§ Motion made, and Question proposed, "That the Clause stand part of the Bill."
§ Mr. HERBERT MORRISON
I want to put a few points on this Clause, with which we are by no means satisfied. It will be remembered by the Committee that at an earlier stage we raised the question as to why the policy of limited borrowing in respect of works on roads and bridges was to be suddenly abandoned and why the entire expenditure in excess of the Road Fund resources for the present year should be put upon the current Budget of the year. I said at the time that perhaps the question was not so much one for the Minister of Transport and the Parliamentary Secretary as for the Treasury, but the Parliamentary Secretary did his best to explain the reasons for this sudden change and reversal of policy. I am bound to say, however, that the answer which he gave did not at all convince myself or my hon. Friends that there was a good case for the change of policy on the part of the Government.
It will be remembered that in the original Finance Bill of this year provision was made for borrowing up to the extent of £10,000,000 in respect of expenditure on road and bridge construction. The reason for that was that the Labour Government had been so successful in stimulating the construction of necessary roads and bridges by the local authorities that the amount available in the Road Fund had become exhausted, and it was found necessary that money should be temporarily borrowed by the Treasury and carried on the Budget of the year for the time being. I hope that the hon. and gallant Member for North-East Bethnal Green (Major Nathan) will not leave the Committee, as I want to put some points to him. It was considered in the Finance Act of this year that, in view of the budgetary position and the financial difficulties at that time, instead of putting that excess expenditure on the taxpayers we should take powers to borrow to the extent of £10,000,000 because the works were of a capital nature.
597 I am not going to engage in the hypocrisy of asserting that I was ever an enthusiastic borrower upon a large scale. I have perhaps a healthy proletarian dislike of getting into debt and borrowing, particularly as one has to pay large interest payments. So I cannot say that I was an enthusiastic borrower, particularly on the lines of "We can conquer unemployment," with its scheme for borrowing £200,000,000 for roads. When, however, we faced a financial position which, on the Budget of the year, was admittedly of some difficulty, when no one wished to impose more new taxes than necessary, I agreed with the Chancellor of the Exchequer that it was a legitimate thing to have a modest borrowing operation up to the extent of £10,000,000 to put things right. My right hon. Friend the Chancellor of the Exchequer, who, again like myself, is not an enthusiastic borrower of big sums of money, said, speaking in the House on the Budget statement on the 27th April this year:It will be necessary for the Exchequer to come to the assistance of the Road Fund this year to meet the cost of road schemes, including works expedited in connection with the present state of employment. The necessary power will be sought in the Finance Bill to enable a loan to be raised for this purpose."—[OFFICIAL REPORT, 27th April, 1931; col. 1401, Vol. 251.]I remember, what every other hon. Member remembers, that that statement was received with loud Liberal cheers as a concession to the principle and substance of the policy for which they fought and to which they adhered. I want to know from the Treasury what is the financial cause for this change in policy within a few months. I do not say that it is necessarily a crime for this Government to reverse the policy of its predecessors, for in fact they have shown that they can reverse their own policy on financial matters. What, however, is the financial cause why borrowing to the modest extent of £10,000,000 in April was right and why it suddenly becomes wrong now?
When we have got that information from the Treasury, I want to know from the hon. Member for North-East Bethnal Green why the Liberal party, which pressed us so strongly to borrow fabulous sums, are now consenting that the limited power to borrow £10,000,000 should be abolished, and therefore consenting to 598 their policy being reversed. I ask my hon. Friend because I believe that he played an influential part in drawing up the policy of the Liberal party in this matter in the Yellow Book, which was the true father of "We Can Conquer Unemployment." He and the hon. Member for Norwich (Mr. Shakespeare), notwithstanding the latter's new official position, owe it to their souls and consciences and to political history to tell us why this borrowing of £10,000,000 is wrong, and why it should be borne on the shoulders of the taxpayers.
We shall later consider a Supplementary Estimate of about £7,000,000 to put this upon the taxpayers this year. The programme has been reduced. I do not propose to discuss that in this connection, because we discussed it on the Schedule to the Economy Bill, but we have never yet had, certainly not from the Minister of Transport, though the Parliamentary Secretary did his best in the matter, a clear statement as to the financial necessity that causes the Government to put an additional burden upon the taxpayers all of a sudden, instead of carrying out the very limited borrowing operation which was contemplated under the Finance Act which was passed only this year. I suggest that before the Committee parts with this Clause, we ought to have a clear statement from the Financial Secretary, and a clear statement from the hon. Member for North-East Bethnal Green as to the change in his policy and that of the hon. Members with whom he is associated, for he played such a prominent and distinguished part in the borrowing policy of the Liberal party.
§ Major ELLIOT
I will respond at once to the invitation of the right hon. Gentleman, all the more because of what he calls his healthy, proletarian dislike of borrowing or getting into debt. These healthy proletarian principles have spread throughout the House, and the uneasiness which the right hon. Gentleman felt, and which he manifestly choked down, we could not help seeing in every twinkle of his glasses during the whole of the debating arguments in which he attempted to justify it to the House. There is not only one fund but two great funds which, not meeting their expenditure out of income, were borrowing upon a scale which called in question the whole stability of our budgetary position. I 599 can imagine the indignation of the right hon. Gentleman and his colleagues if we had stopped the borrowing for one of those funds while allowing the borrowing for the other to proceed. What indignation the right hon. Gentleman would have generated if we had stopped, as was the express and declared intention of every party in the House, including his own, borrowing for the Unemployment Insurance Fund while permitting borrowing for the Road Fund still to continue. I can imagine the right hon. Gentleman and his friends making a most convincing case by saying, "What! are we to say that a bridge is more important than human life, and that a reduction in unemployment benefit is to be carried out but not a reduction in the expenditure on roads down which the joy rider can speed his way to the south coast?" I can imagine the indignation about the rentier class which would have bubbled from hon. Gentlemen opposite.
The Chancellor of the Exchequer was willing to strain every nerve to avoid a check in the development of the country as much as, and indeed more than, he felt himself fully justified in doing, but it was clear as the spring passed into the summer, and as the development of the financial situation both at home and abroad evolved, that an economic crisis was arising in which continued borrowing was liable to lead the people of this country into an awkward position; and it was the policy of every party that the Budget should be balanced. I remember the right hon. Lady, the late Minister of Labour, saying that borrowing for the Unemployment Insurance Fund was a dishonest course, and further stating that she had been forced into this dishonesty although she did not like it. That is an illustration of the greatest importance to show to what length a policy of borrowing, begun with those doubts and misgivings which the right hon. Gentleman assured us he felt when he embarked on this course, will very rapidly lead Departments and indeed Governments.
§ Major ELLIOT
This was a beginning. It was begun by the right hon. Gentleman the late Minister of Transport. The 600 danger of borrowing on the security of this fund had been terribly exemplified in one of the other funds. Borrowing on this fund which, by itself and under happier circumstances, might have been a reasonable policy to pursue, was in the circumstances through which the country was passing not such as any Chancellor of the Exchequer could have continued to support. Therefore, it was necessary at any cost to call a halt and to make sure that the expenditure of the year was, so far as possible, met out of the revenue for that year. I am not going into the wider question to what extent you are justified in using revenue for capital expenditure, and whether there should or should not be a capital account of the State as well as an annual account, because that would lead me very far afield into the realms of finance on which we in this country have not embarked hitherto. The danger was there. The danger was growing. The danger was becoming obvious to all, and it was at that moment that the Chancellor of the Exchequer said that the policy of borrowing on the security of funds which had outrun their own revenue was a perilous policy—
§ Mr. HERBERT MORRISON
Does not the hon. and gallant Gentleman realise that the fundamental reason why we had to borrow was because his right hon. Friend the Member for Epping (Mr. Churchill) had previously raided the fund and taken away money that we ought to have had to spend in this period? The right hon. Gentleman supported him in doing it.
§ Major ELLIOT
I am not going to embark on the question whether every penny which is derived from a certain class of person must be returned to that class. No one suggests that Super-tax payers can claim that every penny should be spent for their benefit. I know what hon. Gentlemen opposite would say if that were suggested. Would hon. Members suggest that every penny raised from the beer drinkers in the Beer Duty should be immediately returned to the beer drinker in increased and improved facilities for beer drinking? What claim can be made that every penny raised from motorists should he immediately returned to the motorists for their benefit? The right hon. Gentleman asked why the policy of borrowing on 601 the fund was reversed. It was reversed because of the immediate stringency, which was obvious to all and obvious to the right hon. Gentleman as much as to anybody. That is the reason why the policy has been reversed, and we ask the Committee to support us in the reversal of that policy.
§ Mr. STRAUSS
The Financial Secretary to the Treasury has told us the reasons why the Government thinks it desirable not to continue borrowing on the Road Fund. Apparently he considers that borrowing at all for this fund is a thoroughly unsound thing. That is, presumably, the reason why the Minister of Transport, who is sitting by his side, was looking rather uncomfortable during his speech, which was really directed against the policy supported by the Minister who, with other Liberal Members, have for the last two years advocated borrowing on the Road Fund as a sound and economical policy.
§ Major ELLIOT
I made it clear that it was owing to the circumstances in which the country found itself in the spring and summer of this year, and that this policy was a thoroughly unsound one in those circumstances.
§ Mr. STRAUSS
I understand that the hon. and gallant Gentleman does not want to put his hon. Friend in too great a difficulty, but he actually went considerably further than that and condemned borrowing for road purposes altogether. The reason given by the Financial Secretary was similar to that given by the Parliamentary Secretary to the Ministry of Transport the other night, when he said that in order to give confidence to foreign bankers and lenders who were to grant money to this country to keep us on the Gold Standard, it was necessary that our finances should be completely balanced and that there should be no borrowing on the Unemployment Fund or the Road Fund. Does the hon. and gallant Gentleman seriously suggest that foreign bankers or lenders would be disturbed if we borrowed a sum of less than £10,000,000 for capital purposes such as roads, and that if we did they would withhold their funds? I do not think such a proposal ought to be put forward seriously. He knows, as everybody connected with finance knows, that roads are things on which capital expenditure is justified.
602 The Road Fund is not like the Unemployment Fund, where the money is paid away every year. Roads last for 50, 100 or even more years. There are roads in our country the foundations of which were laid by the Romans. Is it essential that all money spent on roads must be paid out of current revenue? If it is financially sound to take the money out of current revenue, why do the municipalities borrow, and continue to borrow? Is the Minister of Transport going to allow them to continue to borrow for their roads? Is it to be right for them and wrong for the State? And supposing it were necessary in a crisis and in order to get foreign confidence to curtail expenditure and stop borrowing for the Road Fund, does the same state of affairs exist to-day as existed when that decision was taken? As far as I can see, the Government, in a spasm of panic and hysteria, drew up a policy of curtailment of every form of expenditure, good, bad or indifferent, to deal with the emergency and to keep us on the Gold Standard.
Now that we are off the Gold Standard cannot we consider these various items of expenditure on their merits, or must we still go on with the programme which was conceived in that moment of panic? The attitude of the Government appears to be very much like that of a bolting horse. A horse will continue to bolt for a long time after he has left far behind him the object which originally terrified him. The Government started in August on a certain course because they were frightened of going off the Gold Standard, and they are continuing wildly and blindly on the same course, overlooking the fact that the circumstances have changed. I ask the Minister of Transport whether it is not wise now to consider expenditure on roads, whether it should be out of capital funds or current revenue, on the merits of the case? I have always understood that it has been a principle of the Liberal party, as well as of the Labour party, that in times of depression, when the savings of individuals are not being used for investment, they should be used by the State to build up the economic strength of the country and give work to unemployed people. Is not that principle as true to-day as it was a few months ago?
Owing to the industrial depression the accumulated savings of the people, are 603 greater to-day than for a long time past. The amount on deposit in the various banks was higher in 1930 than in any year since 1921, and the amount in July last was higher than in any July since 1923, because individuals are not investing their money. Surely it is desirable and economically sound that in such circumstances the State should borrow the money for such capital works as increase the amenities of the country and add to its efficiency as an economic unit. The State should borrow the money and give work to unemployed people instead of further taxing the country and adding to the burdens of already overburdened industries. What reason is there to-day why roads which will last for many years should not be financed out of borrowings rather than out of taxation?
There is another point I wish to put to the Minister of Transport, which I would like him to answer. This Committee and the country are entitled to an explanation, which so far we have not had from him or any other Liberal Member, of the reversal of policy which they are supporting. The Liberal party, and doubtless the hon. Member himself, went to the country on one specific thing —that they would conquer unemployment, and they put forward their definite plans. It is true to say that the election address of every Liberal Member was this book, "We can Conquer Unemployment."
§ Mr. STRAUSS
I want to know why the hon. Member is reversing that policy. The sole mandate which the people gave to the Liberal party was to carry out the plans in "We can Conquer Unemployment"; and it was one of the essential points in that book that the big schemes to be undertaken would not be paid for out of taxation, but out of borrowing. I will quote one or two sentences. This book, after telling us of the miseries of the unemployed, and how easy it would be to set them to work on large schemes, goes on to say, discussing roads in particular, because they were the chief feature of the proposals:It would be perfectly proper to charge the interest and sinking fund against the future income of the Road Fund.604 Later, it says:These proposals could be carried through without any additional charge in the way of taxation.That is what they promised the people. It is the only mandate they had when they were returned to this House. It was put more specifically still in the pledge which was given at the time and signed by the Leader of the party, a pledge which was in every election address of every Liberal Member:If the nation entrusts the Liberal party at the next election with the responsibilities of government we are ready with schemes of work, which we could put immediately into operation, work of a kind which is not merely useful in itself but essential to the well-being of the nation. The work to be put in hand will reduce the terrible increase of the workless in the course of a single year to normal proportions and will enrich the nation and equip it to compete successfully with all its rivals in the business of the world. These plans will not add one penny to national or local taxation.Now a Liberal Minister of Transport is deliberately putting on to taxation these plans for carrying out road works. That action merits full explanation. If this money which is now being drawn from taxation had been borrowed there would be £7,000,000 which could be used for other purposes, and unjustifiable cuts need not have been made. I want to know if the plans in this book "We can Conquer Unemployment" are good plans, or are they nonsense? If they are nonsense I hope the hon. Member will come forward now and say that lie has seen that this policy was quite wrong, that it was bound to lead to disaster and that he will make a complete recantation in a white sheet; but if the policy enunciated there is sound economically and in the interests of the nation, why does he now advocate a policy which is diametrically opposed to it? Is it the case that he adopts one policy when there are only 1,250,000 unemployed, and then, when the numbers of the unemployed have increased to 3,000,000, says: "The situation is different; do not let us go on with these plans"? The other day he came to the House and proposed a cut of £8,000,000 next year in the expenditure under the Road Fund. According to a familiar calculation, that means that 32,000 men who would have had work for a year under the programme as originally prepared by the Labour Government are to 605 be deprived of that work. The Minister now comes along to put the burden, to the extent of £7,000,000 for this year, on the taxpayers of the country instead of borrowing the money, as he promised to do. What is the position of the Liberal party? Were they correct when they put their plans before the nation, or were they wrong? On the answer given by the Minister to the questions I have put to him will depend the credence we shall be able to give in future to the pledges of the Liberal party.
§ Major NATHAN
The right hon. Member for South Hackney (Mr. Herbert Morrison), the late Minister of Transport, has challenged me by name about my vote in connection with matters which are the subject of this Debate, on the ground that I have some responsibility (which I at once accept), under the guidance of and in association with my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George), for the proposals set forth in the Liberal Yellow Book, and in the pamphlet "We can Conquer Unemployment" which was referred to by the hon. Member for North Lambeth (Mr. Strauss). I accept that challenge. At the time when the Liberal party, or those more closely identified with the formulation of this policy, of whom I was one, were considering the matters there mentioned, we were faced with a relatively normal financial position and a relatively large and solvent Road Fund. During the early days of this Parliament, when the right hon. Gentleman was responsible for the Ministry of Transport, my right hon. Friend the Member for Carnarvon Boroughs and other Members of the Liberal party, at that time sitting opposite and in opposition to the views of the right hon. Gentleman, did not abate their efforts to induce the right hon. Gentleman and his colleagues to give active effect to the policy, as regards roads, bridges and the like, in the Liberal Yellow Book and in the pamphlet "We can Conquer Unemployment."
I say nothing about our efforts, our fruitless efforts, to induce the colleagues of the right hon. Gentleman in the Government of which he was so distinguished a Member to take active steps in relation to housing, telephones and all the rest of the things which have been referred to. I confine myself to 606 the Department for which the right hon. Gentleman was responsible and which he conducted, if he will allow me to say so, with, in many respects, a knowledge and enthusiasm and an ability which commanded common admiration from all of us in every part of the House. But on the point to which he referred I would remind him of the speeches he made from this side of the House, as a Minister of the Government, and standing at that Box, in which time after time, he refused to take active and forward steps to carry out the policy of which he has to-day spoken of with approbation. He was pressed to do so by my colleagues of the Liberal party and myself, but that pressure was fruitless. It does not lie in the mouth of the right hon. Member to make those complaints as to the attitude of the Liberal party, nor to compare the situation with which the country is confronted to-day with the position as it was when those plans were prepared and when we pressed their performance on the late Administration. The Liberal party has supported the National Government in the pursuit of methods of economy and reduction of expenditure which we of the Liberal party are among the first to regret. It represents in our view a setting back, but for the time a necessary setting back, of the hands of the clock of progress, which we have done so much to put forward in years gone by, and with which we shall have so much to do in the future. We regard it as a temporary intermission of our labours. But sound finance stands first and foremost in the essential policy of this country, and no measures, however attractive and useful in themselves, can withstand the pressure of the necessity of sound finance. Sound finance, more necessary now than at any time, demands that, however regretfully and reluctantly, we should for the moment stay our former progress. The late Minister of Transport will not himself dissent from that because it will not be contradicted that, before resigning office, the late Administration had itself very much the same proposals in regard to limitation as are now put forward. If I am mistaken in that, I shall no doubt be corrected.
§ Mr. HERBERT MORRISON
These are temptations to disclose Cabinet secrets which I learned as a Privy Councillor. I told the House the other night that I would not do it and the temptations of the hon. and gallant Gentleman will not make me rise to the bait.
§ Major NATHAN
I would be the last to persuade the right hon. Gentleman to disclose any secrets. I am content to rest myself on the statement of the Leader of the Opposition on the volume of economies proposed by the late Administration. While I do not want him to confirm to me in terms that such an economy was included in the £56,500,000, I take it from the statements that have been made so often from that bench that that was, in fact, the position. I believe it is impossible to carry forward large measures of national reconstruction except at a proper time and an proper terms by means of borrowed money. I do not believe that national reconstruction can be effected out of the annual revenue, provided no borrowing is made, except on proper terms and at a time when the national finances and the credit of this country, both at home kind abroad, make that permissible. In saying that, I speak for myself.
When the Government is contemplating an average of unemployment of 3,000,000 in a year, which must mean at the peak an unemployment figure of 3,500,000 or even 4,000,000, it will not be found possible to maintain those unemployed in complete idleness without very grave risks to our social structure, and work must be found for them at one time or another. It is unlikely that the work, which it will be necessary to find, can be financed out of annual revenue.
I make no disguise of my belief in that position or of my belief that it will be unwise in the highest degree, in the present critical stage of our finances and with the present apprehensions both at home and abroad as to the future of sterling, to raise money at this moment for any purpose save under the most stringent necessity. The right hon. Gentleman, the late Minister of Transport, will not find me backward in supporting all well-considered measures calculated to improve our national economy and to assist in national development by whatever means of finance may be apt and 608 sound, according to the proper and recognised canons of finance and at the proper time.
§ Mr. EDE
We have just listened to the swan song of Liberalism in this House, as far as this particular matter is concerned. The hon. Member, after all, did very scant justice to my right hon. Friend the late Minister of Transport. The Liberal party in its famous Yellow Book said:We are ready with schemes of work which we can put immediately into operation.I speak as a member of one of the great road authorities of the country who went to my right hon. Friend with my colleagues, with definite schemes, and no definite scheme that has been put before the right hon. Gentleman was ever turned down. I challenge the hon. and gallant Member for North East Bethnal Green (Major Nathan) and the right hon. Member for Ross and Cromarty (Mr. Macpherson), if they are still in the same party or in the same fraction of the party, unitedly, jointly or severally, or in any other way they like to do it, to mention any single scheme of road improvement, which was placed before my right hon. Friend and which was a definite scheme, that was turned down. It is notorious that on every occasion the Liberal party were challenged to say what definite schemes they had that had not been sanctioned by my right hon. Friend, and at no time were they able to do it.
I could not help admiring the undisguised glee with which the Minister of Transport, behind the back of the Financial Secretary to the Treasury, greeted the interruption of my hon. Friend the Member for Houghton-le-Spring (Mr. R. Richardson) when he reminded the House of the escapades of the previous Chancellor of the Exchequer. We were faced during our term of office with the fact that this fund had been badly raided, and we are now faced with the fact that these works are to be financed on a basis financially unsound. It is all very well for the hon. and gallant Member for North East Bethnal Green to talk about the canons of sound finance, but what sound finance is there in financing out of current revenue a road which will last for 20 or 30 years without substantial repair? 609 How can he expect the highway authorities of the country, unassisted or less assisted by the Ministry of Transport, to be able to carry through those schemes, in which I understand he still believes and which he thinks will have to be put into operation very speedily? He thinks that in the coming winter there will be 3,500,000 unemployed. I do not wish to be an alarmist, but I doubt very much, with the policy pursued by His Majesty's present advisers, whether we shall have fewer than 4,000,000 unemployed at Easter. I will say to the hon. and gallant Member for North East Bethnal Green that he will not find it safe to hold meetings in Bethnal Green if the policy of His Majesty's Government still continues and he remains a supporter of it. He will find that people there are not prepared—
§ The CHAIRMAN (Sir Dennis Herbert)
We are not discussing unemployment at the moment. We are discussing a Clause dealing with the Road Fund.
§ The CHAIRMAN
The hon. Member dealt with it very efficiently indeed—so much so that I realised he had got off a mere reference to unemployment in connection with the Road Fund and was discussing unemployment generally.
§ Mr. EDE
I can very well understand the joy of the hon. and gallant Member for North-East Bethnal Green when he realises that I am not going to chase him any more, but I may get up into the Highlands of Scotland again and be in order before I have finished. I desire to know from the Minister of Transport if this alteration of national policy means that the same alteration is to be made in local policy. Is he going to frown at schemes put up to him where the local authority propose to spread the expenditure over a term of years? Is he going to recommend the Minister of Health not to grant loans for five or 10 years on road schemes, because the Minister of Transport will be confined to what he can get out of the national taxes, whereas the local authority still has the power of going to the Ministry of Health and asking for a loan? We 610 had a very alarming hint with regard to that matter from the Minister of Hearth at Question Time to-day, when he said that he was trying to dissuade local authorities from carrying through private street improvements at the present time. In order to help the frontagers it has been the custom for those private street improvements to be carried out on a five or 10 years loan basis—generally in my part of the country on a five years loan. Is what the Minister of Health said this afternoon an indication of Government policy Are we to understand that they are not going merely to stop borrowing themselves, but that they are going to stop the local authorities from borrowing?
§ The CHAIRMAN
I do not want to interrupt the hon. Member unduly, but really he must look at the Clause that we are now discussing. The question is whether this money is to be provided out of the Consolidated Fund or out of money voted by Parliament. We cannot discuss the whole question of the policy of the Ministry of Transport.
§ Mr. EDE
I gather the point is that, if this Clause is not passed, the present policy will be pursued of borrowing in advance on the Road Fund. If it is passed, we shall then be compelled to raise the money in each year. I desire to get a very definite answer from the Minister as to whether he intends to impose the same policy on the local authorities, who are nominally free, but who, in fact, have to secure sanction for their loans from the Ministry. I can assure the Minister that it is a point which is giving the greatest anxiety to the road authorities and, if he could say anything reassuring to them it would to some extent enable them to carry on with their work and prevent them shutting down unduly. The whole policy is bad, and I hope that my right hon. Friend will advise the whole party to go into the Lobby against these proposals, because they represent a policy of despair which can only lead to the worst possible effects in the various localities in the Doming winter.
§ Sir B. PETO
The hon. and gallant Gentleman the Member for North East Bethnal Green (Major Nathan) seems to have left out the principal defence for the change of policy which is now being supported by the Members of the Liberal 611 party. May I point out that Clause 20, which we are now discussing, is the direct outcome of the May Report and in it there is a definite recommendation that all borrowing should stop for the Road Fund, and that only matters of absolute necessity should be undertaken in the present financial state of the country. What was the origin of the May Report I The resolution appointing the committee on National Expenditure was proposed by the Liberal party, and it was unanimously accepted by this House. [HON. MEMBERS: "No!"]
That Resolution was put forward because the Liberal party, although they were in favour of the programme laid down in the Yellow Book, were also in favour of economy, and they persuaded the House to accept the resolution setting up the Committee on National Expenditure, and this was done in order to stop the headlong rake's progress which the country was pursuing. I am not blaming the late Government so much because the position was that the Liberal party were constantly whipping them up. The recommendations of the May Committee were placed before the country, and the proposal we are now discussing is one of those recommendations. Therefore, the principal line of defence for the hon. and gallant Member for North East Bethnal Green has gone, the Liberal party having changed the device on the cover of the Yellow Book to the San Benito of the Auto da Fé. The outcome of the May Report which the Liberal party were mainly instrumental in obtaining should make the late Minister of Transport forget his earlier policy, which is one of the things that is most strongly condemned in the May Report, because they recommend that, in the interests of the financial stability of the country, borrowing must stop.
I am convinced that the policy of the May Report is absolutely vital, and I support the Government proposals in this House with the greatest pleasure, although I am aware that this is a Finance Bill which imposes enormous new burdens on the taxpayers of the country, and although its finance is certainly not in accordance with the tenets and methods we believe in for raising taxation. Nevertheless, I believe that these proposals are absolutely necessary under present circumstances, and as far as this 612 Clause is concerned there is no hesitation on this side of the House on the part of any members of the Conservative party in supporting this Bill.
§ The MINISTER of TRANSPORT (Mr. Pybus)
The discussion which has taken place on this Clause has included references to certain intellectual treatises concerning various political parties. We have heard a good deal about the Yellow Book, and that seems to be the book from which all political parties form a new programme when they need one. The latest political treatise has been issued by the hon. Member for Smethwick (Sir O. Mosley), and, although it is a white book, it is yellow in heart. The hon. Member for North Lambeth (Mr. Strauss) seemed to be much concerned about these cuts; in fact, he appeared to know nothing whatever about any cuts having been considered. I do not know how the right hon. Gentleman the late Minister of Transport ran his Department. Did he when serious, even desperate, work was at hand, turn the hon. Member for North Lambeth out of the room?
§ Mr. STRAUSS
I pointed out that the policy being pursued is one which was opposed by the Liberal party.
§ Mr. PYBUS
At any rate, the hon. Member for Wigan (Mr. Parkinson), in a speech which he made recently, appeared to know nothing about these cuts. I had to refer in the last Debate to the virgin innocence of the late Parliamentary Secretary as to any knowledge of these cuts. He had not apparently heard of them. As for the right hon. Gentleman the late Minister of Transport, shall we be big and adopt his own attitude towards this horrible subject and regard the whole question as one which is not discussed between gentlemen? I am grateful to the hon. and gallant Member for North-East Bethnal Green (Major Nathan) because his speech has made it quite unnecessary for me to say anything whatever in defence of these proposals, and, if it is not out of order, I would like to refer to the subject that we are discussing. We are discussing a Clause which has nothing whatever to do with anything except the mailer in which money used for national development is to be provided for in the national account. Any expenditure on roads in 613 the present financial year must not come out of the Consolidated Fund, but it must be provided by a Vote in this House. I cannot understand why there is so much objection to this Clause, because it is one which really safeguards the privileges of this House, and it provides that the Minister of Transport shall not be able to dip his hand deeply into the Consolidated Fund. Every Member of the Committee will have a perfect right to criticise such expenditure, and, for these reasons, I trust the Committee will now agree to this Clause.
I have listened carefully to the Debate on this Clause, but up to the present there does not seem to have been any references to the great human problem as to whether we are going to have as much road work done in the future as in the past. It is all very well to tell hon. Members that this is a Clause to transfer the means of getting the money from the Consolidated Fund to direct taxation.
What I desire to call the attention of the Committee to is that unless we can have an assurance that when the next Finance Bill is brought into the House of Commons there will be as generous and adequate provision for road construction as was possible under the powers granted under the Consolidated Fund Act, we shall, in effect, be diminishing the usefulness of this kind
§ of work in providing employment for the people. The proposed methods of dealing with this question fall flat unless the Minister of Transport can tell us that the Chancellor of the Exchequer is able to guarantee that there will not be a less amount of money spent on roads in the future.
§ The CHAIRMAN
The hon. Member is now definitely going beyond my Ruling. Up to the present I have allowed a certain amount of elasticity, but the hon. Member must not go into a serious debate on questions which I have ruled out of order.
What is now proposed is not a method of economy, but a method of putting greater charges on the taxpayer for road work next year than would have obtained if the previous method had not been abandoned. In the interests of a great number of men who, up to the present, have found healthy employment on the roads, I protest against the method of economy suggested in the Finance Bill, which will effect no real saving to the ratepayers, and will prevent the carrying out of a good deal of much-needed, useful work. There is no possibility of this kind of enterprise adding any advantage to the nation. This is a retrograde step, and one which we on these benches so deplore that we shall go into the Lobby to vote against it.
§ Question put, "That the Clause stand part of the Bill."
§ The Committee divided: Ayes, 251; Noes, 141.