (Denbigh)	King, Captain Henry Douglas	Thomas, Brig.-Gen. Sir O. (Anglesey)
Dawson, Sir Philin	Kinloch-Cooke, Sir Clement	Thomson, Sir W. Mitchell- (Maryhill)
Dockrell, Sir Maurice	Lindsay, William Arthur	Waring, Major Walter
Doyle, N. Grattan	Locker-Lampson, Com. O. (H'tingd'n)	Warner, Sir T. Courtenay T.
Edgar, Clifford B.	Loseby, Captain C. E.	Williams, Lt.-Col. Sir R. (Banbury)
Edge, Captain Sir William	McLaren, Robert (Lanark, Northern)	Willoughby, Lieut.-Col. Hon. Claud
Edwards, Major J. (Aberavon)	M-Lean, Lieut.-Col. Charles W. W.	Wills, Lt.-Col. Sir Gilbert Alan H.
Edwards, Hugh (Glam., Neath)	Macnamara, Rt. Hon. Dr. T. J.	Wise, Frederick
Eyres-Monsell, Com. Bolton M.	Macpherson, Rt. Hon. James 1.	Worthington-Evans, Rt. Hon. Sir L.
Falle, Major Sir Bertram Godfray	Malone, Major P. B. (Tottenham, S.)
Fell, Sir Arthur	Mitchell, Sir William Lane	TELLERS FOR THE AYES.—
Fildes, Henry	Molson, Major John Elsdale	Colonel Leslie Wilson and Mr. Parker.
Fitzroy, Captain Hon. Edward A.	Moore, Major-General Sir Newton J.
Forrest, Walter	Moore-Brabazon, Lieut.-Col. J. T. C.
NOES.
Ammen, Charles George	Davies, Rhys John (Westhoughton)	Gillis, William
Birchall, J. Dearman	Edwards, C. (Monmouth, Bedwellty)	Grundy, T. W.
Bowerman, Rt. Hon. Charles W.	Erskine, James Malcolm Monteith	Hallas, Eldred
Collins, Sir Godfrey (Greenock)	Galbraith, Samuel	Hancock, John George
Harmsworth, Hon. E. C. (Kent)	Murray, Hon. A. C. (Aberdeen)	Thorne, G. R. (Wolverhampton, E.)
Hayday, Arthur	Murray, Dr. D. (Inverness & Ross)	Thorne, W. (West Ham, Plaistow)
Henderson, Rt. Hon. A. (Widnes)	Naylor, Thomas Ellis	Watts-Morgan, Lieut.-Col. D.
Hirst, G. H.	Poison, Sir Thomas A.	Wignall, James
Hodge, Rt. Hon. John	Rattan, Peter Wilson	Williams, Aneurin (Durham, Consett)
Hogge, James Myles	Rendall, Athelstan	Wilson, James (Dudley)
Jones, Morgan (Caerphilly)	Richardson, R. (Houghton-le-Spring)	Wood, Major M. M. (Aberdeen, C.)
Kennedy, Thomas	Royce, William Stapleton	Young, Robert (Lancaster, Newton)
Kiley, James Daniel	Sitch, Charles H.
Maclean, Rt. Hon. Sir D. (Midlothian)	Sueter, Rear-Admiral Murray Fraser	TELLERS FOR THE NOES.—
Mosley, Oswald	Thomas, Rt. Hon. James H. (Derby)	Lieut.-Commander Kenworthy and
		Mr. Rose.

Third Resolution read a Second time.

Sir D. MACLEAN

I beg to move to leave out "£1,632,990 8s. 6d.," and to insert instead thereof "£1,632,890 8s. 6d."

2.0 P.M.

This is another Excess Vote similar in its framework to those with which we dealt last night. There is an exceptionally interesting feature in connection with this in that we have before us a statement from the Comptroller and Auditor-General on the Navy Appropriation Account for 1920–21. Hon. Members will bear in mind that we are dealing in this discussion not with a matter which has arisen in the current financial year, which ends on 1st April next, but with a matter which has arisen in the year 1920–21. As I remarked last night, this is an example of our method of procedure, in very solemnly, and apparently securely, closing the stable door after the horse is stolen. I hope the Memorandum to which I have just referred and with which I will deal in more detail in a moment means that the Treasury is at last awake to its duties in connection with the control of the finance of the country in general and of the Departments in particular. Dr. Lawrence Lowell, the great American authority, in his classic work, "The Government of England," says, in his chapter on the Treasury: The most important of all Departments and the one which exhibits, in the highest degree, the merits of the English Government, is the Treasury. It is the central Department of the administration which keeps in touch with all the others, and maintains constant financial control over them. That was written, of course, before the War. I think it admirably sums up the duties which the Treasury used to discharge in those days. We often urge upon Members of this House that it is their duty to maintain financial control over the expenditure of the Government, but that can only be a partial control. Everybody who has had anything to do with administration knows full well that, whatever we may do here it must fall short of the value of the Treasury being fully alive to its responsibilities and discharging them day by day, especially in that portion of the year when the Treasury calls upon various Departments to submit their respective Estimates and when the comments of the Treasury are made. These used to result in very great savings to the National Exchequer.

The Public Accounts Committee in the course of their investigations dealt with the Navy. It is a very fitting conclusion to our morning's work on the Navy that we should have this particularly illustrative example of the waste which has been going on in naval administration. I do not say that the Navy is worse than other Departments. I think in many respects the Navy has been far loss blameworthy than some others. I wish to say again, as I said on other occasions, that the way in which the Navy present their accounts provides a good example which other Departments might well follow. At any rate, I can understand the Navy Estimates, and I fail utterly to understand the Army Estimates. In the course of their investigations of the accounts for the year 1920–21, the Public Accounts Committee have submitted this most useful statement by the Comptroller and Auditor-General, and it deals in particular with the Excess Vote which we have now in our hands. What has happened is this. In that year the Navy spent no less than £7,510,527 more than the actual gross expenditure which was authorised. They would in normal circumstances have come to us and asked for that sum, but there were some surpluses on Appropriations-in-Aid which they have been fortunate enough to realise. These Appropriations-in-Aid amount to £5,877,537, therefore reducing the Excess Vote which they now ask us to authorise, and the Treasury and the Exchequer subsequently to pay, to a sum of £1,632,990.

A letter was written by the Treasury to the Secretary to the Admiralty on the 7th February of this year, which contained a very serious indictment of the methods of the Admiralty in their control of their finance, and it arose on this particular Vote with which we are now dealing. Their charges were three or four in number, and I shall be as brief as I can in dealing with this somewhat complicated matter. Their first complaint was that this was not the only occasion upon which they had felt it their duty to reprimand—because that is what it amounts to—the Admiralty for their slackness in this respect. This is the second consecutive year in which they have drawn their attention to it. The Admiralty, in reply, stated that, in winding up the results of the War, they could not be expected to get their accounts in apple-pie order, as no doubt in an ideal state of affairs they ought to be. The Admiralty Accounting Officer, in specific terms, admitted the justice of the criticism of the Treasury. But that admission did not by any means stop the practice, because they seem to have gone on the old, bad lines again, and the charge of the Treasury against the Admiralty is summed up in one sentence. They say: It is obvious that proper Parliamentary and Budget control cannot be exercised when Departments have so little knowledge of receipts and expenditure as is revealed in this case. That is a very sharp, definite, severe condemnation of the financial practices which are being carried out in this particular Department. They go on to ask whether forecasts are furnished regularly by those Departments, during the closing months of the financial year, of the probable expenditure, and whether statements are rendered subsequently to the close of the financial year showing estimated actual expenditure, and they require further information regarding the position as to the settlement of War liabilities to contractors. Dealing with the general position first, it cannot be said that there was no warning administered to the Admiralty by this House. Although the House is, I think, very blameworthy in this matter itself, both in the Committee and on the Report Stage of these Votes, that charge cannot be made against some hon. Members and some parties in the House.

Time and time again, these warning notes have been issued from various parts of the House, and the Prime Minister himself, in the now celebrated letter of 20th August, 1919, to the heads of the great Departments, said: The time has come when each Minister ought to make it clear to those under his control that if they cannot reduce expenditure they must make room for somebody who can. That is the public temper, and it is right. Therefore, you have got general warnings and specific warnings from private Members of this House, you have the official request from the Prime Minister as far back as 1919, and yet you find this state of things revealed in the year 1920–21. I only hope that when the Accountant-General goes into the items of the current year he will find a very great improvement, and it is because I wish to bring what public pressure I can to bear on this and other Departments that I am calling attention to this matter to-day.

There are two examples in the Report of the Comptroller and Auditor-General to which I would specially draw the attention of the House, and they can be found on pages 201–3 of the Naval Appropriation Account Report, copies of which may be obtained in the Vote Office by any hon. Member interested. First of all, let me deal with the question of the settlement of war liabilities to contractors. It says on page 201 that in 1914 the Admiralty entered into a contract with a contractor for the annual supply of a certain commodity. I want to know what that commodity was and what was the name of the contractor, if it can, as indeed it should, be given. The arrangement was this, that if that contractor's annual profits exceeded a certain amount, the Admiralty should be entitled to an abatement in the contract price for the subsequent year—on the face of it a very proper and a very businesslike arrangement. The Comptroller and Auditor-General went into this matter, and he tells us that it appeared to him that in the years 1919 and 1920 the profits accruing to this particular contractor were of such a nature as entitled the Admiralty to a considerable reduction in the price for the then subsequent year, and he asked the Admiralty the very obvious question whether they had got that reduction in price. The answer was, "No; the matter is still under consideration." At the present moment the position is this that on this particular contract alone the Navy Vote has been overcharged by an amount which is estimated to exceed £100,000. That is an example of slackness in a case which was asking for attention and in which, if there had been anything approaching adequate control, the benefit to the nation would at once have been reflected in the price of the year subsequent to that in which the contractor's profits were of such a nature as to justify a substantial abatement of price. Nothing was done. The thing is still under consideration, I suppose, but meanwhile £100,000 in this Excess Vote is due entirely to lack of effective control by the Admiralty over this particular contractor's transactions. I want to know what was the commodity, and what was the name of the contractor.

Then they take another example of this lack of control. A drifter called the "Colonel" arrived at Sheerness Dockyard in October, 1919, prior to expropriation, that is, I suppose, to return to its original owners, and the repairs were started at Sheerness Dockyard without any specific orders from the Admiralty, who, meanwhile, were negotiating with the owners for a lump sum settlement of the claim. Without waiting, as I say, for that, repairs were commenced. In December, about three months afterwards, the particular Department of the Admiralty concerned arrived at an agreement with the owners to pay £3,500 in lieu of reconditioning of the drifter, but, meanwhile, it was found out that no less a sum than £1,300 had been already spent in necessary repairs and other measures to recommission the vessel to return to the owners, and, of course, the Admiralty said, "We agreed to give you £3,500 for reconditioning, but you ought to allow us something, at any rate, for the £1,300 already spent." The owners said, "No; we will not." After some negotiation—it is difficult to realise it, but this is what happened—the Admiralty bought it right out from the owners for £4,800, and they went on with repairs to the extent of £2,548, and a further expenditure of £449 brought up the total expenditure on this drifter—which the owners were prepared to take back for £3,500—to £7,797 and the Admiralty cut the loss in June, 1921, by selling it right out for £750.

Sir F. BANBURY

How was it the Admiralty sold the "Dautschland" for £3,500, when a Member of this House was prepared to pay £5,500, and another £15,000?

Sir D. MACLEAN

I have no doubt there are other examples than the one I am giving, and there is some interest attached to the example the right hon. Gentleman has just given, but to-day I will not refer to it, as it is a matter of judicial investigation at the present moment. The Comptroller-General made inquiries into the facts before him, and he asked for an explanation of the circumstances. The answer really given was that they were still recovering from the effects of the War. That really will not do. This was fully two and a-half years after the Armistice. There was no excuse for it except—I will not say incompetence, because the men are able enough—but sheer slackness. No one can suggest that the men at the Admiralty are not able men, because they are able men. Before the War, every business man who had anything to do with the Admiralty realised, when he came face to face with the Admiralty official representing that particular Department, that he dealt with one of the most competent men in the whole range of any business that any Government Department had to do. That seems to be gone. The men are still there, just as able, but this spirit of slackness, in which nothing seems to matter, money being poured out in all directions, resulted in the loss with which the House is now faced on this particular Excess Vote. You can go through this Report and find other examples, but I think the two I have indicated, which are brought sharply to our notice by the Comptroller-General himself, are sufficient evidence of what many of us have been continually urging upon the Government, that until they re-establish the Treasury so as to function, not merely in a critical sense, but an actively hostile sense to the various Departments concerned in cutting down extravagance, you never will get back to effective financial administration of the affairs of this country. Here is an example which brings a flood of light on one particular Vote, which is evidence of the general condition of affairs permeating the whole of the Government Departments. Turn where you like, you find the same thing, and the only way we can bring that to a head, and get back to the sound, high road of common-sense finance, is by teach- ing the Government what lessons we can, not by mere speeches, but by Votes in the Division Lobby, because that is the only thing they understand.

Mr. A. WILLIAMS

As I happen to be Chairman of the Public Accounts Committee, I think, perhaps, I ought to say a few words. My right hon. Friend who has just sat down has covered the ground very fully, and I am not going into the merits of the case, or anything in the nature of controversial criticism of details, but I do want to say, on behalf of the Public Accounts Committee, that we are very much impressed with the necessity of better accountancy in the Admiralty, and very much impressed with the fact that the Admiralty, admittedly, have lost touch altogether with their liabilities, as was, perhaps, inevitable in the War, when I believe 90 per cent. of the permanent staff were away, and they had to carry on with the remainder and temporary people. But in all the time since the end of the War, the Admiralty have not yet been able to get into touch with their liabilities, and I do not believe that the Admiralty, even at the present time, could tell us what their liabilities are, and are likely to be; nor, I venture to think, are the Admiralty sufficiently impressed with the necessity of putting this side of their work in a thorough order. They say that, so far as other duties will allow, they see the necessity of this, and they hope to put it upon a better footing, but I am perfectly sure I express the opinion of the whole of the Members of the Public Accounts Committee when I say that it is of first-rate importance that the Admiralty should wake up to the importance of this matter, and should make all the necessary efforts to put themselves on a thoroughly sound financial footing.

There is only one other point that I desire to make. I notice a tendency on the part of Ministers, when these Excess Votes come before the House, to say, when they have been before the Public Accounts Committee, that the Public Accounts Committee has approved of them. The Leader of the House used that phrase the other day. I immediately objected, and he modified the statement. I see it was used by a Minister in introducing an Excess Vote last night. It is not really correct. The Public Accounts Committee examine these Excess Votes chiefly from the point of view of regularity, to see that they are all duly authorised, in regular account form, and so on. We have not the right to go to any considerable extent into the question of policy: into questions of great extravagance I think we have the right to go, because that is irregularity in every sense of the word. The Votes come before us and all we have to do is to report to the House that we have no objection; that is to say, if the House on the merits of the case likes to vote money, we do not raise any objection on the point of regularity. These are my two points, and I wish to caution Ministers against the use of this word "approved" as if the Public Accounts Committee approved of these Excess Votes, which we are far from doing. Also, I should like to press upon the Minister who represents the Admiralty the vital importance of the Admiralty in this matter getting into touch and keeping in touch with their liabilities, and with the rate at which they are expending their money, so that before the year comes to an end they will be able to know, as they have not known for a considerable time past, whether or not they are overspending themselves.

Mr. AMERY

I certainly do not venture to complain of the way in which my right hon. Friend the Member for Peebles (Sir D. Maclean) has raised this question; it is of such real importance from the point of view of this House. It is undoubtedly essential for the effective work of this House that Departments should endeavour to present carefully drawn and as true Estimates as possible so that the House shall really know what it is voting, and know that at the end of the year that it is for these purposes, and not for other purposes, that sums of money have been voted. My right hon. Friend paid a very kind tribute to the general financial system under which the Admiralty works. In acknowledging that I should like to say that we do anxiously endeavour to try to get our Estimates as accurate as possible. I have had the figures looked up of our estimating before the War, in the years from 1908 to 1914. I will not go into details, but I notice that the percentage of variation on the Estimate as introduced, and the actual expenditure of the year, is from .45 per cent. to .16 per cent., or less than half 1 per cent., except for one year, 1911, when, owing to serious strikes, we were not able to spend anything like the money taken upon construction work, and, therefore, there was under-spending of over 4 per cent. But we want as soon as possible to get into a proper condition of things.

I want to make it quite clear to the House that there is not any question of the absence of Treasury control over expenditure, nor lack of careful administration. It is simply a question of the accuracy of the Estimates in regard to the very heavy and complicated liabilities left over from the Vote of Credit period during the War. The House is well aware that for a period of years we were not dealing with Estimates at all, but with Votes of Credit and the immense expenditure of thousands of millions under these Votes. At the Armistice the Admiralty had to cancel, and I think wisely, and at once, certain contracts. There were thousands of contracts to be dealt with, some of them of very great complexity. I have been looking into this matter. One contract consisted of 5,000 different items. The hon. Member for Consett (Mr. A. Williams) drew attention to what I think is the real gravamen of the charge, namely, not that the Admiralty is overspending, but that it is not in sufficient and close touch with the commitments of the War, and that we were not able in framing Estimates to say definitely whether the payments still outstanding would be cleared up in the coming year.

I want to submit that as a matter of fact that is one of the subjects which has taken up a very considerable part of my time since I have been at the Admiralty. A good deal of the delay and a great deal of the uncertainty as regards these matters is due to the very fact that we have had to keep in most continuous and close touch, and there has been prolonged controversy over these claims that have been made against us. We contend that by fighting them strenuously and, sometimes—I admit—at length as we have done, we have made very great savings to the public Exchequer. Some of these claims have never been presented until quite recently. If we had settled with some of these earlier our accounts would have been perhaps more satisfactory from the point of view raised by the hon. Gentleman, but they would have represented very heavy loss to the tax- payer. Let me give one or two instances of the kind of thing that occurs. A firm recently came to us with a very large claim for loss of profits, etc., the amount being half a million or thereabouts. On our basis we considered them entitled to £25,000. You cannot arrive in a moment at a settlement in regard to a matter where the different points of view is as profound as that, and which may involve any number of investigations, counter investigations and conferences. I could give other instances where the amount of claim has been as large as half a million and the final settlement has amounted to a few thousands. Ever since the Armistice we have been busy with these items, and by fighting many of them we have saved something like £7,000,000 to the taxpayer. It is for the purpose of securing these savings that we have necessarily had a considerable staff. If we had given way to pressure—sometimes pressure exercised in this House—and had got rid of staff more quickly, we might have made a loss to the taxpayer of a very considerable portion of those very substantial savings. From the point of view I have put forward, I am not in the least disposed to stand in a white sheet on behalf of the Admiralty. I believe we have made very substantial savings. I believe the reductions in staff we are making to-day may well lose something we might have saved by keeping the full staff we have had up till now.

It is quite impossible under these circumstances to make any sort of accurate forecast of these claims. Those Estimates would have had far less meaning if we had loaded them up with the maximum estimate of the sums to which we might find ourselves committed. It would have been no benefit to the House if we had framed our Estimates some £7,000,000 or £8,000,000 higher in order to cover all conceivable contingencies. I think it would really be better if we could put these matters entirely into separate Supplementary Estimates. I would give as an instance a small item of £450,000 referred to in the First Lord's memorandum, a sum which only comes into next year's Estimates because it was the subject matter of quasi legal decision, and could not be cleared off before the end of this month. In the same way, while it is quite true that the expenditure during the year 1921 showed £1,600,000 excess, the expenditure of the previous year was nearly £3,500,000 surplus, largely because some of the items we had hoped to have settled in the preceding year were not settled till the year 1920–21. My right hon. Friend gave a couple of examples of what he called clean-cut examples of slackness. He said nothing was done, and we simply did not trouble to get in touch with our accounts. He mentioned a certain commodity. I am not able to give the actual commodity or the name of the firm, but I will give the facts. In this case there was a special agreement and the Accountant-General, I think, agreed that it would not be desirable to give the name. The result of the investigation of the accountants as to the amount of the rebate payable showed a serious difference of opinion largely on the question as to whether Excess Profits Duty should be charged against the profits before deduction. There was a protracted controversy, and as no agreement could be reached the matter was referred to arbitration together with three other points in dispute. These other points were not connected with the rebate, but were counter-charges. This arbitration has been for some time in the hands of the solicitor and, as hon. Members know, when matters of this kind go to arbitration they generally take some considerable time. As soon as the accounts for the year ended the 31st March last were completed an agreement was arrived at that a full rebate should be paid and the Accountant-General took the necessary steps to claim the amount. I suggest that here was an instance of the difficulty of the whole business, because we were involved in a protracted controversy and discussion. These sums may have been withheld from the taxpayers during two years, but there will be a substantially greater relief to the taxpayers when the money is secured, as I hope it will be, in a very short time.

Sir D. MACLEAN

Was the explanation which the hon. and gallant Gentleman has just given laid before the Accountant-General?

Mr. AMERY

I believe so. Take the other instance of expenditure on the drifter "Colonel." I am sure my right hon. Friend will realise that the Admiralty, in disposing of an enormous mass of vessels, had to deal with the matter on business principles, and were liable to business risks. As a rule business men look to the results as a whole, and not simply to the result in any particular case. On this matter I should like to inform the House that we realised something like £4,500,000 for the taxpayer. We sold 400 trawlers at an average price of over £10,000 each, a far greater price than could have been realised if they were sold now or had been sold a year ago. With regard to the particular vessel in question, the "Colonel," we were under an obligation to recondition it at a cost of £3,500. Its then market value was £4,800. We had the choice of spending £3,500 and letting the owner have the vessel, or paying £4,800 and keeping it ourselves. Under the circumstances, the latter decision appeared obviously the right one in the interests of the taxpayer. But as it happened, the bottom fell out of the market before we had disposed of that particular vessel, and it sold for a mere portion of its former value. In conclusion I wish to say that this is not a matter of extravagance, but a matter arising out of the extreme difficulty of framing any Estimates ahead when there are still outstanding obligations resulting from the War.

Sir G. RENWICK

I am not quite clear as to the reasons given for this big excess expenditure. I have looked carefully through the particulars given here and I must confess that I cannot quite see how this £8,000,000 excess occurs. It is rather ancient history as it relates to the Estimates for the year ending 21st March, 1921. I see an explanation on the paper. It says: The surplus Appropriations-in-Aid are mainly accounted for by larger receipts than anticipated from supplies of fuel"— How they get a surplus from supplies of fuel I cannot understand. Then it says: from trading accounts, from the sale of old steamboats, and on account of salvage operations. I want to ask whether that means that the Admiralty are carrying on any trade. We all remember that in 1919 the Admiralty wished to build merchant ships. A Committee under Lord Colwyn in the latter part of 1919 reported practically against the building of these ships. Nevertheless, the Government did build ships, and I believe are still building ships. Is any part of this £8,000,000 excess due to a loss on the building of these merchant ships? I should be very pleased if the hon. Gentleman can give me an explanation on that point. Representing a constituency connected with shipbuilding, I am well aware that all shipbuilders are absolutely against the Admiralty undertaking the building of merchant ships. We know that they have done it, but we want to be sure that they are not going to do it any more, and that they have not lost on these ships a similar amount as was lost on the locomotives at Woolwich. I want to know definitely if any part of this £8,000,000 is due to a loss upon the building of merchant ships.

Mr. AMERY

No, none.

Sir G. RENWICK

Then how is it made up?

Mr. MOSLEY

The hon. Gentleman who represents the Admiralty said that he found no occasion at all to appear in a white sheet, but the Treasury, after a far more careful and detailed examination of this sum than we can possibly devote to it in this House, are very emphatically of the opinion that the hon. Gentleman would be becomingly attired this afternoon in a white sheet. Let me remind him what they said: It is obvious that proper Parliamentary and Budget control cannot be exercised while the Departments have so little knowledge of the receipt and expenditure as is revealed in this case. Yet the hon. Gentleman refuses to stand in a white sheet. He is very satisfied and pleased with the performance of his Department on this occasion. He is so elated by his successes in other and more controversial spheres that he is prepared even to go to the length of defying the Treasury and ignoring their considered opinion. I venture to say that until the hon. Gentleman does assume a white sheet, and until he realises the magnitude of these offences, we shall not get that accurate accountancy which is so strongly demanded in the letter which the Treasury addressed to the Department only in February last. As they pointed out on that occasion, this is the second year running where these discrepancies have occurred, and it is the failure of the Admiralty to profit and benefit by the experience of the previous year which has resulted in this repetition of the offence in the year under discussion. Even in regard to the current year, the Admiralty give us no guarantee that the same thing will not happen. All that they can say is that they are hopeful that a very much closer approximation between Estimates and expenditure during the year 1921–22 will result. Therefore, we may anticipate the same occurrence in the third year running. The Admiralty really display no serious appreciation of the situation at all. They hold out no promise in their letter to the Treasury, or even in the statement which the hon. Gentleman has just made, that any greater effort is going to be made to avoid these occurrences in future. What does he say in the letter to the Treasury of 23rd December last? He says that he hopes that as post-War conditions become stabilised these difficulties will disappear, but in the meantime such steps are being taken as the present staff will allow and without interfering with more important work to centralise the responsibility of controlling these Services. What work is more important than economy? What other work distracts the attention of his staff from presenting the accounts to this House in proper form?

The Treasury point out in their last letter to the hon. Gentleman that none of their main recommendations made on the occasion of these same occurrences last year have been adopted, despite the fact that the Admiralty recognised that the recommendations were fair and proper. The Treasury, after the case of 1919–20, made two recommendations: First, that more detailed instructions should be given to the branches, and, secondly, that when efforts were being made to expedite recoveries and payments the officers, branches or Departments concerned should be warned to submit forecasts of the financial results involved. The Admiralty Accountancy Officer accepted these criticisms as perfectly fair. Now the Treasury say that detailed examination of the Estimates for the year under discussion shows no evidence that any special efforts were taken to guard against these occurrences. Until the hon. Gentleman recognises that there is something to be remedied, until he is prepared to assume a white sheet and be a little less satisfied with the performance of his Department than he is this afternoon, the warning, and advice of the Treasury evidently will continue to be ignored, and we shall find a perpetuation of this curious position in which the Treasury say: It is obvious that proper Parliamentary and Budget control cannot be exercised when Departments have so little knowledge of the receipts and expenditure as is revealed in this case. The hon. Gentleman has made out a great case of the difficulty of the position in regard to these war liabilities which mature unexpectedly. It is difficult to follow entirely why bills should differ so widely from the Estimates and why such grave discrepancies as between £500,000 and £60,000 in the ultimate settlement should obtrude themselves. It is difficult to understand these things, and I fail entirely to understand the explanation. The Ministry of Munitions, as the Treasury point out, were faced with exactly the same position in the liquidation of precisely the same kind of liabilities on a far

greater scale, but the Ministry of Munitions were considerably more successful in effecting their Estimates, although their difficulties were far greater and their commitments far more diffuse than those of the Department of the hon. Gentleman. They have shown very clearly that it can be done, and I trust that the hon. Gentleman in the coming year will be able to effect some improvement.

Mr. WISE

I only wish to ask one question with regard to the Trading Account referred to by the hon. Member for Central Newcastle (Sir G. Renwick). Most of us are agreed that the Government should not trade, and I should like to have some explanation as to how these accounts are made up.

Question put, "That £1,632,990 8s. 6d. stand part of the Resolution."

The House divided: Ayes, 139; Noes, 40.

Division No. 65.]	AYES.	[2.57 p.m.
Adair, Rear-Admiral Thomas B. S.	Fell, Sir Arthur	Moore-Brabazon, Lieut.-Col. J. T. C.
Amery, Leopold C. M. S.	FitzRoy, Captain Hon. Edward A.	Morris, Richard
Armstrong, Henry Bruce	Forrest, Walter	Morrison, Hugh
Ashley, Colonel Wilfrid W.	Fraser, Major Sir Keith	Murray, William (Dumfries)
Atkey, A. R.	Ganzoni, Sir John	Neal, Arthur
Baird, Sir John Lawrence	Gardiner, James	Newman, Colonel J. R. P. (Finchley)
Banbury, Rt. Hon. Sir Frederick G.	Gardner, Ernest	Newson, Sir Percy Wilson
Barnett, Major Richard W.	Gee, Captain Robert	Newton, Sir D. G. C. (Cambridge)
Barnston, Major Harry	Gibbs, Colonel George Abraham	Norton-Griffiths, Lieut.-Col. Sir John
Bartley-Denniss, Sir Edmund Robert	Gilbert, James Daniel	Parry, Lieut.-Colonel Thomas Henry
Bell, Lieut.-Col. W. C. H. (Devizes)	Gilmour, Lieut.-Colonel Sir John	Pearce, Sir William
Benn, Capt. Sir I. H., Bart. (Gr'nw'h)	Gould, James C.	Peel, Col. Hon. S. (Uxbridge, Mddx.)
Bennett, Sir Thomas Jewell	Grant, James Augustus	Percy, Charles (Tynemouth)
Betterton, Henry B.	Green, Joseph F. (Leicester, W)	Perkins, Walter Frank
Birchall. J. Dearman	Greene, Lt.-Col. Sir W. (Hack'y, N.)	Pinkham, Lieut.-Colonel Charles
Boscawen, Rt. Hon. Sir A. Griffith-	Greig, Colonel Sir James William	Pollock, Rt. Hon. Sir Ernest Murray
Bramsdon, Sir Thomas	Gretton, Colonel John	Pownall, Lieut.-Colonel Assheton
Brassey, H. L. C.	Hacking, Captain Douglas H.	Pratt, John William
Breese, Major Charles E.	Hall, Lieut.-Col. Sir F. (Dulwich)	purchase, H. G.
Bruton, Sir James	Harmsworth, C. B. (Bedford, Luton)	Renwick, Sir George
Buckley, Lieut.-Colonel A.	Harris, Sir Henry Percy	Richardson, Sir Alex. (Gravesend)
Burdon, Colonel Rowland	Haslam, Lewis	Roberts, Rt. Hon. G. H. (Norwich)
Butcher, Sir John George	Henderson, Lt.-Col. V. L. (Tradeston)	Roberts, Samuel (Hereford, Hereford)
Carew, Charles Robert S.	Hennessy, Major J. R. G.	Samuel, A. M. (Surrey, Farnham)
Cautley, Henry Strother	Hinds, John	Scott, A. M. (Glasgow, Bridgeton)
Chamberlain, Rt. Hn. J. A. (Birm, W.)	Holbrook, Sir Arthur Richard	Seager, Sir William
Cheyne, Sir William Watson	Hood, Sir Joseph	Seddon, J. A.
Coats, Sir Stuart	Hopkins, John W. W.	Shortt, Rt. Hon. E. (N'castle-on-T.)
Colfox, Major Wm. Phillips	Hurd, Percy A.	Stanley, Major Hon. G. (Preston)
Conway, Sir W. Martin	Inskip, Thomas Walker H.	Steel, Major S. Strang
Craik, Rt. Hon. Sir Henry	James, Lieut.-Colonel Hon. Cuthhert	Sugden, W. H.
Curzon, Captain Viscount	Johnstone, Joseph	Taylor, J.
Davidson, J. C. C. (Hemel Hempstead)	King, Captain Henry Douglas	Thomson, Sir W. Mitchell- (Maryhill)
Davies, Sir David Sanders (Denbigh)	Lindsay, William Arthur	Thorpe, Captain John Henry
Davies, Sir Joseph (Chester, Crewe)	Locker-Lampson, Com. O. (H'tingd'n)	Walters, Rt. Hon. Sir John Tudor
Davison, Sir W. H. (Kensington, S.)	Lort-Williams, J.	Waring, Major Walter
Dockrell, Sir Maurice	Loseby, Captain C. E.	Warner, Sir T. Courtenay T.
Doyle, N. Grattan	Lyle, C. E. Leonard	Warren, Sir Alfred H.
Edgar, Clifford B.	McLaren, Hon. H. D. (Leicester)	Williams, Lt.-Col. Sir R. (Banbury)
Edge, Captain Sir William	McLaren, Robert (Lanark, Northern)	Willoughby. Lieut.-Col. Hon. Claud
Ednam, Viscount	M'Lean, Lieut.-Col. Charles W. W.	Wills, Lt.-Col. Sir Gilbert Alan H.
Edwards, Allen C. (East Ham, S.)	McMicking, Major Gilbert	Wise, Frederick
Edwards, Major J. (Aberavon)	Macpherson, Rt. Hon. James I.	Worthington-Evans, Rt. Hon. Sir L.
Edwards, Hugh (Glam., Neath)	Marriott, John Arthur Ransome
Eyres-Monsell, Com. Bolton M.	Mason, Robert	TELLERS FOR THE AYES.—
Falcon, Captain Michael	Mitchell, Sir William Lane	Colonel Leslie Wilson and Mr. Parker.
Falle, Major Sir Bertram Godfray	Molson, Major John Elsdale
Farquharson, Major A. C.	Moore, Major-General Sir Newton J.
NOES.
Ammon, Charles George	Jones, G. W. H. (Stoke Newington)	Rose, Frank H.
Collins, Sir Godfrey (Greenock)	Jones, Morgan (Caerphilly)	Sitch, Charles H.
Edwards, C. (Monmouth, Bedwellty)	Kelley, Major Fred (Rotherham)	Sueter, Rear-Admiral Murray Fraser
Erskine, James Malcolm Montelth	Kenworthy, Lieut.-Commander J. M.	Thomas, Rt. Hon. James H. (Derby)
Foxcroft, Captain Charles Talbot	Kiley, James Daniel	Thomas, Brig.-Gen, Sir O. (Anglesey)
Galbraith, Samuel	Lowther, Major C. (Cumberland, N.)	Wallace, J.
Grundy, T. W.	Maclean, Neil (Glasgow, Govan)	Watts-Morgan, Lieut.-Col. D.
Hallas, Eldred	Maclean, Rt. Hon. Sir D. (Midlothian)	Wignall, James
Hancock, John George	Mosley, Oswald	Williams, Aneurin (Durham, Consett).
Harmsworth, Hon. E. C. (Kent)	Murray, Hon. A. C. (Aberdeen)	Wilson, James (Dudley)
Hartshorn, Vernon	Naylor, Thomas Ellis	Wood, Major M. M. (Aberdeen, C.)
Hodge, Rt. Hon. John	Poison, Sir Thomas A.	Young, Robert (Lancaster, Newton)
Hogge, James Myles	Rattan, Peter Wilson
Holmes, J. Stanley	Richardson, R. (Houghton-le-Spring)	TELLERS FOR THE NOES.—
		Mr. G. Thorne and Mr. Kennedy.

Resolutions agreed to.