ECONOMY (MISCELLANEOUS PROVISIONS) BILL.

HC Deb 22 April 1926 vol 194 cc1413-531

Order for Third Reading read.

The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Sir Kingsley Wood)

I beg to move, "That the Bill be now read the Third time."

4.0 P.M.

In so doing, I beg once again to commend the Bill to the favourable judgment of this House. When the Economy Bill was first introduced, and its contents were circulated to this House and to the public, a very interesting communication was made by one who was a Member, and a very respected and valued Member, of this House, Sir Donald Maclean, who, in a letter to the "Times," hoped that in connection with these proceedings a national spirit of economy would prevail. In the course of his communication, he invoked the warning of Mr. Gladstone, addressed to the House of Commons in 1863, which, in the judgment of Sir Donald Maclean, applies with crushing force to-day. His quotation was as follows: '"Together with the increase of expenditure there grows up what may be called a spirit of expenditure, a desire, a tendency prevailing in the country, which insensibly and unconsciously, perhaps, but really, affects the spirit of the people, the spirit of Parliament, and the spirit of public Departments.' He concluded his communication with these words: One wonders how many voices will be collected in the House of Commons on Tuesday and Wednesday next"— That is to say, when the Second Reading was to be considered— in support of these, old-fashioned, unpopular, but vital principles. I have no doubt the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) has communicated with him so far as his section of the House is concerned. I would like to say a word or two on the principal criticisms which have been directed against, the major part of this Bill, and I want briefly to say a few words concerning the proposals in it in relation to education. I hope many Members of the House will agree that, after the proceedings in Committee on this Bill, few can doubt that Clause 14 merely declares that the Board of Education possesses powers which leading Members of both the Opposition parties have repeatedly declared are essential to the working of the percentage grant system. It is interesting to note that the Opposition now declare that these powers are too great to be entrusted to any Department or any member of the Government, and with that criticism the Government are disposed to agree. The President of the Board of Education has already explained that, in our judgment, the percentage grant system, involving as it does the use of such powers, tends inevitably to deprive the local authorities of the freedom and discretion which they should enjoy, and the Government have therefore announced their intention to introduce a system of block grants at the earliest possible moment. Until such powers can be fully worked out, powers incidental to the existing system must be used, but we are glad that many are now beginning to realise the disadvantages of that system and the necessity for its alteration in the interest of education.

If I may, I want, very briefly, to deal with a few of the main criticisms which have been directed to the principal parts of this Bill so far as National Insurance is concerned. With regard to the first Clause in the Bill and the reduction of the State grant, a good deal of criticism was originally directed against the act ion of the Government, and it was alleged that the Government were guilty of some breach of pledge, a pledge that bound the State to continue the grant of two-ninths towards the funds of the approved societies. No doubt, the OFFICIAL REPORT has been ransacked and all the many communications which the right hon. Gentleman the Member for Carnarvon Boroughs made in 1911 have been examined, but no one has produced in this House that pledge, and I venture to say that no one to-day, on the Third Reading of this Bill, can say that a pledge of that character has been broken in the slightest degree. The right hon. Gentleman the Leader of the Opposition fell back upon what he called a breach of a statutory undertaking, and he cited Section 4 of the National Insurance Act, 1924, which, as I understand, he put for- ward as the Section containing this particular pledge. It was an unfortunate choice to make, because that Section was, in fact, an alteration of the original Section in the 1911 Act, and the exact proportion of the State contribution was altered quite properly, as I believe, by the right hon. Gentleman the Member for Carnarvon Boroughs himself.

Mr. RAMSAY MacDONALD

I said so, but I said that that was done after agreement with the other two parties.

Sir K. WOOD

I am now talking about the pledge. If there had been a pledge, no society, no group of societies, had the right to waive it, it is a pledge to the insured person. I want to add this. If one examines the financial structure of National Health insurance from 1911 until to-day, one is obliged to come to the conclusion that probably no other Statute has been so materially altered from time to time, and it, should be noted in connection with its financial provisions. I venture to put before the House what I consider is an exact precedent for the action which the Government are taking to-day. When the right hon. Gentleman the Member for Carnarvon Boroughs was Prime Minister, there was a Committee appointed to inquire into national expenditure. They examined the National Health Insurance finances and made certain recommendations. I find that in 1922 they made the following recommendations to the right hon. Gentleman so far as National Health Insurance finance was concerned. They said: We consider that a revision of Health Insurance finance will he necessary, and in any such revision the points to which we have called attention above should be considered. The variation in the conditions of the scheme could not lay the Government open to any charge of breach of faith, seeing that the original arrangements have so frequently been modified in the interests of the other parties thereto, especially in view of the ascertained surplus dealt with in the following paragraph. That report was furnished to the right hon. Gentleman containing those recommendations and that statement so far as the pledge was concerned. What did his Government do? They introduced an Act of Parliament, the National Health Insurance Act, 1922, and they effected two economies at the expense of the insured persons of the country, quite rightly in my judgment, in the interests of national finance. What was the first thing that they did? The State had hitherto paid a sum of £50,000 a year for what was called an Index Clearance Register. By the first Section in that Act the right hon. Gentleman's Government withdrew that grant and the funds of the National Health Insurance scheme had to pay it. What was the next thing that was done? There was a fund called the Women's Equalisation Fund. It cost the State some £250,000. Under the second Section of that Statute the right hon. Gentleman's Government withdrew that State grant, and the money for the Women's Equalisation Fund had to he found under National Health Insurance finance. It was done by increasing the reserve values of certain women's societies, and the effect, both to insured men and insured women, was to postpone the time when the reserve values would be redeemed and by that means benefits were still further postponed. I think I am entitled, having regard to all the statements made concerning the action of the Government in this matter, to draw this comparison, so far as any breach of pledge is concerned, between the action of the Government then and the action of the Government to-day. At that time, these proposals had a very mixed reception. There was no enthusiasm, and there was a good deal of criticism.

Mr. J. H. THOMAS

Will the right hon. Gentleman say that the proposals which were ultimately embodied in the Act were not those proposals which followed the Geddes Report, and were submitted to a representative body of approved" societies and discussed by them prior to their discussion by this House?

Sir K. WOOD

Yes, and, as I have already pointed out, they had a very mixed reception.

Mr. THOMAS

Were they not agreed to?

Sir K. WOOD

Certainly not. I think the best that can be said is that they were received with acquiescence—[Interruption]—perhaps the right hon. Gentleman will allow me to finish my sentence—on the part of a number of societies and by opposition on the part of others. It is quite natural, and I do not myself complain, that whenever there has been any attempt by the State to reduce or affect any of the funds of national health insurance the approved societies have always taken steps to put their case before the Prime Minister or the Chancellor of the Exchequer of the day. But my point is this. I am not concerned on this particular point whether the representatives of the approved societies agreed or not. This is a question whether there has been a pledge given to the insured persons of the country, and, if there has been a breach of such pledge, no assent by anybody can sweep or turn it away. Let me say this to the right hon. Gentleman the Leader of the Opposition, the view which he has put forward with regard to the action of the Government in this matter has been by no means shared by all of his supporters. I suppose that a person who is as well qualified as anyone to state what was the intention in 1911 and whether there has been any wrong committed in connection with national health insurance is the head of the Trade Union Approved Societies of the country. What did Mr. Kershaw, the President of the trade union approved societies, say when he went before the Royal Commission? This is what he said: The pledge, in so far as legislation can be a pledge for all time, did not contemplate any surplus over the whole population. We cannot agree that the claims of societies as a whole in this respect extended beyond the original expenditure in the aggregate upon normal benefits. We suggest that the obligation of the State does not really extend beyond providing the necessary initial paper reserves to enable people of all ages to pay the flat rate contribution for the normal rate of benefit. I venture to say, in all fairness, having regard to the charges which have been so constantly and so recklessly made concerning the action of the Government in this matter, that I am certainly entitled to invoke the opinion at any rate of a leading trade unionist and one who has been intimately concerned in the administration of approved societies right, I believe, from the beginning. What has been said since? We have had Debates in this House?

Mr. LLOYD GEORGE

Whom did Mr. Kershaw represent?

Sir K. WOOD

He is President of the Trade Union Approved Societies of the country. I believe my right, hon. Friend, in the course of his speech, quoted what Mr. Kershaw thought about dependant allowances. Let me say this further. There have been debates in this House, and there has been a, considerable discussion outside, and, whatever may be said as to whether the approved societies had originally time to confer and consider these proposals, it cannot be said that their leading members are not in a position to give judgment to-day. There was during the Recess a discussion by a number of approved societies on the Government proposal, and I hope my right hon. Friend the Member for Carnarvon Boroughs will at any rate recognise this name which I am now going to give him. One of the leading representatives of the approved societies and the friendly societies to-day is Mr. Duff. He is the Chairman of the Consultative Council, and I may say that he is opposed to the Government proposals as they are formulated to-day, and therefore can in no sense be considered a friendly critic. What did he say as reported in the "Times" of 12th April? He said: He was not certain that the payment by the State of two-ninths of the cost of benefit and administration could he regarded as for all time sacrosanct. If the financial history of Health Insurance had been examined in all its phases, and the financial stringency of the country considered, he was not sure they mould not have found it extremely difficult to establish a case for retaining the complete two-ninths contribution of the State. Having regard to the very forcible criticisms made by the approved societies which I have quoted to the House to-day and the judgment and opinion of the Chairman of the Consultative Council, Mr. Duff—

Mr. GRIFFITHS

That is a personal opinion and not the opinion of the Members. Is it not a fact that the person referred to is the director of the Prudential Assurance Association?

Sir K. WOOD

No, Sir, but I should not think worse of him if he was. Mr. Duff is one of the leaders of the friendly societies. I think that is a personal opinion which ought to be brought to the notice of the House. Now let, me deal with the merits of this proposal. The Leader of the Opposition has constantly referred to what he calls a sort of partnership which is existing in con- nection with the administration of National Health Insurance and he has described the partnership as the State, the employer, and the workman. Assume this is so, What have they done since 1911? The first partner, the State, has over and above his statutory undertaking contributed to National Insurance Funds a sum of over £24,000,000. That is what one of the partners has done. What has happened so far as the employer and the employed are concerned? Quite recently in connection with this Fund, as the House well knows, we have reduced the contribution of both.

I want to argue this question purely on its merits, and I do not think it is an unfair thing, when these two partners have each in their turn been relieved as regards contributions, to say that after accumulating these large funds and considering the prosperous condition in which they are, that they should make to the partner who has made heavy extra payments what is not an unreasonable contribution to national necessities. I base the reason for the reduction of the State grant on two main grounds. In the first place, I do not think it is realised by Members of the House that a very large proportion of the surpluses of approved societies to-day is not due to good management, nor is it due to those other matters which the right hon. Gentleman the Member for Carnarvon Boroughs quite properly said the societies if they carried out should receive as a benefit. The right hon. Gentleman can refer to the Insurance Royal Commission and the evidence placed before it. He will find that no less than one-fifth of the surpluses of approved societies to-day are due to what is called interest profit. A further point is the release of annoyed societies from liability for sickness and disablement benefits to persons aged from 65 to 70 from the 1st January, 1928. When one is doing justice to the approved societies we must have regard to the very considerable relief which is afforded to them by that provision.

What is that relief? I do not know whether the ex-Chancellor of the Exchequer realises the amount of relief which has been so brought to the approved societies. The effect of it is to extinguish charges on approved societies representing a capital liability of £37,000,000. Is not that a fair consideration to have in view when you are bringing forward proposals of this kind? Criticisms have been directed to the relations of insured persons and this form of relief. I wish to point out that relief has been effected by granting pensions to insured persons and their wives representing 3½ times the cost of health insurance benefits and unemployment benefits previously provided to the persons of those ages, and so far as the present insured population is concerned a preponderating part of the cost of pensions is now falling upon the Exchequer. I say to the House that by the Contributory Pensions Act of last year the relief to the health insurance system resulting from the substitution of pensions at the later ages has passed on to the insured and their employers who were jointly granted a reduction of health insurance contributions amounting to no less than £2,500,000 a year. I think those are considerations which any fair-minded person should have in view in considering these proposals.

I say to the House that now that the margin of these financial resources has been brought to light by this Report owing to the actuarial investigation that has been made it is just that the third party, the Exchequer, should have its appropriate relief? I notice even in the Labour Minority Report of the Royal Commission it is stated that a balance between the expenditure on these schemes and the productive capacity of the country should from time to time he struck. We have had all sorts of criticisms, some of them mutually destructive, of these proposals. It was said that societies will be made bankrupt by the economy cut and small societies would be put in great danger. I ask any hon. Member who has read the Government actuary's report if he does not agree with me when I say than I am glad to think the approved Societies can be reckoned amongst the most sound and stable of our social institutions. I feel at any rate that the right hon. Gentleman the Member for Carnarvon Boroughs knows that as a matter of finance the reduction of the State contributions made by the Bill will leave the societies in precisely the same position as if the provision of the extra cost of medical benefit and the provisions of the dependents' allowances recommended by the Royal Commission as extended benefits had been carried into effect. So far as the finance and the stability of these societies are concerned they are exactly in the same position as if the recommendations of the Royal Commission had been carried out. In other words if these dependants' allowances had been given instead of relief being afforded to the State as far as finance is concerned the position would have been exactly the same.

Mr. THOMAS

After the third valuation.

Sir K. WOOD

Yes; exactly the same. The Report of the Royal Commission is fortified by the Report of the Government Actuary and the Actuaries Committee. If the Report of the Royal Commission is carefully examined it will be seen that they say that after giving effect to their proposals to which I have referred a surplus in the opinion of the actuaries may be expected to arise to the extent of about £2,000,000 a year, apart entirely from the interest earned on the surplus existing when the new conditions came into effect. In other words, at any rate in accordance with the advice which the Government is afforded through the actuaries to the Royal Commission on the proposals as they are placed before the House to-day, there can be said now to be a probability of a very considerable surplus.

Another fear was expressed which I am anxious should be dissipated as soon as possible, and it is that the Bill will result in the disappearance of additional benefits after the year 1931. I want to say that in my judgment I believe that those fears are baseless and I will give my reasons why. If hon. Members will study the Government Actuary's Report they will find that it is estimated that the aggregate surpluses of approved societies are estimated to amount to no less a sum than £65,000,000 up to the 31st December, 1925. What is going to happen? A sum of £30,000,000 of that money will be taken for the purpose of additional benefits in the next five years, but there will be retained a sum for the future, and that will leave according to the estimate which I have given no less a figure than £35,000,000 to be carried forward to the third valuation. We have got according to the statement of the Government Actuary a surplus of £2,000,000 per annum and we have according to the same authority £35,000,000 to be carried forward. The hopes of the future so far as 1931 is converned are more substantial still than that when it is remembered that it will no longer be necessary to include in the National Insurance finance charges for additional sickness and disablement benefit just at the time when it is most costly between the ages of 65 and 70. My judgment is that so far as the quite natural fear of approved societies is concerned even after 1931 they need not be apprehensive on this account, because a very large sum of money will certainly be available even after the year 1931.

Let me say this further word. A good many members of approved societies, and a good many Members of this House, have naturally looked forward to the extension of the National Health Insurance, particularly in connection with specialist and consultant services. I am sure we would all like to see that important alteration made. Let me say there is nothing in the Government proposals which would tend to prevent or hinder the extension of those additional services which we all desire to see. As a matter of fact, if the right hon. Gentleman or any other Member will look at the Actuary's Report, he will see that it would be perfectly possible to go forward with these proposals if the Government so decide and the societies agree.

There has been a good deal of apprehension—I do not know how it has arisen—in relation to the question of hospitals. I have had a number of letters sent to me from various hospitals in words something like those: I am requested to intone you that the passing of the Clause withdrawing a portion of the subsidy from approved societies will mean a big slice off our income. I have other letters here in similar terms. It is an unfortunate misapprehension, and anyone who has put forward that statement is under a wrong impression as to the position. Let me tell the House exactly what is the position as far as hospitals are concerned. When the first valuation of approved societies was made, in 1921, the societies were able to set on one side over £300,000 a year for the treatment of members in hospitals and convalescent homes, and of that sum upwards of £200,000 was available for hospitals, and, I think, approximately that sum has been expended. What is the position on the second valuation As far as we can judge, there will be a sum of between £500,000 and £600,000 a year available. That is two and a half times the amount available on the first valuation. Therefore, if approved societies like—and there will be no interference as far as my Department is concerned—in the next few years they can give two and a half times the amount they did before.

With regard to the Navy and Army Fund, the 23,000 men do not represent by any means the number of people admitted into this Fund. As a matter of fact, this Fund, as I said some little time ago, was built up by millions of people since 1911. If one examines the question who are entitled to this Fund at the present moment, one will find that 200,000 people have been admitted to this Fund. A large proportion have passed into occupations above the income limit and ceased to insure, and, as far as their contributions are concerned, they are equally entitled, at any rate, from the point of view of contribution, to participate in whatever benefits there may be in this Fund. Let me put the position as I see it. Who is going to judge, say, between the difficulties of the men who have gone out of insurance, and the difficulties and suffering of the 23,000 men who are still drawing benefits from the Fund? Who is going to say that consideration ought not to be given, say, by remission of taxation, and an endeavour to reduce unemployment among the people who have returned to civil life? A very large majority of these 23,000 people, as far as we can judge, are in receipt of War pensions, and very many, I think, are in receipt of 100 per cent. pensions.

Therefore, I venture to say to the House that putting £400,000 on one side for the benefit of this small number of men is not an unfair and an unreasonable proposal. It has been said that the whole policy of the Government in this connection, and as exemplified in this Bill, is to starve the National Insurance and Health Services in the country, and that it is a retrograde policy. It is very interesting to compare what the State was paying for health services in the first year following the National Insurance Act of the right hon. Member for Carnarvon Boroughs with what is contemplated in our Estimates as presented to this House for next year in respect of housing, tuberculosis and other matters. We are asking the House to increase the amount in respect of housing, tuberculosis and other health services administered by the Ministry of Health. In 1913–14, the first completed year following the National Insurance Act, the sum so spent was £3,633,489. What will it be if our Estimates are passed for the year 1926–27, for exactly the same services? No less a figure than £8,503,190. Having those figures in view, and the modest economies which are contemplated in this Bill, I, at any rate, can ask those who believe that the national finances demand some relief at the present time, and also believe that these proposals are fair and just, to give their support to the Government on the Third Reading of this Bill.

Mr. RAMSAY MacDONALD

We have listened to a somewhat technical defence of the Government position, dealing mainly with the inside administration of approved societies. The general reflection that came into my mind as I listened to the hon. Member was that if all he says be true, if he is going to reduce the contribution he makes to these societies, and, at the same time, secure that no damage is done financially to those societies; if all those extra payments for which he claims credit have been paid into those societies, why did he not put his case before them? Surely that is the most obvious thing. Does he mean to say he prefers to come here on an afternoon and give that case to the House of Commons rather than face the authors of the memorandum issued against his Department, the memorandum drafted by the actuaries of the approved societies? He knows perfectly well, point by point, that to everything he has said to-day, especially the more technical matters, which do not fit themselves into a general Debate such as this, if he had faced the actuaries of the approved societies, a reply adequate was ready, and he himself would not have been able to come to this House with Clauses in a Bill such as this, and say he had got the approval of any of the approved societies.

We have reached a very interesting stage. It is admitted that this Bill is incomplete. It is admitted that this Bill ought to be amended. We are assured that it is going to be amended when it gets to another place. The Home Secretary assured us that he would withdraw an Amendment, and indicated there were others, the only reason being that he did not want any alteration in this Bill so as to have no Report stage, and so save time. In other words, it is the case of the familiar, "What thou doest, do quickly." So tremendously keen are this Government for economy, that they find that to economise time is a far greater concern of theirs than to economise money, and although there is a mistake in the drafting of this Bill which is going to involve the taxpayers to the extent of £28,000 per annum, because the Government shirk the Report stage, they have kept that charge upon the shoulders of the taxpayers, who are being assured that it is their financial interests alone which are being considered in this Bill. £28,000 per annum is the charge to be put upon the taxpayers because the Government are afraid to face a Report stage. Yet the Bill is called an Economy Bill—an Economy Bill which had better not be discussed more than is absolutely necessary under the Standing Orders. No sooner does this Bill get launched than it gets into dry dock in another place to he patched up.

The hon. Member has gone through his usual familiar inadequate and twisted statement as to what the Bill does. He started by saying that our case was that the State's contribution of two-ninths was the bargain, the pledge. Whoever said that? Nobody ever said it. What did we say, what do we say now, and w hat will we continue to say after this is over? It is that this insurance scheme is a tripartite affair. The bargain was that the State said the mass of the people were going to he compulsorily insured on account of the Act of 1911, and that if we compelled them to insure, we must give them an inducement to insurance. They had their Hearts of Oak, their benefit societies, hundreds of them before 1911; but the Government had come to the conclusion that the state of insurance, both from the corporate point of view and the individual point of view, was unsatisfactory and, borrowing from the neighbouring State of Germany, it decided to start a scheme which left a large class of the poor people of this country, the wage earners, no alternative at all. They could not refuse to insure themselves. They were compelled to spend, whether they thought it thrifty or thriftless, a certain part of their weekly wages in insurance. In order to justify that mandate, that edict, that akase, the State said, "We will recognise the social interest, the national interest, the communal interest in your insurance by paying something, two-ninths, to enable the machine, the system to work." Would the hon. Gentleman, even in the most apologetic and inaccurate way, get up at that Box and say that the State now has got the liberty, has got the moral freedom to so go out of that scheme?

Sir K. WOOD

I have already said so, and I have explained the reasons in my speech.

Mr. MacDONALD

Does the hon. Gentleman say yes?

Sir K. WOOD

Certainly.

Mr. MacDONALD

That shows how much the Tory Government believes in pledges. The hon. Member has quoted Mr. Kershaw. The pledge was that the State would stand in as a third party in that scheme, and everybody knows it, and no one knows it better than the hon. Gentleman himself. During the whole of 1911, negotiations were proceeding to smooth the way for the scheme. If the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) had gone to the country and said, "At any moment we regard ourselves as free to withdraw from that scheme," I do not believe that any trade unionist, or any member of a friendly society would have agreed to it. I am sorry I have not a record of it, but I was present and remember the circumstances when Mr. George Barnes, then a Member of this House, made a speech in 1911—if my memory does not cheat me, it is to be found in Volume 23 of the Debates of 1911. I am sorry I have lost the note of it. Mr. Barnes made from these benches, a sort of semi-attack upon the right hon. Member for Carnarvon Boroughs—on the Second Beading of the Bill I think it was—on the ground of the uncertainty of it, and the right hon. Member for Carnarvon Boroughs got up and enumerated the benefits that were to be given. He enumerated the extra benefits that were to be insured for, but which were not the subject of a hard and fast pledge in the same way as the first category of benefits.

Mr. LLOYD GEORGE

It was dependent on the valuation.

Mr. MacDONALD

He pointed out that when the valuation took place and these extra benefits were decreed, that the State still would continue its responsibility. His words were something like these. He asked Mr. Barnes whether he was aware of the continuing benefits of the scheme which was being launched as a tentative experiment. You may say "Where is the bond?" You may quote your Shylocks and say as Shylock did "Where is the bond?" There is no Member of this House or anyone outside who has been connected with the friendly societies or the approved societies but knows perfectly well that this question of the State drawing out for the convenience of itself was never suspected by anyone who was concerned in the negotiations. The hon. Gentleman quoted Mr. Kershaw. I have a memorandum here—I understand the hon. Member has seen it—which is prepared in this way. There are certain points stated regarding the Bill and the comments upon it. The first is the accusation of breach of the pledge given in 1911 on the introduction of the Scheme of National Health Insurance as regards the contribution of the State towards the cost of the scheme. Then the Government's answer is given that there was no breach of pledge, and then Mr. Kershaw's comment on the Government's answer is as follows: That is technically true, but at the same time it has always been understood that the State contribution would remain at two-ninths of the expenditure and that this two-ninths would continue and be available for extended benefit when the reserve values had been redeemed. [Laughter.] If the meaning of that laughter is that Mr. Kershaw has made a foolish comment, then that must be reflected on the remarks which the Parliamentary Secretary to the Ministry of Health made in which he spoke of Mr. Kershaw as an exceedingly important authority and witness on his behalf. If Mr. Kershaw is so very important, will the Parliamentary Secretary tell us what he thinks of this? This is what Mr. Kershaw says about the Bill: The immediate and direct effect of the economy proposals it to deprive the average working class household of 8s. a week at a time of sickness, when in scores of thousands of households the total income otherwise will be the ordinary sickness benefit of 15s. He goes on: It is difficult to believe that a saving of £2,000,000 a year to the taxpayer at the expense of stricken households will meet with the approval of Parliament, so that it is not economy in any sense of the word. That is Mr. Kershaw on the pledge and on the effect of the Bill. I repeat, and I will say it again outside the House, that the Government suited its own convenience, that it was afraid to meet the friendly societies or the approved societies; that the Government, although no change had hitherto been made in the financial arrangements between the State and the approved societies without a conference and without an agreement, although the agreement might not have been unanimous—although that had been the invariable practice, and I have been unable to find any cases where it was not—the Government, for the first time, when it makes the biggest change that ever has been made, declines to meet the approved societies and says: "Our position is an independent position. We have been paying in; the scheme has been built up upon the assumption that, we are to continue to pay in. We have been partners, but now, because the Chancellor of the Exchequer is in difficulties, because last year he pledged himself or promised to reduce expenditure by £10,000,000 a year by internal saving, he finds it was all nonsense and he has to turn to the savings of other people in order to make his balance."

There is another argument. The Parliamentary Secretary says, "Look what we have done from the point of view of public health and so on. Pensions, widows' pensions." Now we understand the secrets of the Widows Pension Bill. Twelve months ago the Government were taking great credit for it. They never told us that the sums they were then taking credit for as being sums that they were to pay into the pensions fund, were going to be made good in 1926 by reducing the payments that they were making into similar funds. They did good by bits and then they worked one good off against the other. We can go to the widows and say, "You are enjoying your pensions and the Government is compelling the sick and the poor and the needy and the children to pay the wherewithal." As a matter of fact, nine-tenths of these things were done in pursuance of the ordinary duties and responsibilities of any Government. It had nothing whatever to do with this insurance. The Government was bound, as a Government in the 20th century to go on with its schemes for improving and advancing tuberculosis treatment and public health in the thousand and one ways in which it can be advanced now. The Government did that because there is a Ministry of Health in existence, and if the Ministry of Health did not do its duty it knew it would be hauled aver the coals for it. To say, "Because we have done those things, we are now going to justify ourselves in breaking our bargain, in doing violence to the understanding that has been come to"—well, I am very glad the Labour Government has not occupied that position because I would have been ashamed to defend it.

We are told that the 5 per cent. interest that is now being paid on the money loaned to the Government from this Fund ought to be taken into consideration. Why does not the Government do that all round? If I have put money into Government Stocks in any shape or form, why does the Government squeamishly try to he honest to me while it is dishonest with the combined savings of the working classes which they have been compelled to pay in? Why is it necessary, why is it justifiable, why is it fair, why is it decent?

The CHANCELLOR of the EXCHEQUER (Mr. Churchill)

It is tax free.

5.0 P.M.

Mr. MacDONALD

Why did you not make that case to the approved societies? It is no good making it to me. Why do you not make your case to your partners? They were the people to make it to. It is not our concern, but your concern in relation to those pledges. But there was no question of tax free in the argument up to now. The question was 5 per cent. It does not matter whether it is three, four, five, six, seven or eight—the argument is "Because this unforeseen income has come, therefore we are entitled to take it into account in considering our financial relations with those Funds." You are not entitled to do so in the least. Why do you not take other things into account? The money you pay now is of less value than it was before. You have no lousiness to take one category of beneficiaries, and say, "You in that category will have special consideration given to you, because you are enjoying precisely the same financial advantage that everybody enjoys who has the same sort of stock and scrip as yourselves." You cannot one day say to them, "We are very generous," and ask them to build up their financial expectations and all their financial arrangements on some concessions you give them, and then of your own free-will say that that concession is to be withdrawn. I am very much interested in the confessions that are to be made if the Government makes a clean breast of this. We have heard a great deal about Moscow. It will be worse than Moscow if the Chancellor of the Exchequer pursues the line he is pursuing in interjection. He said that when the State wishes to do a thing, it can do it cof its own free-will.

Mr. CHURCHILL

We said it was a fair matter to take into consideration—the increase in the rate of interest and the improvement in the position of the societies through that cause—and then the right hon. Gentleman says, "if you take that into consideration in regard to these societies, why do yon not do so in all other matters?" But the difference is that, in regard to all other individuals, their advantage is cancelled out by the great increase of taxation, while the advantage to the societies in respect of the increased interest remains absolutely intact on account of their being tax free.

Mr. THOMAS

If that is so, are not the benefits depreciated?

Mr. MacDONALD

The Chancellor of the Exchequer shifts off one ground on to another. The incidence of taxation is a matter all by itself. If money is paid into a pool or into a fund as an income from investments in State funds, then, if that fund is subject to Income Tax, Income Tax should be imposed. If it is not subject to Income Tax, then the right hon. Gentleman has no business to turn round and say, "For my convenience, although the House of Commons has never consented to regard that fund as subject to Income Tax, I am going to penalise it financially, because it has got this available surplus." That is his argument. If he wants to impose an Income Tax on the fund, let him do so by an honest way, as a tax-paying subject. But this is not a tax-paying subject, and therefore no Government should juggle with it. That is the situation in which they are. Therefore, I say the agreement, the bargain—to put it on no higher level—was a clear understanding come to in 1911 with everyone concerned. I had a certain amount of active work to do in 1911 to get my friends to accept the scheme. I was by no means speaking for a unanimous party. We all know the grave suspicions—the Chancellor of the Exchequer knows them, too—of the trade unions and the friendly societies which all had to be squared up, and I was one of those who helped to do so. It was a tripartite arrangement, and that tripartite aspect of the transaction, it was said, would always be kept in view. The Chancellor of the Exchequer was perfectly entitled to go to the other two partners and say, "I cannot go in." He was perfectly entitled to put up then the case we have heard to-day, and then get them to agree. We had a similar difficulty over the doctors. We got them to agree.

I would like to say now—although I was not a principal in the negotiations, I was behind the scenes all the time and knew all that was going on—I never met a body of men like the representatives of the approved societies more willing to meet us honourably and generously than were those men in 1924 when we had to conduct the negotiations. It is an insult to them to come to the House of Commons, to assume, to suppose that the Government could not go to them and negotiate an agreement with them that would be honourable and fair to the State. That is the main point There are others—the Army, Navy and Airmen's Fund. We are now told it is not an insurance at all. [Interruption.] I do not talk about an approved society. I said an insurance. I am interested in the principle of the thing. Was it an insurance? No one knows better than the Parliamentary Secretary to the Ministry of Health than to talk about a, man who pays his insurance and then goes out for some reason, good, bad or indifferent. He gave us to understand that a man who insured himself and then went out had somehow or another no right to a share in the distribution of the fund, unless it is provided for. If your policy provides for it, it is all right. No such provision is made in this case. It was an ordinary insurance. This is a case where the Government have no claims. It is not their's. You have paid into the pool from which it is drawn, but that does not make that pool your's. Here is this queer twist of morality. You certainly contributed, and you contributed generously, to the pool, but the moment the money left your hands, and the moment the War Office, the Admiralty and the Air Force passed their money in, and the State passed their money in, the property was the property of the organisation that depended on it—the Fund.

Mr. CHURCHILL

The Fund was the property of the Fund.

Mr. MacDONALD

The Fund, in precisely the same way as the Scottish Widows' Fund, is the corporate property of every insured person in that fund. That fund was not the Government's money, and the money could not be touched by the Government without coming to this House for power to touch it. But what was sad by the Secretary of State for War was that it need not do this at all, but that it could stop them. That was the point I made. I said, and I repeat it, that the Secretary of State for War has got no business to, and cannot, stop subscribing without getting power from this House.

Sir K. WOOD indicated dissent.

Mr. MacDONALD

No doubt the hon. Gentleman has got legal advice. So have I got legal advice. We want to get this point hammered in—that legislation is necessary to get power for the Government to touch this money. The Government says in the distribution of this property, "We are going to take £1,100,000." The situation is absolutely absurd. The grand final argument is that we have got to take £4,700,000—at least to reduce the inflow and divert the sum which from various sources amounts to £4,700,000—out of these Funds, and in the end the Funds are going to be as effective for the purposes as before. That is a miracle. The hon. Member seems to have discovered the widow's cruse of oil. The more you take out of it the more goes into it, and after you have lived on it for days you discover it is just as full as when you started. The Government is reducing those Funds by £4,700,000. To that extent they are making the Funds ineffective, and damaging the interests of the insured persons. You cannot get out of it. So with unemployment. I believe the Chancellor of the Exchequer—I was very sorry that certain reasons made it impossible for me to listen to the speech he delivered on the unemployment Clause, but I read it—admits there was a breach of promise, and the employers when they were asked to pay a penny more were promised that the Government was going to hurry on in making this payments, so that the special conditions of the Fund would be terminated, and then the penny was going to be taken off. Instead of that, he comes in and reduces his payments, and imposes this penny for an indefinite period upon the employers, after he had admitted that it was iniquitous that that should be done.

There it is, in one case after another. It is an absolute sham of economy. All that the Government want is, not national economy, but saving to enable the Treasury to say it has got a Budget that balances. The Chancellor keeps that penny, for instance, on the cost of production. That is not national economy; the employers could use that penny far better than he can use the money that he is taking by this Bill. By keeping that penny as an extra charge on the cost of production, he is helping to damage the prospects of British goods, both in the home market and in foreign markets. We have said that all along. And not only that, but he is doing another thing; he is saving the Treasury, he is saving the taxpayer—he is saving the citizen as a taxpayer, and is putting burdens upon the citizen as a ratepayer. It has been a sort of dictum that, from the point of view of damage to industry, rates, because they are a charge upon production, are far more oppressive than taxes: but the Chancellor of the Exchequer is only interested in taxes. What does he care about the rates? What does he care about cost of production? National economy is something that takes all charges into account, and does not say that it is secured because a Chancellor of the Exchequer is saving taxes at the expense of industrial costs of production and rates as well.

The same thing is true of education. We are told, again, that there is nothing in this Clause, that it is the most innocent Clause that ever was devised, that it means not a single farthing. What is it doing in this Bill? Where does the economy come in? I will tell the Noble Lord the President of the Board of Education where the economy is bound to come in. He is making everything uncertain. Local education authorities do not know what he may be doing. He is not merely taking power. I do not know that I object to that; I think that central authorities must have the power that they require. But that is not what he is doing. The Noble Lord is taking power to be uncertain, and that is where the grievance comes in. There is not a local education authority in this country that, after this Bill, will know from month to month whether it is safe for it to go on spending until it has actually got the money from the Department.

The PRESIDENT of the BOARD of EDUCATION (Lord Eustace Percy)

They never had that certainty, and cannot have that certainty under the percentage contribution.

Mr. MacDONALD

Then what is the use of this Clause, if it does not give the Minister more power to vary? That is the whole point. If, with the doubt as to his power, they are uncertain, how much more complete must the uncertainty be now that he has the power to do what he likes with them? That is the whole question, and that is where-the economy will come in. He is going to limit the development and expansion of education. I suppose we shall listen to-day to the same sort of speeches to which we have already listened on both sides. So far as we are concerned, we are in no doubt about it; we regard this Bill as a fraud: we regard this Bill as being unsound from the point of view of national economy. It is not national economy; it is national waste. We regard this Bill as being a mere expedient of the Chancellor of the Exchequer, driven to his wits' end to appear to carry out pledges which he cannot carry out to try to get out of the difficulty into which he got himself last year when he remitted Income Tax to the tune of £42,000,000—

Mr. CHURCHILL

£32,000,000.

Mr. MacDONALD

Income Tax and Super-tax—

Mr. CHURCHILL

And increased the Death Duties by the same amount. The net amount is £32,000,000.

Mr. MacDONALD

I will take the right hon. Gentleman's figure. He reduced the toll paid by Income Tax payers by £32,000,000 net, and it has put him into a fix this year. He believed last year that he could reduce his expenditure by £10,000,000. He finds that he cannot, and he has produced this Bill, not to save, not to economise, not to make the expenditure of every sixpence that goes through his hands more efficient and more fruitful than it has been, but he has introduced this Bill to enable him to lay sacrilegious hands upon an accumulated sum of money, and to stop streams flowing into pools which he ought to continue to keep open. In that way he hopes next week to come and tell us that he has a Budget of £800,000,000 which he is managing to balance once again—at the expense of the poorest, the most needy, and the most oppressed classes of this country. That Bill we shall continue to characterise in the country as we have characterised it here, and as it has been characterised for the last week or two in this House. We shall do that again and again, and we will back up our characterisation by hard facts that have never been met by any speaker on the other Side of the House.

Mr. LLOYD GEORGE

We have had a certain amount of opportunity for examining this Measure in detail, but not the usual opportunities that are extended in the case of Government Measures. One stage has been cut out altogether. Still, we have had discussions which have extended over a great many hours in Committee. This is an opportunity, not so much for examining the Measure in detail, as for reviewing it as a whole. It has one characteristic, and that is that it is reactionary all along the line—in social reform, in educational reform. It is in many ways a unique Measure. It is perfectly right that, in an Economy Bill, there should be scraping and filing. I am not complaining that it has dots of odds and ends; I am only complaining of the character of what has been put into it. It is like a gipsy stewpot—a rabbit snared in one spinney, a hare trapped in another field, a. chicken or two purloined from someone else's farmyard—[An HON. MEMBER: "What about the eggs?"]—and probably one or two hedgehogs thrown in. My right hon. Friend and his colleagues, and those who support them, will probably find some of the bristles sticking in their throats. That is rather the kind of way in which my right hon. Friend is trying to make his living to-day.

This is a direct attack on one class in the community, and that the largest, and the class that can least afford it. You have, first of all, provisions which deprive 15,000,000 men and women of Mat class of a few extra shillings a week in time of sickness, promised them after certain valuations by a Government of which my right hon. Friend and myself were members. The time had arrived when that promise had matured; a Royal Commission had recommended that the extra 8s. should be given, with a special medical benefit in cases of very painful illness. Fifteen million people have been deprived of that, and the Chancellor of the Exchequer will he better off on Monday by £2,800,000 from that operation. But he and his Government will he much worse off in ordinary realities. You have £1,000,000 taken away from the rank and file broken in the War; and increased facilities for education, promised at the last Election, as I shall point out, by the Prime Minister—facilities which were given by Germany to her children when she was bankrupt, and which she never surrendered, and by practically every Dominion in the Empire—those facilities are to be taken away from the children of the people. It is all an attack on the same class. I am going to give particulars of that in a moment.

The Bill is unique in another respect. A larger number of violated pledges are registered in it than in any Bill I have seen in this House. I am not referring merely to the pledges at the last Election, hut I am perfectly certain that if hon. and right hon. Gentlemen sitting opposite had told their constituents at the last Election that they would vote for this Bill, that majority would not have been there to-day. I should like to ask the Minister of Health what would have become of his majority of 80 if he had gone to Birmingham and said, "One of the first things I am going to do in the House of Commons is to deprive you, the working men and women of this Division of the extra 8s. a week in case of sickness." I think he would have had to find another constituency. There is the pledge about education; there are the pledges about health—they are all broken.

The third characteristic of the Bill is this: I do not believe that in the whole of my experience in this House I have seen a Measure forced through by such a proportion of all-night Sittings as has been given to this Bill. I shall not criticise the methods, because they are to be the subject of discussion later on, and in any event it would be out of order; but there was all the hurry, there were all the symptoms of urgency and panic. It was treated as a great Emergency Bill that had to be carried at all costs. Whatever the provocation, whatever the resistance, whatever the suspension of Rules of the House, it must go through, and must go through at once. I should like to know why. The Parliamentary Secretary to the Ministry of Health gave us to-night about as able a speech as anyone could make for so miserable a Bill. He made a speech during the Easter vacation and said, "This thing must go through; the Government say so," and they entrusted to him the exalted duty of issuing that ukase. We know the hon. Gentleman's capacity and efficiency, but it was rather an exalted position, giving him command of the armies of the faithful. It reminded me of that episode in the "Arabian Nights" of the cobbler of Bagdad, who, when he was asleep, was suddenly translated to the Caliph's Palace, and when he woke up he said, "Am I Abou Hassan or am I Commander of the Faithful?" My hon. Friend woke up one morning and found that he was not really Under-Secretary, hat was commander of the faithful. It was quite clear that it had to go through. The Chancellor of the Exchequer said so—the man who put him there. It has all the characteristics of my right hon. Friend—impetuosity, impatience, a good deal of recklessness of consequences when he has plans of his own.

He calls it a Measure of economy. Let us examine it. If the nation were in such a condition that, to save itself from insolvency, it had to cut down even essential services, we should have to face it, but let us see what has happened. Since 1923 the cost of armaments has gone up £11,000,000. I am taking the figure for this year, which does not represent the real figure in the least, because, as the First Lord of the Admiralty has pointed out, there are many things that were postponed and put off. The increase in educational facilities is about half that, in spite of the increase of population. Why are we cutting down education when armaments are going up? There is not an enemy visible, even on the haunted seas of the Navy League. No one can point to an enemy. This is the jubilee of Locarno. We are £11,000,000 up, and we are not going to cut it down. What is the real significance of this Measure, in so far as education is concerned? It is the first time you have introduced words into an Act of Parliament definitely to discourage the authorities from spending money on education. Up to the present it has been the policy of all parties—Conservative, Labour and Liberals—to say to the authorities, "We will give you £ for £. Build your colleges, raise your schools, improve your education and we will encourage you." That has been the policy of every Government. For the first time you introduce words into an Act of Parliament which forbid, which retard, instead of promoting, which say, "You must have regard to what someone else decides as to the conditions of your neighbourhood, and we are to judge."

That is a very serious reactionary step which is taken for the first time and it is contrary to the pledge of the Prime Minister. I will read the words if anyone challenges them, but I do not suppose anyone will, because they must be in the minds of his faithful followers. At the last Election there was nothing he was more specific upon than upon education. There was nothing upon which he gave more definite promises. When he talked about giving an opportunity to every child, without reference at all to the class or to the means of his parents, to get advanced education, he did not talk about words of this kind which restrict, which narrow, which postpone, which disqualify, which will equip the Board of Education for the first time with the power to prevent that development, and that is what those words do. It is a penny wise policy. It is all based on the assumption that we have heard many a time. I remember the attack that was made upon us when I had the primary responsibility. There was the same attack—the assumption that somehow or other the local authorities were too eager to build schools, too eager to improve schools, too ambitious, that they were incurring too great expense upon education. Is this the time to talk about that when we are entering into rivalry with some of the best educated countries in the world, where children are taken from the elementary schools at the expense of the State to a secondary school, and if they are bright boys they have the opportunity to reach the highest stage in the land? Here is England, the richest country in this island, the richest country in Europe and the richest country in the Empire. From the point of view of secondary and higher education, England, the richest, is the third in the facilities it gives to the children of the people who have not the means to provide education for themselves.

Lord E. PERCY indicated dissent.

Mr. LLOYD GEORGE

The Noble Lord has only to look at the statistics. I challenge him to deny this proposition, that compared with Scotland, which is not as rich a country, the facilities for the children of the working people to receive secondary and higher education are not to be compared. I will give him a second challenge. They are not equal to the facilities that you have got in Wales. Look at the number of children that pass in the elementary schools in Scotland to advanced schools, and from advanced schools to the Universities—look at the number that pass in Wales from the elementary schools right up to the University, with a system of scholarships organised by the county council—poor counties; I am not re- ferring to rich counties like Glamorgan. I am referring to the poor mountain districts of North Wales who rate themselves voluntarily to the utmost limit for the purpose of providing this education. This is the time when England, the richest, is England, the third in this respect, and brings a Clause like this, which will equip the Board of Education with something that looks like a statutory instruction that they are to keep back the education of the children in England. It is folly. It is not economy. It is sabotage. It is entering upon exactly the wrong course at a critical moment in the history of our trade. Are Scotsmen extravagant with their education? That is not a usual characteristic of Scotsmen. Scotsmen are not in the habit of being accused of extravagance and spending money without getting something in return, and if they are spending money on education it is because they are getting a hundredfold for it. I remember a story the late Mr. Bonar Law was very fond of telling about a Scotsman who spent all his life in Calcutta. Someone asked him bow, after spending 40 years there, he had preserved the purity of his accent, and he said, "It is because I always dealt with principals."

It is a very significant story and you find it everywhere. Anyone who organised any Department in the War knows that somehow he found these well-educated young Scotsmen there to hand. There was no question of favouritism. They came there upon merits. You have only to look at the superiority of Scottish agriculture. I met an agriculturist from Scotland the other day, and he said the condition of agriculture in the South of England was perfectly appalling. I said, "Are you doing well?" He said, "I will tell you, but I do not want you to repeat it. I am making money even now, but I am a tenant farmer." It is a mistake. It is not economy not to equip these people. During the War, when we came to find officers, we had to depend upon the men turned out from the secondary schools and colleges in England, Scotland and Wales. It is equally true with industry. The men who officered the Army are now, or ought to be, available to officer industry, and it is needed in England. Not so long ago I met a very able American who had visited some of the factories in this country. He bad made a point of trying to find out for himself. I will tell the House the observation which he made to me, because it has a bearing on this Clause. He said: Your workmen are all right, hut as for your equipment and as for your organisation, it is beneath contempt. And this is the time when we are going o curtail facilities which are given in America to every child to go from the lower grades of education to the secondary and the upper grades, in order to equip them for business. To save money by cutting down expenditure of this kind is, I think, the greatest folly in the world and especially to do it now. If this Clause has any meaning at all, I hat is what it means. We can see it all around us in the holding up of educational development. The Noble Lord the President of the Board of Education (Lord E. Percy) is in charge of the children of the country. He is the trustee for them. He is their nurse. The Chancellor of the Exchequer says to him: "They are growing too fast. They are always wanting new clothes. Starve them a little." What sort of a nursemaid is he? There is no point in putting this educational Clause in the Economy Fill unless it is intended to cut down expenditure upon education, and you are doing it at a time when competition is becoming more formidable. It is being done now when competition is going to become more formidable than any competition we have ever faced.

I wonder how many Members of this House have read the reports of the Board of Trade on the developments in France, and the reports in many newspapers of all colours. They are very remarkable and very ominous. The artistic races of Europe are, for the first time, developing mass production. They are re-equipping their factories and, for the first time, they are organising their selling. What is the result in France? Woollen exports are 45 per cent. above what they were pre-war. Cotton exports—[Interruption.] My hon. Friend says it is the franc. If hon. Members will look at the report they will see that it is not altogether the franc. There is the fact that the metal trades are 100 per cent, up and that machinery is 100 per cent. up. Those are very ominous figures.

What has happened? What always happens in France. France is the most conservative country in Europe. That is why it has so many revolutions. It does not change as we do from time to time in order to meet conditions, and then there is an accumulation of things, and it needs violence to put them right. The same thing has happened with her industry. She had a great educational system after the war of 1870, but it did not tell on her industry, because her industrials were conservatives. They depended upon tariffs. They had obsolete machinery and obsolete methods. The German guns came, and amashed their machinery and destroyed their old methods, and now they are re-equipped from the English Channel down to the Mediterranean, and they are not merely competing with us, but in many respects they are beating us. Their exports are far above pre-War, whereas ours are not 80 per cent. of pre-War. What is oar answer? Our answer is Clause 14 of the Economy Bill: building more aerodromes and fewer schools, building more cruisers and fewer colleges, training more men to bomb cities and fewer men to direct industry. That is the folly of this Clause, and, in that respect it is one of the worst of the Clauses in the Bill, and they are all very bad.

I have said a good deal on the question of National Health Insurance, and I shall therefore have less to say about it to-day, but I want to say something, having regard to what fell from the Parliamentary Secretary to the Ministry of Health. What has happened? Last year, the Chancellor of the Exchequer said, with a wave of the wand of the fairy godmother, that he was going to provide for the widows and orphans of the working class. He said that he was going to give great benefits to them. He has regretted it. There is no worse form of stinginess than to be lavish one moment and then to regret it, and take back more than you ever gave. That is really what the Government are doing. They are taking back more than they ever gave, when we look at the whole of this Bill. That is thoroughly bad policy.

The Parliamentary Secretary has answered a charge about pledges. He has answered every charge except the charge that was made. Does he deny that, in substance, the Government and Parliament in 1911 had a schedule of benefits and of additional benefits which would be given as a result of valuation, and that that did constitute a Parliamentary pledge to the people who are paying their money that they would get these benefits when they matured? If it did not, I do not know the meaning of a pledge. What does it mean? This is no, a question of an electoral pledge. Everybody knows that every party in its turn has difficulties in redeeming electoral pledges, not because they do not believe in them, not because they are not sincere, but because they have Parliamentary difficulties to face, difficulties of time, and obstacles which they never foresaw. That is not the case here. This is a pledge dependent upon saying to 15,000,000 of people, "If you go on contributing 4d. per week out of your wages, you will get so much at once, and in the course of years, when the valuation justifies us in doing so, we will give you this list of additional benefits." Surely that is a Parliamentary pledge. That is a Statutory pledge, and the Government have broken it. The Parliamentary Secretary says that the same thing was done before. He says, "There was a Fund for the Equalisation of Women, and you took that away." The Equalisation of Women Fund was created in 1918, and not in 1911. How could that be a breach of a pledge given in 1911, when the Fund was not created until 1918?

Sir K. WOOD

I did not say 1911. I quoted the Act of 1922. The Geddes Report made recommendations in 1922, and the Act was passed in 1922, when £250,000 were saved for the State at the expense of National Insurance funds.

Mr. LLOYD GEORGE

The hon. Member has not got my point. In 1922 there was a change adopted in the Equalisation of Women Fund. That was not a Fund created under the Act of 1911, but a Fund created in 1918. It was not in existence in 1911. Therefore, it could not have been a breach of a pledge given in 1911. It has nothing whatever to do with it.

I would ask the Chancellor of the Exchequer whether it is wise at the pre- sent time, when there is a growing distrust of all Governments and even of Parliament amongst hundreds of thousands of workmen, when that feeling is fostered and when it is spreading, that it should be strengthened by the Government's breach of faith to millions of workmen, at a time when you need good will more than you ever did. I am sorry that the Chancellor of the Exchequer has done this. There are two things which we have done in this country since the War which no other country has done, and we have a right to be proud of them. The first thing we did was that we decided to face our liabilities on the spot and to raise whatever taxation was necessary to pay our way, and to reduce even our gigantic debt. From the moment that peace was signed we decided to do that. We have paid hundreds of millions, and we had a surplus that enabled us to liquidate our debt. Even after the subsidy, there was a substantial sum. No other country among the belligerents has done that. I am speaking of those who really took a great part in the fight. I am not referring to the United States of America who came in later.

What is the second thing we did? In spite of all the very heavy burdens of the War, we never reduced our social services for the relief of distress among the unfortunates of our citizens. Old Age Pensions, National Health Insurance, Unemployment Benefit. Medical Benefit, Housing—we have never reduced these benefits even to this hoer. It is a great thing for us that we have maintained these services. It is a great boast. We said, "All these people gave everything they had in the hour of our need, and we will stand by them, whatever happens, so long as we can afford it." We have never reduced them. The victories of the War were shared with others. There is not a belligerent that could not boast of great victories won by the valour of their sons, but these two things are pre-eminently and entirely our own and I am very sorry that the Government have thrown them away. It is a pity. It is a misfortune. It is something that they will regret. We pass this as an emergency Measure. Three all-night sittings took place to carry something which ought never to have been proposed. It is a new interpretation of the old phrase about coming like- a thief in the night.

This is not the end of this Measure. It is not the end of it in the country, and it is not the end of it in this House. Hon. and right hon. Gentlemen who sit above the Gangway on this side of the House have already declared their views on the subject. They certainly cannot rest whilst this thing is not set right. We on these benches have a special responsibility as representing the party that carried the Measure, and I say without hesitation for my colleagues and myself that we can support no Government that will not undertake to set right this deep wrong. Some of the provisions of this Measure are merely paltry, others are shabby. Many of them bear the stamp of perfidy, all of them are foolish, and in the circumstances of the present hour they add an additional peril to those we are passing through.

6.0 P.M.

Sir MARTIN CONWAY

It is the experience of everyone, as he advances life, that he sheds a certain number of his illusions. I am thankful to say that I have preserved a good many of mine, but I stand here to-day disillusioned in the matter of national economy. When the War came to an end we hoped and expected that after a few years of restoration we should go back to the position of things before the War. We thought that Europe, gorged with war, would live in a peaceful condition for a generation at all events, and that military, naval and other preparations would be reduced to a scale smaller and less costly than before the War. We thought the enormously increased staffs of Government offices would suffer rapid diminution, and, generally speaking, we thought that beyond the necessity of paying the interest on the Debt we had contracted we should return to very much the same level of national expenditure on which we stood before the War. We find that that is not the case, and I for one, and those whom I represent, are becoming disillusioned about promises of economy. A great deal is said about economy, but, as a matter of fact, when it comes to any attempt to introduce serious economies in the national expenditure, it is found that it cannot be done.

Every Government has tried to reduce national expenditure, but what happens in this House? When any definite economy is suggested, there is sure to be a section of Members who feel bound in the interests of their constituents to resist it. That is a disease of democracy. Democracy has many great virtues, but it has naturally the weaknesses which correspond to its virtues, and this is one of them. I have come to the conclusion that, although we may talk about economy and demand from the Chancellor of the Exchequer a diminished taxation, as a matter of fact it cannot be done to any considerable extent. We are committed to a scale of expenditure which we dislike, of which we disapprove, but to which we are bound, and from which we cannot hope to escape. We all with one consent begin to make excuse when any special economy is suggested.

Let me take education as a case in point. Naturally I support, and have endeavoured to support, in every way I can the development of education in this country. Every word that has just been said on the question of Education by the right hon. Gentleman the Member for Carnarvon (Mr. Lloyd George) receives my sympathetic attention. I have listened over and over again in this House to education debates; but they all come to turn upon money expenditure. One educational authority is called progressive because it is spending more money; another is regarded as reactionary because it is reducing its expenditure. But there is in fact no settled relation whatever between education and money. Let me recur to the example which the right hon. Gentleman has just cited, the example of Scotland and Wales. Why is education in Scotland on the whole better than education in England? It is not because, Scotsmen spend more money on education, but because they inherit a tradition in education, a tradition of teaching which we in England do not inherit.

Mr. MACQUISTEN

They are more intelligent.

Sir M. CONWAY

Whether they are more intelligent because they are better educated or whether they secure better education because they are more intelligent, I will leave the hon. and learned Member to decide, but it cannot be denied that there is a tradition of teaching in Scotland which is higher than the tradition in England—I am not qualified to speak about Wales. I do not know whether hon. Members can look back on the days of their youth and remember those who taught them, but as I look back there stands out amongst all the teachers who endeavoured to drag me up in different ways, one teacher, a Scotsman, who really possessed a genius for teaching. I saw a statement the other day in the newspapers about a certain school the Portsmouth County Girls' Secondary School, the teacher of which I mention with all honour—Miss Hitchcock. There has been an examination—I think it was the Oxford and Cambridge local examination—for which 500 or 600 students had entered from all parts of the country. There were nine girls placed in the first class, and only nine, and every one of those nine came from this school at Portsmouth. That is not a result arrived at by money. It is a result that is arrived at by having a teacher who can teach. You do not improve your teaching and the power of teachers to teach by the amount of money you spend on education. A teacher who can really teach can teach behind a hedge row, and can teach 100 scholars. A teacher who lacks the gift cannot efficiently teach even in the most comfortable surroundings or with only one child to deal with at a time. It is not a question of the size of the classes or the character of the school buildings, or any other mechanical factor. It is a question of the efficiency of the teachers you employ. The improvement of education in this country does not depend on the amount of money you spend. You might double or treble it without real advance. Money would not alter the result as compared with what can be accomplished by improving the quality, character, independence, and responsibility of your teachers.

Mr. WALLHEAD

Will the hon. Member admit that the difference between Scottish education and English education, from the scholar's point of view and the teacher's, is largely due to the fact that the Scottish universities have been far more democratic and easier of access than the older English universities.

Sir M. CONWAY

That may be one reason, but at all events we have democratic universities in this country at the present time, and I represent eight of them. If that were all that is wanted we should soon have an excellent supply of teachers. The fact that under existing circumstances we cannot greatly reduce our national expenditure is not one which much frightens me. If I look back to the time succeeding the Napoleonic wars, I find that we then had to carry a burden of debt of about £1,000,000,000. That burden of debt was carried, as all debt is carried, by the productive workers of the country. There were some 10,000,000 to 12,000,000 productive workers in Great Britain and they had to carry this burden of £1,000,000,000. To do that they had their own physical strength, and a very small horse-power, say, a hundredth of horse-power on the average behind each. At the present time we have something like double that number of productive workers, and at the back of each there is something like one horse-power. You had, therefore, some 10,000,000 or 12,000,000 workers, with an infinitesimal horse-power at their back carrying a debt of £1,000,000,000, and now, instead of those 12,000,000 pigmies, you have 22,000,000 giants, each strengthened with about one horse-power. These figures are very rough, but I use them by way of illustration. You have eight times the burden to carry, but you have all the difference between double the number of giants to carry it as compared with the pigmies that actually carried a much bigger relative burden.

We must not regard the burden we have to bear so much as the capacity we have to bear it. At the present time, though we have this greatly increased capacity and only an eight-fold burden to carry, we are staggering under the load. Why is that Surely the reason is that we have not got together. We are pulling against one another instead of pulling side by side in the same direction. If you get two men on opposite sides of a wheelbarrow pulling in opposite directions it will not go very fast. If they push the same way they will cover very much more ground with little toil. The alternative to diminishing our expenditure by drastic economies, which appear to be unattainable, is to increase our income. When a man falls behind, gets into debt, and is not able to pay his way, he can do one of two things: he can diminish his expenditure, or he can increase his income. The thing we have to do is not to bother so much about knocking off a million here and there and reducing a Budget of £800,000,000 to £790,000,000, as to increase our national income so that we can carry this burden with ease, as we might. If we would set our minds to that we would be doing something of infinite importance. It seems to me that we are like a number of people sitting on the ground and doing one another out of ha'pence, when underneath us, if we dug a hole, we should find chunks of gold.

Here we are as a nation sitting on a gold mine and not working it. We have the whole British Empire undeveloped. We have an abounding population, the most honest, the most skilful and on the whole the best population in the world—the best breed. We have this enormous, undeveloped territory in all parts of the world at our disposal, and we are not developing it as we might. With great economy and national self sacrifice we have built up the national credit to a high level, but we do not employ that credit to any considerable degree; we do not employ our credit as we might to develop our potentially rich Empire. It is not a question of peddling about with small loans and small stimuluses to particular trades. What we want to do is to take the whole Imperial problem into our consideration entirely regardless of party and as a national thing, to put our backs into that development confident that it will give a good return for all that we may do. In that way we shall receive so great an addition to our national wealth that we shall be able to do all that we are doing for social services, reduce taxation, and pay our way. If more money is needed for education we could have it. All this we can only attain by pulling together, all classes working for a common end, by having vision and following that vision to a great attainment.

Mr. SULLIVAN

I listened to the speech of the last speaker with great interest. I am afraid that we have had too many speeches of that kind in this House. Their sentiment is remarkably good, but after its expression the probability is that hon. Members opposite will take their cue from the party Whip and vote in favour of this Bill. I want to remind the House that during this Debate no Member on the Front Bench who represents the Scottish people has thought fit to take part, despite the fact that every Member from Scotland has had protests from every friendly society on the other side of the Border. We have Members occupying responsible positions who, somehow or other, always fail to put up a case for the country that they claim to represent. I do not think the absence of the Chancellor of the Exchequer from the Debates on this Bill has been an accident. I feel sure that he has felt ashamed of the job that he had in hand, and that he has made a choice of certain colleagues to try to carry through a very mean Bill. I must congratulate the Parliamentary Secretary to the Ministry of Health on the fact that, while he put up no case, he seemed to revel in the Bill that he was handling. The main point is that the nation is short of money. The Government are going to rob the approved societies and to take away the chance of members getting those additional benefits which they were promised.

The other point is not a new one. That is the reduction of the money set aside for the payment of the unemployed. I think that every Member of the House deplores the fact that we have so many unemployed. There is nothing more tragic than the sight of the idle man or idle woman walking from one place to another in a vain search for work. In course of time such seekers for work deteriorate physically, and even when times change they find it almost impossible to do any work because of the conditions under which they have been compelled to live. The Government reduced the amount available for the unemployed by £6,500,000 last year, and this year they propose a further reduction of £4,000,000.

I would make an appeal to hon. Members opposite. I have had some experience of local administration, and I would remind the House that a reduction of expenditure under this Bill does not mean a reduction in fact. Hon. Members may save the Chancellor of the Exchequer, but if expenditure is put on the local rates that not only hurts the people of the working class, but hurts the employers who wish to find work for that class. That is exactly what is already happening. One of the parishes which I represent has increased its poor rate five times compared with the pre-War period. Already such parishes are feeling the pinch of this Measure and of that passed last year. The probability is that by the end of the financial year we shall be paying in local rates, if not all, at least two-thirds of the £4,000,000 that the Government propose to save under this Bill. I do not believe in economy of that kind Shifting burdens from one point to another is not real economy, and in the end the effect is detrimental rather than helpful.

In connection with education we have to remember that education authorities are committed to programmes for a number of years ahead. I was astounded at an interruption made by the Minister of Education while the Leader of the Opposition was speaking. He suggested that local education authorities never had any real power as far as spending was concerned. The Minister can talk for England. I believe they have a very free and easy method on this side of the border, for the reason that in England there is not the same keenness about education as is to be found in Scotland. It must be remembered that no education authority can suddenly curtail a programme that has been planned for years ahead. The arrangement by Act of Parliament is that we get 50 per cent. of the approved expenditure. That is the arrangement on our side of the border. Within those limits we have full power to deal with education. When the Minister of Education sought to contradict that statement either he misunderstood the statement or he does not know the system prevailing in Scotland. I put it to the House that the net result of the interference here will be an increase of the local rates.

We do not want to save money on education at the expense of the children. I can remember reading speeches that were delivered during the War, and the argument went on these lines: that our enemies had become dangerous because they were better educated as a people, but that never again would Britain lag in the race for education. There is now a Tory Government in power, and it is trying to break in on the little scope that the authorities have provided. The net result of all the Government's endeavours will be that they will get together a few millions, but I suggest to hon. Members opposite that it is quite clear that the occupants of their Front Bench are not happy in this matter. It is quite clear, too, that if the party Whips were taken off, the result of the vote might be far different from what is now anticipated. When people talk of economy they always think of economy at the expense of someone else. If we economise we should make up our minds to economise as a whole.

The Press of this country hounded the Conservative party into promises of economy. A Chancellor of the Exchequer was discovered and put into power in the strong belief that he was able to accomplish a miracle. After being in office a few months he increased expenditure. A year ago the Government made a blunder that they are trying to cover up to-day. The present Chancellor is the first Chancellor of the Exchequer since the end of the War who has failed to make a reduction in the annual Budget Despite all the tall talk and the promises made at the General Election, the Chancellor has increased expenditure, and the likelihood is that he will continue in that way as long as the country suffers him to remain in his present office. He is desperate, and is looking for money. The only place where he is not looking for money is the place where the money is. The bulk of the people of the country are pauperised as a result of the War and of the peace, but nobody can deny that there is wealth in this country and that the Chancellor could get it had he the courage to tackle it. Unfortunately, the Member behind him and the people comprising his party have made up their minds that they will keep what they have, and that all the economy is to be practised at the expense of someone else. This Bill will probably turn out to be one of the worst bits of work that even a reactionary Conservative Government has ever done.

There is another way in which the Government might try to get sonic money. The settlement with the United States, made by the present Prime Minister, is not to-day hailed as it was when the settlement was made. We are going to make certain annual payments for upwards of 60 years to America because we had to obtain money on behalf of other nations, but what do we find? Up to the present day no Tory Chancellor of the Exchequer has been able to get the French people to make any payment whatever of either interest or principal in respect of War debt. Negotiations have been taken up repeatedly, and the present Finance Minister in Paris is going to come here again, but he has already made the stipulation that these negotiations will be conducted, always taking into account that the French will not pay more than they get from Germany. That is the bargain, apparently, which we have to make, and the present Chancellor of the Exchequer was willing to accept £12,000,000 a year in respect of a debt of about £600,000,000. Yet the Prime Minister guaranteed payments of £34,000,000 a year to America in respect of a debt of £700,000,000 or £800,000,000. The Italian debt was over £500,000,000, and the Chancellor of the Exchequer and the Government have agreed to take a payment equal to about £4,000,000 a year. In other words, supposing the French keep faith on the arrangements now proposed, we will get £16,000,000 a year in respect of a debt of £1,100,000,000 and we will pay America £34,000,000 a year in respect of the debt of £700,000,000.

I suggest that if the State was managed as it ought to be, the probability is that some relief would be given to the nation which is suffering so much from heavy taxation, but, instead of that, the Conservative Government are going from blunder to blunder, and I venture to predict that next year, instead of being better, they will be worse as a result of this Bill. I sincerely hope hon. Members will think over the position. It is unfortunate that sometimes the party system in this House works as it does, because I do not believe that many Members on the other side, if left to themselves, would support a Bill of this kind. They wont something bigger, and after all, with a Budget of £800,000,000, why should we fight in this way and sit up all night, time after time, all over a few millions? I feel that the Parliamentary Secretary was very desperate for arguments when he used the instance of the public health expenditure. He said that in 1911 the State was spending a sum roughly of £3,000,000 in public health services.

Sir K. WOOD

Only on certain specified items.

Mr. SULLIVAN

He said that the sum had gone up to £8,000,000, but for every penny which the State gives the public health authorities have to find from the rates another payment, and they are just as anxious to keep down the rates as the Government are. Indeed, I think they are more anxious to keep down the rates than the Government are to keep down taxation. The point I wish to drive home is that in 1911 our national expenditure was about £150,000,000 and in 1926 it has gone up to £800,000,000, and there is a bigger difference between those figures than there is between the figures of £3,000,000 and £8,000,000. In a-Arching for the mote in somebody else's eye, the Government have failed to see the beam in their own. I appeal to the House, even at this late hour, to consider that this Bill ought to be thrown out and something better introduced in the interests of the people.

Mr. NUTTALL

It is with very great diffidence that I rise to address the House for the first, time, more especially as the Bill under discussion is one of primary importance, and, in consequence, we have had the advantage of hearing almost all of what one may term the "leading lights" of the House upon it. I would therefore ask for a double share of the indulgence which is usually shown to a Member on these occasions. We have had many and varied speeches during these Debates, a number of them being from hon. Members who are well versed in certain portions of the Bill. I do not pretend to have any special knowledge, but during these Debates it has struck me that the point of view of the man in the street has been very seldom expressed. After all, he is the man who has to find the Chancellor of the Exchequer the money which is necessary to balance the Budget. It is from his point of view that I would approach the Bill. We are to-day labouring under a very heavy burden of taxation. We are, I believe, the most heavily taxed nation in the world, and, in addition to that fact, we have met all our financial obligations both externally and internally. There is no doubt that, not entirely, but partially because of our taxation, our trade is bad and we have a great army of unemployed Other nations of Europe who have not met their obligations in the same way, and whose taxation is less, have nothing like the same number of unemployed.

It seems, therefore, to me to be vitally necessary, if we are to get our trade going once more, to try to reduce taxation. If we are to do that, it is also obvious that we must have drastic economy. We must also check the rising tide of expenditure; otherwise, we shall have increased rather than lessened taxation. In consequence of the demand of the country for economy and lessened taxation, an Economy- Bill is brought in by the Government, immediately, a storm is created by those whom the proposed economies affect. Personally, I do not in the least blame them, because you cannot have economies without affecting someone, but I think it would be entirely wrong for this House to climb down, merely because of the opposition which has been created, if it thinks that these economies can he effected without doing anyone any material harm. The Bill proposes economies amounting in the first year to between, £8,000,000 and £10,000,000 and in the second and subsequent years to between £7,000,000 and £8,000,000. After listening to the speeches in these Debates, and after reading the Bill carefully, I cannot find anywhere that there is taken from anybody any advantage or benefit which is being enjoyed at the present time. One hears thrown across the Floor of the House such words as "robbery" and the like, but talk of that kind is rather inaccurate. I have always thought, rightly or wrongly, that robbery meant taking away from a person something which was actually his at that moment.

The Bill is divided into completely separate parts; there is no connection of one part with the other, and I propose to confine myself to two parts of the Bill. The first of these is the part dealing with Health Insurance. Probably it is on this side of the Bill that the greatest amount of opposition has been created. We all know full well the number of circulars we have had from approved societies, but I would respectfully suggest that when we are dealing with this subject, we ought to have a right perspective. We ought to look at things as they actually are, and not as we would like to imagine them. I must confess that several times during these Debates I have with difficulty restrained myself from rising to ask, "What is all this fuss about?" It seems to me that the following points are almost generally admitted and, certainly, I think the Minister of Health would endorse them as correct. First, under the Act of 1911 and subsequent Acts, the benefits obtained have been much greater than was anticipated at the time of the passing of the original Act. Secondly, although those benefits are greater, the approved societies have been able to amass surpluses up to almost £65,000,000. It is also admitted that under the Contributory Pensions Act of last year, certain burdens were taken off the approved societies in respect of men and women between 65 and 70 years of age. Further, it will not be denied that since 1911 the State has borne up to £24,000,000 more than its liability under the Act of 1911. Again, although the State's contribution is to be reduced, I believe it is correct to say that the benefits enjoyed to-day will not and need not be reduced. The State's contribution has already been reduced in the case of women by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George). Finally, so far as I can see, there is no question whatever of touching in any way the surpluses of the approved societies.

In consequence, it seems to me that these. Clauses in the Bill amount merely to this—that in future the surpluses of the approved societies will accumulate at a less rate than in the past and that certain new additional benefits which the approved societies would like to give their members will have to he postponed, at any rate for a time. I support the Government most heartily on this part of the Bill, for this reason. I think the Government is entitled to say to the approved societies that the general taxpayer, that is the man in the street, has shouldered his burden fairly and squarely under the Act of 1911 and the subsequent Acts, and now that it is possible for him to be relieved partially of that burden, without doing anybody any material harm, he ought to be relieved to this extent.

As to the other portion of the Bill on which I would say a few words—that is the portion dealing with Unemployment Insurance—it seems to me the facts in regard to it are roughly as follows. In consequence of the gratifying reduction in the number of unemployed in the last few months the amount to be paid into the Unemployment Insurance Fund under the Act of last year is more than is necessary, but, at the same time, although the contribution of the State can be reduced, the benefits under the Act will not be touched in any way. It seems to me that, owing to the fact that the State to-day is desperately hard up, it is entitled to reduce the amount of contributions, provided that the benefits of the people who, unfortunately, have to go to that Fund are not touched, but I would venture to suggest that if, later on, it should be found that another reduction can be made in the amounts paid into the Fund, it should be given to the employer and the employé. I suggest that for one simple reason, and that is that during the last few years many and varied burdens have been placed upon industry, not the least of which was the Contributory Pensions Act of last year, and I believe that we are promised a Factory Bill next year, which again will undoubtedly be another burden on industry. These burdens in themselves, I agree, are not very heavy, but the aggregate of the burdens is very onerous on industry, and there is no question to my mind that industry will have to be helped, because industry has been having during the last few years, and is having to-day, a desperately hard time. Therefore, I would, with great respect, suggest that the next time that arty help can be given it should be given, not to the State, but to the other two contributors to the Fund. There is an old saying that one should not work a willing horse too hard, and, therefore, I hope that will not he done in the case of industry.

My final word is this, that at the last election I, personally, preached, if I preached anything, the necessity for economy, and I feel that drastic economies are necessary and will have to be made if we are to get our trade going once more. The Government know, and we all know, that everybody, of all shades of political opinion, gives lip-service to economy, but when economy is applied to any particular aspect of administration, very often quite a number of us become rather timid but the country to-day needs economy and demands economy, and the Government will, in my view be failing in their duty to the country as a. whole unless they make those economies, although, as we know, they will be temporarily unpopular, bat I am certain that in the end the country will thank them, and it is on those grounds that I support this Bill. I thank the House for their indulgence.

Mr. SUTTON

I should not have spoken at all this evening had it not been for the large number of letters that one has received in regard to this Economy Bill, as it is termed. Personally, I, like the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George), think it is one of those Bills that might be termed penny wise and pound foolish. It is not an Economy Bill, in my opinion, when you are cutting down at the education source, at the unemployment source, and also at the source of health. I have listened attentively to the many speeches on the Bill to-day and previously, and I have wondered what kind of a Government we have in office at the present time. I have seen some treachery performed by Governments in the past during my short time in this House, but I have never seen the treachery performed by any Government of the past that has been performed by the present Government. The Parliamentary Secretary to the Ministry of Health said that this Fund, although he would not call it a National Health Insurance Fund for the service men and ex-service men, had been contributed to by over 200,000 men. I understand there are now 23,000, and they are to have £400,000 put aside for their benefit. I wish to point out one way in which these reductions are taking place from the 200,000 to 23,000. A particular friend of mine has sent me some papers. He is a friend who has served 23 years in the Army, who was discharged in 1921 as physically unfit for service, and who is in receipt of a pension at the present time for his disabilities. The Minister of War, speaking on the 13th April with reference to the service and ex-service men, said: There is another class, however, to whom that arrangement does not apply. There is the man whose health has been impaired during service and whom no society will accept as a member, and for that man there is the Navy, Army, and Air Force Insurance Fund."—[OFFICIAL REPORT, 13th April, 1926; col. 38, Vol. 194.] There has been some dispute as to what this Fund should be called. Some call it a society, but I find that the real name is "Navy and Army Insurance Fund." That is the official name, and this gentleman, who has been discharged through disabilities after 23 years' service, fighting in several wars, including the last War, received on the 17th March, 1925, this circular: Sir,—With reference to your membership of the Navy and Army Insurance Fund, I have to inform you that the Department is no longer satisfied that your state of health is such as to disqualify you for admission to an approved society.'' I want the Members of this House to notice that this same man is receiving a pension to-day for his disabilities, and yet the Navy and Army Insurance Fund want to throw him off that Fund, and have asked him to join an approved society instead. The letter went on: A list of approved societies can be seen at any Employment Exchange. With your application you should enclose your member's record card and this letter, at the foot of which is given your contribution and sickness card record during the two years ending 4th January, 1925. This gentleman ignored that circular, because he was of the opinion that no approved insurance society would take him in on account of his disabilities, but on the 27th April, he received another circular, as follows: With reference to the letter sent to you on the 17th March, 1925, regarding your membership of the Navy and Army Insurance Fund, please state whether you have yet applied for admission to an approved society, as advised in that letter. If you have applied to an approved society, please give full particulars of the society, and if your application was refused enclose any letter or statement which you have received from the society. If you have not applied to an approved society, you should do so at once. You can only remain a member of the Fund if you prove that you are net able to obtain admission to an approved society owing to the state of your health. If you do not apply to join an approved society you will, if you continue to be insured, become a deposit contributor and entitled to limited benefits only. It seems to me that this Fund is forcing men, even men who are receiving pensions to-day through their disabilities, to leave the Fund and join some approved society, and I am taking it that those 200,000 men who may have contributed to this Fund are being pushed off the Fund in a similar way to that in which this gentleman has been pushed off. He ignored the two circulars sent to him previously, believing that he would not be able to join an approved society on account of his disabilities, and then they sent him this short circular on the 17th September: Sir,—With reference to the notice recently issued to you regarding your position as a member of the Navy and Army Insurance Fund, I have to inform you that, as you have not apparently joined an approved society, you have been transferred to the Deposit Contributors' Fund as from the 6th July, 1925. A membership record card, showing your number as a deposit contributor, and an explanatory leaflet will he issued to you at an early date. That goes to show that, in spite of this gentleman ignoring the circulars sent to him, and not attempting to join an approved society, he was compelled by the Navy and Army Insurance Fund to clear out, and become a Post Office contributor. I should like to know how many others have received those forms. This is a particular friend of mine, who lives in close proximity to me, and whom I have known since his discharge from the Army. As I have said before, there is a possibility that some thousands may have received similar forms. I happened to be speaking to this gentleman this week-end, and I asked him to let me have particulars. I said that if I got an opportunity for 10 minutes I would state the case to stow the hypocrisy of the present Government. The hon. Member for West Birkenhead (Mr. Nuttall), who has just made his maiden speech, said that no one was going to be penalised by this Bill. Yet he admitted in his concluding remarks, that the Government were going to be benefited by taking this amount of money, and he hoped that on another occasion the employers and workmen would benefit.

7.0 P.M.

As I have said, it was only on account of the large number of letters that one has received that I wanted to enter a protest against this Bill. In my opinion the villain of the piece is the Chancellor of the Exchequer. He is determined, on account of his recklessness, to get his money from somewhere, and he has decided to get his money from the poorest of the people. If we on this side could only have our way, we could balance this Budget very nicely indeed. We would balance it from the people who have the money, not from those who are simply suffering through poverty at the present time. I want to enter my protest against the hypocrisy of the present Government. I know it is impossible to defeat the Government, and I have told people from time to time that when this Government appeals to the country, they will present the electors with a sheet a mile long of Bills that they have put on the Statute Book. Yet the people, in my opinion, will not be one penny better off, taking them in the mass, than they are to-day. I hope the Government will suffer for this, as I believe they will, in time to come, and I enter my protest.

Sir JOHN MARRIOTT

Before I address a very few remarks to the House, I should like to be permitted to offer my felicitations, and I know those of others, to the hon. Member for West Birkenhead (Mr. Nuttall) who made such an admirable maiden speech. I believe that that speech, closely reasoned as it was, will have a considerable effect on opinion, and I warmly congratulate the hon. Member. We have over and over again during the last 10 days been derided from the benches opposite for having sat here as dumb dogs. [HON. MEMBERS "Hear, hear!"] Yes, I thought I should have that emphatic cheer. May I appeal to hon. Gentlemen opposite to allow one of the dumb dogs, before this Bill finally passes through the House to have, if not a first bite, a valedictory bark. I do not pretend—I have never pretended, either in this House, or outside it, that I am greatly in love with this Bill. I do not know that anybody ever was greatly in love with economy in the concrete. Everybody preaches economy in general; very few practise it in particular.

I suppose hon. Gentlemen opposite will tell us, as they have been telling the country, that during the last 10 days this Bill has been absolutely "riddled with criticism." Well, I am willing to confess this much. I doubt whether any Bill was ever drafted which offered a series of more attractive, targets to criticism. In fact, those targets are so capacious that even people who cannot ordinarily hit a haystack are able to hit a bull's eye. I do not in the least blame hon. or right hon. Gentlemen opposite for making the best of an obvious and easy opportunity, but I respectfully suggest that a good deal of the criticism which, in the course of the last 10 days we have been hearing from those benches, is really irrelevant to the purposes of this Bill. A great deal of it is grossly exaggerated, and some of it—I do not want to use a harsh word—[HON. MEMBERS: "Go on!]—well, then, let me say, is gravely hypocritical. What I was going to say was slightly disingenuous. I am not greatly in love with the Bill for one or two reasons. In the first, place, because it seems to me that, as a Measure of economy—and as a Measure of economy it is brought forward—it is quite inadequate, and quite disappointing to those of us who have given the best of our Parliamentary time for a good many years to an attempt to restrict national expenditure.

In this Bill, there is no general effort to restrict expenditure. On the contrary, when he was introducing the Bill, the Chancellor of the Exchequer made it abundantly clear that no substantial restriction of expenditure is to be looked for. He drew up, as the House is aware, and circulated this White Paper, containing a very elaborate statement on the reclassification of our expenditure in four categories. Having made what seems to me a rather arbitrary reclassification, the Chancellor of the Exchequer proceeded as I thought rather summarily, to rule out three of the four categories. The fourth contains, as the House will remember, £165,000,000. You have only, we were told, got £165,000,000 at the utmost to operate on in the interests of economy and restricted expenditure. On the Second Reading of this Bill, I ventured to take very grave exception to that reclassification. To what I ventured on that occasion to urge we have, up to now, had no reply whatever from the Government Benches.

The discussion has turned almost entirely on the details of the first Clause of the Bill. I hope it is not unreasonable to ask tile Chancellor of the Exchequer or the Minister of Health, or whoever is going to reply to-night, if he will be good enough to correct a misapprehension—if I and those who think and act with me are labouring under a misapprehension—or that he will remove the apprehensions which were certainly created very widely by the speech of the Chancellor of the Exchequer when he was introducing this Bill. That speech was very largely and widely accepted as an intimation that we are to look upon an expenditure of £800,000,000 as the standardised normal expenditure for an indefinite period to come. In the second place, we had in that speech the intimation that the very best we could hope for, the most we could hope for, is not any mitigation of the burden of taxation, but only a transference of expenditure from one category to another. There is to be no relief, then, but only re-adjustment. Such a message, I venture to think, will bring very cold comfort to the overburdened taxpayer of this country.

Much of the odium which has undoubtedly been aroused by the production of this Bill has, I venture to think, been aroused, not so much by the actual provisions of the Bill itself, as by the very exaggerated commentaries which have been made on it from the other side of the House. That odium will be very largely dissipated, no doubt to the disappointment of hon. Members opposite, by a closer study of the Bill itself. Meanwhile, I want to make my own personal position in this matter clear. I have voted steadily for this Bill through all its stages. That was not because I liked its detailed provisions. Many of them I dislike as heartily as do hon. Gentlemen opposite. It was not because I think the Bill in any degree adequate as a Measure for the restriction of national expenditure, but simply because I think the Government is entitled to expect, when they have presented a Bill for economy, that those who, like myself, have been persistent in our demands for economy, will not by detailed objection to this or that Clause in the Bill defeat the Measure, but will accept it, not as an effective, not as an adequate contribution, but still as an honest and substantial contribution to the problem of national expenditure.

Sir JOHN SIMON

I am sure hon. Members who are in the House, wherever they sit, must have been much interested in the confession of faith of the hon. Member for York (Sir J. Marriott). He tells us that he has steadily supported this Bill through all its stages, and he is going to vote for it on the Third Reading. And he described it as ineffective, inadequate, and disappointing! Certainly, if we may take the hon. Gentleman's speech as a fair sample, we are now quite clear why it is that supporters of the Government have taken so small a part in the debates on the Bill. I quite agree with the hon. Gentleman that it is very easy to speak enthusiastically in favour of economy in the abstract, and I further quite agree with him that economies in the concrete are always certain to find strong opposition from somebody. There is no more difficult task for any Government than to secure economy effectively. It is not because I think the Government have failed in an easy task that I oppose this Bill. Neither do I oppose it merely because the economies proposed are, I suspect, going to turn out very unpopular. I think probably it is true to say that almost any kind of proposed economy will raise a protest. The real question raised by the Bill is: If this Bill is the Government's notion of the way to economise, is it a tolerable Bill either as regards the extent to which it effects economies, or the method which it pursues?

I take this Third Reading as the Government's notion of the way to economise, and, treating it as such, I find it consists substantially of four parts. There are four main provisions in the Bill. One of them, the provision in Clause 8 as to unemployment insurance, appears to me, from the point of view of economy, to be a mere sham. The second of them, the one which is in Clause 14, the education provisions, appears to me to be promoting economy by way of threat to the local educational authorities. The third of them, the provision in Clause 1 as to health insurance, seems to me to he a breach of a very important Parliamentary understanding. The last of them, about which I confess I myself feel most strongly of all, and on which I take no party attitude, is, it seems to me, the lamentable provision in Clause 5, which I think is a shocking misuse of the power of the majority, and little short of a gross betrayal of men to whom we owe every possible obligation. I am not concerned simply to attack the Bill by using strong language. I have tried in the course of these Debates to support the strong view I hold by arguments of the same strength.

I desire, very briefly, to put before the House on the Third Reading reasons why I suggest these four Clauses should be thus described. As regards Clause 8, how does it deal with unemployment insurance That Clause from the point of view of national economy is a mere sham. What is it that admittedly it does? It reduces the Exchequer contribution to the Unemployment Insurance Fund on the terms that the employers of this country are to continue to make week by week an extra payment, so that while on the one hand the Exchequer contribution is reduced, on the other hand the burden on industry remains larger than it ought to be. If it is said that the situation of trade and industry is so grave that it is not possible to reduce the employer's contribution, that is the burden which industry must bear, but if it is a fact that trade has sufficiently improved—it is a sanguine estimate, but there it is—to justify the fulfilment of the promise made to the employers, then it is a mere sham to say, "I will postpone the fulfilment of that promise and reduce the Exchequer contribution for the time being instead."

I can understand the Chancellor of the Exchequer believing that that is economy, because he happens to be one of those confident mortals who believes that he can do better with other people's money than they can do themselves. Nevertheless, other things being equal, it is better for people to look after their own money than that the Chancellor of the Exchequer should deal with it. It is obvious that you are continuing the burden on industry by exactly the same amount as you are reducing the Exchequer contribution to the Fund, and unless the Chancellor of the Exchequer is able to make better use of the money than the traders of this country could, then that Clause is a complete sham, because it really continues an unnecessary burden. That burden is by no means limited to the employers, because if you put an unnecessary burden week by week on every employer, you the be quite sure that it is going in the end to work out through the workmen's wages, tenders, and competition, so that it rests upon industry as a whole and tends to delay that progress which everybody desires to see. It is the height of absurdity for anybody to pretend that Clause 8 of this Bill is anything less than a pure sham as far as economy is concerned.

With regard to the education Clause, we have recently adopted it in Committee, hut really how can anybody seriously pretend that that Clause is included in this Bill otherwise than with the object of frightening, threatening, urging and pressing local authorities to spend less money on education? I quite agree with what was stated by the hon. Member for the Combined English Universities (Sir M. Conway) when he said that education is not the same thing as paying out cash. If this Clause or anything that the Board of Education is doing were directed to getting more value for your money, then there might be a great deal to be said for it. I have not the slightest desire to see money spent recklessly upon education, because I do not believe in using money wastefully in that direction, but at any rate let us be practical about it. After all, what are the main directions in which, according to the previous declarations of the Noble Lord the President of the Board of Education, he desires to encourage educational advance? He says that he desires to reduce the size of the classes, to secure an improvement and an enlargement and an increase in the educational buildings and schools. He also says that he desires to see that the children should be taught by trained teachers rather than untrained. But that is not peculiar to one side of the House or the other. As a practical matter, those are the substantive principles at which the existing system of national education must aim. How can you have a reduction of the number in the classes without involving expenditure How can you multiply buildings unless you are prepared to find the money to provide better ones? How can you provide certificated teachers in the place of uncertificated teachers in this country unless you are prepared to pay the certificated teacher his proper salary?

It is quite useless to repeat the statement about progressive education not involving the spending of money, because it must involve such expenditure. The hon. Member for Combined English Universities expressed his views very forcibly, and he said that a great deal of educational progress could be carried out without very much expenditure of money. You may cultivate the Muse on a little oatmeal in Scotland, but that does not alter the problem that in the elementary schools it is a question of reducing classes from the size of 60 to something less. What is now proposed is not helping to get rid of insanitary buildings, or raising the standard of the teaching by employing trained rather than untrained teachers. I cannot understand why the Government have introduced Clause 14 dealing with education into this Bill, unless the object is to compel or cajole local education authorities to such an extent that they will not spend quite so much money as they are spending now. It is said that this Clause has been introduced for the removal of doubt, but if there is a single Clause in this Measure calculated to foster and create doubts and uncertainty in the minds of every local education authority in this country, then it is this Clause.

The Noble Lord invites local education authorities to come to see him at the Board of Education in order to discuss their plans and programmes, and he is asking them what are their schemes. He intimates to them that he can approve or disapprove of those schemes. If you put this Clause into the Bill, you are doing nothing but saying to these 300 or 400 authorities, "Mind you, even though you may think you have produced the most persuasive arguments, and even though you have evidence that the ratepayers consent to this rate for education, even though you have made your contracts and entered into your engagements, there is no assurance that the central Government will give you that 50 per cent. of the authorised outlay which you have been accustomed to rely upon." How is that going to remove doubt? It would be much better to introduce it honestly and say it is introduced not to remove doubts, but for the purpose of creating more doubts in the mind of the education authorities, so that they will hesitate to spend money. That is the real effect of this Clause. There is only one doubt that Clause 14 removes. When I read the Prime Minister's declaration before the General Election about the policy of the Conservative party, when I read the speeches of the Noble Lord the President of the Board of Education explaining what a strong and determined lead he was going to give to national education, I confess I had my doubts. But I have not got those doubts any longer, and I know that my doubts were well founded. This Clause at any rate has removed any lingering doubt as to whether when it comes to business the Conservative party can do what some of them very much want. Those who control the effective Tory machine sacrifice the interests of national education in preference to some other competing claims.

Really this Bill has nothing to do with economy, or, if it has, it creates it in the worst of all possible ways. Take the first Clause of the Bill. As I said on the Second Reading, it does appear to me that the Clause relating to health insurance is, as far as anything can be, a breach of a fundamental Parliamentary understanding. That is how it appears to me. I do not take any pleasure in throwing that kind of accusation across the Floor of this House. I quite agree that it is within the legal power of Parliament, and sometimes it is the duty of Parliament, to insist upon revising a bargain, and there may be cases where this is justified, but it is very seriously open to question whether there is any justification at all for this Clause. I wish to make a suggestion to hon. Members opposite who are supporting this Clause. There is a question which perhaps is more important, and it is: is it really economy at all to cut down the State contribution to health insurance, and even if it is workable is it justified? Can we properly do this without the assent of the approved societies? I hold most strongly that it is no contribution whatever to national economy to slow down the pace at which national health may be improved. National health is national wealth, and if you are doing something which is really delaying the progress of national health, it is no good telling me that you are saving the national wealth. The time has long gone by when this was a matter of controversy in this country. Everybody admits that national health insurance is a good thing. I know this point was a matter of the most bitter controversy when the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) introduced it. We all remember very well the view expressed by Mr. Bonar Law at that time, but now even the Report of the Health Insurance Commissioners accepts this as one of the very valuable public services which are steadily tending to build up the health and strength of the nation.

The Minister of Health has been most careful to insist upon the limits within which this Clause must operate, but I do not think that even the right hon. Gentleman himself will suggest that you can take this money away from the State contribution towards National Health Insurance without pro tanto delaying the day when some additional progress which depends upon the spending of money under this scheme might be effected. That does seem to me to be a very serious thing, and when I read the Report of the National Health Insurance Commission, the impression it makes on my mind is that here is a body of people who heard evidence from all parts of the country and from all sources, and they all came to the deliberate conclusion that this is a great social instrument gathering force and momentum and which, in the next generation, is going to make our country far stronger than it is to-day. Therefore it is a very grave responsibility for anyone to say in these circumstances, "I believe I am promoting the interests of the nation if I slow down and take away the contribution which the State has hitherto made."

I do not know whether this quotation has been previously observed, but, reading the other day through the Debate on the Third Beading of the National Health Insurance Bill, 1911, I came across this passage in the speech of Mr. Bonar Law, I would ask hon. Gentlemen opposite to observe this here is a man who was Leader of the Conservative party at the time lie was sitting there and leading the Opposition, criticising and, to some extent, fighting this Bill. He was a man of the greatest possible capacity and good sense, and one not in the least likely to attribute to the authors of the Bill anything in the nature of an arrangement which they had not made. Let me just read this sentence from the Third Reading Debate on the Bill, from the mouth of Mr. Bonar Law himself. He said: By the arrangement of the Chancellor of the Exchequer"— and that was the right hon. Gentleman sitting beside me (Mr. Lloyd George)— the State has to pay two-ninths of all benefits. The moment the money necessary for the Sinking Fund is free the benefits will jump up. It must take place immediately. I think that sentence really means, "It cannot take place immediately," there seems to be a slip there. They may be deferred, but in that case the State will have to pay in the future not only the arrears of 2d. but it will have to pay two-ninths of the accumulations of interest which have accrued in all the approved societies in the colintry."—[OFFICIAL REPORT, 6th December, 1911; col. 1512; Vol. 32.] I really have great admiration for the ingenuity and pertinacity of the Parliamentary Secretary to the Ministry of Health, but how anybody can say, after what was said by his own Leader at the time, that there never was any arrangement made, passes my comprehension. The then Leader of the Opposition has put it on solemn record himself, that here you are committed to paying 2d. and interest on 2d. in the future, and that the State will have to pay it. Really it is no good trying to split fine points about it and pretending that it never happened. I have often observed that there is nothing in the world so technical as a layman talking law—nothing. When it comes to finding a really barren technicality, commend me to the layman who is trying to talk law. I really do not think it is a reasonable view to take that in 1911 there was not as clear an arrangement as could be made that this fraction should come from public funds. I have only heard of two attempts to dispute it. One was by saying, "It was only two-elevenths front men and a quarter from women." But the House will see from the extract that I have just read that that is not a substantial point. The reason why the women came in under those terms was the lowness of women's wages, but the actuarial calculation did not in the least depend on that, and it was on two-ninths all the time. The only other argument I have ever heard is that of the right hon. Gentleman opposite, that years afterwards that the women's contributions from the State was two-ninths. That was not reducing the State contribution. The State paid 2d. for women at the start and 2d. for women at the end, and all that happened was that instead of the other two parties providing 6d. to add to the 2d., they provided 7d., and that was done after negotiations with the friendly societies, and in view of the fact that women's wages had, happily, very substantially risen since 1911.

At any rate, whether we look at this from the point of view of what is the real way to promote national health or from the point of view of what really was the understanding and the bargain then struck, I am afraid I regard this Clause as one of the worst examples in the world of suggested economy. If we were in the presence of some great national disaster and we had now to pass a moratorium, even in respect of social health services, this would have to he considered, but surely this is a very different situation. We find in spite of all efforts that have been made, we have increased expenditure in connection with the fighting Services and yet at the same time you have this miserable attempt to withdraw the contribution which the State is making to this immensely important service of insurance. What is really involved? It means, if I calculate it aright, that the contribution the State has hitherto made during times of peace and of war and in good times and in bad, to these friendly societies, is going to be reduced by 35 per cent. That has got to be provided out of something. The gap which this Clause is going to create has got to be filled from somewhere. How is it going to be filled? It is going to be filled either because these societies will have to put now a bigger burden on their members or because they are going to slow down the rate at which in future you will be able to draw benefit. I do not think any real case has been made for any such action and I very much regret to think that the Clause has been introduced.

But the Clause about which I feel most deeply and which I would even now in the Third Reading debate beg the right hon. Gentleman to reconsider, is Clause 5. I have not the slightest desire to trade on the House's emotions or anything of that kind, but let the House look at this thing—and it must strike any man who inquires what is the origin of the fund. It cannot be disputed that this Navy and Army Fund is a fund which was raised largely by contributions from fighting and working soldiers and sailors, and really it cannot be disputed that the fund was not part of the general resources of the State. It was a fund set aside and earmarked for the benefit of those who were called upon to contribute. The hon. Gentleman who opened this Debate and has produced this most unhappy controversy said, "Why, who are the people who contributed? Why! lots of them are dead. Others have moved into employments which are beyond the range of insurance." Well, what about it? If you had said to a soldier or sailor who had been contributing week by week to this fund and having pay stopped to contribute to it, when he was dying on the field of battle, "What about this fund which you have been contributing to?" Can any human being doubt that his reply would have been, "That is a fund for my comrades who survive as well as for myself." Of course he would, and it is really to me a shocking thing that we should light-heartedly pass from this Clause without considering what it really involves.

The hon. Gentleman who opened this Debate said, "After all, these are only 23,000 people and there are other people involved." Let us begin with the 23,000. Who are they, after all? We are told that the Government have been so generous to them and have actually set aside £400,000 for these 23,000 men, or about £15 apiece. But who are they, after all? Many of them are people who cannot even get a pension. We have all heard of cases. I have heard of two or three in my own constituency. I do not want to try and exploit this, nor to raise feeling about it if I am wrong, but I am not wrong, for many of these people cannot get a pension. Here is a man who suffered from tuberculosis. If he were my son or yours, do you think £15 would do him any good? He cannot go to a hospital without paying for it and he has no right to go to the Ministry of Pensions Hospital because it is not enough that he is suffering from tuberculosis or to say he was in the Fighting Services. He has got to do more and show that his present ill state of health is either caused by or aggravated by a particular incident in his service in the War.

I have never joined in the wholesale attack on the Ministry of Pensions. I think the Minister of Pensions has struggled to administer his Department with sympathy and fairness. The mere fact that he has done so makes me doubly anxious that we should not lightheartedly pass over these poor people who, after all, have got a better claim to this Fund than I have. When the Chancellor of the Exchequer opens his Budget next week and it appears he has saved me from something in the way of Income Tax or Super-tax because he has raided this Fund, all I can say is I shall not be very comfortable, and I cannot think that there are many hon. Members in the House who will be comfortable either. Here is a Fund which was earmarked for the service of the working and lighting soldiers and sailors who needed help because of bad health after the War and a Fund for those who were not able to get into friendly societies because they were too utterly smashed up. Yet we are actually asked to admire the generosity of the Government which says, "Well, here is a small sum here. Sit down quickly and take £400,000, or £15 apiece and we will take the rest for the purpose of the Budget settlement." I cannot think this is right or fair. I cannot think it is a thing which any one of us would do if we were administering things in our own business or any single matter in which we had a private concern. I know it is said, and quite truly, that these men have not got any claim by law, but we know the reason why. The reason is, as the Secretary of State for War told the Commission, because when this Act was passed it was so difficult to estimate what might be the extent of the claims which would be made by men who were broken in the wars that Parliament fixed minimum benefits. How has it turned out? It has turned out that there is more money available than was anticipated. What ought you to do with it? You ought beyond all question, it seems to me to say, "This is a Fund that is earmarked for men of this sort." It shocks me more than I can describe to feel that the House of Commons should include in this Economy Bill this miserable Clause.

The Chancellor of the Exchequer will one day have to think this over. He has been Secretary of State for War, he has been First Lord of the Admiralty, and he has been head of the Air Force. No man has ever used language better calculated to appeal to the patriotism and gallantry of his fellow countrymen. I cannot think he will be entirely comfortable when he comes to think one day what this is which is being done. I very greatly admire some of the robust qualities of the Chancellor of the Exchequer. I am sure he has never spent a sleepless night haunted by the fear that what he will have to tell the House of Commons when he opens the Budget next week is in ridiculous contradiction of his assurances to the House last year when he opened the Budget. But he might, at any rate, consider whether in his selection of marauding expeditions, in which he is employing his colleagues, it is really necessary to do this act of meanness in reference to men who seem to have the claim that these men have. I understand that the Chancellor of the Exchequer complained because I had spoken strongly about his conduct in this matter. I have spoken strongly because I feel strongly, and I invite hon. Members in all parts of the House to consider whether or not, even now, the Government ought not to be pressed to drop this Bill. It seems to me that economy admittedly is one of those objects which probably no Government can pursue in a practical spirit without incurring unpopularity. If I thought that this Government or this Chancellor of the Exchequer was really trying effectively to restrain expenditure in directions where it ought to be restrained, I should not care for all the protests of the Admiralty and all the demonstrations of the Navy League, but should be glad to support the Government and see economy effected. But it does seem to me to be a thousand pities that the Chancellor of the Exchequer, having abjectly failed to secure his fond hopes about a reduction of £10,000,000 and having got the worst of the controversy with the Admiralty, should be reduced to these unhappy attempts, here and elsewhere, to delay, to frustrate, to undermine, the essential social and educational services of the country and to cap it all with what I cannot but think is the most unjustified laying of hands upon funds earmarked for other purposes.

Mr. CADOGAN

The right hon. Gentleman who has just sat down will not have the satisfaction of hearing from me a confession of faith similar to that indulged in by the hon. Baronet the Member for York (Sir J. Marriott). Unlike the Member for the Combined English Universities (Sir M. Conway), I am still not altogether disillusioned on the subject of the Economy Bill, and I shall not be so long as we have a Chancellor of the Exchequer as able as the present one. Earlier in the afternoon the Leader of the Opposition stated that the economy contained in Part I of the Bill—and I think the right hon. Gentleman the Member for Spen Valley (Sir J. Simon) stated the same thing—was a sham economy.

Sir J. SIMON

I did not use those words about Part I.

Mr. CADOGAN

I thought the right hon. Gentleman used those words about Clause 8, but at any rate the Leader of the Opposition used that expression. I think this is the first real economy that we have had in these times of industrial depression and financial instability. Let me explain to the House why I think this Bill is real economy. Earlier in our discusssions the Chancellor of the Exchequer, I think on the Debate on the Second Reading, laid it down as one of the first principles of sound finance that we should be careful to obtain full value for our expenditure. Thus far I do not suppose the most candid of his critics opposite will he disposed to cavil with him or to dispute that proposition. But in order to set the finances of this country on the best and surest foundation it is not only essential to obtain full value for our expenditure; it is also absolutely essential to obtain full value for our economy, and that seems to me to be the merit of Part I of this Bill. It has not been argued hitherto in this Debate as forcibly as it might be argued that this is the first attempt at economy that is not going to throw thousands of workpeople out of employment. Any economy which has that effect cannot yield a full measure of benefit to the Exchequer. In our endeavours to effect economy it so often happens that although the gross monetary value of the saving appears to be considerable, there are generally counterbalancing factors which make the not result yield only a very meagre fraction of the spoils for the State.

The most disappointing feature of the economies which have hitherto been advocated by members of the Labour party is that they are so very extravagant and detrimental to the individual. When we are congratulating ourselves, as hon. Members opposite have been congratulating themselves, that we are going to cut down expenditure on defence, we shall certainly discover that in that process we are throwing out of employment a considerable amount of skilled and unskilled labour, which will become a charge upon the nation's finances. We cannot throw men out of employment in the dockyards without giving them compensation. We cannot scrap Rosyth Dockyard without adversely affecting Dunfermline. There is a number of those economies whereby we either affect adversely those sections of the community, or throw on the labour market a further contingent of the unemployed. Hon. Members realise that it is absolutely vital for the Government to obtain some measure of economy in these hard times. Their only justification for opposition to this Economy Bill would be in they could give the House some feasible alternative. The right hon. Gentleman the Member for Derby (Mr. Thomas) hour after hour and day after day has fulminated against the Government, but he has never once offered any alternative suggestion. Only last Saturday the Leader of the Opposition likened the right hon. Gentleman to the angels of Heaven. I believe he even placed him on a plane rather higher than the angels of Heaven. But, unlike the angels, the right hon. Gentleman the Member for Derby harps merely on one string, on the same monotonous note of criticism. The worst of being an angel is that you lose touch with mundane affairs.

But perhaps it is not quite fair to say that no suggestion of economy has emanated from the benches opposite. There was a typical instance furnished us not long ago as to how the Labour party would devote themselves to this question. That instance emanated, not from an irresponsible, insignificant, back bench Member, but from one who speaks with all the weight and authority of the party behind him by reason of his recent nomination to the executive of that party. His alternative suggestion was in the shape of a Resolution which, had it been carried out, would have had the effect of scrapping the Navy altogether. It might be legitimately argued that it was hardly necessary to attach very much importance to so fantastic a proposal, and I should not attach much importance to it were it not for the fact that the hon. Member who suggested it—he is not here to-night—bears very great weight in the counsels of his party. He has not yet been repudiated by his colleagues, and he still sits on the Front Bench. So I take it for granted that, if the Labour party ever take office again, its leaders would be either unwilling, or, as I rather suspect, powerless to prevent the hon. Member giving effect to this most disastrous of all economies, which would affect, not only the widows and orphans and the 15,000,000 members of the approved societies, but the whole Empire.

When hon. Members opposite come down to this House and profess to speak—I think ill-advisedly—on behalf of the whole 15,000,000 members of the approved societies in resisting this Bill, I would like to point out in contrast that, in resisting the suggestion made by the Labour party, I am speaking not only on behalf of the 15,000,000 membes of the approved societies, but on behalf of the whole community. What would be the immediate effect of the only suggestion for economy that has been put forward by the Labour party? It would not only throw out of employment those on the effective strength of the Navy, but would also throw out of employment men in the shipyards, men in the iron foundries, men in the clothing factories, and the men in all those trades which are concerned with the rationing of the Forces. When we come to consider the effect of the Economy Bill, we need apprehend no such calamitous result.

I would earnestly appeal to those who profess to speak on behalf of the approved societies when they insist that we are scaling down benefits from them other than the £65,000,000 surplus, and I would point out to them that by common consent whatever Government is in power as long as we are passing through a period of financial stringency, be it Liberal, Labour or Conservative, there is a bounden duty on that Government to effect drastic economies. Let hon. Members point out clearly to the members of the approved societies that, if these economies suggested in Part I of this Bill are to be abandoned, then some others will have to be substituted which will have a far more detrimental effect on individuals. Be honest and straightforward with members of the approved societies, and I believe that if the situation is honestly explained to them, they will understand that, hard as it may be, it is fairer to allow some slowing down of the future accumulations of their surpluses than to offer economies which they know not of.

One of the curious letters which Disraeli was in the habit of writing to Queen Victoria is so apposite that perhaps the House will pardon me if I read an extract from it. He wrote: Generally speaking, when the country goes mad on any subject Lord Beaconsfield feels that for a time explanation is hopeless; it is useless to attempt arguing the question, it is absolutely necessary to wait till everything has been said in this one direction and even often repeated; when the public, getting a little wearied at hearing the same thing over and over again, begins to reflect a little more calmly, and opinion often changes as quickly as it began. I feel that it probably would be hopeless for us to try to explain until the public are enabled to reflect a little more calmly on the situation. With regard to the reduction of the State grant to the National Health Insurance Fund, this Bill will not diminish the surplus of the approved societies nor will it reduce the two groups of additional benefits consequent upon the second valuation. And yet the accusation bas been made against us that we are robbing the widows and orphans under this Clause. I think hon. Members opposite have under-estimated the intelligence of their fellow people. I think it would be a very uneducated widow and a very young orphan who would be taken in: by such clap-trap as that. The hon. Member for West Birkenhead (Mr. Nuttall) in an able maiden speech, explained that you could not deprive people of something that they did not possess. Perhaps the most cogent argument that has been brought against the Economy Bill is that it effects such a very small saving, but it is those very hon. Gentlemen who have brought forward that argument who also go to the approved societies, and tell them that the Government are robbing them of a super-abundance of rare and refreshing fruit.

8.0 P.M.

Really, hon. Members opposite should make up their minds which of these two mutually destructive arguments they are going to advance here. They cannot possibly have it both ways. I would protest against Measures passed by a Government, or any understanding arrived at by a former Government, being regarded as binding on its successors. The Report does not bear out that attitude at all. I know that the charm of Reports of Royal Commissions is that you can find passages within their two covers that will justify any act. The passage I wish to read seems to be so pregnant and so suited to my argument, however, that with the permission of the House I will read it. It is on page 116: We hold that the National Health Insurance Scheme was in the nature of a great and novel experiment in the field of social welfare, and that it must now be opened to Parliament, untrammelled and unfettered, to review the whole scheme in the light of 13 years' experience of its workings, and make such changes, however drastic, as that experience may have shown to be desirable. That passage, read in conjunction with another passage on page 73, completes a justification of the Chancellor of the Exchequer in introducing this Bill: If ignoring such considerations of prudence the rate of expenditure outruns in a substantial way the productive capacity of the country the result must surely be to stultify the aims which the nation has set before itself. It is small consolation to a bankrupt to be told that his doctor's bills have been the main cause of his disaster.

Sir J. SIMON

The hon. Gentleman omits the following passage: We consider also that the scheme should he self-supporting, subject to the payment by the Exchequer of its present proportionate share of the cost of benefits and their administration.

Mr. CADOGAN

Reading a little further the right hon. Gentleman will find: There may come a time, and, in fact, there has come a time when the State may justifiably turn from searching its conscience to exploring its purse. Apart from the fact that no pledge was even given in 1911, or at any other time, this is a most extraordinary reactionary attitude for hon. Members opposite to adopt, and certainly for Labour Members, towards our laws as if they were like the laws of the Medes and Persians. and particularly so from a party that advocates a reduction of the rate of interest on Government loans. I dare say a time will come when we may have to remind them of this attitude. We absolutely repudiate the validity of their argument. No assumption is more paralysing in its effect or more apt to impede progress than the assumption that successive Governments should be bound by their predecessors. The right hon. Gentleman the Member for Spen Valley has adopted an attitude that the position of the Government is exactly analogous to that of a trustee in regard to a trustee fund.

I hesitate to differ from so eminent a lawyer, but what analogy can there be between a Government that contributes to a fund and a trustee who does not do anything of the kind, but merely administers a trust? We on this side of the House are just as solicitous as Eon. Members opposite of increased benefits all round. We are just as anxious to succour the oppressed. We have not only done lip service to that cause but we have carried it into effect, without heading this country towards national disaster, in spite of the fact that the nation is meeting an annual charge of something in the neighbourhood of £308,000,000. Hon. Members opposite seem to think there is nothing we cannot afford. That seems to be their prevalent idea, and the policy of the Chancellor of the Exchequer may doubtless one day approximate to that ideal provided we husband our resources. Trusting in the good sense of my fellow-countrymen, and taking a wide broad view of the situation, I feel I shall take them with me when I vote for this Bill.

Mr. CAPE

At the commencement of his speech the hon. Member for Finchley (Mr. Cadogan) said that the finance of this country wanted to be put on a proper basis. I want to assure him that, as far as I am concerned, and I think I may say as far as all the Members on these benches are concerned, we are all anxious to see the finance of this country put on a proper basis, but what we do object to is that the first attempt made to effect any economy, as far as finance is concerned, is made exclusively on the working classes of this country. This so-called Economy Bill deliberately sets out in its different parts and Clauses that all the money it intends to save will be at the expense of some benefit at the present time, or some future benefit, for the workers of this country. I want to suggest to the hon. Member that if he is anxious, as be seems to be—and I have no reason to doubt his anxiety—to put the finance of this country on a proper basis, then he ought to see that the class from which he springs should bear then share of the suffering entailed. This Bill has five salient points. First of all, it pretends to make, or effect, a saving from contributions of the State to the National Health Insurance Benefit Fund. I would like to remind the hon. Member that every contributor to this Fund is a worker earning weekly wages, and the only people who will feel any effects are those people who depend on this Fund when sickness overtakes them. The effect of this Bill will be on the people who cannot help themselves.

In the case of the unemployment benefits, there again, we find it is the workers who will be directly and solely affected. No other class of the community will have to suffer by any encroachment made on the Unemployment Fund because no other class of the community depends on the benefits except the working class when unemployed. The contributions paid are paid, generally speaking, by the working classes. First of all, the worker has his ordinary weekly contribution deducted from his wages and, secondly, the employer pays a sum into the Fund. I put it to the House that the employer does not pay it from profits but in charges on the industry, therefore the worker must feel the weight of that additional contribution, because any attempt made to maintain or advance wages is laid on the worker. In regard to the State's contribution, I do not know whether I dare have the audacity or not to say that we think workers are part of the State and that workers contribute to the Treasury of the State. As a matter of fact, even the workers who receive these funds contribute by what they purchase as commodities of life to the Exchequer of the State. So the contributions from the State are contributed in part by the very people who receive them. Largely speaking, the workers themselves are largely responsible for the revenue that creates this Fund.

I was anxious to hear the Parliamentary Secretary to the Ministry of Health this afternoon, because I thought he might have found something new to put before the House. What did he find? Two principal points he raised. One was that the Coalition Government in 1922 did something as far as changing the Act was concerned. We have learned since that it was not the 1911 Act they were making some change in, but the 1919 Act. But assuming that it was the 1911 Act, is it any justification that because the Coalition Government did something wrong in 1922 this Government should do wrong now? That cannot justify their action. The next point he made was: "What have we done for you? We are relieving the National Health Insurance Fund by the fact that at 65 years of age we are going to put these men on Old Age Pensions in 1928." Then there must be something wrong in the previous statement made by Ministers, when they have been trying to impress upon the people that they were giving us something great so far as the new old age pension scheme is concerned. If you are going to penalise the National Insurance Fund because you are going to make old age pensions payable at 65 in 1928, for Heaven's sake do not tell people you are giving them something for nothing, because already you have penalised them to this extent, that you have increased their contributions for insurance purposes, and, not satisfied with that, you have decided that you will not contribute your fair share to the fund to which the workers are already contributing. If, because you have made that change, you are going to penalise us in two or three different ways, I think it is fair to say that again you are hitting at the workers in more than one direction.

I want now to deal with registration, which, again, directly affects the worker. Probably some hon. Members will say that it affects everyone, but it affects the workers more than anyone else. Wealthy people never have to flit from place to place looking for work, but the necessity for people of the working class moving from place to place means that they will have from time to time to be off the register when there is only this one system of registration. They will not be robbed, probably, of any money value, but they will be lobbed of rights and privileges which have been given to them by this House. With regard to education, a good deal has been said, and probably will be said, by abler people than myself, but first of all the President of the Board of Education sent out Circular No. 1371, then the next thing we had was Memorandum No. 44, and now, to strengthen his position and to enable him to be more drastic in his economies on education, he is seeking, or has been compelled, to make provision, in Clause 14 of this Bill, to give him greater powers than he has ever possessed before. I would ask the House, if it is not intended to make drastic cuts in education, why is this Clause put into the Bill, to cause so much bitterness in this House, if it is not intended to apply that Clause when it becomes part of an Act of Parliament?

I believe that once this Bill passes through all its stages and is placed on the Statute Book of this country, the President of the Board of Education will be one of the first to give effect to the powers incorporated in it. I have been informed—I do not know whether it is right or wrong, and will stand corrected by the right hon. Gentleman if he corrects me—that already letters have gone out to certain education authorities drawing their attention to the need for economy, and to what is included in Clause 14 of this Bill. I have not seen one of those letters, and, therefore, cannot speak with authority about them, but I suggest that every item dealt with in this Bill affects the working class of this country and not one penny towards any economy, as far as this Bill is concerned, is coming from the pockets of the wealthy people in this country.

One hon. Member—I think it was the hon. Member for the English Universities (Sir M. Conway)—told us this afternoon something which I do not think anyone on these Benches knew before. He said that two men at a barrow, one pulling one way and one the other, would never get any further. That is a really classic thing. I want to suggest that, if there is to be any pulling at the national barrow, both sides and all parties should pull one way. In this case the Cabinet is not making any attempt to make the wealthy pull at all; the whole burden has to be pulled by the working class, who to-day, owing to economic pressure, to the high cost of living, to want of work and low wages, are not able to bear the burdens they have to bear, but by this Measure they are being asked to bear more. I have voted consistently, right through the whole stages of this Bill, against the Bill and for every Amendment that has been moved to better the Bill, and I hope that to-night I shall be able also to register my protest by casting my vote against the Third Reading.

Mr. BLUNDELL

In the few remarks I wish to address to the House, I shall confine myself to Part I of the Bill. I am one of the Members who object to practically everything in Part I of the Bill, with the exception of the Clause that has excited so much vehemence from the right hon. Gentleman the Member for Spen Valley (Sir J. Simon). It seems to me that the taking of the £1,100,000 from the Navy, Army and Air Force Fund is the one portion of Part I of this Bill that is entirely justified. I believe that the right hon. Gentleman joined the Army as a General. If he had joined it as a private soldier, he would have contributed to this Fund. It was persons who were in that position, and who were not insured persons at all who had to contribute to the Fund while serving in the ranks of the Army during the War, and who built up the Fund to dimensions which could never have been anticipated.

The reason why the Fund rose to this size was that a large number of persons during the War, who were not insured persons at the time when they joined the Army, were then obliged to contribute, and the State contributed also on their behalf. When they left the Army, they were still not insured persons, and, therefore, made no claim on the Fund. The Fund, therefore, is in the air, and it seems to me perfectly justifiable and proper that it should be claimed by the State on behalf of the community. The party to which the right hon. Gentleman the Member for Spen Valley belongs has recently put forward proposals by which the State is to resume ownership, as I think it is called, of the land of this country, which already belongs to a number of other people. If the right hon. Gentleman is able to swallow that camel, why he should strain so much at this gnat of a fund, which does not belong to anyone and to which no one has any definite claim at all, I find it very difficult to follow.

My objection to the greater part of Part I of this Bill is that it does not really effect any economy at all It. has not been suggested by anyone that the money was not well spent, and it cannot be maintained that the effect of this Bill will not be to decrease the growth of surpluses, and, therefore, to decrease the potentialities of good work which may be done by the approved societies adminis- tering the National Health Insurance Act For that reason, I, personally, think that this part of the Bill is a mistake. I must say, however, that, since we discussed Clause 1 in Committee, the fears I then had as to the consequences it would have on health insurance have been very considerably diminished by certain information that has been made public since then, and also by certain events that have happened since then. For instance, I did not know at the time, and I do not think many Members in the House knew at the time, that £20,000,000 of surplus had already accrued during the third valuation period. We did not know at the time that the increased interest earnings had amounted to over £2,000,000 a year since the second valuation.

Mr. MARCH

They have not had the third valuation yet.

Mr. BLUNDELL

I am aware that the third valuation period is now in progress, but in the part of the third valuation period which has elapsed since the second valuation took place, it is already estimated that £20,000,000 have accured which will be carried forward into the third distribution period. It has also been estimated that, in consequence of the Widows' Pensions Bill, the average number of contributions per insured person has risen from 43 to 47, and that will make an enormous difference in the fund at the disposal of approved societies when the next valuation comes about. Another important fact is that the Government Actuary estimates that the amount of deficiency which will be caused by this Bill will amount to less than £200,000 a year.

Several things have happened which have rather shaken my confidence in the case put forward on behalf of the approved societies. First, with the exception of the Scottish Rural Workers' Approved Society, no approved society has put forward any figures showing what the effect of the Act will be on its finances. They have preferred to indulge in rather vague declamations and accusations against the Government. Another significant event has been that, although the Minister of Health, in reply to an Amendment of mine on this Clause, stated in the most definite terms that he had not closed his mind to any modifications and was quite prepared to receive any suggestion which might be agreed upon by the approved societies—and he repeated those assurances quite categorically to a deputation which he received from approved societies—the societies have not put forward any proposals which might form a basis of negotiation. They have not even, as far as I am aware, attempted to do so. It seems to me that those facts have placed the approved societies and their spokesmen on the horns of a dilemma. Either they have overstated their case or they do not sufficiently fear the effect of the Bill to be willing to save something out of the wreck by negotiations with the Minister of Health, at the expense of a little pride.

For these reasons I do not now propose to vote against the Third Reading, and a number of my friends have asked me to say on their behalf that they take up the same position as I do. We do not propose to vote against the Third Reading, but we cannot vote for the Third Reading unless we obtain some assurance that the Government will reconsider the position if their anticipations do not turn out to be accurate. I think the considerations I have referred to are considerations of great importance in the third valuation period. If the anticipations of the Government are fulfilled, I do not anticipate that there will be any reduction of the present additional benefits during the third period, but I suggest that the Government should back their opinion and give some assurance that if their anticipations turn out to be faulty, they will reconsider the matter with a view to preventing any reduction of benefits during the third distribution period.

I ask my hon. Friend on the Front Bench to convey to those responsible that a number of Members who are anxious to support the Government feel that they cannot do so unless they get some assurance that, if the amount of surplus now estimated to have accrued during the third valuation period proves less than the estimate; if the increased interest earnings are seriously diminished if the increase in the average number of contributions is not maintained; and if the actual amount of deficiency caused by the Bill is materially greater than the estimate—if those events come about or such a combination of them as would lead the Ministry of Health to suppose there would have to be a reduction in benefit during the third period, the Government will reconsider the whole position with a view to preventing such a catastrophe. I suggest that that is a fair proposition to put to the Government. I understand we are going to have some form of betting tax, and this is an opportunity whereby the Government might avail themselves of it by backing their opinions. Very categorical statements have been made, and if they are fulfilled in practice I think there is very little fear that the Bill will have the effect that many of us anticipated it would have. On the other hand, I think members of approved societies are entitled to ask the Government to say, "Very well, if we prove to be wrong and you prove to he right, we will see that you are no worse off in consequence." On behalf of myself and a number of my friends, I ask the Government to give us that assurance, that if their estimates do not turn out in the future to be correct they will see to it that the approved societies do not suffer.

Mr. TINKER

We have had a long discussion on this Measure, and nearly all the points have been exhausted. One thing that amazes me is the number of times a person can get up and speak on the same Measure. I think it is unfair that right hon. Gentlemen should have an opportunity of speaking three, four or five times on the same Measure when other people have not spoken at all. The time has come when back benchers must say something on this point. We only get our chance at the tail-end of the Debate. The one point I want to discuss is in reference to broken pledges, which I think have been made on this Measure. As I understand it, National Health Insurance was promised—and the promise has been carried out up till now—that it should have two-ninths of the expenditure incurred in buying their members medical benefits or anything of that kind. That was a solemn pledge. Now it has been broken. There may be times when pledges have to be broken, but there are two ways of doing it. First of all, you must get the electorate to give its sanction. There has been quite a number of by-elections since this was first proposed, and the electorate have not been questioned on the Measure. The second point is that something may arise in consequence of which, in the general opinion of the House, it may be wise to alter the existing law, but on this occasion no one can say that, because the Opposition represents more than 50 per cent. of the electorate, so that the Government, representing a minority, ought not to alter the Act of Parliament.

Last night from those benches we had a Motion on subversive propaganda. I think what you are doing now is doing more in that direction than anything I can mention. I take it subversive propaganda means to upset the existing form of government—to upset the present constitution. You are doing more in that direction than anything the people can do outside. People expect that the Government will respect their authority and not break it. I have gone to my meetings telling the extreme persons that this is the right form of government and we ought to make the fullest use of it. Where do I stand now? Here I am protesting against the Government breaking pledges. When I go out to address meetings I shall he faced with it. "Your arguments have been for this present form of Government, yet you are bound to admit that this Government has not done the right thing." I am hound to agree with it. There is no other argument I can advance. Last night we had a speech from the Home Secretary, in which he said: We are placed here as the Committee of the great democratic millions of -this country. We are elected for a certain number of years. We, the Ministers, are in effect the apex of the democratic Constitution. For the time being you have entrusted us with the powers of the community. The country as a whole has entrusted us.…with the duty of governing the country within the Constitution. I claim that the Government are not doing that at the present time. According to the Constitution, you cannot amend an Act of Parliament unless you have sanction from the people, or the general consent of the House of Commons. Neither the sanction of the people nor the consent of this House have been given to the present Bill. The Government are bringing on their heads something that they will regret later. The Home Secretary spoke about a number of small fires being lit and he said that we should expect the policemen to put them out. I say to the Government, "You are lighting a small fire which may go further than you expect" The day will come when there will be another form of Government and when we attempt to do something there will be an outcry from the party who now support the Government and they will say that we are not doing the right thing. I do not know how they will be able to defend that position after their action in regard to this Bill. I am not appealing to the Government to withdraw the Bill because I know such an appeal would be useless, but I am making my protest against what I believe to be an undemocratic action, and one which is against the goodwill of the country. In lodging my protest, I hope the Government will take notice of what I have said in the event of their having to make a protest in the future against any action which may be taken by our party.

Mr. MACQUISTEN

I have listened to all the speeches to-day and they are very similar to the speeches that have been made for some days past. Those who have made Opposition speeches seem to think it necessary to make the same speeches three times. There is an old saying that you must say a thing three times to a Judge and six times to a jury. Those hon. Members have paid us the compliment of giving us judicial office. This is called an Economy Bill. I am disappointed with it because very small economies are being effected. It is almost like a broker's commission of 1 per cent. on the national expenditure. I question very much whether under the present Cabinet system and the present Constitution we can get economy. In former days when the King was the executive and the spending authority, this House of Commons was the checking authority and it resented and curtailed expenditure. Those days are gone, and there is now no checking of expenditure because the House of Commons is really a spending authority. Members of Parliament seem to vie with one another and Governments seem to vie with one another in promoting expenditure, and when any Government seriously endeavours to tackle any question of public expenditure it is always spoken of as though it should be politically lynched.

Attacks are made from the Liberal Benches on the expenditure on the national services of defence. If there is one party that should be very dumb about that question it is the Liberal party, because if that party had been a little more farseeing and had put this country into a better state of defence, the late War would not have cost us 50 per cent. of the amount that was expended on it, and in all probability it would never have taken place. We have now the accumulated results of Liberal views on that matter.

Mr. DEPUTY-SPEAKER (Mr. James Hope)

The origins of the late War seem a little alien to this Bill.

Mr. MACQUISTEN

I am saying that they took exception to the present expenditure on the national services of defence. Salus populi suprema est lex. I was pointing out that they should learn from their guilty past, and I think with all due respect that I was entitled to do so.

Mr. DEPUTY-SPEAKER

Then the hon. Baronet the Member for Caithness (Sir A. Sinclair) would be able to give his version at length.

Mr. MACQUISTEN

The hon. Baronet is of value to his party. In regard to the national services of defence on which economy is suggested, some of us on the Conservative side are disappointed, because we cannot see why it is that the number of soldiers and the personnel of the Navy should be substantially reduced while what we may call the clerical part, the overhead charges, cannot be reduced. We cannot understand why there are more men in the Admiralty and in the War Office, and why there are so many men on the ground in the Air Force. We cannot see why there should not be reduction in that part of the Services. If a very searching investigation were made by those in the Government who are anxious for economy, there might be a considerable reduction made in these particular charges, without in any way affecting the efficiency of the fighting Services, which I, until human nature changes, regard as the first and fundamental charge upon the national life. If we do not keep the nation safe, all the rest goes by the board.

I am sorry that there is not more economy in this Bill. There is not very much. Charges have been made about bad faith in connection with the National Health Insurance Act. Those charges have been made very keenly, constantly and bitterly, and they have been fairly well disproved by the Parliamentary Secretary to the Ministry of Health. The right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) made a very loud claim as to the enormous benefits that his particular offspring, the National Health Insurance Act, had conferred upon the people. I often wonder what working men he meets, because I have never met a working man who had words too strong to condemn that Act. While I have received about a dozen resolutions, all printed resolutions, and couched in similar words, from officials, protesting against this Bill in regard to National Health Insurance, I have not received a single line of protest from any one of the 15,000,000 people who, according to the right hon. Member for Carnarvon Boroughs, are angrily protesting. I am satisfied that if a proposal were seriously brought forward to scrap the National Health Insurance Act, it would meet with almost united approval from the people who are at present affected by it. [An HON. MEMBER: "Where have you been living?"]

It is an intolerable liberty to take money from the working man and say, "We will take this money from you and pay your doctor on your behalf." That is what it amounts to. The working man should be treated like a gentleman, and left to pay his own doctor, according to his own way. I think the whole principle of it is absolutely unsound. I have never yet met a doctor who did not condemn it. [HON. MEMBERS: "They have done very well out of it!"] One of them told me that he made £1,500 a year by having a few working men coming to see him, and that it was taking money under false pretences. I said to him, "Why do you not chuck it? He said that if he did, someone else would come in and get the money. I asked him where the people go, and he said that they employ their own doctor, who is someone else's panel doctor, and pay him. He said that he received from £75 to £100 per quarter in respect of people, very many of whom refused to choose a doctor. The doctors divide the money among themselves, although they really do nothing for it. That is equivalent to obtaining money for services not rendered.

These are some of the abuses of the National Health Insurance Act. The right hon. Member for Carnarvon is very proud of his Act, but I wish he would go and have some conversation with working men who are not connected with its administration. I do not think he would be quite so pleased with it. I am doubtful indeed as to the great advantages of this Act. It certainly has made it difficult for the medical profession. In the old days when a young medical man left the university he went into a working-class district, and so worked his way to the West End. He cannot do that now because the men are all on the panel, and there are panel doctors themselves with 10,000 to 16,000 persons on the panel who employ young doctors to assist them. That is going on all over the country, and it is absolutely wrong. If this Act had been made to apply to the well-to-do in the first case it would never have been passed, but it was to be tried on the working classes. I do not think that the benefits of the Act will be seriously affected by a diminution of contribution from the State. As far as I have been able to follow the Debate, they are still going to get the full benefit. It may be that at some future date some benefit which otherwise they would have obtained may not be obtained, but it is time enough to cry out about that when it [An HON MEMBER: "It will be too late."] I do not believe it will he too late at all: I do not believe in climbing hills until I come to them. I think it is only a faint possibility.

Let me say a word with regard to the Army Insurance Fund. In this connection the right hon. Gentleman the Member for Carnarvon Boroughs forgot the real point—the real point in regard to tuberculosis and those who have to prove that their state of health is due to Army service is this, that the burden of proof was put the wrong way in the Pensions Act. It should have been put the other way, and it should have been for the Pensions Board to prove that the man's state of health was not due to his war service. That is why you get the hard cases, and if a proposal were made to put that right it would certainly meet with my support. In asking a poor fellow to come before a board you are doing harm, and adding to his sufferings and anxiety. Anyone who is in ill health cannot stand the strain of appearances before a board. It is understood, when you have a client in the witness box who is often suffering from severe nervous strain, that once he gets his verdict and is out of the box, he recovers in a few days. It is because the strain is taken from him, because he has succeeded. In this case there is a sum of money floating in the air, as it has been described, and everyone knows that if a man dies without any relations, the State comes in and takes the money. That is the principle which is applied here, and in my opinion no breach of faith is involved.

Mr. CONNOLLY

Does the hon. and learned Member know that in the Fourth Schedule of the original Act it was promised definitely that if a surplus accrued it would be used for the augmentation of old age pensions?

Mr. MACQUISTEN

I am speaking now about the Army Fund, and that does not come under that Act.

Mr. CONNOLLY

You are speaking about prospective benefits.

Mr. MACQUISTEN

I am speaking about. these accumulations. The money was got for a specific purpose which has been served, and as the law at present stands now the surplus belongs to nobody. In the case of a man who dies without heirs, the money goes to the benefit of the whole community. I think the right hon. Member for Carnarvon and the right hon. and learned Member for Spen Valley made far too big a song about this matter. They are suffering from what one would have thought they would realise—the mistake of overstating your case. There is nothing more ineffective than to overstate your case. Then with regard to the educational Clause. I listened with interest to the right hon. Gentleman the Member for Carnarvon Boroughs who denounced this proposal root and branch and drew an awful image of our industrial destruction, in which he said we were threatened in our own markets by the competition of other countries, simply because the Minister of Education is getting powers more clearly defined than he has at the present in order to check injudicious expenditure. He did not tell us that France gets her education for £18,000,000 a year, or less than one-fifth of the cost of our education. [An HON. MEMBER: "Does she get value?"] They can speak French better than you and I can. £18,000,000 is the total cost—that is about a year ago—

Mr. WALLHEAD

And the dogs in France understand French well?

Mr. MACQUISTEN

Oh yes. That is what it costs France. The whole point is this. There is considerable dissatisfaction among those who call themselves educationists, which generally means that they are not very practical people, with the high cost of education and the comparatively mediocre results. I think the Government will have the sympathy of the general body of electors and ratepayers if they take these powers. They need not be exercised. Their very existence will probably prevent any necessity for them to be exercised, for it will, at least, limit the opportunities of those who take the view that the mere expenditure of money is bound to improve the educational facilities of the country. That is not the case. It is the personality of the teacher; and a teacher, like a preacher is born, he is not even made. A great teacher is one of the most wonderful productions you can have, and you cannot pay him in pounds, shillings and pence. If the Minister has the power to stop extravagance here and there it will meet with the approval of practically the whole body of electors of this overburdened and overtaxed country.

Mr. MacLAREN

In listening to my hon. and learned Friend speaking about the early days when the Insurance Act was a matter of contention, my mind went back to that same period, when I remember that we were treated to a great discourse outside the workshop gate, where I was employed at the time, by two champions of his party, who came up to contest the ground in favour of their candidate against Mr. McKinnon Wood. I remember how those two gentlemen, hanging out of a taxi-cab window, warned us that if the Insurance Act came into being the country would go bankrupt, because there would be no possible means of getting money to support the requirements of the Act. To-day I find that the gentleman who was then advocating the cause of his party in that by-election is no less a person than the Secretary of State for War in the present Government. I never thought that I would live to see the time when those who were the prophets of disaster and evil would become Cabinet Ministers of a Government which was trying to cover up a bankrupt Budget by raiding a fund which they then said would be bankrupt in any case, The whirligig of time is a marvellous thing. It not only gives us changed circumstances and opinions, but also gives us this enigma: The party in power, who said that the Insurance Act, which was then under discussion, would lead to bankruptcy, are the party who are now hoping to reinstate their Budget by robbing those very Acts of whatever advantages have accrued to them financially.

On the Third Reading of this Bill I do not think it serves a very good purpose, at least from the Opposition point of view, to run after the details of the various propositions that have been advanced tinder the guise of economy. As the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) said, the best view to take of this whole matter now is to survey the ground of the propositions underlying the Bill. It has been said already, and I repeat, that this is not an Economy Bill. It is a device resorted to by the Chancellor of the Exchequer to browbeat his subordinates into standing the crossfire to which they would be subjected, in order that he might get some patches to make his Budget look something like a presentable Budget on Monday next. I agree very largely with the last speaker as to the Insurance Act. I was never enthusiastic about it. I am one of those who believe that the workers can look after themselves far better than any bureaucratic State. In fact, the more I watch the development of this country the more I dread getting too high on the road of bureaucratic subjection. But we have the Act in operation now. The Chancellor of the Exchequer is devising these schemes of economy in order to steady his Budget. We should keep that fact in mind all the time. Most of the Debates during the past 10 days have been futile in impeaching various Ministers instead of keeping well in mind the real criminal, who is the Chancellor him- self. The only person, indeed, who spoke fairly bluntly on the other side was the Noble Lady the Member for Sutton (Viscountess Astor). She intervened one day and advanced a criticism that, although she had to tolerate as her Chancellor of the Exchequer the present occupant of that office, she hoped it would not be for very long. She admitted that there were certain things in this Bill which she abhorred, and that if she had the power she would reverse them, but she was overawed by the personality of this member of the Cabinet. I congratulate the hon. Member on her speech.

9.0 P.M.

Being somewhat given to music, I always watch for the motif in a speech, and I watched for it to-day in the speech of the Parliamentary Secretary to the Ministry of Health. It was recurring constantly in his remarks that the reason why the Government were advancing this Bill was to get a revision of taxation in order to cure unemployment as far as possible. That was the scheme behind the whole of the so-called economy. Apart altogether from the ungentlemanly act of raiding public services in order to secure these economies, I think that if the Government were really honest about economy, and if they had any ability of statesmanship, they would go about their work in quite another way. The best way to economise is to cut down taxation, and to cut it down in such a way that you will not starve your best services, but rather weed out those forms of subsidies and subventions which are going to useless and parasitic growths in the community. We are spending millions per annum in the treatment of tuberculosis and other diseases, under the Ministry of Health. We are spending those millions in trying to treat those diseases, while we know perfectly well, if we consult the reports of any medical officer of health in any responsible area of the country, that the diseases are being bred in the very houses to which people are being sent back after being treated in the hospitals. We are spending those millions and 90 per cent of the money spent in so-called preventive treatment might as well be chucked into the Thames to-night.

Here, then, is a way to economise. Get down to the root causes which are maintaining these diseases and are giving rise to this enormous and iniquitous expenditure. How are we economising? Not in a statesmanlike way, not by a method which would make one honour and respect the propositions of those who say we are economising, that is by cutting at the root causes of enormous expenditure, but by tinkering about in this hypocritical, undignified and disgusting manner. Ninety per cent. of our costs are recurring year by year. Our housing conditions are breeding diseases as fast as we try to cure them. I do not know how much the Chancellor of the Exchequer hopes to secure by the various economies under the Bill, but one way in which I would economise, if I had the power, would be to cut out the subsidies or subventions or bounties to what I consider to be parasitic growths in the community. In 1923 we had a Bill brought in to give relief from rates to the owners of land in agricultural areas. It will cost the country something like £7,000,000 this year to clear up rates that might have been paid by those owners if they had paid in full on agricultural values.

There is another way in which the Government are feeding parasitic growths. You are handing over £7,000,000 to people who are not losing anything, but are gaining by every pound spent in national development. This year, I understand, the Government will have spent something like £24,000,000 on public works, all of which has added to the marketable value of the property of those people who are receiving these remissions in the rates for this year. I do not know if, even the Chancellor of the Exchequer, hopes to get £7,000,000 out of this so-called Economy Bill. I suggest he will not get even that amount, considering costs of collection and other matters, but £7,000,000 could be saved in the direction I have suggested. Then we have the subsidies in connection with beet sugar, which, in my opinion, is another case of feeding a monopoly inside your own country and giving rise to a parasitic growth. I have indicated methods which could have been pursued by any Government really determined to carry out economy, but this Government will not adopt any of them. To follow any of these paths towards economy, to tackle the housing of this country in real earnest so as to wipe out the necessity for these enormous charges for public health services, or to do any of these things, would mean challenging vested interests. You would be met by the adamant walls—the concrete walls—of the vested interests if you took any line of action of this kind.

We cannot hope to see the present Government pursue those lines of action, but I hope that with the growth of intelligence among the electorate of this country, the people will become conscious that by means of the ballot box they can send men to this House who understand these matters, and I hope it will not be long before these things are done. I do not blame the present Government—in fact, I admire them. They are in this House for the special purpose of defending these historic monopolies, and they do it efficiently. The pity of it, from my point of view, is that they hay e recruited. the best brains they can from the old Radical party to carry out the work for them. As I say, to attempt economies along any of the lines I have suggested, means challenging vested interests so that the road is open to the Government to pursue the old policy of attacking those who are least organised and least able to meet the attack. And so it is the soldier or the sailor, with his little legacy, whatever it may have been, who is to suffer. God knows I am a. bitter opponent of war. I have been so in the past, and I always will be so. But when men come into my office in the Potteries, tell me of their diseased conditions, and show me those yellow papers which come from Birmingham stating that their condition has not been brought about or aggravated by war; when I look on the ghastliness of these men going out of the office door, with no hope, and then come to this House and hear the grandiloquent statements of the Chancellor of the Exchequer as he makes broadcast strokes through the air, and tells us all about the great economies he is effecting at the expense of these men, then I have difficulty in expressing my feelings.

It is not enough to ask: Have these men any legal right or claim to this fund? As the right hon. and learned Gentleman the Member for Spen Valley (Sir J. Simon) said, there is a moral claim, and I do not think my colleagues here will miss the opportunity of telling these men, when they ask us to try to unlock the barred doors, and to get them some con- sideration, that whatever little legacy they had has been drawn upon by the Chancellor of the Exchequer to restore his reputation as the man who steadied this great State and balanced the Budget. I think that is one of the cruellest things in the whole of this manœuvre of so-called economy, and I, for one, detesting war as I do in all its ramifications, will make a strong point of that wherever I go. With regard to the other points, I will not go into them, because to do so with any detail or any enthusiasm is but to play the game of the Chancellor of the Exchequer. He lays the trail, and he hopes we will run after him, but I would never do anything of the kind. This is only a contemptible manœuvre of so-called economy that will save not one-half of the sum which is being thrown out annually to feed parisitic growths and maintain public services that would not be in existence if the health conditions of the working people were what they ought to be. If your slums were abolished there would be no need for sanitary and health and other services costing millions annually. Therefore I put forward this statement, not as an appeal—for there is no heart so hard, no ear so deaf as that of the monopolist—but in the form of an impeachment. I will not call this an act of robbery, but I will call it ungentlemanly deceit under the guise of economy. God give you good of the economy you get from it! May your consciences impeach you when you meet these men and they ask you what you have done for them when they have been told by the tribunals that there is nothing for them!

Mr. REMER

I have previously entered my protest against one particular Clause in this so-called Economy Bill, and I want to make my protest against it again to-night. I refer to Clause 8, dealing with Unemployment Insurance. Someone has to pay the contributions of Unemployment Insurance, and the alternative which we have in this Bill is whether they are to be paid by the taxpayer or by the employers and employed. In my opinion the position of industry is so precarious that it should receive the first consideration. It should receive consideration before the general taxpayer. A deduction of one penny from the contributions would be far more valuable to industry than it would be to the general taxation of this country because it must be remembered that these contributions are being paid on an extensive scale by many firms who are making considerable losses. For these reasons I wish finally to enter my protest as a Member of the Conservative party against what I regard as a great mistake in this Bill and a great blot upon it. As far as I am concerned I cannot support it.

There is a further reason, and this is perhaps the main reason, why I do not like this Bill. In my opinion the economies are too small. There is a demand and necessity at present for larger economies. I cannot help feeling, when I analyse the expenditure of this country, that the Chancellor of the Exchequer has signally failed in the mission on which he has gone forward, namely, to reduce the expenditure of this country. Last autumn he promised the people of this country that there would be large economies. He promised us bread and has given us a stone. The economies which he puts forward are not real economies; they are so small and insignificant that I for one must express my sincere disappointment. The greatest necessity of our country is the reduction of expenditure and of taxation. I feel bound to express from these benches my emphatic opinion that the Government have not done everything possible to secure that reduction of expenditure which is vital. I think the Chancellor of the Exchequer has not tackled this problem with that fire which some of us hoped for when he was appointed Man-cellos of the Exchequer. Those of us who feel deeply on the subject are disappointed that so little has been done to bring down expenditure and reduce the taxes of the country. This Bill contains some very small economies, and for that reason I cannot vote against it, but, mainly owing to the position of Clause 8, I cannot support a Bill which contains in it a Clause which I think is against the best interests of our country at the present time. For those reasons it is my intention, when this Bill comes to the Third Reading, to abstain from voting altogether.

Mr. THOMAS

I much regret that there were not more members of the Government present to hear the speech that has just been delivered by one of their supporters. The hon. Member for Macclesfield (Mr. Remer) appears to feel some surprise at what he terms the failure of the Chancellor of the Exchequer. I do not know to what extent the view he has expressed is shared by hon. Members on that side. But while sympathising with him, I want to say quite frankly that he puts himself in a, rather invidious position to-night. He damns the Bill, he considers it a bad Bill, and he not only says it does not go far enough, but he himself said, on the Committee stage of the Bill, that one part of it was a deliberate breach of faith. It is true that he said that in the early hours of the morning, and that ire may have forgotten it now—

Mr. DENNIS HERBERT

The right hon. Gentleman said it too.

Mr. THOMAS

Yes, but the difference is that, unlike the hon. Member for Macclesfield, who seems to have forgotten it, I am going to repeat it now. He was dealing with one phase of the question alone, namely, that, of unemployment. He said—and I agree—that it was a deliberate breach of faith.

Mr. REMER

I say it now.

Mr. THOMAS

Exactly. That is to say, the hon. Member still believes that the Government, of which he is a supporter, is guilty of a deliberate breach of faith—that is his admission, his statement, his view, repeated to-night—and his courage, his loyalty, his duty to his constituents are such that he is going to show his protest by not voting at all.

Mr. REMER

I thought I had made it clear to the right hon. Gentleman and to the House that I was not prepared to cast a vote against small economies. There is a certain amount of small economies in the Bill, and to vote against it might be construed into voting against those economies.

Mr. THOMAS

Yes; so that when we deal with small economies, that is a matter of vital importance, but the hon. Member does not attach so much importance to a deliberate breach of faith as he does to small economies. Here is a new psychology for a Member of Parliament. He says: "I am going to justify my neutrality to-night on the ground that the Bill contains small economies, but while I believe it is a deliberate breach of faith, that is a detail that I do not consider anything about." I think we might leave the hon. Member to his constituents, and I hope they will not only take note of his speech and his action, but that they will at least feel proud of having in this House such a champion of independent thought on the Government Benches.

Mr. REMER

They are.

Mr. THOMAS

I refuse to measure the courage of the hon. Member's constituents by his action to-night. But we are discussing an Economy Bill. Why it is called an Economy Bill I fail to understand. I would assume that an Economy Bill was a Bill that presented to the House of Commons certain economies in the administration of Government services; that is to say, that the Government would be able to say to the House: "While last year or the year before there was a certain legitimate Government expenditure, by our efficiency, by our better methods, by our rigid application of the pruning knife, we are able to save a certain amount of money." That would be the broad definition of an Economy Bill. If the right hon. Gentleman the Chancellor of the Exchequer had come down and said: "In connection with the Army, in connection with the Navy, in connection with the Air Force, I have saved so much money"—

Mr. CHURCHILL

I have saved £4,000,000.

Mr. THOMAS

The right hon. Gentleman says he has saved £4,000,000, but, he says, "I must find some other means of getting it," and he promptly proceeds to steal £10,000,000 to make up for the £4,000,000. In the first place, this so-called Economy Bill is an attack upon every social service in this country, and I suppose that it is following the example of the right hon. Gentleman that some of his more subordinate Ministers seem to emulate his methods. For instance, we have the Parliamentary Secretary to the Ministry of Health saying to himself: "Why should I allow the Chancellor of the Exchequer to do this all alone? He is a bold, big man, but this is a role of which I am not going to allow him to have the monopoly. I must come in as well, and I am going to say that not only is this Bill not an injustice, and not only are we not injuring the insured persons, but, as a matter of fact, we are generous people." He said, indeed, this afternoon: "We are not doing nearly so much as we ought to do." Really, the Chancellor of the Exchequer is much better fitted to play that role than is the Under-Secretary, because we not only expect it from the right hon. Gentleman, but he will carry it off with an air of consistency, and the hon. Member cannot quite do that. He cannot carry it off for this reason, that in the east, he has not only championed every proposal affecting insured persons, he has not only defended them, he has not only shared the responsibility, with us, of championing their rights, but he has never hesitated to say that he looked upon this National Health Insurance Act as one of the most important and beneficent Acts on the Statute Book of this country.

That being so, why he should play the role to-day of not only pretending—because no one knows better than he does that it is pretence—that under these proposals the insured persons are not affected, are not injured, are not deprived of the benefits to which they are entitled, I cannot possibly imagine, except that he is trying to emulate the audacity of the Chancellor of the Exchequer. The first claim I make is that when we are talking about "surplus" in connection with insured persons, we are really dealing with a word that is out of place in this connection. I would put it to the House, and I would much prefer to put it to those who took part in the original Insurance Act and who have had any experience of the administration of the Insurance Act on either side of the House, whether it is not true that everybody connected with National Insurance always treated the word "surplus" as being something that was to provide the additional benefits There can be no disagreement on that point, with anybody who knows about the Insurance Act. The fact that minimum benefits are provided in the Act, followed by additional benefits, all of which must come from a surplus if there is a surplus, and if there is a deficit it must be made good by the members, presupposes that a surplus must be used for additional benefits. If there is common agreement on that point, I would put this question to the Chancellor of the Exchequer. I want to make allowances. The Chancellor does not know very much about the Insurance Act. That is why he attacked it. That is why he seized upon it. I am dealing at the moment with National Health, and I will come to unemployment afterwards. I am dealing with the technicalities of the surplus, and I repeat that the surplus was intended or accepted, and is to-day accepted, as a means of supplying additional benefit.

If that be true, how can there be a surplus until every additional benefit prescribed in the Act is given effect to. Will the hon. Gentleman say effect is given to every additional benefit? Is it not true that there are not only a number of additional benefits not given effect to to-day, but that some societies are so impoverished that they can give no additional benefits? It is not only true to say that all additional benefits are not given effect to, but it is true to say in some cases there are no additional benefits. If it be true and if it is argued, as the hon. Gentleman argued to-day, that no society and no member [...]s affected, that no individual insured person suffers through this particular Bill, I want to ask the House this simple question. It is now agreed that nearly £4,000,000 is taken from a Fund. For the purpose of getting agreement I will not argue the particular fund for the moment. It is agreed that this is the only Fund from which additional benefits can he given. If, therefore, this money is taken from the only Fund from which additional benefits can be given, who can pretend, when they walk into the Lobby to-night, that the Bill is not depriving someone of a benefit to which they are entitled? I would not object in the least if hon. Members opposite were to get up and say "Yes, we are taking this money. The State requires it. It is an absolute state of emergency. The State is in real difficulties, but we frankly admit in taking this money we are taking money that was intended and could be used for the purposes I have enumerated." That is a position I can understand and a position that could be argued. That is a position we would at least argue against. I rather gather now that the right hon. Gentleman the Chancellor of the Exchequer says no one pretends any other. That being so, then why did he not correct the hon. Gentleman when he said the reverse this afternoon? Why was not he present to have heard the Debate night after night when we were arguing it from this side, and that was the only defence from that side? With righteous indignation the Minister got up and his supporters cheered.

Mr. CHURCHILL

I made no statement that the societies would be better off because this money was taken away than they would have been had it been left in their hands.

Mr. THOMAS

I will come to that in a moment. The record in the OFFICIAL REPORT to-morrow will show and there are those of us who heard. I ask those Members in the House who heard the speech of the hon. Gentleman whether it is not a true and accurate summary to say that in his view no approved society member suffered as a result of this Bill? I am content to accept the admission. Now it appears there is common agreement that so far as the approved society members are concerned, this Economy Bill deprives them of benefits to which they are entitled. That being so, we are now entitled to put this other question. The right hon. Gentleman the Chancellor of the Exchequer was a Member of the Government that introduced the original Act. The hon. Member was neither in this House nor had any responsibility for Government when the Act was passed, but he played an important part in the negotiations. He has played an important part in the negotiations since. I ask him whether he can remember, and whether he can say now, that there has been any Amendment of any sort or kind affecting the insured members introduced into this House without not only consultation but negotiation, and invariably agreement between the parties? There has never been one. Every time that it has been necessary to alter the Insurance Act the first thing done was to consult the persons affected. Why was that course followed? Because of the very obvious fact that there were three parties to the bargain, the employer, the employé and the State, the whole three being partners in a given concern. That is why negotiations took place.

Here we find that the first time approved societies heard of the matter, the first time they were told anything about it, was on the morning of the afternoon that the Bill was introduced, and the Consultative Council was told, "This is the Bill we are going to introduce this afternoon, whether you like it or not." It may be that the Chancellor of the Exchequer may feel justified in ignoring the representations of 15,000,000 people. It may be that the present Government feel that they are stronger, more representative, and better judges of the wishes of these people; it may be that a new method is to be introduced, but I put it to the Chancellor of the Exchequer clearly and definitely that, if the representatives of approved societies find themselves ignored in the manner they have been ignored by this Bill, flouted, and defied, arid not even given a chance of consultation, then they will have to seriously consider whether it is worth while for them to go on with the business. If they decide upon that course, it certainly will not be economy as far as the Government are concerned. Therefore, my first ground for opposing this particular Clause is because not only were the representatives not consulted, and funds were taken that did not belong to the Government, but because, over and above all that, since the Bill was introduced the accredited representatives of the approved societies have made representations to the Minister of Health asking him to defer the consideration of this Bill. If, in spite of those protests and that opposition, the Government intend to pursue their course, the responsibility will be theirs, and we do not intend to share it.

However mean may be or whatever may be said against the action of the Government in connection with the insured person generally, I think one of the most contemptible parts of this Bill is the way in which they have taken the money which belongs to the dead soldiers. That illustrates a change in the mentality of the Government and the way in which the workers may he humbugged. If in 1917 or 1918 the present Chancellor, when passing through the greatest crisis of the nation's history, when the call was made for men and when trade unionists and trade union leaders were asked to rouse the country, had come along and said, "As a result of your sacrifice and your effort, in seven or eight years' time the accumulated fund which you have created while fighting for your country is going to be taken by the Government," I wonder what the answer would have been. The fact cannot be denied. The Chancellor of the Exchequer cannot get up to-night and say that when he is dealing with this particular Fund it does not include a surplus which was due to the unfortunate soldiers and sailors who died in France and Gallipoli. That cannot be denied. Not only are the Government taking this money but to-night they have put up the Minister to say in connection with this particular piece of robbery, "This is a concession to the soldiers." The Chancellor of the Exchequer seems to have infected all the rest of his colleagues with that doctrine. First there is a common agreement that so far as the surplus in this particular Fund is concerned, part of it is due to the unfortunate sacrifice of the lives of our soldiers and sailors.

It is true that the present Secretary of State for War put a memorandum before the Insurance Commissioners and suggested that the soldiers at least should get additional benefits. That is not in dispute; but by the action of the Chancellor of the Exchequer in this Economy Bill the additional benefits must not be on a maximum scale, but must be on the average of the whole of the approved societies. The first point I make is, who determines the average and what is it? Hon. Members know that some societies are giving and can give better benefits than others. Some can give an additional 2s. 6d. for sick pay and some of them can pay from the first day of illness instead of after the waiting period of three days. All these are additional and supplementary benefits. There are some societies that can give 40s. instead of 30s. for maternity grants. Those additional benefits are the maximum benefits that the best managed and the most fortunate societies can give. It is equally true that, not only is there a large number of societies that do not give anything like those maximum benefits, but there are 10 per cent. of the societies that cannot give any. This so-called concession to the soldiers and sailors, a concession that actually takes away their money, was first justified by the Secretary of state for War on the ground that the State was not in the same category as the employer. Then when it was pointed out to him that, in the Debates originally, it was proved that the State was in precisely the same position as the employer, the Government, while taking this £1,000,000, then says to the soldier and sailor that they are really doing them a good turn because, having taken £1,000,000 of their money, they are leaving them £500,000 to give them the average benefits of the others. I do not know what defence or what justification the right hon. Gentleman will make, but I am perfectly sure that, as far as the representatives of the soldiers and sailors are concerned, they at least will look upon it as a poor reward for the services they have given. Let us assume for the moment that there was even a doubt as to the obligation—

Mr. CHURCHILL

Is there any doubt?

Mr. THOMAS

None. That is why I think you are not only making a mistake, but doing a grave injustice by taking it. But if there were any doubt what would be the nearest approach to a trust of that kind? Supposing three Members of this House, drawn from all parties or from any particular party, were called in and told, "As a result of so many unfortunate fellows being killed in the War, this Fund finds itself unfortunately with £1,500,000 more than was expected." Supposing that situation arose, what would any three business men or any three Members of this House say in their private capacity? They would say "What is the nearest approach to give effect to what would be the intention of those unfortunate men who were killed and who created this surplus?" That is the way they would approach the question and I am entitled to ask whether there can he any doubt but that they would come to the conclusion that this money should be used in some way for the benefit of these un fortunate people? As a matter of fact, when we debated this question on Committee stage, a number of the Government supporters felt so uncomfortable about this transaction and about an injustice being done that they actually got up and asked if it could not be used for people who were consumptive. Proposals of that kind were made in the Committee stage by supporters of the Government. But no, the Government's answer, the Government's determination, the Government's decision, and I suppose the decision of the majority when this vote is taken is "No, so far as we are concerned this is money we intend to have and which, regardless of consequences, we are going to take."

Those are the two first points. In the first place, the insured person is, to the tune of £15,000,000, deprived of his additional benefits. In the second place, in the case of the unfortunate soldiers and sailors, who died in Gallipoli, who died in France, who died in the service of the country, the surplus they helped to create, instead of being used for the benefit of our soldiers and sailors, is swallowed up by the Government in the National Exchequer, and it is called economy because we are saving money. As to the third point, I think the Chancellor of the Exchequer will himself admit that he believed it to be somewhat of a breach of faith.

Mr. CHURCHILL indicated dissent.

Mr. THOMAS

The right hon. Gentleman shakes his head. Let me remind him of what he said on Committee stage. It was early in the morning and he probably forgets it. I am now dealing with unemployment insurance, and I put it to him whether it is not true that when the additional penny was put on—

Mr. CHURCHILL

It was not put on. What happened was that it was left on when there was twopence taken off both.

Mr. THOMAS

That is the difference. It was not put on, but it was not taken off when it could have been taken off. Then is it not true that there was a specific Section in the Act which says that, under certain circumstances, it shall be taken off? Then here we have it, not put on but not taken off. But, to put it right a Clause is inserted in the Act which says that this shall come off under certain circumstances, and the right hon. Gentleman himself, in taunting us on this side in connection with this Clause, said that if anyone had a right to complain it was the employers in this connection. Then the employer, at least, has some right to complain. Hon. and right hon. Gentlemen opposite are continually telling us that anything that imposes a burden upon industry reacts upon the worker. They have told us that, with any taxation or imposition of any kind, it is the worker that always feels it. That is why it was necessary to take it off. If that is true, and if it is admitted that the employer was entitled to expect a penny off and that the employer had it provided that it should come off, are we not entitled to say, if there is any truth in your statement that the reaction would be felt by the workers, "Why do you not give the employer the benefit of it instead of taking it?" This again is called economy. It is economy because the State takes the money instead of the employer getting it. I would like to describe it by another name. What is the position of the large number of Members opposite who not only objected to this original imposition but, as one of them said in the early part of the Debate this evening, looked upon it as a deliberate breach of faith. That Member was so anxious not to betray his faith that he said that he felt so keenly upon it that he proposed not to vote at all.

We have come to the third stage—the insured person, the soldier, the sailor and the employer—but the observation I would make on the Unemployment Act is that there was never a time when, instead of depleting the Fund, it was more necessary to give it assistance.

The fourth part of this wonderful Economy Bill is that we have now reached a stage where the national finance is so bad, the nation's resources are so exhausted, that it is necessary in order to save £100,000 actually to deprive people of their franchise. There is no dispute on that point. The Government spokesman admitted that in connection with the saving of £100,000 certain people would lose their votes. The new Economy Bill, in order to save £100,000, is to deprive certain people of their franchise. Let us see how it operates. Supposing the Government gave effect to the Royal Commission on Coal. You are brought right up against that fact now, and supposing that, in giving effect to that Report, it is necessary for certain pits to be closed and colliers transferred to ther parts of the country. That is not only not an impossibility but, in the view of many people, it is some contribution towards a solution of the problem and it is a necessity. Every miner transferred in those circumstances, to save £100,000 a year, is deprived of his vote if the Election happens to come within the period.

Lord E. PERCY indicated dissent.

Mr. THOMAS

Perhaps the Noble Lord was not present when the Minister said that, but it was admitted by the spokesman of the Government that the one safeguard against that was that for the last 20 years we have always had an election in the winter and not in the summer, so that we may take it that the Government, as well as giving us supposed benefits under this Bill, are also going to be consistent, at least in regard to the time when elections are to take place.

But there is a much more serious argument than that. It is no secret that there are two trains of thought among the industrial workers of this country. There are those who believe that we ought to abolish Parliamentary institutions and who believe that the Parliamentary machine has failed. There are those who believe that Parliament is a farce in industrial methods. I join issue with that doctrine. I look upon Communism or Fascism as equally dangerous and bad for this country. But what is my answer to those people who do not believe in constitutional government? What is my answer to the industrialists and to those who say that Parliament has failed, if I have to admit that, in order to save £100,000 per annum, the workers are actually to be denied the right to vote for their own representatives in this Parliament? There is no dispute on that statement of the case, either by the Government spokesmen or by anyone on this side.

10.0 P.M.

During the Debate on the Committee stage, a clear and specific question was put to the Minister. He was asked: "Is it true that certain people will, under the provisions of this Bill, be denied and deprived the opportunity of voting?" The answer was, "Yes; it is true that certain people will be denied that right, but it is equally true that more will get it." There is an agreement that this is to be the defence of democracy. One would have thought that this would be the worst time for a Minister of the Crown to attempt such a thing and that in no circumstances whatsoever ought we, in a democratic country, to deny the right to vote to any person. What right have we to put forward such a claim as that, and now we have the admission that more will be admitted to the franchise. Again I put the answer. In the railway service there are, roughly, 70,000 employés. Their conditions of service are such that at a moment's notice they can be transferred to another part of the country. I myself, within six or seven years, was transferred to four different places, and it is common to have hundreds of men every week transferred.

Mr. CHURCHILL

That is why we are shortening the period of qualification.

Mr. THOMAS

The right hon. Gentleman says that that is why they are shortening the period of qualification. They are shortening it in order to deprive my railwaymen of the opportunity of voting. [HON. MEMBERS: "No!"] If that is why they are shortening it, why not, instead of dealing with the franchise under the guise of an Economy Bill, consider the question in all its bearings and go into it fully? The real answer is that it cannot be disputed that the Government are driven to such an extremity that for £100,000, the amount stated by them, they are depriving large numbers of the people of the right of franchise, and they are doing so at a time when they, like us, ought to be exhausting every means of endeavouring not only to maintain the constitution of this country but also to show that it is so broad and democratic that everyone is included, and no one is deprived even to give £100,000 to the Chancellor of the Exchequer.

The next economy in on education. The Noble Lord the President of the Board of Education wondered why it is that any one of us should object to this Clause, and should suggest for a moment that it in any way interferes with or hampers the educational system of this country. It can be stated in a sentence. We do not believe, we refuse to believe, and we do not intend, that the Noble Lord shall be the one sole authority to determine the standard of education in this country. If there is any justification for our suspicion, it is to be found, indeed, in Circulars issued even since this Economy Bill was introduced. There is a Circular issued to the Merthyr Education Authority on the 16th April. These are the words: The Board are advised that the teaching staff could be reduced substantially below the number contemplated. I presume that the education authority at least should know something of their requirements. They are elected by the people. They are responsible to the people. Here you have the best illustration of the Noble Lord's interpretation of economy. It merely means, "Reduce your teaching staff and so reduce your standard of education amongst the children." I have enumerated various, but not all, the details of the Economy Bill. I will summarise. You have robbed 15,000,000 insured persons of money that provided additional benefits to them. You have taken that. You have taken part of the money which was accumulated by the deaths of the soldiers and the sailors that fought for you. You have deceived the employers by inserting a Clause in the Unemployment Insurance Act that led them to believe that the penny would be taken off. You are using the penny. You have taken money from education and thereby standardised it according to the method of the Noble Lord. You have gone beyond that, and taken £100,000 in order to disfranchise a large number of people Ai this country.

All this is done under the guise of economy. It is done by a Government that said not a word during the Election—it never uttered a word about social insurance or unemployment insurance; it said nothing about the franchise, it said nothing about additional benefits; but was content to rely upon being returned to this House, not on insurance, not on unemployment, not on the franchise, not even on the surplus of dead soldiers and sailors, but was content to be returned because of a letter of a very doubtful character. That is the way that you are using your majority. That is the way you have interpreted the mandate you were given. It is because the Chancellor has failed to economise that he has resorted to these measures. We will vote against this Bill, we will repeat to the people what we Bay to you, and it is with confidence that we will await their verdict.

Mr. CHURCHILL

The right hon. Gentleman the Member for Derby (Mr. Thomas) has delivered a very vigorous and tensely argued speech into which a certain number of violent expressions, much against his natural attitude of mind, have found their way, without, I think I can say, leaving any wounds behind or creating any feelings—

Mr. J. JONES

Ora pro nobis.

Mr. CHURCHILL

—I am not very good at Latin; perhaps the hon. Gentleman will translate it for me—without creating any feeling that he has indulged in unfair conflict. When I moved the Second Reading of this Bill, more than three weeks ago, I set myself to answer two questions. First of all: "Why these economies?" Secondly, "Why not a great many more economies?" I took, as the House will remember, a much longer time in dealing with the second of those points than with the first. To-night I propose to reverse the process. Whatever else these long Debates have shown, whatever else they have done, they must have opened the eyes of some of our perfervid newspaper economists to the difficulties of reducing expenditure. After all, the economies contained in this Bill are the result of a prolonged selective process of searching and canvassing. For five or six months we surveyed, with the whole expert staff of the country, the field of expenditure. These economies you like so little are the comparatively few and lucky survivors of an immense number of proposals that were brought forward and failed under the close examination to which they were subjected.

Mr. WALLHEAD

What genius found them?

Mr. CHURCHILL

The hon. Member no doubt could have suggested many better, but we were not in a position at that moment to avail ourselves with full confidence of his advice.

The Debates have also revealed what we all know, or what we all ought to know, the utter insincerity of all this talk about economy on the part of the Labour and Liberal Opposition. I do not reproach the official opposition—the Labour party—with inconsistency in the matter. Everyone knows what is their view about current expenditure. The more there is the better—let me be fair—as long as it does not go to the defensive forces of the country. But even there they have shown a much greater expansiveness than their Liberal allies below the Gangway. For instance, the right hon. Gentleman the late Chancellor of the Exchequer approved of a cruiser programme larger than any that our naval advisers now press upon us. He approved of, or, at any rate, acquiesced in, during his powerful tenure of office, am air programme which contemplated an expansion which to-day would have raised the cost of the Air Estimates £4,000,000 above what we are now presenting to Parliament. It is quite true, I know, that the naval programme for the building of cruisers was not put on any ground of militaristic argument. Oh, no; it was not so much to build ships as to give work; it was not so much to keep up the Navy as to keep up the dockyards; but, still, whatever were the motives, the result was the same, and the Sea Lords were perfectly contented. They were a good deal more contented with the right hon. Gentleman than, I am sorry to say, they have from time to time shown themselves with me. But I do not reproach the Labour party, because they have always been a party whose views on the subject of public expenditure have naturally, consciously or unconsciously, tended towards profusion.

When we come to the Liberal party, however, there is a shocking falling away from high and ancient historic tradition. "Peace, Retrenchment and Reform." Retrenchment! This is one of the most sacred watchwords of the Liberal party, and I am really shocked to see how they have fallen away from, it in recent times. Retrenchment! This all requires to be re-stated. They are not in favour of any retrenchment except retrenchment on the armed forces. Any money that is spent for any purpose, in any direction, under any conditions, so long as it is not spent on the defence of the country, must be sustained and made good. That is the position they adopt at the present time. Never again are they to be accepted as the friends of true economy, which consists of endeavouring to secure value for money in every sphere in which money is expended, and preventing expenditure in any direction from reaching a disproportionate scale, having regard to the general situation of the public fortunes. The only true friends of economy, as has been revealed by these Debates, are the supporters of the Government. [Interruption.] They have sat here day after day and night after night, listening to very hard and very irritating language, and signifying their support and friendship for economy by actions which spoke louder than words, and consumed a good deal less Parliamentary time. On behalf of those who have proved themselves the friends of economy, I will endeavour to-night to offer, not an argument to show why we have gone no further, but an argument to justify the specific economies which we propose in this Bill.

A great deal of hard and strong language has been used in these Debates, and I shall claim, as I am sure I shall be accorded, the fullest liberty and latitude of debate in replying to the serious charges that have been made. I asked a gentleman very kindly to look through the Debates and let me have a statistical appreciation of the strength of the language used, and his analysis is very interesting. The word "robbery" or "robbed" was used 67 times; "confiscation," 10; "plunder," 10; "steal," 3—and once more by the right hon. Gentleman the Member for Derby in his last remarks, but that arrived after the list was closed;"aid," 11; "theft," 2; "filch," 1; "grab," 1; and there was one "cheat." The right hon. Gentleman the Member for Spen Valley (Sir J. Simon) is entitled to the credit of that. "Breach of faith," 19; "betrayal," 5; "outrage," 1; "infamy," 1; "rascality," 1; "perfidy," 1; "mean," 15; "paltry," 1; "despicable," 1; "shabby," 1; and "dastardly," 3. I received the following compliments: "the villain of the piece," "robber," "marauder," "cat-burglar" and "artful dodger." I think that is rather complimentary having regard to the quarter from which it emanated. The more exuberant Members of the party opposite have for some years, at elections at any rate, been accustomed to salute me by the expression "murderer," and from that point of view "robber" is a sort of promotion. It shows that I am making some headway in their esteem. Words which are on proper occasions the most powerful engines lose their weight and power and value when they are not backed by fact or winged by truth, when they are obviously the expression of a strong feeling, and are not related in any way to the actual facts of the situation.

I would only say, since all these terms have been used and we have kept our temper under them all, I hope we shall be allowed to answer in the short time that remains, not indeed the abuse, for to that I will not condescend to retort, but the gravamen of the charges which have been made. I begin with a remark that fell from the Leader of the Opposition. He said in effect, "None of this trouble would be necessary if you had not reduced the Income Tax and Super-tax last year. If you bad not deprived the revenue of the balance of £32,000,000 none of this would have been necessary." Of course, that is an argument which from some points of view is unanswerable. I might as well say it would not have been necessary if the late Chancellor of the Exchequer had not taken off the Corporation Profits Tax two years ago and deprived me of £30,000,000 of revenue. But after all, so far as the Income Tax is concerned, the right hon. Gentleman said, in the days of his responsible office, that he never contemplated maintaining the rate at 4s. 6d. and that he contemplated some time when a reduction might be made. Therefore, it is common ground between us that it was a, matter that might be considered. As far as the Super-tax is concerned, of course it does quite well outside to mention the Supertax and not to mention the increase in the Death Duties, but here in this House really our controversies have passed beyond that stage. [HON. MEMBERS: "What about Houston? What about Jersey?"] That is a matter which requires the most searching examination by the House of Commons.

The right hon. Gentleman for Derby will forgive me if I do not deal at length with his somewhat extravagant complaint about the provisions which refer to a single register. I understood his contention to be that if a single person was disfranchised by any change it would be a constitutional outrage, most improper and most dangerous at the present time. Never mind how many others were enfranchised at the same time. Never mind whether more people actually voted on a given occasion than before. Never mind how much money it costs to round up this one particular errant and excep- tional voter. We do not agree with that argument. We think that a saving of £250,000, shared between the Exchequer and the local authorities, is well worth while achieving, provided that a larger number of people will vote, in all probability, than would vote if the Measure were not passed.

Now I come, for that is the wish of the House, to the main subject of controversy between us, the Health Insurance provisions, in the first place. Let there be no misunderstanding about this. We are proposing to reduce the existing contribution for men from two-ninths to one-seventh, which means a saving of £2,800,000 to the State. First of all, there is a charge of breach of faith. That has been repeated 19 times, or 20 times if I include its repetition by the right hon. Gentleman who has just spoken. I am quite content with the reply which the Parliamentary Secretary to the Ministry of Health gave in his admirable speech.. He gave a good many references to important authorities like Mr. Kershaw and Mr. Duff, and the remarks they had made I am content to rest myself on a quotation from the Majority Report of the Royal Commission, which was mentioned by my right hon. Friend the Minister of Health in winding up the Debate on the Second Reading. The Royal Commission said: We cannot take the view that we are limited by the necessity of adhering to any particular principles on which the scheme was originally set up, or by any statements which were made at the time of the inception of the scheme in explanation or in defence of the provisions contained in the original Bill. On the contrary, we hold that the National Health Insurance Scheme was in the nature of a great and novel experiment in the field of social welfare, and that it must now be open to Parliament, untrammelled and unfettered, to review the whole scheme in the light of 13 years' experience of its working and to make such changes, however drastic, as that experience may have shown to be desirable. Which, I ask, is likely to be right? A body of experts, of high authorities, who have impartially and disinterestedly gone into the whole question of Health Insurance, or a body of estimable but excited and angry politicians, engaged in opposing the Government, in endeavouring to improve their party prospects by attacking the Government, or in vying with each other in the endeavour to gain personal distinction by pre-eminence in abuse and diatribe? Which of these tribunals is the more likely to give a fair and impartial opinion as to whether or not there is a breach of faith in regard to this matter? To which of them is the public outside likely to attach the greatest importance?

Apart from the rights of the question, what are the merits? The right hon. Member for Derby seemed to be under a misapprehension as to the Government's position. Of course it is obvious the societies would have been in a better position if this £2,800,000 had not been taken from them. No one can argue to the contrary, and I freely admit it. What we have contended is that even after this money is taken they will be far better off than they expected to be; far better off than their original author expected them to be. That is our case. We base it on three main reasons. The first is the improvement in the position of the societies through the lamentable and terrible consequences of the War. These very terrible consequences inured to the advantage of the societies, but they left their mark upon the State. There is the premature death of hundreds of thousands of contributors, which released immediately immense funds which otherwise were held in reserve to provide them with their undoubted rights, and simultaneously with that death, which has thrown upon the State a heavy burden in providing, as it does to a greater extent than any other country in the world, for their dependants, there is the rise in the rate of interest, referred to by the right hon. Gentleman the leader of the Opposition. [An HON. MEMBER: "What about the War Debt?"] I am coming to that. The rise in the rate of interest has afforded to these societies an enormous and unexpected advantage which aggregates £2,000,000 a year. As that £2,000,000 is tax free they are in a different position from the holders of War stock, or any other people in any other part of the country, because they are receiving the difference between 3½ and 5 per cent, on their money and they are not charged, as every other owner throughout the country is charged, with Income Tax at 4s. in the £ and with Super-tax in addition. That is why we think it quite just to say, not that the societies ought not to have this money, but that their position has been notably and sensibly improved by the fact that they have had this great war-time increase of interest without having the great war-time increase of taxation.

Mr. MacDONALD

Does the right hon. Gentleman suggest that these societies should now become taxable subjects?

Mr. CHURCHILL

Not in the least; on the contrary. But I do say that their greatly improved actuarial and financial position should be taken into consideration at a moment when, in the view of the Royal Commission, the House of Commons untrammelled and unfettered is entitled to examine the whole position. The second reason on which we rely is the general improvement in national health, which is largely due to the increasing direct subventions of the State in regard to disease, housing and other matters. That has very sensibly improved the position of these societies. The third contention on which we base ourselves is the improvement of the finances of the societies through the direct action of the State which has been taken through the increased grants which every Government in succession has given and which aggregate since the inception of this Measure—and I am proud to have been a member of the Government which passed it—in these 13 years upwards of £24,000,000.

Lastly, there is the old age pension at 65, a scheme that we introduced ourselves last year. Tint has received very little recognition from the party opposite, and it has only now begun to be appreciated in the country. But it relieves these friendly societies of actuarial liabilities which were computed at £37,000,000. We say that all these circumstances taken together, in view of the statement of the Royal Commission, justify our decision to return to the original basis of the Insurance Act, by which new entrants at 16 years of age will receive the whole value of their contributions, and by which they will have a prospective right to increased benefit as the fund accumulates. Let me take the illustration of the position of one of these men. I leave out women for the moment, because it is a separate calculation, though it follows, with certain alterations, very broadly the line in regard to men.

Take the case of the men. The original contribution for men was 4d. For that they received a sickness benefit of 10s. a week. Their contribution is now 4d. But they will now receive, not in consequence of this Bill but after this Bill, in spite of this Bill, if you like—I am not trying to argue unfairly—they will receive a benefit of 15s. a week, and, if the friendly societies to which they belong choose to exercise their powers as they can, they will receive benefits of over 20s. a week, or the equivalent of over 20s. a week, as a result of an increased contribution of only id, a week. Such has been the astonishing and unexpected prosperity of this Fund that, as a result largely of the calamitous conditions of the War, which has smitten so many other funds and national interests in this country, for the sake of an additional halfpenny on the contributions, more than double the benefits—even after this Bill, which, I quite admit, makes a certain deduction—will be received by the beneficiaries. This, we are told, is the result of a breach of faith, of a gross betrayal and of shameless perfidy. Do you seriously think that contributors throughout the country, the ordinary man and woman contributor who find themselves in possession of definitely improved benefits and see the actuarial position of their society improving and a programme of new benefits being developed year after year and week after week—do you suppose they are going to be influenced by the foolish and extravagant distortions of the facts in this House?

Now I come to the soldiers', sailors' and airmen's surplus. This has been the subject of the most strenuous attack, not only by the right hon. Gentleman, but by the right hon. and learned Gentleman the Member for Spen Valley (Sir J. Simon). As a matter of fact, I think it is, on the whole, the most overwhelming case included in the whole of the Economy Bill. How was this Fund accumulated? It was accumulated mainly by the contribution of the State. It was accumulated partly and even largely by the contributions of persons who are dead and untraceable. To whom does this surplus belong? Does it belong, and can it be contended that it belongs, to the 23,000 original contributors, that they are the heirs of the whole of this sum? [An HON. MEMBER: "Yes!"] An hon. Member says yes. He has not read the legislation of 1911 of my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George).

Mr. SEXTON

We do not want to read it.

Mr. CHURCHILL

That legislation explicitly prohibits the enjoyment of any additional benefits by those 23,000 men.

Mr. SEXTON

No such thing!

Mr. CHURCHILL

Is that so? It says so explicitly—it is not a matter of argument—in Section 59 (1), (e) of the National Insurance Act, 1924, which incorporated the provisions of the great Insurance Act of 1911. It is perfectly clear that this does not belong to the small residuum of men who have passed through the fund and whose aggregate contributions do not amount to one-tenth of the surplus. No one could contend or pretend that the money belongs to them. It certainly does not belong to the soldiers who are serving now. They are receiving the full benefits, and, in addition, they are provided, when they leave the Army, with the full advantages of entering into the insurance system on a level with their civilian confreres. This surplus of £1,100,000 belongs in law to the Exchequer now. The right hon. and learned Gentleman the Member for Spen Valley, who challenged the Secretary of State for War, has admitted that to-day. He has said that, as a matter of legality, it belongs now to the Exchequer; that we have a legal right at the present time to the ownership of the Fund.

Sir J. SIMON

There is nothing -new in what I have said to-day, but it is the first time that the right hon. Gentleman has been here. I have, from the beginning, admitted most frankly that as the actual Statute law stands, the beneficiaries are only entitled to minimum benefit, but the question which I have seriously raised is whether, when Parliament deals with this surplus, the proper and fair thing to do is not to recognise that these are the people who have a right to it.

Mr. CHURCHILL

I am speaking for the moment of the law. I will come to the equity in a minute. Surely the right hon. and learned Gentleman, who is a master of legal subtlety and one of our leaders in the forensic art, is not going to be the person to give a low and an inferior status to legality—to technical legality. I say he has admitted in the presence of the House that we have a legal right to this money.

Sir J. SIMON

I have never admitted anything of the kind.

Mr. CHURCHILL

It is indisputable. Can the right hon. Gentleman deny there is a legal right? I regret very much I did not hear his speech, because I was called away to attend to public affairs, but I am informed that he said we had a legal, if not a moral, right.

Sir J. SIMON

My own view is quite clear, and I have said from the beginning that as far as the Statute is concerned, as things are these men only have the right to minimum benefit. That is not the same thing as to say that the State can appropriate this money. Parliament has to deal with that question.

Mr. CHURCHILL

I am advised, and I understand that the right hon. and learned Gentleman said so, that in strict law the Fund already inures to the benefit of the Exchequer, and all we are doing is, instead of reducing the contributions as we were entitled to do, to take the capital sum and pay the increased contribution. That is all we are doing. The Fund, as we contend, is in law already ours, and so it comes to this, that we are accused of stealing but we are stealing what is already ours. It is a theft of our own property. That is the law. Let us look at the equity of the matter. Take these 23,000 men. By the legislation of my right hon. Friend the Member for Carnarvon—with which I fully associate myself—embodied in the Act of 1924, these men are prohibited from receiving additional benefit. They can only receive minimum benefits. If this Bill which has been so covered, so fouled with outrageous abuse, were not to pass into law these men could not receive anything but minimum benefit, instead of which, if this Bill, which is an outrage, of course, which is one of the vilest scandals ever perpetrated, were rejected to-night, these men would lose the additional benefits they will now receive—namely, 18s. a week for sickness instead of 15s., 9s. for disablement instead of 7s. 6d., 46s. for maternity instead of 40s., together with dental benefits, etc., which are at present not provided at all.

Mr. J. JONES

Dental treatment out of dead men's teeth.

Mr. CHURCHILL

These are indisputable facts.

Mr. THOMAS

Are the benefits which the right hon. Gentleman has read out what the men are going to get—the average?

Mr. CHURCHILL

That is so. Those are the increased benefits which those men are going to receive as a result of this Bill. The right hon. Gentleman must not mix them up with the Health Insurance Fund. We have liberated a large portion of the surplus for these individuals and we have liberated a much larger portion of the surplus for these individuals than could possibly be attributed to the contributions of those killed in the War.

Now I come to the 'Unemployment Insurance Fund, as I have still some distance to go. I spoke of this late the other night, and I do not wish to go over the same ground, but I feel, as hon. Members opposite feel, the urgent need of abridging the deficiency period and reducing the very high contributions now exacted from both employers and employed, and paid by them, and particularly by the employed, with so much good will in order to help their less fortunate comrades. I think everyone should try to abridge that period and reduce those charges. We have not only spoken to this effect, but we have testified to it by acts because last year we reduced the contribution by 2d., both from the employer and from the employed. Last year, when we reduced it by 2d., we had the idea that the state of unemployment would be such that the Fund would become insolvent unless a large additional Exchequer contribution were made. We have changed our view on a change of facts. We are now convinced that it was not necessary to make that large additional contribution, and instead of the State giving, as we proposed last autumn, 2¼d more, we are entitled, without endangering the solvency of the Fund, to give ¾d. less.

That is our position, but, while on the figures it may be justified, there is surely a much more practical reason. I put it to hon. Members opposite in the small hours of the morning in different words, but they accepted its validity to a considerable extent. You say the Treasury is pinching and scraping. Of course she is, but what is the poor devil pinching and scraping for? She is pinching and scraping because all her affairs are overshadowed by this enormous payment of £24,000,000 which we are making for the coal subsidy. It is that that is deranging our finance. What would have happened if we had not intervened? What would have happened to this Fund if there had been a strike last August? How long would the deficiency period have lasted then? How long would increased contributions be exacted from the workmen if that had happened? How long may they be, if our efforts at intervention should fail now? It is because we have made a supreme effort to save this Fund, among many other things, from going on the rocks that we feel quite justified in making such arrangements as are financially convenient in dealing with the maintenance of its solvency during future years. I have taken away £5,000,000 from this Fund. On the coal subsidy we have put up £24,000,000. Whatever may be said of ungenerous behaviour on the part of the Government, no such suggestion could apply to our proposals dealing with unemployment insurance. On this subject nothing that will come from this Economy Bill will cause the insolvency of the Fund, or will cause any reduction in benefits, or will lead to any administrative change not already sanctioned by the House.

Now I come to education. We are accused in education of starving, of robbing the child of his chance in life. A reactionary policy in education! These are serious charges. Let us examine these charges by a perfectly simple test: the provision made by the Labour Government for expenditure on education in 1924 and our provision in 1925. For all forms of education the Labour Government paid from the Exchequer £46,600,000 odd, apart from the expenses of administration. The figure in our Estimates, these reactionary Estimates, is £51,250,000. But to be fair it is necessary to reduce from that- figure £2,750,000, which is a pure book-keeping transaction in respect of the payment of teachers' pensions. Therefore, the true and comparable figure becomes £48,500,000. The fact remains that we are providing this year £2,000,000 more for education than was thought necessary by the paragons of educational virtue. I thought myself that the population had increased. It is the exact opposite. The population of the schools has decreased. The right hon. Gentleman expected 5,050,000 for the elementary schools. We expect 5,020,000, a reduction of 30,000 If you take the general educational figures of the country, including Scotland, a reduction of 60,000 is evident. We are providing £2,000,000 more for education while the schools are expected to have a population of 30,000 less. And this is starving education! This is a reactionary policy! There never has been a moment when more has been spent on education, except in 1921, and there never has been in any year so much spent per child on education.

Now I come to the right hon. Gentleman the Member for Carnarvon Boroughs. He told us, in one of those similitudes which give his friends almost as much pleasure as they do himself, how we had robbed, how we had filched the nest egg from the pillow of the sick working man, and when it came to education he accused us of a, gross reactionary policy at every stage. He made an impassioned protest against cutting down educational expenditure. Who has out it down? Who was in recent times the arch-cutter down? Where were the muscles and the sinews that wielded the Geddes axe? When I recollect that the right hon. Gentleman produced a Bill to Parliament far more chilling and discouraging to educational expenditure than anything that has ever emanated from my right hon. Friend; when I recollect that in 1922–23 he cut down the Education Estimates by over £3,150,000 and reduced the capital expenditure on new facilities by £680,000; when I remember that the capital expenditure we have approved is five times as great as that which he considered necessary for the building of schools, etc., at, the period of the Geddes axe—I approved of that policy then and I approve of it now—when I reflect on all these aspects of the right hon. Gentleman's past I am astonished—I will not use too strong a word—at his excessive complacency.

There is one other point I should like to make, and it is that we shall not be judged by the criticisms of our opponents but by the consequences of our acts. We do not seek for any other test. If our Bill does produce all these evil consequences, and if it means a great contraction of the social services of the country, then some of the wild language used will find some excuse in the public mind. If, on the contrary, the country realises that a greater sum is to be spent on social services, then all this violent language will recoil upon the heads of those who have used it. We are told that we are cutting down all the social services of the people. Under the Labour

Government in order to maintain efficiency £111,500,000 was deemed to be sufficient for the social services, but this reactionary party and Government, as we are called, this year are providing £120,500,000 for the social services or £9,000,000 more than was previously thought to be necessary. These are facts, and facts are stubborn things. You may dislike them, dispute them, and deny them, you may even divide against them; but to disprove them—that we defy you to do.

Question put, "That the Bill be now read the Third time."

The House divided: Ayes, 328; Noes, 138.

Division No. 193.]	AYES.	[11 p.m.
Acland-Troyte, Lieut.-Colonel	Chadwick, Sir Robert Burton	Gilmour, Colonel Rt. Hon. Sir John
Agg-Gardner, Rt. Hon. Sir James T.	Chamberlain, Rt. Hon. N. (Ladywood)	Glyn, Major R. G. C.
Ainsworth, Major Charles	Chilcott, Sir Warden	Goff, Sir Park
Albery, Irving James	Christle, J. A.	Gower, Sir Robert
Alexander, E. E. (Leyton)	Churchill, Rt. Hon. Winston Spencer	Grace, John
Alexander, Sir Wm. (Glasgow, Centr'l)	Churchman, Sir Arthur C.	Grant, J. A.
Allen, J. Sandeman (L'pool, W. Derby)	Clarry, Reginald George	Grattan-Doyle, Sir N.
Amery, Rt. Hon. Leopold C. M. S.	Clayton, G. C.	Greene, W. P. Crawford
Applin, Colonel R. V. K.	Cobb, Sir Cyril	Greenwood. Rt. Hn. Sir H. (W'th's'w, E)
Apsley, Lord	Cochrane, Commander Hon. A. D.	Gretton, Colonel John
Ashley, Lt.-Col. Rt. Hon. Wilfrid W.	Cockerill, Brigadier-General G. K.	Guest, Capt. Rt. Hon. F. E. (Bristrol, N.)
Astbury, Lieut.-Commander F. W.	Colfox, Major Wm. Phillips	Guinness, Rt. Hon. Walter E.
Astor, Maj. Hn. John J. (Kent, Dover)	Conway, Sir W. Martin	Gunston, Captain D. W.
Astor, Viscountess	Cope, Major William	Hacking, Captain Douglas H.
Atkinson, C.	Couper, J. B.	Hall, Lieut.-Col. Sir F. (Dulwich)
Baldwin, Rt. Hon. Stanley	Courtauld, Major J. S.	Hall, Capt. w. D'A. (Brecon & Rad.)
Balfour, George (Hampstead)	Courthope, Lieut.-Col. Sir George L.	Hammersley, S. S.
Balniel, Lord	Cowan, Sir Wm. Henry (Islington, N.)	Hannon, Patrick Joseph Henry
Banks, Reginald Mitchell	Craig, Ernest (Chester, Crewe)	Harland, A.
Barclay-Harvey, C. M.	Craik, Rt. Hon. Sir Henry	Harmsworth, Hon. E. C. (Kent)
Barnett, Major Sir Richard	Croft, Brigadier-General Sir H.	Harrison, G. J. C.
Barnston, Major Sir Harry	Crookshank, Cpt. H. (Lindsey, Gainsbro)	Hartington, Marquess of
Beckett, Sir Gervase (Leeds, N.)	Cunliffe, Sir Herbert	Harvey, G. (Lambeth, Kennington)
Bellairs, Commander Carlyon W.	Curtis-Bennett, Sir Henry	Harvey, Major S. E. (Devon, Totnes)
Benn, Sir A. S. (Plymouth, Drake)	Curzon, Captain Viscount	Haslam, Henry C.
Bennett, A. J.	Dalkeith, Earl of	Hawke, John Anthony
Betterton, Henry B.	Davidson, J. (Hertf'd, Hemel Hempst'd)	Headlam, Lieut.-Colonel C. M.
Birchall, Major J. Dearman	Davidson, Major-General Sir J. H.	Henderson, Lieut.-Col. V. L. (Bootle)
Bird, E. R. (Yorks, W. R., Skipton)	Davies, Dr. Vernon	Henn, Sir Sydney H.
Blades, Sir George Rowland	Davies, Maj. Geo. F. (Somerset. Yeovil)	Hennessy, Major J. R. G.
Bowater, Sir T. Vansittart	Davies, Sir Thomas (Cirencester)	Herbert, Dennis (Hertford, Watford)
Bowyer, Captain G. E. W.	Davison. Sir W. H. (Kensington, S.)	Herbert, S. (York, N. R., Scar. & Wh'by)
Brass, Captain W.	Dawson, Sir Philip	Hills. Major John Waller
Brassey, Sir Leonard	Dixey, A. C.	Hilton, Cecil
		Hoare Lt.-Col. Rt. Hon. Sir S. J. G
Bridgeman, Rt. Hon. William Clive	Drewe, C.	Hogg Rt. Hon. Sir D. (St. Marylebone)
Briggs, J. Harold	Eden, Captain Anthony	Hohler, Sir Gerald Fitzroy
Briscoe, Richard George	Edmondson, Major A. J	Holbrook Sir Arthur Richard
Brooke, Brigadier-General C. R. I.	Ellis, R. G.	Holland, Sir Arthur
Broun-Lindsay, Major H.	Elveden, Viscount	Holt, Captain H. P.
Brown, Col. D.C. (N'th'l'd., Hexham)	Erskine, Lord (Somerset, Weston-s.-M.)	Homan, C. W. J.
Brown, Brig.-Gen. H. C. (Berks, Newb'y)	Evans, Captain A. (Cardiff, South)	Hope, Capt. A. O. J. (Warw'k, Nun.)
Buckingham, Sir H.	Everard, W. Lindsay	Hopkins, J. W. W.
Bull, Rt. Hon. Sir William James	Fairfax, Captain J. G.	Hopkinson, A. (Lancaster, Mossley)
Bullock, Captain M.	Falle, Sir Bertram G.	Horlick, Lieut.-Colonel J. N.
Burgoyne, Lieut.-Colonel Sir Alan	Fanshawe, Commander G. D.	Howard, Captain Hon. Donald
Burman, J. B.	Fermoy, Lord	Hudson, Capt. A. U. M. (Hackney, N.)
Burney, Lieut.-Com. Charles D.	Fielden, E. B.	Hudson, R. S. (Cumberland, Whiteh'n)
Butler, Sir Geoffrey	Ford, Sir P. J.	Hume, Sir G. H.
Butt. Sir Alfred	Foster, Sir Harry S.	Hume-Williams, Sir W. Ellis
Cadogan, Major Hon. Edward	Foxcroft, Captain C. T.	Hunter-Weston, Lt.-Gen. Sir Aylmer
Campbell, E. T.	Frece, Sir Walter de	Huntingfield, Lord
Cassels, J. D.	Fremantle, Lieut.-Colonel Francis E.	Hurd, Percy A.
Cautley, Sir Henry S.	Galbraith, J. F. W.	Hutchison, G. A. Clark (Midl'n & P'bl's)
Cayzer, Sir C. (Chester, City)	Ganzoni, Sir John	Iliffe, Sir Edward M.
Cazalet, Captain Victor A.	Gates, Percy.	Inskip, Sir Thomas Walker H.
Cecil, Rt. Hon. Sir Evelyn (Aston)	Gault, Lieut.-Col. Andrew Hamilton	Jackson, Lieut.-Col. Rt. Hon. F. S.
Jackson, Sir H. (Wandsworth, Cen'l)	Nail, Lieut.-Colonel Sir Joseph	Spender-Clay, Colonel H.
Jacob, A. E.	Neville, R. J.	Sprot, Sir Alexander
James, Lieut.-Colonel Hon. Cuthbert	Newman, Sir R. H. S. D. L. (Exeter)	Stanley, Col. Hon. G. F. (Will'sden, E.)
Jephcott, A. R.	Newton, Sir D. G. C. (Cambridge)	Stanley, Lord (Fylde)
Joynson-Hicks, Rt. Hon. Sir William	Nicholson, O. (Westminster)	Stanley, Hon. O. F. G. (Westm'eland)
Kidd, J. (Linlithgow)	Nicholson, Col. Rt. Hn. W. G. (Pirst'ld.)	Steel, Major Samuel Strang
Kindersley, Major Guy M.	Nuttall, Ellis	Storry Deans, R.
King, Captain Henry Douglas	Oakley, T.	Stott, Lieut.-Colonel W. H.
Kinloch-Cooke, Sir Clement	O'Connor, T. J. (Bedford, Luton)	Streatfeild, Captain S. R.
Knox, Sir Alfred	Oman, Sir Charles William C.	Strickland, Sir Gerald
Lamb, J. Q.	Pennefather, Sir John	Stuart, Crichton-, Lord C.
Lane Fox, Col. Rt. Hon. George R.	Penny, Frederick George	Stuart, Hon. J. (Moray and Nairn)
Lister, Cunliffe, Rt. Hon. Sir Philip	Percy, Lord Eustace (Hastings)	Sueter, Rear-Admiral Murray Fraser
Little, Dr. E. Graham	Peto, Basil E. (Devon, Barnstaple)	Sykes, Major-Gen. Sir Frederick H.
Locker Lampson, G. (Wood Green)	Peto, G. (Somerset, Frome)	Tasker, Major R. Inigo
Loder, J. de V.	Philipson, Mabel	Thom, Lt.-Col. J. G. (Dumbarton)
Looker, Herbert William	Pilcher, G.	Thompson, Luke (Sunderland)
Lord, Walter Greaves-	Pilditch, Sir Philip	Thomson, F. C. (Aberdeen, South)
Lougher, L.	Power, Sir John Cecil	Thomson, Rt. Hon. Sir W. Mitchell-
Lowe, Sir Francis William	Pownall, Lieut.-Colonel Assheton	Tinne, J. A.
Lucas-Tooth, Sir Hugh Vere	Price, Major C. W. M.	Titchfield, Major the Marquess of
Luce, Major-Gen. Sir Richard Harman	Radford. E. A.	Tryon, Rt. Hon. George Clement
Lumley, L. R.	Raine, W.	Vaughan-Morgan, Col. K. P.
Lynn, Sir R. J.	Ramsden, E.	Waddington, R.
MacAndrew, Major Charles Glen	Reid, Capt. A. S. C. (Warrington)	Wallace, Captain D. E.
Macdonald, Capt. P. D. (I. of W.)	Rentoul, G. S.	Ward. Lt.-Col. A. L. (Kingston-on-Hull)
Macdonald, R. (Glasgow, Cathcart)	Rice, Sir Frederick	Warner, Brigadier-General W. W.
MacIntyre, Ian	Richardson, Sir P. W. (Sur'y, Ch'ts'y)	Watson, Rt. Hon. W. (Carlisle)
McLean, Major A.	Roberts, E. H. G. (Flint)	Watts, Dr. T.
Macmillan, Captain H.	Roberts, Samuel (Hereford, Hereford)	Wells, S. R.
Macnaghten, Hon. Sir Malcolm	Ropner, Major L.	Wheler, Major Sir Granville C. H.
McNeill, Rt. Hon. Ronald John	Ruggles-Brise, Major E. A.	White Lieut.-Colonel G. Dairymple
Macquisten, F. A.	Russell, Alexander West (Tynemouth)	Williams, A. M. (Cornwall, Northern)
MacRobert, Alexander M.	Rye, F. G.	Williams, Com. C. (Devon, Torquay)
Maitland, Sir Arthur D. Steel-	Salmon, Major I.	Williams, Herbert G. (Reading)
Makins, Brigadier-General E.	Samuel, A. M. (Surrey, Farnham)	Wilson, Sir C. H. (Leeds, Central)
Malone, Major P. B.	Samuel, Samuel (W'dsworth, Putney)	Wilson, R. R. (Stafford, Lichfield)
Manningham-Buller, Sir Mervyn	Sandeman, A. Stewart	Winby, Colonel L. P.
Margesson, Captain D.	Sanders, Sir Robert A.	Windsor-Clive, Lieut.-Colonel George
Marriott, Sir J. A. R.	Sanderson, Sir Frank	Winterton. Rt. Hon. Earl
Mason, Lieut.-Col. Glyn K.	Sandon Lord	Wise, Sir Fredric
Meller, R. J.	Savory, S. S.	Withers, John James
Merriman, F. B.	Shaw, R. G. (Yorks, W. R., Sowerby)	Wolmer, Viscount
Meyer, Sir Frank	Shaw, Lt.-Col. A. D. Mcl. (Renfrew, W.)	Womersley, W. J.
Milne, J. S. Wardlaw-	Shaw, Capt. W. W. (Wilts, Westb'y)	Wood, E. (Chest'r, Stalyb'dge & Hyde)
Mitchell, S. (Lanark, Lanark)	Sheffield, Sir Berkeley	Wood, Sir Kingsley (Woolwich, W.)
Mitchell, Sir W. Lane (Streatham)	Simms, Dr. John M. (Co. Down)	Wood, Sir S. Hill- (High Peak)
Moore, Sir Newton J.	Sinclair, Col. T. (Queen's Univ., Belfst.)	Woodcock, Colonel H. C.
Moore-Brabazon, Lieut.-Col. J. T. C.	Skelton, A. N.	Worthington-Evans, Rt. Hon. Sir L.
Morden, Col. W. Grant	Slaney, Major P. Kenyon	Wragg, Herbert
Moreing, Captain A. H.	Smith, R. W. (Aberd'n & Kinc'dine, C.)	Yerburgh, Major Robert D. T.
Morrison, H. (Wilts, Salisbury)	Smith-Carington, Neville W.
Morrison-Bell, Sir Arthur Clive	Smithers, Waldron	TELLERS FOR THE AYES.—
Murchison, C. K.	Somerville, A. A. (Windsor)	Commander B. Eyres Monsell and
		Colonel Gibbs.
NOES.
Adamson, Rt. Hon. W. (Fife. West)	Davies, Rhys John (Westhoughton)	Hardie, George D.
Alexander, A. V. (Sheffield, Hillsbro')	Day, Colonel Harry	Harris, Percy A.
Ammon, Charles George	Dennison, R.	Hartshorn, Rt. Hon. Vernon
Attlee, Clement Richard	Duncan, C.	Hayes, John Henry
Barker, G. (Monmouth, Abertillery)	Dunnico, H.	Henderson, Right Hon. A. (Burnley)
Barnes, A.	Edwards, John H. (Accrington)	Henderson, T. (Glasgow)
Barr, J.	England, Colonel A.	Hirst, G. H.
Batey, Joseph	Evans, Capt. Ernest (Welsh Univer.)	Hirst, W. (Bradford, South)
Bowerman, Rt. Hon. Charles W.	Forrest, W.	Hudson, J. H. (Huddersfield)
Briant, Frank	Garro-Jones, Captain G. M.	Hutchison, Sir Robert (Montrose)
Broad, F. A.	George, Rt. Hon. David Lloyd	Jenkins, W. (Glamorgan, Neath)
Bromley, J.	Gillett, George M.	Johnston, Thomas (Dundee)
Brown, James (Ayr and Bute)	Gosting, Harry	Jones, J. J. (West Ham, Silvertown)
Buchanan, G	Graham, D. M. (Lanark, Hamilton)	Jones, T. I. Mardy (Pontypridd)
Buxton, Rt. Hon. Noel	Graham, Rt. Hon. Wm. (Edin., Cent.)	Kelly, W. T.
Cape, Thomas	Greenall, T.	Kennedy, T.
Charleton, H. C.	Greenwood, A. (Nelson and Colne)	Kenworthy, Lt.-Com. Hon. Joseph M.
Cluse, W. S.	Grenfell, D. R. (Glamorgan)	Kirkwood, D.
Clynes, Rt. Hon. John R.	Griffiths, T. (Monmouth, Pontypool)	Lansbury, George
Collins, Sir Godfrey (Greenock)	Groves, T.	Lawson, John James
Compton, Joseph	Grundy, T. W.	Lindley, F. W.
Connolly, M.	Guest, Dr. L. Haden (Southwark. N.)	Livingstone, A. M.
Cove, W. G.	Hall, F. (York, W. R., Normanton)	Lowth, T.
Dalton, Hugh	Hall, G. H. (Merthyr Tydvil)	Lunn, William
Davies, Evan (Ebbw Vale)	Hamilton, Sir R. (Orkney & Shetland)	MacDonald, Rt. Hon. J. R. (Aberavon)

MacLaren, Andrew	Scrymgeour, E.	Townend, A. E.
MacNeill-Weir, L.	Scurr, John	Trevelyan, Rt. Hon. C. P.
March, S.	Sexton, James	Varley, Frank B.
Maxton, James	Shaw, Rt. Hon. Thomas (Preston)	Viant, S. P.
Montague, Frederick	Shiels, Dr. Drummond	Wallhead, Richard C.
Morris, R. H.	Short, Alfred (Wednesbury)	Walsh, Rt. Hon. Stephen
Morrison, R. C. (Tottenham, N.)	Simon, Rt. Hon. Sir John	Watson, W. M. (Dunfermline)
Murnin, H.	Sinclair, Major Sir A. (Caithness)	Watts-Morgan, Lt.-Col. D. (Rhondda)
Naylor, T. E.	Sitch, Charles H.	Wedgwood, Rt. Hon. Josiah
Oliver, George Harold	Slesser, Sir Henry H.	Westwood, J.
Owen, Major G.	Smillie, Robert	Whiteley, W.
Palin, John Henry	Smith, H. B. Lees (Keighley)	Williams, David (Swansea, E.)
Paling, W.	Snowden, Rt. Hon. Philip	Williams, Dr. J. H. (Llanelly)
Pethick-Lawrence, F. W.	Spencer, G. A. (Broxtowe)	Wilson, C. H. (Sheffield, Attercliffe)
Ponsonby, Arthur	Spoor, Rt. Hon. Benjamin Charles	Wilson, R. J. (Jarrow)
Potts, John S.	Stamford, T. W.	Windsor, Walter
Purcell, A. A.	Stephen, Campbell	Wright, W.
Rees, Sir Beddoe	Sullivan, Joseph	Young, Robert (Lancaster, Newton)
Richardson, R. (Houghton-le-spring)	Sutton, J. E.
Riley, Ben	Taylor, R. A.	TELLERS FOR THE NOES.—
Ritson, J.	Thomas, Rt. Hon. James H. (Derby)	Mr. Allen Parkinson and Mr.
Rose, Frank H.	Thurtle, E.	Warne.
Salter, Dr. Alfred	Tinker, John Joseph

Bill accordingly read the Third time, and passed.