HC Deb 27 September 1939 vol 351 cc1373-7

Before I refer to the subjects of a duty on excess profits and capital increases I should like to make a few observations on war costs and economy. It is inevitable, as we all appreciate, that the cost of modern war, as expressed in money, should be fearfully high, but we must not assume that, because the figures that we are facing are so enormous, that is a proof that there has been prodigious squandering and waste. The truth is that the increasing complication and elaboration of machines of war and the mechanisation which accompanies the development of military force, while they greatly increase the power in defence as well as in attack of a military unit, also greatly increase its cost. Without quoting actual figures I should like to give this information to the Committee which is interesting and valuable. I have been looking at figures which show the effort needed to produce, for example, modern type aircraft as compared with that which was required for the production of those types that were being manufactured in the final months of the war of 1914–1918.

It is very relevant to the subject that we are considering now, and the Committee may be interested to have some general indication of the relative effort, and consequently of relative costs. Modern types of aeroplanes are made of metal where they used to be largely made of wood, they are incomparably more complex in design, they demand a far greater range of intricate and costly equipment, and the horse power per type has increased some hundreds per cent. A main result is that the effort, as represented by man-hours, to produce a modern type aeroplane may be as much as ten times greater than was needed to produce a similar type in 1918. Broadly speaking, a modern aircraft costs from three to seven times more than a comparable type in 1918, and, of course, maintenance and replacement costs have increased in proportion.

Similarly, in the case of the Navy, ships of comparable tonnage now cost two or three times as much as they did in 1914, While the maintenance of the much more complicated equipment has added greatly to the recurrent cost. As regards the Army, it is broadly true to say that a division in the field costs nearly twice as much to equip and maintain as a division in the later years of the last war. These considerations go a long way to explain the magnitude of the expenditure, but they also lead to the conclusion that it is more important than ever it was that we shouldget full value for our money, that all expenditure which is wasteful or unnecessary should be avoided, and that these principles should be applied not at the end of the war but at the beginning. I do not feel that I should be at all completing the discharge of my duty as Chancellor of the Exchequer if on this occasion I limited myself to proposing greatly increased burdens to be placed on my fellow-countrymen. It is equally my duty to call for the most determined efforts, alike in public and in private expenditure, to search out for means to avoid wasteful outlay. That is a very different thing from asking everyone to stop spending. Any spending which the private citizen finds himself in existing circumstances able to undertake should be undertaken with a deliberate regard to what is helpful to the community in time of war, and his outlay should not be in the form of luxury or extravagance.

In the various public Departments, and in local authority administration—[Interruption] —it is a general proposition not applied to any particular body—in public expenditure here at the centre, and in local government expenditure too, while we are waging war against the enemy abroad let us also wage war against waste at home. In the field of Government expenditure I have one or two announcements to make. Certain additional measures have been quite recently taken. There are two Departments at least which will clearly have to spend enormous sums: the Air Ministry and the Ministry of Supply, whichfurnishes the Army. In each of these Departments within the last few days, by agreement between the Ministers in charge and myself, a special appointment has been made to the Council of the Department of a highly qualified and experienced business man—in the case of the Air Council it is Sir Harold Howitt, and in the case of the Supply Council Mr. Ashley Cooper— for the express purpose of securing hat all proposals for new expenditure are framed with a strict regard to the necessities of finance, and also that the actual operations of the Department shall be conducted on the most economical basis. If I have only mentioned two of the Services, let me add that no one has shown himself more zealous in endeavouring to promote this principle in his own Department than my right hon. Friend the First Lord of the Admiralty.

In the sphere of civil defence I have one or two observations to make. It is quite essential that the Civil Defence should at all times be ready for action, when required, at the shortest notice. Because we have had an easy and a peaceful time for the last few weeks, it would be a mistake to suppose that we do not need to be ready. At the same time it is the Government's intention, in order to conserve our man-power and to avoid unnecessary expenditure, to take steps to ensure that no more people are employed whole time on Civil Defence services than the needs of the situation in fact require. The Home Secretary, I think, dealt with the matter in a question to-day, and he authorises me to say that he is now giving immediate consideration to this subject in order to secure a review by local authorities of their war establishments in the light of the experience that has been gained as the result of the mobilisation effected at thebeginning of hostilities. I trust and believe that, with the ready support of public-spirited citizens who are prepared to give part-time service, local authorities will be able to effect reductions in the expenditure of man-power and of money.

Therefore,while nothing must be done which would lessen the efficiency of our Civil Defence, we can assuredly rely in full measure on the public spirit of citizens to continue to take their share as unpaid volunteers in part-time service and so limit the call on others for whole-time duty. In addition, the Treasury is sending special and stringent instructions to all Departments to avoid unnecessary expenditure in every sphere. As regards staff, it is obvious that, with the increase of the Government's activities—for instance, the control of the food supply of the whole country—great increases of staff are needed and justified, but the Government are very much alive to the necessity of watching this development. Any well-supported complaint of waste or unnecessary expenditure will be promptly investigated and dealt with. In this connection, the question of the extension of existing machinery or the institution of new checks will be kept under constant observation.

Sir W. Davison

What about the expenditure on the Ministry of Information?

Sir J. Simon

I am sure it is the feeling of the Committee, it is the feeling of the whole country that we are fully prepared to face the vast expenditure that will be involved in fighting and winning this war as long as every effort is made to eliminate waste and secure full value for what is spent. I should like to tell hon. Members that at the Treasury in these last few weeks I have been receiving every day almost by every post, letters containing a few crumpled £I notes, sometimes a single coin, or packages enclosing a gold chain or a bangle or some small article of personal jewellery—often from very poor people—all of them with the message that they wish their names to be kept secret and that they wish their gifts to be used to meet some portion of the expense of the war. I must say that when I see this tray of modest offerings I do feel most deeply that the spirit in which these gifts are offered should make every one of us the more determined to ensure that, for every £1 of war expenditure, we get £1 worth of value.