HL Deb 06 July 1915 vol 19 cc248-80

VISCOUNT MIDLETON rose to call attention to the growth of the civil expenditure of the country and to move the following 'Resolution— That in view of the necessary expenditure on the war it is, in the opinion of this House, incumbent on His Majesty's Government to take immediate steps to reduce the civil expenditure of the country.

The noble Viscount said: My Lords, I think the Motion that I have placed on the Paper is one the discussion of which will not be wholly unacceptable to His Majesty's Government. The course of the last few days has shown us a considerable change in the attitude of the Government towards questions connected with the war. I make no criticism of and do not challenge what was up to a short time ago their attitude. They endeavoured to make the war fall as lightly as possible on all classes of the subjects of the Icing. Many classes have put out their fullest strength, have themselves suffered, have subscribed largely, have given everything as if they had been forced. By others the war has been treated in such a way that it has fallen on them almost as a featherweight. But the speeches that have been made in the last few days—notably the speech delivered in your Lordships' House last Friday by my noble friend. Lord Curzon—show that the Government are determined that the people shall no longer he in any doubt, that the mask shall be taken off, and that the gravity of the position shall be fully established.

What I have to plead this afternoon is that the subjects which call for attention and on which the public requires to be aroused are not merely questions of the provision of men and of munitions; there must also be considered the question of how the finance of the war is going to be worked. Finance may come low with some nations in their preparations for war, but with us it must conic practically first. We are in this war, as we have been in previous wars, the bankers of the Allies and of our own Dependencies. We are forced by our situation to import an immense amount more than we export, and I do not doubt that before this war is ended our financial experts will tell us that we shall have to strain our resources, as we are ready to do, to the uttermost farthing. In those circumstances I think we may properly inquire of the Government whether in the peace services, for which they are solely responsible, they are exercising the fullest possible economy. Although I feel that I must trespass unduly upon the House because the theme, is a very wide one, yet I think the gravity of the position is such that your Lordships will feel that the time which I take up is not wasted.

I have to trouble the House with some figures. I will first endeavour to state what, the immediate future will be; I will then ask you to consider what the past has been, and what preparation and training we are in financially for the future; and afterwards I will submit such proposals as I can for meeting the deficit which must arise. I would explain that the figures which I shall quote are in no sense amateur figures. They are, so far as I have been able to obtain them, figures drawn by the best experts, and I have every reason to believe that they will bear any amount of examination. What, as I understand, the Government estimate will be the state of our finance at the end of March next, on the assumption not merely that the war is then over but that war expenditure is also over, which of course is a very different thing, is as follows. The deficit in 1914–15 was £333,800,000. The original estimate of the deficit for the present year, 1915–16—as estimated on May 4 by the then Chancellor of the Exchequer—was £855.400,000, but since then the Prime Minister on June 15 announced that there will be an increase in this amount, due to the rise in the cost of the war, of £94,000,000. The total amount of debt, therefore, which will have been incurred by March 31 next will be £1,293,200,000.

The whole question, with which so far as I know no attempt has been made to cope in either House of Parliament up to now and to which I invite your attention to-night, is this. Assuming that war conditions are ended by March 31, and that all the present taxes are raised, what will be our peace position next year and in the years to come? This is how it works out. Income Tax, Succession Duty, and such services are estimated to produce in the present year £103,000,000—that is to say, probably four times as much as within the past few years has been raised from those services. Of that sum £54,000,000 belongs to the period before the war, including the £18,000,000 extra which Mr. Lloyd George proposed, in May of last year, to raise for peace services Deducting this £54,000,000 from £103,000,000, we have left to meet the debt on the war a sum of £49,000,000. The yield of the new taxes other than Income Tax is put at £11,000,000, and the suspension of the Sinking Fund will provide a further £2,780,000. Consequently we have something like £62,780,000 with which to meet the interest on debt. The interest on the new debt which will be incurred up to March 31 next is £58,194,000, and war pensions are taken at something like £18,800,000. Therefore we have to meet altogether a charge of £77,000,000, and we have £62,780,000 with which to meet it; in other words, there is a deficit of £14,210,000 a year to make up in time of peace. And that is on the assumption that the whole of the war taxes come in; that all the advances which have been made to our Allies and Dependencies, now running to more than tens of millions, are repaid to us; and that war expenditure can end at the conclusion of the financial year; and, what is still more uncertain, that we shall afterwards be able to return to peace conditions as to our Army and Navy, and that the whole of the revenue which in happier times has been obtained continues to come in. I think that is a pretty serious position.

But the position is much more serious if you look back for a few months and see how we stood and how we have encroached upon our resources. The Chancellor of the Exchequer said the other day that the savings of the country had now reached, according to statisticians, between £300,000,000 and £.100,000,000 a year, but we have made pretty good inroads upon those savings. If we look back to 1885, 30 years ago, we shall no doubt be told that our trade has doubled. But our national expenditure has far more than doubled. If you go hack only ten years you will find that our Imperial expenditure, which was £142,000,000, is now £207,000,000, a rise of £65,000,000; and that our local expenditure, which was £87,000,000, has risen to £134,000,000, a rise of £47,000,000. We are therefore actually spending every year £112,000,000 more than we were spending ten years ago. That is, I think, in itself a stupendous figure. But still more, look at taxation. Go back only to last year. In fifteen months there has been added taxation amounting to nearly £80,000,000. Of course a good deal of that—more than £60,000,000—is for the war. I do not complain. I only say that when the national savings are estimated at £300,000,000 to £400,000,000 and we have added £112,000,000 to our annual expenditure and £80,000,000 annually to our taxation revenue, I am not sure that statisticians would not say that we had made as little civil preparation to meet the exigencies and the strain of the war as we had made military preparation.

There are members of this House who listened for many years to Mr. Gladstone's Budgets. I must say I sincerely wish that one speech only by Mr. Gladstone could be delivered on our present situation. I know of many criticisms to which he was subjected from our side of the House and even from his own. Most members of this House will recollect Lord Overstone's familiar observation that Mr. Gladstone's Budget speeches were "triumphs of delusive oratory"; but nobody ever accused Mr. Gladstone of not being a first-class friend to economy; nobody ever pretended that he did not succeed in getting a sovereign's worth for each sovereign of the nation's money, and he created a financial atmosphere which prevailed for two generations but which has now been absolutely dissipated. I do not desire to impeach anybody for this change. Nor do I wish to revive any of the past controversies as to the great expenditure which is now taking place on certain social subjects. But I do wish to make an appeal for a complete change of procedure with regard to our civil finance, and to urge that we should endeavour as far as lies within our power to re-establish the atmosphere of economy which Mr. Gladstone left as his financial legacy to the country.

The effect of the figures which I quoted just now is to give us a grave outlook. I may say at once that I do not propose to touch on the finance of the war. Not because I do not think—it must be obvious to all of us—that in an expenditure of £3,000,000 a day there is room for very considerable care and forethought which, if the war is going on long, will certainly have to be applied to it; but I wish as far as I can to narrow the circle of discussion. The point on which I would fix is this. Twenty years ago our Civil Service estimates were £20,000,000; to-day they are close upon £60,000,000. It is with regard to the increase here of £40,000,000 that I invite your Lordships to go into details; and there, again, I desire if I can to narrow the circle of discussion. I shall no doubt be told that of that £10,000,000 nearly £10,000,000 is due to the rise of education, £13,000,000 to old-age pensions, £7,000,000 to national insurance, and £1,000,000 to Labour Exchanges—roughly, £30,000,000 in all. I pass them over with reluctance, but with only one remark upon each.

Whatever we feel about education, I venture to say that our condition is one in which we ought to modify the pace. We cannot run to luxuries at this moment. The campaign of the Board of Education on such matters as making all class rooms of the same size and haying no class to exceed thirty or forty children, as the case may be, is in ordinary times possible but is really untenable at present. It involves an expenditure of millions of pounds in building new schools, in extending schools which are hedged in right and left —expenditure for an ideal to which we cannot hope to attain when we have to keep three million men under arms. In the same way I hope that I may have support from the Front Bench opposite when I say that the whole system of bringing children of tender age, between three and five years, to school simply to be amused and to be taken off their parents' hands is one that requires to be looked at radically from top to bottom. It is a system which has been carried so far as this, that even in the holidays, at the public expense, these children are brought to school and amused and fed though they cannot be taught; and I am told, on the authority of members of the London County Council, that the large incomes which have fallen to so many working men during the war have had the effect, not of greater care being taken of the children, but of less, and that the number of children now running about the streets who have to be cared for by the public authority is infinitely greater than it was. I cannot help thinking that some discipline ill this matter is desirable on the part of the Government. Then I come to old-age pensions. I do not suggest any alteration in that respect. So far as they were merely crumbs that fell from the rich man's table they enjoyed a popularity which they will not enjoy if it is found that the result of our great expenditure after the war is that wages cannot be paid, and that unemployment at the one end is the set-off to old-age pensions at the other. Therefore I say that in the interests of old-age pensions what I now propose to your Lordships is an important factor. I have cut down my available sources of attack from £40,000,000 to £10,000,000. There are also the revenue services, which have increased by £18,000,000 during the same period.

When I talk of atmosphere, I should like to say a word on that which happens in both Houses of Parliament and which I think is capable of immediate reform. Take a proposal like national insurance. All our sympathies were aroused for the main object. The only facts given us were those of the actual bonus or sum which the State would supply to assist the insurer to obtain the benefits which he was to get at different periods. All the rest was left absolutely nebulous. I believe I am right in saying that expenditure on staff, & c., has never in any of these Bills been brought before either House of Parliament at all. What has been the result in the case of national insurance? I believe the money paid for actual cash benefits amounts to between £4,500,000 and £5,000,000 a Year. But the cost is between £7,000,000 and £8,000,000, and you are paying for staff and buildings £3 for every £5 that you pay to the people whom you wish to benefit. Parliament never has an opportunity of judging of these things. There goes 1½d of Income Tax and a penny or two on the 1b. of tea without anybody knowing anything about it. I think most of your Lordships have seen the Return which Mr. Boner Law moved for in the House of Commons and which was supplied a few days after the war broke out and before any war expenditure had begun. That Return showed that there had been appointed in the last eight years, in connection with these Acts, 5,387 permanent Civil Servants serving for pensions and unable to be removed, not to speak of over 10,000 temporary Civil Servants. Realise what 5,387 men amount to in that situation. Remember that if you add a single battalion to the Army in time of peace the pay is carefully scrutinised and every man has to be voted by the House of Commons, not because anybody is afraid now that the Army will infringe on the liberties of the people but because any increase of that kind has to be made as public as possible. Now 5,387 permanent officials represent practically the exact number of the whole of the combatant officers of the Army on the British establishment before the war. You might have added the whole of the officers of the Army for the sum that you are obliged to pay for the administration of these new Acts. That is a case which ought to be rigorously subjected to change.

Then there is another. I wonder whether anybody has ever traced the history of such a measure as the Irish Land Act. When Mr. George Wyndham introduced that Bill he put the expenditure at £390,000 a year, and he gave us as a set-off, on which he was carefully questioned on several occasions by hon. Members in the other House, reductions on the Constabulary and reductions of other descriptions which would amount to £250,000 a year within five years. Those reductions and the promise of so small an expenditure had very great influence on Parliament in 1903. Now here we are in 1915. What has been the result? The expenditure on Irish land has gone up by £773,000; whilst the expenditure on the Constabulary instead of being decreased, has advanced by£124,000. Therefore we are just £900,000 to the bad on that estimate, and there has been nothing in the condition of Ireland which has caused the change because there has been less crime in that country than in earlier years. Take, again, old-age pensions. The probable expenditure under this head was put at. £7,000,000 or £8,000,000. Old age pensions cost £13,000,000. The set-off which we were promised in this ease was a reduction in pauperism. That reduction has occurred to a moderate extent, but the estimates are very much as before. Those are new services.

I will give four instances of old services the expenditure in connection with which has been increased by this legislation, which involves an enormous amount of inspection and of correspondence, not one item of which was brought before us in a concrete form. The increase in the expenditure on the Home Office, Board of Trade, Local Government Board, and Board of Agriculture as compared with twenty years ago is as follows—

1896. 1915.
Home Office, £118,000 £267,000
Board of Trade, £178,000 £449,000
Local Government Board, £181,000 £271,000
Board of Agriculture, £103,000 £341,000
Total £580,000 £1,328,000

In other words, there has been in this period a rise of nearly £800,000 in the expenditure of these four Departments. Really we were not a badly-governed country in 1896, and the great increase in expenditure strikes me as very serious.

I have worked out the details in one case. In 1897 there were 56 Home Office inspectors of factories and workshops, who cost £23,000. In 1915 the number had been increased to 223 inspectors, costing £79,000. The factory population in this country is about 5,100,000, and I have worked this out on the assumption that the 223 inspectors, besides taking an annual holiday, work about thirty or thirty-two hours a week; I dare say they work a good deal more. But if they worked those hours and gave that attention to their duties, they are so numerous that they would each only have 440 persons to inspect in a week, which would enable them to give five minutes' personal interview to every man, woman, and child in factory employment. I cannot help thinking that that is a type of case in connection with which a great change might be made. Again, take the prisons. Prisons, as far as I know, are not subject to any new legislation. There were 21,000 prisoners; there are now 18,000. The prison population has gone down by 3,000, but the estimates have gone up from £586,000 to £777,000. The prisoners are one-seventh less; the cost of them is over one-fourth more. Then take law and justice. In a scramble of this kind we should be sorry if the men of the long robe were not to the fore. Legal charges twenty years ago were £501,000; they are now £634,000. The brilliant exception in connection with all these rather difficult points is Scotland. I must say that the economy of Scottish character has conic out in these estimates, which have advanced, so far as I can judge, far less in Scotland than in this country or in Wales or Ireland. I think Your Lordships will admit that in connection with the figures I have given there should be some opportunity for revision.

I now bring you to what is a gold mine compared with the others. The cost on public buildings in 1895–6 was £1,800,000; their cost has risen in twenty years to £4,062,000. I am not attacking any one Government in particular. The figure rose considerably in the first ten year, but it has risen £1,300,000 in the second ten years. I do challenge some of these items. I challenge, for instance, the necessity of beginning at Cardiff a large labour exchange at an expenditure, I think, of £70,000 in a year like the present. I think we might challenge putting in £250,000 for buildings wholly for unemployment in a year in which nearly 3,000,000 men have come to the Colours, and in which I suppose the numbers employed on Government service must have been increased ten, twenty, fifty, or a hundred fold. I do not think there is the slightest evidence of the necessity for building £250,000 worth of unemployment works.

From the moment that I put this Motion on the Paper I have had the advantage of correspondence and of instances of possible economy being sent to me from hundreds of people. Many of them are of a very personal character and many involve not merely individuals but classes, and some of them involve not merely classes but countries. But fascinating as they are and interesting as they might be to your Lordships, I would rather not touch upon them because I think it is far better that we should try and invoke all the assistance we can. But I will take one instance of a small character. The House of Commons last autumn, after the beginning of the war, constructed a new tea room at a cost of between £4,000 and £4,500. I cannot help thinking that at this moment, when we are urging everybody to be thrifty and when we are engaged in a war which will strain our resources to the utmost, it is undesirable that public bodies should expend a sum of that kind on accommodation of this nature, because it attracts an amount of attention and raises an amount of feeling which is out of all proportion to the advantage derived from it.

There is another Vote which constitutes such an anomalous situation that I must be allowed a moment or two upon it. The Stationery Office expenditure has gone up from £550,000 in 1895–6 to £1,031,000. Every Office is spending more in this direction. Parliament sits no longer, and I am quite certain that Members of Parliament do not desire any increase in the literature which is showered upon them. Within three months of the formation of the National Insurance Commission the Commissioners ordered—I am not criticising the Stationery Office and their conduct; I believe the Department to be admirably worked; it is the orders given to them—the Commissioners ordered 2,800 tons of paper, all of which was handled by die Post Office causing an enormous increase in that Department too. Within three months the National Insurance Commissioners sent 175,000,000 circulars to be printcd—four apiece for every man, woman, and child in the United Kingdom. Some of those circulars were put on the table on Monday, withdrawn on Wednesday, and replaced on Saturday. There is absolutely no end to the waste and want of consideration for the public which has been shown in regard to the Stationery Office. I do not wish and I have tried not to use language which shows the indignation that some of us feel at these things, but I do think that it is, to Use an ordinary expression, "up to" the Government to put a stop once and for all to this scandalous waste, which in a country in which we are happy to think there is no corruption is simply due to slipshod methods, and which ought to be suppressed with an iron hand. I hope that steps will be immediately taken to cut down all unnecessary, printing, and, if possible, to reduce it—as I believe it could be reduced—to half, apart, of course, Scorn the necessary forms which are used by Public Departments like the Post Office. I would remind the House that in the ample scope for economy here it is not proposed to cut down anybody's pay, or to subject any one to hardship, or to do anything except to do for the public what we should all do in our own houses.

May I say a few words with regard to the Post and Telegraph Service. This revenue Department has been conducted on the assumption, which I think is a sound one, that in prosperous days we ought to give the cheapest possible service. The postal service pays a profit of £5,500,000 a year; that is after deducting £1,250,000 which is the loss on telegraphs. I do not suppose that most of us knew that every sixpenny telegram that we sent cost the Government elevenpence or thereabouts to transmit. I am not sure that there is any justification for continuing that system at a time when our national expenditure is so embarrassed. No doubt smaller people like cheap telegraphs, but I think they prefer cheap tea; they soon will have to choose between the one and the other and a good many other things. Then, again, Press telegrams are forwarded at a loss to the country of £200,000 a year; some statisticians have told me that the loss is three or four times that amount. I believe that a large proportion of that loss is due to the demands, not of the public, but of those who make speeches, that their speeches should be telegraphed at full length; and I am not sure that if the result of a change in regard to Press telegrams was to limit the number and extent of the speeches telegraphed the public would not be the gainer in both respects.

It has been suggested to me that if every telegram was charged at the rate of ¾d. a word with a minimum of 9d. the country would gain £600,000 a year, and might gain £200,000 on Press telegrams; and I believe we could put the balance right by restricting the practice, which has been gravely abused of recent years, of free Government telegrams. I precluded myself from quoting personal cases, but I can assure your Lordships that the gross abuse of Government telegrams—the sending, not of short telegrams of ten or fifteen words, but telegrams ranging from 200 to even 800 words, following people about and utterly blocking the local telegraph offices and containing information (I am speaking from chapter and verse) which could easily be transmitted through the post—is one which has increased, is increasing, and ought to be diminished. I think the system by which a large number of public individuals are allowed to telegraph anything they please is a doubtful one. There was a famous case at one of the Offices to which I belonged in which a well-known statesman telegraphed, about the unexpected marriage of a friend, "Darby marries Joan"; this telegram formed the subject of discussion with the Auditor-General for a great many months, and in the end the statesman's private secretary told me that he had triumphantly vindicated the right of his chief to send the telegram, which might have been a cipher. That shows that the Auditor-General has regard to these things, but so long as the telegram is a Government message and if it is the transmission merely of a paragraph which has appeared in all the evening newspapers he is powerless to interfere.

Take the Postal Service. This has been rendered much more costly by a number of concessions wrung from reluctant Ministries by enthusiasts like the late Sir Henniker Heaton, who did great service with regard to telegrams to our Colonies but who, I think, really pressed too far upon the Post Office in regard to concessions which in happier days were admissible but which at all events are not now. There are three or four details with which I must trouble your Lordships. There is the system called the half-penny packet post, by which large numbers of circulars of uncertain weight are sent, and I am informed that if you allowed for a 25 per cent. reduction of business and put the rest on the ordinary footing the gain would be £1,500,000; and I believe it would be an incalculable advantage to all of us if circulars did not travel so frequently. Most of us remember the time when one could only send 1 oz. for 1d.; one can now send 4 ozs. I am sure that no poor man wants to send 4 ozs. for ld., and I think it is highly desirable that there should be a return to the system of sending 1 oz. instead of 4 ozs. for 1d., and it would be an immense saying. Then, again, there is the forwarding of letters gratis from one house to another. I have seen redirected letters which have made ten journeys following people about. These redirected letters used to have to bear another stamp; they are now forwarded any number of times by the Post Office for nothing, and one member of this House who has more than one residence in the country told me that he received fifty-one copies of the War Loan scheme which had been forwarded after him at the public expense. We all want cheap newspapers, and the ordinary daily newspaper should be capable of being sent for a ½d. But there are some periodicals published weekly which weigh ten or twenty times as much as a newspaper and which are also forwarded for ½d., a charge out of all proportion. I suggest that the postage on periodicals of high weight should be raised to 1d. I do not know whether I should be considered too undemocratic if I suggest that postcards, which used to be Sd. a dozen, might be restored to that elevation. If they were, we should gain £500,000; and if there were fewer deliveries outside the big towns, which I should not propose to touch, there would be an enormous gain. Besides that, I would have it in the power of the Treasury to reduce at least by half if not by two-thirds the Government correspondence and Government periodicals which are usually forwarded by the Post Office.

If you took all these steps I do not think it would be art extreme thing to say that you might dispense with staff, without making any reduction of pay, to the extent of 7½per cent., on which you would make a gain of £1,000,000; so that your total gain on telegraph and postal rates, without materially interfering with anybody's happiness or anybody's transmission of news, would be close upon £5,000,000 annually. And you could gain at least another £1,000,000 on buildings, and at least £250,000 on the Stationery Vote. I believe, too, that with a wise economy and not with a restriction of real education you could gain something considerable on the Education Vote, in connection with which you have £20,000,000 to play upon, in addition to the £30,000,000 expended by the local authorities. And I am sure that in the establishments about which I said so much at the beginning you might make a further large saving.

I ask that the Government should not meet me by proposing the appointment of a Commission, or by any dilatory procedure of that kind. I would like them to take the matter into their own hands. I would like the Treasury to have its hands strengthened, either by members of the Government or in any way which is thought most desirable, and that it should be laid down with regard to every Department in the State that every appointment which becomes vacant from to-morrow should be regarded as a new appointment; that is to say, no new appointment to fill the vacancy should be made without the terms being settled by the Treasury. Let the Treasury be given the power with regard to each appointment of settling whether or not it is necessary in the present condition of affairs. I will take two cases. I saw that an inspector of fisheries died the other day. My noble friend the President of the Board of Agriculture will be pressed, of course, to put in somebody else. I think the Treasury ought to settle whether the present moment is not one when you might adjourn for a time the inspection of fisheries so closely and acutely, and whether in this connection we could not save several hundreds of pounds a year. Then look at the Land Commission in Ireland. Nearly all the land there has been valued. The work is down to one-sixth or one-eighth of what it was, but the appointment of sub-commissioners goes on gaily whenever there is vacancy. Next I suggest that the expenditure of all the Departments should be scrutinised with a view to economy. The letters and mintiœ in connection with Somerset House might be reduced. I had three letters the other day., as to shares which were certified by the brokers and the solicitors as worthless, asking whether a value of £1 or £5 should be put upon them. There were three or four more letters to decide whether a man who had died had been legally married twenty years ago, although the certificate was obtainable at once. All these matters might be reconsidered, especially in connecton with audit. Were this labour reduced by ten or twenty per cent. you would save ultimately a great deal of staff. My next demand is that the Government should try and run the revenue departments so that they should pay the largest sum possible without arresting the service.

These proposals would lead to large economy, with two provisos. The first is that they should not be undertaken as a sort of penal attack on the Departments. The heads of the Departments should be consulted; they should be brought into counsel, and should be made to understand that they would be doing a national service by doing everything in their power to keep down expenditure. The second is that it should be made clear to the public that small economies would re-present at the aggregate an enormous amount in national expenditure, and that it is the small economies of unimportant persons which build up the national wealth. For that reason I went out of the way to mention the one case of the House of Common's expenditure—others might be mentioned—merely to show that it is quite impossible to induce people to make a supreme effort unless yon show them that you yourselves have done all you could, not only in great matters but in small. And I ask the Government to begin at once. What we do now will be ancient history before the end of the war. If we neglect it now, the opportunity may never come to us again. The proposals may not be liked, but the principle must he accepted that this is the moment for economy; and if the Government will be hold and decisive and will not palter with the matter, great results may be achieved. I may be told that we may stop the promotions Of some deserving men and take away somebody's increase of pay. Well, I am afraid there must be self-sacrifice at a moment like this.

It may be pointed out to me that the heads of the Departments are too busy to undertake this new work of supervision. If that be so, I will undertake to find among those whom I am addressing a committee of men who have served all their lives in the Public Service, who know perfectly well what can be done without impairing efficiency, and who, I will guarantee to say, could effect savings amounting to something between £5,000,000 and £10,000,000 between now and Christmas if they were allowed to do it. I think that is an object which is worth attaining. How can the Government call on the nation for a supreme effort if they themselves neglect the one obvious substratum of national resource, which is economy? And how are we to meet. the men who have given up their businesses and gone through all the processes of military training and endured all the perils of the trenches if we are going to tell them when they come back that we have been such indifferent stewards ill their absence, and have been so afraid of disturbing the ordinary easy course of our lives, that we have left things so that on their return they must pay a quarter or a third of their income towards the cost of the war?

After this war, like after all wars, there is bound to be a reaction. You will never have a moment which is so favourable to action as the present. We are not asking you to do anything which will be an impediment but an assistance to the Government now and to those who succeed them. When one looks back and thinks of that least pleasurable chapter of our history—the reaction after the war of 1815—one thinks that now, of course, we have none of those social inequalities which caused discontent at that time; but every other thing which leads to reaction will occur now as much as then. In those days there was dislocation of trade; there well be great dislocation of trade after this war. There was financial trouble; there will be great. financial trouble after this war. And there was what Lord Castlereagh called "an ignorant impatience to be relieved from the pressure of taxation"; I believe there will be after this war a great deal of impatience, which I should hardly call ignorant, to be relieved of the pressure of taxation. I am not in the least suggesting that the remedies which I have been allowed to put forward this evening are in any way a panacea, but at least they form something of a palliative; and if the House will accept my Motion and the Government will give effect to it, I think we may do something substantial towards relieving the privations which must necessarily follow upon the war.

Moved to resolve, "That in view of the necessary expenditure on the war it is, in the opinion of this House, incumbent on His Majesty's Government to take immediate steps to reduce the civil expenditure of the country."—(Viscount Midleton.)


My Lords, the noble Marquess who leads the House is unfortunately not able to be here this evening, and he has asked me to say a few words in reply to the lotion which has just been made by my noble friend opposite. My observations are certainly not going to be of a controversial character. My noble friend and I have for many years past fought side by side, and I should be always sorry to cross swords with him; and on this particular occasion I am certainly not going to do so. For I am bound to say that with the greater part of the observations which ho made I, for one, am in entire agreement; and I think my noble friend must have detected from the cheers which greeted him at the conclusion of his speech that his comments and criticisms were approved of, not only by those who sit on that side of the House, but by those who sit behind me as well. It is possible that some of the figures which my noble friend has cited may be challenged. It is possible that some of the Departments to whose action he has taken exception may be able to make a case in their own defence. Some of the increases of expenditure upon which he commented may have been inevitable and due to legislation which still remains upon the Statute Book, and from the after effects of which there is no escape. But as to the broad facts I do not think there can be any dispute.

I agree with my noble friend in thinking that the financial position of this country, which to my mind gave some cause for anxiety before this war broke out, now requires the gravest attention which Parliament can give it. We have had-within the last few clays from the Prime Minister the startling statement that we are now spending at the rate of no less than £3,000,000 a day. That expenditure, so long as the war continues, is I am afraid certainly not likely to diminish. We are continually assuming new liabilities, and, even if the war were to end in the near future, I do not think that the situation would be any less unsatisfactory than my noble friend has described it. In these circumstances it surely goes without saying that the first duty of the Government is to avoid incurring any new liabilities which can by any legitimate means be escaped from; and the second is to scrutinise as closely as we can the existing expenditure to which we are already committed. I think my noble friend was justified when he said just now that if we are to be admonished that frugality is indispensable in relation to our private expenditure, the same frugality is certainly not less desirable with regard to our public expenditure. But while it is a very simple matter to express sentiments of this kind, I think my noble friend will admit that it is not quite such a simple matter to apply them in practice. With the outbreak of a great war the floodgates of extravagance are opened wide. Checks are brushed aside, and it is not a very easy matter to impose them at a time when everyone is on the side of extravagance, and when few people are ready to raise a finger in defence of economy.

My noble friend dealt at some length with the Civil Service Estimates, upon the portentous growth of which he descried with great effect. So far as the Civil Service Estimates of this year are concerned, I do not think my noble friend will find, if he compares them with those of last. year, that the increase is very large or incapable of being defended. Of course, in making a comparison of this kind you may, if yon like, include the Supplementary Estimates of last year or you may exclude them. Probably the fairest comparison is that which you can make if you include in the figures of last year the Supplementary Estimates of July last, and if you include in the Estimates of this year the corresponding expenditure for the year 1915–16. On the basis of that comparison I find that the increase in this year's Estimates amounts to £680,000. That increase includes a sum of £145,000 which has been granted to the Universities to cover war losses, and I am able to say that the increase on the normal services would have been larger had it not been for very drastic economies which have actually been made in regard to expenditure on museums and galleries. I mention that in order to show my noble friend that some attempt is being made to retrench where retrenchment is possible. Into that sum of £680,000 there also enters a stun of £379,000 on account of old-age pensions. That, of course, as my noble friend knows quite well, is automatic and unavoidable; and I believe that £200,000 of the increase is due to the fact that there were fifty-three Fridays in last year.

Passing from those to other services find an increase of £100,000, which is more than accounted for by increases solely due to the war£I mean things like unemployment, secret service, and grants to make tip the deficiency of County Court fees. Then, again, as I dare say my noble friend knows, many of the Departments, including the Foreign Office, the Board of Trade, and the Home Office, are performing services which may be described as war services partly met from the ordinary Votes. They really are war services, although they are not so classed; and in the same way they provide a considerable amount of civil pay for Civil Servants who are absent on military service or seconded for war duties. I am advised that if what is really war expenditure were deducted, these Estimates would show a considerable decrease. I hope that the House will bear in mind that these Votes which my noble friend discussed, and about which I am saving something, offer a very restricted field for retrenchment. Take, fur example, the salaries of public servants. You cannot deprive them of their salaries; if you dispense with their services you have to pension them, and you cannot by any stroke of the pen suddenly bring about a large reduction under these heads. My noble friend told us, in a very effective passage, that the number of officials appointed in the last eight years was as great as the number of combatant officers serving in the Army at the beginning of the war. I do not defend that for a moment, but there the fact is. These men have been appointed, and they have a tenure with which von cannot arbitrarily interfere.

Then my noble friend said something about expenditure on public works and buildings. There, again, you cannot suddenly pull up the whole of your expenditure. If works are actually in progress my noble friend knows well that nothing is so extravagant as to stop them and resume them afterwards. But I am able to tell my noble friend that his principles are certainly kept in mind, and that there will be no new commitments under this head that can possibly be avoided. Then my noble friend passed to the revenue departments. These show an increase of £656,000, of which over £600,000 is for the Post Office. Part of this, I am told, is for interest and sinking fund on the loan made in 1914 for the telephone service, and the balance of the increase is described to me as due to necessary increases of establishment and automatic increments. I was very much struck, as I think the House must have been, at what my noble friend had to say both as to the Post Office and as to the question of charges for telegrams. I cannot see why, in the case of these revenue departments, every effort should not be made to make them at any rate self-supporting, and, if possible, a source of profit to the public. But when you come to charges for letters and for telegrams you have to bear this in mind, that if you press too hardly upon the people who use the Post Office or the telegraph office you may greatly restrict the number of messages and letters sent, and run a certain risk of depriving yourself of the income which may be necessary if the service is not to be run at a serious loss. My noble friend said something about the Land Valuation Department., and I am glad to be able to tell him that here there is a reduction of £123,000 owing to the approaching completion of the initial valuation These estimates, again, include an expenditure of £35,000 for the new currency notes, which was inevitable; and of £110,000, the cost of collecting the increased taxation recently imposed.

Then many I say a word with regard to the question of the extent to which this vast liability which lies ahead of us has been met out of taxation. I see my noble friend Lord St. Aldwyn opposite to me, and I know how much importance he attached to providing at any rate a fair portion of war expenditure out of taxation instead of by means of loan. I have here a note of the amount raised this year and to be raised next year by way of additional taxation as distinguished from income provided from loan. I find that in 1915–16 we shall obtain from additional taxation under the head of Income Tax £12,000,000, and under the head of Super Tax £6,000,000; and for the year 1916–17 the corresponding figures will be £43,000,000 Income Tax, and £7,000,000 Super Tax. Passing to the additional duties imposed, the figures for 1913–16 will be—Beer, £17,300,000; tea, £3,250,000. The corresponding figures for 1916–17 will be—Beer, £19,000,000; tea, £3,600,000. So that taking those figures together you will have from additional war taxation for the year 1915–16 over £68,000,000, and for the year 1916–17 over £72,000,000. I think that that is a substantial contribution, but I realise as fully as any of your Lordships that those figures, although they may admit of comparison with the taxation imposed by my noble friend at the time of the South African War, will only be a drop of water in the bucket when we come to deal with the enormous commitments which look us in the face.

I can assure the House that His Majesty's Government do not differ from my noble friend in the apprehension with which they regard the financial outlook. We hold that it is incumbent upon us to use every means of assuring our control over the expenditure now in progress. My noble friend was apprehensive that I should offer him a Royal Commission. No, my Lords, we make no proposal of the sort. What I do say is that we are prepared to institute a careful scrutiny of the action of all the Departments concerned in our public expenditure; and I am sure I may acid, in reference to what my noble friend said, that this scrutiny will be particularly exercised when we come to deal with the question of new appointments and the creation of new offices. In the next place, we propose to set up in certain eases special machinery for the purpose of investigating the expenditure of those branches of the spending Departments in which the absence of sufficient control has made itself felt. Air noble friend will, I am sure, recognise that I cannot at this moment tell him what particular kind of machinery we propose to set up. This Government lies only been in office for five weeks, and the question is one of such importance that no hurried action in connection with it would be desirable. But I hope that I have said enough to show my noble friend, not only that we do not disagree with him, but that we desire to meet him by taking practical steps in order to get rid of any of the abuses which he has so eloquently described to-night.


My Lords, criticism of the expenditure of the country is usually considered, and rightly so, a matter for the representatives of the people in another place, but I am afraid it is perfectly clear that, with seine few exceptions, there has been no attempt there during the last six months at any rate, or perhaps even for a far longer period, to make any effective criticism whatever of that expenditure. On the contrary, I believe it may fairly be said that in Committee on the Estimates in the House of Commons the energies of the Government of the day have of late years almost invariably been devoted to checking demands for increased expenditure rather than to resisting attempts to diminish the expenditure they themselves have proposed. Therefore I think that your Lordships will feel that my noble friend who sits beside inn is entitled to the gratitude, not merely of your Lordships' House, but of the country at large, for the speech which he has made to us this evening. It was a speech marked by great ability, but by even greater industry. He has evidently made a complete study of the Civil Service Estimates, to the increase of which he takes such great, and it seems to me such reasonable, exception; and he has placed before the country criticisms which I am glad to hear from my noble friend Lord Lansdowne will command the immediate attention of His Majesty's Government. They will, I believe, also have a great effect in directing the attention of the people once more to the necessity of economy in public affairs.

I fought for some seven veers as Chancellor of the Exchequer in defence of what I believed to be economy. It was a hard battle even then; it would be a much harder battle now, for the extravagance of the country throughout all classes and in everything in public and private expenditure alike, has greatly increased since those clays. But I remember perfectly well even in my own time Icing told by Sir William Harcourt, who was himself a great advocate of economy, that he believed lie and I were the only two real economists in the House of Commons. Now that is the position in which any Government is placed, and I entirely sympathise with what my noble friend has just said as to the extreme difficulty of decreasing estimates which practically largely consist of almost stereotyped expenditure. However much you may criticise, you cannot get rid of such great items of expenditure as the Old Age Pensions Act, or the insurance Act, or the growth of education, but if the Government wilt take it up I am quite sure that a great deal might be done to diminish the waste end fraud which exist under the Old Age Pensions Act, and possibly even to bring the actual cost of that Act somewhere near the original estimate, which, I think, was not much more than half the present figures.

In the same way with regard to insurance, what could be more grossly extravagant than the manner in which, as my noble friend has told us to-night, the Insurance Commissioners conducted their work in the earlier stages of their existence? I do not know whether any other of your Lordships besides myself asked that he might he furnished with copies of the various circulars that were issued. I did, and my house was flooded with these things—all of them contradicting one another: so that before many weeks had passed the whole code under which these gentlemen acted must have been perfectly unintelligible even to themselves. At any rate I am glad to hear that the expenses of the Insurance Commission will he reduced, for I am quite sure that might he done now that the system is established. When my noble friend talks of the difficulty of discharging clerks except by giving them rights of pension and so on, I believe it would be Found, as it has been found with the Police in the county in which I reside, that if you gave these clerks the choice of enlisting for military service a large number of them would go, and their work would he usefully and easily done by those who would remain behind. I venture to commend to His Majesty's Government some action in this matter beyond that which has vet been taken.

Then my noble friend who has just sat down said something about buildings. I have had something to do with buildings myself lately. It is only about two months ago that the Education Department and the Local Government Board were forced by the Treasury, and necessarily forced, to restrict the expenditure which they had allowed and encouraged and even forced many local authorities throughout the country to embark upon in regard to new buildings. My noble friend behind me referred to the case of new class-rooms required by the Education Department. The Education Department actually endeavoured to compel in these times, six months after the opening of the war, the London County Council to spend £1,000,000 a year on these new classrooms, and it was only on something like rebellion by the London County Council, backed up I am glad to say by the Committee on Public Issues over which I had the honour to preside, that that was knocked on the head and that unnecessary expenditure stopped: And so it has been with every local municipal authority throughout the country. For sanitary purposes, for education purposes, for purposes of all kinds, they have been urged by those two Government Departments to undertake fresh and great expenditure during these last six months. Thank goodness that has now been stopped, and very little indeed of public money will be spent in that way for some time to come. But the Government themselves might apply this rule about buildings to their own work more than my noble friend has suggested they can. You can do a good deal, if not to stop, at least to slow down, the expenditure on buildings. You can do a great deal by preventing the unnecessary purchase of sites before those sites will be actually wanted; you can deal with the matter from that point of view, and if the Office of Works is instructed to take a course of that kind I believe that a good deal of money will be saved during the coming year.

I was most impressed, perhaps, with the suggestions which my noble friend behind me (Lord Midleton) made with regard to the Post Office. The time has come, I venture to say, when we ought to make the Post Office more of a revenue-producing department than it has been for sonic years. It is right that you should pay the staff of the Post Office well. They do hard work, very hard work in many cases. Nobody will grudge their being paid well. But I am quite sure that the public might, without any real loss to the nation, pay more for the postal service that is rendered to it than it does now. Therefore I hope, now that we have a Postmaster-General, fortunately I think front this point of view not a member of the Cabinet, who is a man of great ability and industry, that he will be instructed by the Treasury to go closely into this matter and make such changes in the immediate future as may largely increase the net revenue from the Post Office and the telegraph service. Because, my Lords, it is not too much to say that the financial situation at the present moment is very grave.

My noble friend Lord Curzon spoke the other day of the grave peril of the country. I will not go so far as that, but I do say that the financial situation is very grave, as anyone with financial experience who cares to look ahead knows, and I do not think that my noble friend Lord Lansdowne quite realised the fallacy of one part of the figures which he gave us on that point. He admitted the figure quoted by my noble friend behind me of £1,293,000,000 as the war expenditure up to March 31 next, and he told us that the new taxation imposed towards that expenditure during this year was a matter of £68,000,000. Well, I take those figures. But he had no right to bring into this calculation the taxation which will be, I suppose, at any rate may be, continued of the same nature for the year 1916–17, because if the war unhappily goes on we shall certainly have to meet further war expenditure in that year, and if it does not go on we shall still have to incur that great expenditure in winding up matters after the war for which no provision has yet been made in the figures quoted by my noble friend.

Therefore the figures with which we have to deal are really these, that. towards a war expenditure of £1,293,000,000 you have raised by increased taxation so far only a matter of £68,000,000. What does that mean? The interest on the debt incurred will be, I believe, £58,000,000, and war pensions will cost, as my noble friend said, £18,000,000 or thereabouts—a total of £76,000,000. There will actually be on March 31 next a deficit as matters now stand in respect of the payment of the interest on the debt—not any portion of the war debt itself, but the payment of the interest on that debt—of £14,000,000. Such a thing has not been dreamt of in the financial history of this country for at least a hundred years.


I did not deny that.


No; but you brought the revenue of 1916–17 into a calculation with which it had nothing to do. That is the point to which I took exception. Well, that is the position. Now what has been done in previous wars? When I was Chancellor of the Exchequer I raised one-third of the cost of the Boer War in three years by taxation; two-thirds were raised by loans. I was criticised then by sonic members of the present Government for not having raised enough by taxation. Why? Because in the case of the Crimean War one-half was raised by taxation. And in the case of the great French wars one hundred years ago, what did our ancestors do They spent £800,000,000 on those wars. For the first six years of those wars Mr. Pitt most unwisely did not attempt to raise any part of the cost by taxation. But that policy was, happily, altered. Of the £800,000,000 spent no less than 17 per cent., nearly £400,000,000, was found by the taxpayers during the duration of that war, and only 53 per cent. was raised by loans. We have now to thank our ancestors of one hundred years ago for the very grave sacrifices they made in taxing themselves to that extent. What are we doing in imitation of them? We are deliberately casting so far the whole of the burden of the cost of this war upon posterity. I say it is a bad policy. I say it is an unfair policy to our country. I say it is a policy that is a disgrace to the present generation.

I do not say for a moment that it would be possible to raise one-third of the cost of this war by taxation. Of course, it would not. An expenditure of nearly £1,300,000,000 in little more than a year and a-half is an unheard-of thing; you could only raise quite a small portion of that amount by taxation, but you ought to raise a good deal more than £68,000,000. And why cannot you? I think that the Government were very much to blame last year in not at once when the war began imposing additional taxation to meet part of this cost, instead of delaying any imposition of new taxation for more than three months. The result was, of course, that they lessened the resources of the country by the loss of the taxation which they might have imposed for that time. They are pursuing precisely the same policy now. We have a sort of doubtful suggestion from the Chancellor of the Exchequer that more new taxation will be imposed. Why does not he propose it at once? Why has he waited from February until July to bring forward his measures? The only one reason that I have heard given is that new taxation would have interfered with the success of the War Loans. I never found that new taxation interfered with the success of the loans I had to raise. On the contrary, I believe that people would be more likely to subscribe to the War Loan if you told them plainly what taxation they would have to pay in the year before them, because they would then know better what their real resources were.

But what is this new taxation to be? I do not wish to dwell long upon that subject, because, of course, it is not our duty here to initiate taxation. We have nothing to do with that. But I will venture to call the attention of the House for a few moments to the position in which we are placed with regard to more taxation. Of the taxes that were raised last November the great.bulk,£48,000,000, I think, as against £18,000.000, were derived from Income Tax and Super Tax—direct taxation The result of that is this. You impose on the wealthiest Income Tax payers a tax of 5s. in the £ on their total incomes, in addition to what they must necessarily pay as insurance against heavy Death Duties, and, no doubt, in most cases towards local rates. You can, of course, increase that; I do not deny it. But if yon do increase it you will be approaching dangerously near to confiscation You cannot carry direct taxation beyond a certain point. If you try to do it you will have evasion.

Let me look back to the financial history of the last ten years. What has been done by the Government in office during that time? They have increased the cost of the civil services, as my noble friend behind me has reminded the House, by £30,000,000 as compared with what it was in 1905–6. The main heads of that increase, as he said, were old age pensions and insurance, nearly £22.000,000; and education about £4,500,000. How did they Lind that money? By adding 3d. to the Income Tax, and imposing a Super Tax, which together produced about £11,200,000 a year, and by adding nearly £9,500,000 a year to the Death Duties—a total addition to direct taxation, of nearly £22,000,000. What did they do with regard to indirect taxation? These measures for which they had to provide money were great measures of what was called social reform for the benefit of the poorer classes of the core-inanity. But did they tax the poorer classes for that? Not a penny. On the contrary, during those ten years they reduced the taxation on tea, abolished the export duty on coal, and reduced the tax on sugar by more than £3,500,000—a total reduction of nearly £7,500,000 in indirect taxation. If they had had any sense of fairness in spreading the taxes so as to make the burden at all equal between different classes of the community, they never would have imposed so enormous a proportion of the cost of social reform upon the direct taxpayers. The effect of their having done so is that from direct taxation we are able now to raise nearly £22,000,000 less towards the cost of the war—for which direct taxation is specially intended—than we should have been able to do if that £22,000,000 had not been devoted to these Civil Service Estimates. I call that bad finance. I think we have had a lesson as to the effect on the country in what we see now, and I hope with all my heart that it may be a lesson for the future. It is possible, as I have said, still further to increase direct taxation, but it is possible also to increase indirect taxation. I hope that a large and broad view will be taken when the Government make their proposals which will bring all classes into contribution. What I confess I feel is this, that in some quarters there has been, almost a desire that no one should bear the cost of this war except the soldiers at the Front and the class who pay Income Tax. No doubt the increased cost of provisions has been a burden upon the working classes, but much of that burden has been met, as we know very well, by war bonuses and increased wages. Every class in this country ought in any future increase of taxation to bear its share.

I feel that I have trespassed too long upon your Lordships' time with regard to this subject, but it is to my mind a matter of the gravest importance. As my noble friend has urged upon you, although much must be done and ought to be done soon by increased taxation towards meeting the cost of the war, yet no doubt much also may be done by well-directed economy. My noble friend Lord Lansdowne has tried, I think unsuccessfully, to show that the Civil Service Estimates of the present year are not so bad as they were painted. They ought to have shown a large reduction—far more than he stated. And why? The speeches of the Prime Minister and of many members of the present Cabinet may be quoted to show the urgency with which they have pressed upon private individuals, and quite rightly, the, necessity for curtailing all superfluous luxuries at the present time and carrying on their establishments on a totally new basis. That principle ought to have been acted upon in the preparation of the Estimates for the current year. Why was it not attempted six months ago? Why was it not attempted during the autumn and winter before the Estimates were presented to the House of Commons, just as it is with taxation? It is late now to attempt these economies, but I am glad that we have got something from my noble friend Lord Lansdowne by way of a promise that they will be attempted to be made. Let the Government grapple with this question of reducing unnecessary Civil Service expenditure, and it will do something at any rate to redeem what I believe to be the grave errors of the past, and deserve the gratitude of the taxpayers.


My Lords, I do not rise to enter into the somewhat dubious field in which the noble Earl who has just spoken found himself a few minutes ago as to the rise in the expenditure on social reform in recent years and the means by which the burden has been distributed. There is a great deal to be said upon that, but this is not the moment to say it. I would only remind the noble Earl that the £70,000,000 which the Government of the country cost Mr. Gladstone in 1808 bore the same proportion to the sum of £850,000,000 which was represented by the national annual resources in those days as the £210,000,000 of the other day bore to the £2,400.000,000 which represents the corresponding resources to-day. Those are very general figures, but they represent very deep realities. This country is very much stronger for the great advances that have taken place among our people during the last few years and for the new distribution that has taken place of the things that make for moral and material strength, and I, for one, should be sorry to say a word that would suggest a regret for the policy of social reform which has bulked so largely in recent years.

As to the way in which taxation has been borne, there again great questions arise upon which I will not touch now. I concede to the noble Earl that it would be a most convenient thing if we had twenty, thirty, forty, fifty millions, or even more, free to pay for the expenses of the war. No doubt it would; but even so, I would rather not be without that prosperity and contentment of our people on which I base my best hopes for the future in the colossal struggle in which we are engaged. The noble Earl spoke of economy, and there I am entirely in agreement with him. Money has been wasted -right and left. It is being wasted at this moment, because we have not got the habit of surveying these things as a whole with a critical eve. I remember, when the noble Earl was Chancellor of the Exchequer and when I used to have the pleasure of seeing him in another place, putting across the floor of the Douse this question to him, Why is it that the Treasury, which is the body that ought to set the nation an example in having a principle of economy to go upon, maintains the doctrine of the equivalent grant—the doctrine that because one part of the country needs something, therefore the other parts of the country which do not need anything must take a corresponding amount of money and do what they can with it, and then, when their time comes when they do want something, go without because we cannot find the money for the rest?


I got rid of that doctrine.


I was going to say that the noble Earl then gave me a most sympathetic answer on that subject. He said lie disliked the doctrine but it was deeply rooted, and he did a great deal to get rid of it. But it still survives; and whenever any question comes up or one part of the country needing something, the Treasury still goes on acting upon what remains from the pruning knife of the noble Earl of the old doctrine. I give that example as an illustration of our absolute deficiency as a nation in looking at these things in an organised way. The Treasury, I think, is one of the greatest offenders. It looks at, things in a penny wise and pound impotent fashion. It exercises about as little intelligent restraint as any Department of the State, and we have suffered in days gone by—not under one Administration, but under a series of Administrations—because the Treasury, on the one hand was not more sympathetic and on the other hand not more firm. I quite agree with the noble Earl that we have a bad record of waste and extravagance to look book upon, and I am glad to know from the noble Marquess (Lord Lansdowne) that he is taking the whole prospect seriously into consideration.

The House is much indebted to the noble Viscount (Lord Midleton) for the able and lucid exposition which he gave of various deficiencies in the present situation, and if I am critical it is not about what the noble Viscount said but about what he did not soy. And about the whole tone of this debate I am critical, because I think your Lordships are not looking in the face the most formidable fact which you have to meet. In preparation for war we cannot afford to economise, and there are some economies that we cannot afford to make in preparation for peace. Your Lordships come here and discuss things as though when the war comes to an end all that would be required would be that we should make some readjustments to meet the tremendous burden of debt. raise new taxes, and go on as before. All that will be swept away, and this will be it different country when the war is over. It will be a different country in more ways than one. It will be a different country because we shall be a poorer country, and because we shall find oursolves deprived of the advantages and the prestige of the past and the tradition which gave us a unique position in commerce and in industry which we have enjoyed up to now largely because we were in possession of the field and our rivals could not come in. The field will have been broken into. Capital will not abound here as much as in some other countries. We shall have to face a state of things when Our manufacturers and merchants will be thriven on their Own resources and will have to rely on their skill, ingenuity, and enterprise to make up lost way, aye, and make up lost way against; a great current of difficulty.

If ever there was a time when it behoved us to apply our minds in preparing for that situation it is now, and there are some ways in which the preparation is vital. The noble Viscount and the noble Earl both took the Education Department as one in which it was desirable to effect great economies. I agree that there has been a great deal of extravagance in buildings, and I dare say there is extravagance to-day. Education ought to be given in barns and hovels, anywhere where it can be given, just now. We have no money to waste on fine buildings, but we must get efficient teaching for the children, the future generation upon which the country will depend. Aye, and more than that. We must do something to bring about a condition of affairs in which our merchants and manufacturers of the future will be better trained, better disciplined, and better educated in the higher walks of learning, or they will not be fit to hold their own with the new competitors who are growing up, and the brunt of whose competition they will experience for the first time when this war is over. Therefore I think the most unfortunate example to take as a field in which economy could be practised at the present time is the general estimates of the Board of Education.

I was glad to catch, in the noble Marquess's speech, a reference to a sum of £142,000 which is to be given as a war grant to the Universities this year. That is absolutely vital. To follow out the principles of which we heard so much tonight in the case of an item like that would be to economise to our future ruin. It is just that kind of thing we have to get out of our heads and learn to avoid. Economy, yes; we shall have to put ourselves on tile most ruthless short commons and bear a great amount of taxation, but I hope we shall not commit the superb folly of being penny wise and pound foolish and sparing On the preparations for peace that expenditure which is just as essential, if it is not as urgent, as the expenditure we are making daily upon the war. Therefore, while I welcome this Motion, and while I am glad to know that the Government are facing the situation with the deep seriousness which it requires, I wish to enter a protest against the notion that ruthless economies can be practised in every direction. They cannot be practised about the fighting services just now, and they cannot be practised about our educational system. They cannot be practised about public health. They cannot be practised, for instance, on the efforts that are being made at the present time to organise better for preventing the wastage that takes place in the birth of children and the wastage in the death of those children in the early years of their lives. I dissented very deeply from the noble Viscount when he spoke with almost reprobation of the practice of bringing young children of from three to five years of age into the schools. No doubt the Education Department has cut down in places. But that is an age when children are most susceptible of having their minds projected; and if the future of the race is a thing which we take seriously, and about which we are in earnest, we shall not neglect that period of child life more than any other. I say again that I am in deep agreement with the necessity for economy, and not the less so because I see certain heads of expenditure under which there can be no diminution but must be increase. That makes the situation all the more serious and makes it incumbent upon us to prepare ourselves to face a burden, when the war comes to an end, even greater than is represented by the figures which have been discussed to-night.


My Lords, I intervene in this discussion with great reluctance, but I think it my duty to do so. We have been discussing finance. The salient fact is that we are spending £3,000,000 a day upon this war, and have been given to understand that that is likely to last for a long, long time. I am glad that the noble Viscount brought forward this Motion, but I wish that it had been addressed to a larger and more august community. I wish it had been addressed to all the nations of Europe, because the figures that he gave relate to the wealthiest, the most powerful, and the most enduring of all the nations that are now engaged in the war. Figures of a similar kind will apply to those who are poorer, and it comes practically to this— that if wisdom does not come to the councils of Europe we are going straight to European bankruptcy in a comparatively short time. I believe that this country is more likely to last out than any other, and I know that the resolution of our people is as strong as— stronger perhaps than—that of any. But when you consider that similar figures to those to which allusion has been made by the noble Viscount apply to other nations of Europe, it means bankruptcy, and bankruptcy, I fear, in many places, may be the prelude to revolution. I think that those who have the wisdom may be able throughout Europe to point the moral.


My Lords, I propose to amend my Resolution by the substitution of the word "effectual" for the word "immediate." This alteration is made at the instance of his Majesty's Government, to whom I am grateful for accepting the Motion. But I hope it will be understood that the fact that the word "effectual" is substituted by no means precludes immediate action.

Motion, as amended, put—

"That in view of the necessary expenditure on the war it is, in the opinion of this House, incumbent on His Majesty's Government to take effectual steps to reduce the civil expenditure of the country."

On Question, Motion agreed to.

House adjourned at half-past Six o'clock, till To-morrow, a quarter past Four o'clock.