HL Deb 20 July 1915 vol 19 cc503-44

LORD RIBBLESDALE had the following Questions on the Paper—

To ask His Majesty's Government what is the nature of the machinery proposed to be set up for the purpose of investigating the expenditure of certain branches of the spending Departments; are new positions to be created for this purpose or will the investigations be conducted by existing officials, and if so, of what Department. What instructions are to be given to the officials conducting the investigation and what is the nature of the scrutiny to be extended to new appointments and the creation of new offices; and further to call attention to the destruction of capital and credit all over Europe owing to the war, and the danger thereby caused to the financial stability of the entire Continent.

The noble Lord said: My Lords, I will shorten what I have to say as much as I can in order to leave room and opportunity for speakers of more ability and influence. I know quite well that a great many people think that owing to the various vicissitudes which His Majesty's Government have to encounter just now no speeches at all ought to be made. A noble relative of mine, Lord Glenconner, wrote to that effect the other day to The Times, and Sir John Simon, I think, in a week-end speech a few days ago, said that anybody who was at all inclined to find himself in disagreement with anything that was going on and ventured to say so was "distilling poisonous gases and propagating hysterical fears." Then the other night when my noble friend Lord Weardale said that there was such a thing as Ministerial responsibility and that there was a Prime Minister, Lord Crewe seemed quite annoyed and read Lord Weardale a lecture to the effect that that was an attack upon the personal character of Mr. Asquith. I do not take that view. I think there is such a thing as Ministerial responsibility. If not, who is responsible? Certainly not the innocent Back Bench Peers who sit about in the House, nor the newspapers. One inevitable result that comes from a Coalition Government is that you have a coalition attitude of vigilance and criticism. I am for that. In my view, just as our Armies have to face our enemies, and just as our taxpayers have to face the cost of the war, so our Ministers have to face criticism of their conduct and their expenditure.

My Question on the Paper divides itself into two parts. The first part emerges from Lord Midleton's speech the other night—a speech which put the points simply and clearly, and to which I think all noble Lords listened with pleasure and appreciation. It was said of Professor de Morgan that he could make mathematics romantic and disquieting in their sequence and their consequences, and of Lord Midleton's figures the other night it can be said that in his dexterous hands their leaps and bounds were as graceful as those of antelopes. A good deal of my Question seems to have been answered by the recent announcement of the appointment of a Government Committee. I venture to hope that it is not merely going to be a "candle-ends and cheese-paring affair," and that the Committee is going to look into the very much larger questions which were adverted to by Lord Midleton. I saw the other day that Lord St. Aldwyn somewhere or other said he rather wished that it was going to be a Cabinet Committee and to be presided over by the Prime Minister. Well, I do not know. I bow to Lord St. Aldwyn. He is not a member of the Cabinet, but personally I should like to see him on the Committee. I only hope that this Committee is not going to have too official a character. The official mantle clings closely and tightly. I would not at all even say that some of the "leaven" to which Lord Curzon alluded the other evening, if they sat on that Committee, would not find themselves curiously cramped by that same mantle. The noble Marquess, Lord Lansdowne, will tell us how far this is to be a purely official Committee, or how far the people of this country are going to hear from outside or capable sources how their money has been spent and is going to be spent. In the debate on July 6 the noble Marquess, in speaking of the careful scrutiny which they were prepared to institute, added that this scrutiny would be particularly exercised "when we come to deal with the question of new appointments and the creation of new offices." Perhaps the noble Marquess will tell us how that will work out. I am reminded that Mr. Gladstone when he was Chancellor of the Exchequer, in 1863 I think, heard that a senior clerk in the Public Debt Office was at death's door. He at once wrote to Lord Palmerston bidding him on no account to fill up the office, as it was quite unnecessary. However, no doubt the noble Marquess will explain to us how the scrutiny to which he referred will work out. I think the appointment of this Committee is a salutary if a rather tardy move.

I see that Ministers are constantly paving visits to the Front. I dare say that is a pleasing amusement, but Ministers cannot win battles; they certainly cannot kill Germans; and I cannot help thinking that they may be better able to bring about both those results by looking after our business at home. Anyhow, public economy and private thrift are the order of the day, and I do not know that it has come a moment too soon. I will read one quotation from Mr. Gladstone, because it hangs on to something I want to say later. This is what Mr. Gladstone said a good many years ago, and to some extent it represents the kind of way we have been going on for some years past— All excess in the public expenditure beyond the legitimate wants of the country is not only a pecuniary waste but a great political and a great moral evil. It is characteristic of the mischiefs that arise from financial prodigality that they crap onward with a noiseless and a stealthy step. That was said a good many years ago, but you had a warning of very much the same kind not very long ago from the noble Earl who sits on the Cross Benches, Lord Cromer. I find that on the Second Reading of the Old-Age Pensions Bill in July, 1908, the noble Earl spoke of reckless finance, and he added— The main duty of the Government is to make prevision betimes for the European conflict which will be forced on us before many years have clapsed. Any one who wants to see how near the mark Lord Cromer was should look at that speech, for the noble Earl expressed himself with an accuracy, a foresight, and a moderation which we seldom find in people who play the rôle of prophets.

The other night, after Lord Midleton and Lord St. Aldwyn had spoken, we heard a remarkable speech from Lord Haldane, who said that there had been a good deal of muddle, and I think waste, at the Treasury, but that could not be helped and we must get used to it. Then he went on to lay votive offerings on the altar of social reform and of education, and as far as I recollect said that so far from relaxing our efforts in that direction we should spend a great deal more on those experiments. Well, I rather approve of the spending of a great deal of the money that has been devoted generally to improving the conditions of our poorer neighbours, and I approve of doing all we can to bring about a higher standard of citizenship, higher notions of what the citizen can do for his country; but I am hound to say that we leave had very poor value for our money. For what is the net result? In a commercial country involved in a great war labour is a most essential part of the body politic and of your national salvation, but conditions of labour have been created which are always unreliable and often refractory. Lord Haldane, on July 5 in his speech at the National Liberal Club, told us that although large orders for munitions had been placed they lead not been completed. He said— The industrial conditions in face of such a demand wore such that the manufacturers could not complete and were confounded. I do not think that is in some ways very surprising And here again I will quote from the noble Earl, Lord Cromer, for I find that, on July 20, 1911, on the occasion of the discussion of the Parliament Act, he told us in this House— Concession after concession has been made, each popular, each costly, and each based on the temporary Party and electoral necessities of the moment rather than the permanent interests of the country. Well, it is very difficult to say what we can do. We have just had the Munitions Bill passed. Its powers are defined, but I should think it is a very nice point whether they can be enforced. However, I am glad to see that the Coalition Government—whether the old Government would have done the same I know not—are at all events waking up to the general position, financial and other, in which we are.

"Crisis," "Grave peril," have become the shibboleths of every Ministerial utterance, I am sorry to say in very sad contrast to the braveries and optimisms of some three or four months ago. But, as I say, it was high time you did something. I go further, and say I believe that you must take some risks. The noble Marquess, Lord Lansdowne, when speaking on the Registration Bill the other evening, indicated that circumstances aught possibly arise where sonic form of national service would have to be instituted. It looks very much as if some form of national labour will also have to be instituted. I am prepared to speak civilly of trade unions. I quite understand that the great body of workers are loth to part with the fabric of trade unionism which they have built up. But it really seems to me that something will have to be done by which labour will be placed at the disposal of the public, and not of the individual trade interest.

I now come to the second part of what I have to say. A good many years ago Mr. Gladstone used to advise me to take full advantage of the opportunities afforded in the House of Lords by our plan of putting Questions. Mr. Gladstone used to say that in the House of Commons Questions were put down to elicit information, and that in the House of Lords they were put down to convey an argument. Well, I make no pretence of conveying an argument as to the second part of my notice on the Paper. There are one or two noble Lords here to-night who will do that very much better than I can. I merely invite the attention of the House to two or three broad considerations on the world aspects of credit and of finance as they are affected by this war. Since I put my Question down I see that Mr. Harold Cox delivered a lecture in the City, at which Lord St. Aldwyn also spoke; and the Press is full of literature on the whole question of what the war is costing the world, and of letters on the subject of the cost of the war all round, to belligerents and to neutrals alike. I do not want to go further into that. I will merely remind you of some figures which are probably in all your minds. According to the figures of June, the world had 12,477,000 men under arms. They were costing £10,000,000 a day. The figures which I saw assumed a fourteen months' war, of course a hypothetical figure. Very simple arithmetic will explain what that force of men, involving that amount of money a day, with all the cleaning-up bills, will cost the civilised world engaged in these operations. And I see that for us what we shall have to pay, when the war is brought to a conclusion, satisfactory or unsatisfactory, will add something like £130,000,000 to our national expenditure.

It was Lord Bacon, I think, who said that "extraordinary expenses must be limited by the worth of the occasion." That is a thesis upon which most people could write an essay, and how you wrote your essay would depend a great deal upon your own interpretation of the word "worth" or the word "occasion." I certainly shall not inflict on the House any observations of my own on that. But probably in the mellow seclusion of your own sitting rooms you sometimes look at Horace (that is supposed to be a pursuit of the members of the House of Lords, or was), and I dare say you remember the obstinate and upright man and the lines— Si fractus illabatur orbis, Impavidum ferient ruinœ. That is all very well, but looking round on the state of affairs, looking round on what this must mean, not to this country but to Europe and the civilised world, I am bound to say that I do not feel impavidus. I should very much like to see us—if we could do so on any basis of dignity and of reason—get out of this age of conflict which seems to have beset the world and go back into an age of commerce. That would be very welcome to me, although I quite recognise that of course we are at war, that this country must go on with the war, and that we have a staying power which will enable us, I believe, to go on with the war. But do not let us blind ourselves to the possibility of some new shift in the circumstances providing some basis of that kind; and let us not shut our eyes to the consequences of this great war to civilisation, to commerce, to wealth, to hundreds of other things which will be in the minds of all your Lordships, if an occasion arises in which we can consider putting an end to it or getting an end brought to it, as I say, on a basis of reason and dignity. Mr. Pitt, on the exceptional occasion of his deathbed, is supposed to have said—though I believe it is contested—"Roll up the map of Europe." To my mind, were an inhabitant of Mars or Saturn to visit Europe now he would say, viewing the waste of treasure and life, "Take Europe to see a mad doctor." I beg to ask the Questions standing in my name on the Paper.


My Lords, it fell to me the other evening to deal with this subject in reply to my noble friend opposite (Lord Midleton), and I may be perhaps allowed this evening to say a few words in reply to the Questions addressed to the House by my noble friend who has just sat down. He reminded us that his Questions on the Paper fall into two sections. He began with a series of questions addressed to His Majesty's Government, questions which he had a perfect right to put and of which we certainly do not complain; and having addressed those questions to us he passed on to a review, or perhaps I ought rather to say an anticipation, of the financial situation which is likely to arise as the result of the great war now in progress. He indulged in this anticipation no doubt because he thought that it was germane to the questions he had addressed to us, and indeed he used the formula which he himself borrowed from Mr. Gladstone. His series of questions was used "to convey an argument," the argument which he laid before the House.

When my noble friend draws our attention to what he calls the destruction of capital and credit which may follow upon this war, he is making a suggestion the reasonableness of which I suppose no member of this House could be found to dispute. We all realise how grave the financial situation which will arise at the end of this war must be; and when my noble friend presses that point upon our consideration he is really, if I may say so, forcing an open door. My noble friend gave us some figures bearing upon this part of the case. All such figures must obviously be more or less conjectural. But whether the figures are a little larger or a little smaller, the broad facts remain; and these are surely that although some nations may possibly emerge from this struggle with an increase of territory, or perhaps an increase of reputation, no nation is likely to emerge from it with unimpaired resources. I do not think it would be an exaggeration to say that the youngest member of your Lordships' House cannot expect to live long enough to see the complete obliteration of the terrible traces which this war is going to leave behind it. It will leave those traces not only in the form of an arrestation of progress and prosperity, but in a great burden of financial embarrassment, I might almost say financial disaster, which it will take all the resources of the civilised world to bear. We, at any rate, shall none of us make light of my noble friend's anticipations, or contradict him when he bases upon them a plea for frugal and careful administration.

My noble friend reminded me of the pledge which I gave the other evening. My pledge was a two-fold pledge. I undertook, in the first place, in general terms that the Government collectively and every member of the Government would make it their business to introduce a careful scrutiny of the action of all the Departments concerned in our public expenditure. That was a general pledge against financial prodigality, to use my noble friend's words, and I gladly repeat it to-night. But I added to that a more specific pledge. I gave an undertaking that we would in certain cases set up machinery for the purpose of investigating the expenditure of those branches of the spending departments in which the absence of sufficient control had made itself felt; and my noble friend asked me, very properly, to tell him what is the special machinery which we have in view.

Let me, in the first place, say to the House a few words in regard to the Departments in connection with which we propose that this special machinery will be set up. Our proposal is that it shall deal not with the whole of the public expenditure but with the civil expenditure of the Government. I may say as to that that I noticed that my noble friend Lord Midleton, in the course of the very able speech which he addressed to the House the other evening, was careful to confine himself to the question of civil expenditure. Indeed, he will remember that the Motion which he carried without any discordant note was a Motion that effectual steps should be taken to reduce the civil expenditure of the country; and my noble friend focussed his attention upon questions arising out of the civil expenditure and the civil expenditure alone. I am quite sure that when my noble friend adopted that course he did so because, with his long administrative experience, he realised that in the midst of the strain and stress of a great war it is really impossible to impose a public inquiry upon the War Office and the Admiralty. In our belief, to do this would be to run the risk of something very nearly approaching the paralysis of the activities of those Departments. Those of us who have had experience of inquiries conducted into one branch or another of the public administration know that one of the consequences of setting up such an inquiry is that the whole of the officials concerned at once begin to turn their attention to the manner in which they are likely to come out of that inquiry, and away from all other business which lies ready to their hands. It is almost impossible to exaggerate the dread which many people have of the kind of cross-examination which witnesses have to undergo before Committees or Commissions of this kind. I have myself known cases of soldiers whose intrepidity was beyond all question, but who, nevertheless, made a very poor show indeed when they had to submit to cross-examination before a body perhaps consisting of a certain number of gentlemen brought up to the legal profession and of others who, though not lawyers themselves, seemed bent upon showing that in the art of cross-examination they had nothing to learn from lawyers. The view which I have ventured to express, that an inquiry of this kind ought not to be conducted at the present time either into the affairs of the War Office or into the affairs of the Admiralty, is very strongly held by my colleagues; and we therefore propose that the special machinery which I shall describe in a moment is to be directed to the civil Departments and to civil Departments only.

Now as to the form which this inquiry is to take. I told my noble friend the other evening that we did not propose to appoint a Royal Commission, and I remain of the opinion that a Royal Commission would not be appropriate for the purposes which we have in view. Nor, again, do we desire to set up anything like a tribunal entirely external to the Government. We believe that this inquiry will be quite as much in the interests of the Government as it will be in the interests of the public, and that the Government should therefore take a part, and a conspicuous part, in it. For this reason we propose that the Committee should be presided over by the Chancellor of the Exchequer. We believe that it will greatly strengthen his hands in discharging the duty which particularly belongs to him—that is, the duty of controlling the expenditure of the different Departments of the Government. And we propose to associate with the Chancellor of the Exchequer Mr. Montagu, the Financial Secretary. But, my Lords—and at this point I can reassure my noble friend—nothing is further from our intention than to make this an official or a Departmental Committee. On the contrary, we propose to go outside the ranks of the Government and to invoke assistance from a number of gentlemen of experience in these matters and of an entirely independent position in public life. I will first give to the House the names of those members of the Com- mittee who will be taken from the two Houses of Parliament; and here I must premise that I am going to give the names of those who have been asked to serve upon the Committee, but I am not yet able to say whether the whole of them have accepted the invitation that has been sent to them. In the first place we propose to include my noble friend Lord Midleton. He will have to pay the penalty of the ability with which he dealt with this question the other evening, and I am sure he will not be reluctant, no matter how laborious the task may be, to give us his invaluable assistance. We propose to add the following members of the House of Commons: Mr. J. M. Mason, Mr. Evelyn Cecil, Sir L. Chiozza Money, Mr. H. T. Baker, and Mr. J. H. Thomas, a Labour Member; and we propose to include from outside the Houses of Parliament the following three gentlemen: Sir Gilbert Claughton, Bart., Chairman of the London and North Western Railway Company; Mr. Gaspard Farrer, a partner in the house of Baring Brothers; and Mr. Harold Cox, to whose speech my noble friend referred, a gentleman whose public utterances are always listened to with attention, and who has made this particular subject his special study. So much as to the composition of the Committee. And then my noble friend would like to know what the reference to the Committee is to be. The terms of reference will be as follows— To inquire and to report what savings in public expenditure can, in view of the necessities created by the war, be effected in the Civil Departments without detriment to the interests of the State. I think my noble friend will agree that that is an ample reference which will give the Committee all the scope that it can possibly desire.


Might I ask my noble friend whether it is clear that the Civil Departments include the Revenue Department and the Post Office?


That is certainly intended. If the terms of reference require reconsideration I will see that they are amended. My noble friend has the Post Office in view; I know that that is intended to be covered. Before I sit down perhaps I may be allowed to say this with regard to the Departments which do not come within the scope of the reference—I mean the Admiralty and the War Office. I am anxious that it should not be supposed that either of these Departments is indifferent to the cause of public economy, or that they do not intend to avail themselves of every opportunity to keep within the strictest bounds the immense expenditure which is at this moment passing through their hands. I am able to say particularly that the War Office is most anxious to put a stop to any unnecessary expenditure or waste, and is ready to consult with the Treasury and to devise any means of which they or the Treasury may be capable to curtail unnecessary expenditure. I am able to add that Lord Kitchener is going into this matter himself with the Chancellor of the Exchequer, and that he has appointed a Departmental Committee in the War Office to deal with the whole subject. This Committee is working in consultation with the Treasury, and every effort will be made to avoid any possible waste. I think I have told your Lordships all that I can tell you with regard to the Committee. It certainly will not be, as my noble friend put it, too official in character. In appointing it my noble friend will not, I think, consider that we are merely paying lip service to the cause of economy. I think the composition of the Committee and the terms of reference should be sufficient to show that this inquiry means business, and we are confident that its results will be to the public advantage.


My Lords, I do not suppose that any of us feel much disposed to indulge in useless recriminations as regards the past. At the same time the history of the recent past is so fraught with lessons which can be of use to us in the present and in the future that it is impossible not to make some allusion to it. We all know that when a gambler is ruined it is not entirely due to the fact that he loses large sums of money at the gaming table, but also to the further fact that he becomes hopelessly demoralised by the gambling table and loses all sense of the true value of money. That is what I think has happened to the public in this country with regard to public expenditure. I have a very clear opinion myself as to what is the main cause of this demoralisation, but I am not going into it fully, and for two reasons. In the first place, to do so would rake up old controversies which may very profitably be allowed to sleep; the other reason is that the eminent statesman who I cannot but think is himself largely responsible for the present state of things has very amply condoned any mistakes he has made in the past by the fearless energy and ability with which he has thrown himself into the national cause since the war began. But still there are one or two points in the past to which I think allusion should be made.

My noble friend Lord Ribblesdale did me the honour to quote from one or two speeches which I made a few years ago. It is a fact that I rather posed then as a political and financial Cassandra, and my warnings received about as much attention as those which were given to that ill-treated prophetess in the days of Agamemnon and Priam. But I did not stand alone in that matter. There were a great many members of this House and of the other House who were alarmed at the growth of expenditure and who frequently asked the question, Quo vadis? without getting any very satisfactory reply. Then there is another point to which I think some attention should be drawn, all the more so because some hard things are occasionally said about the House of Lords. I think it is just as well to remind, if not the general public, at all events the thinking public of this fact. It does sometimes happen that the views expressed by Peers and by this House collectively deserve more attention than our critics would have the public believe. Your Lordships will remember that when the Old-Age Pensions Bill was under consideration here an Amendment was carried by a very large majority limiting the operations of the Bill to a period, if I recollect rightly, of seven years. The idea was not in any way to wreck the Old-Age Pensions Bill, because every one recognised that some such measure was necessary. I think the view that was prevalent in this House was rather that we were taking a leap in the dark, that the question had been insufficiently and inadequately examined in the House of Commons, that we were incurring liabilities to an absolutely unknown amount, and that we were embarking on a hazardous experiment of which no one could foresee the result. It was therefore thought, very wisely, that the Parliament of the nation would act wisely if they had an opportunity of reconsidering the whole question in a few years by the light of such experience as had been gained. You are aware that that Amendment was rejected, even scornfully rejected, by the House of Commons. Is there any impartial man, not carried away by Party spirit, who will now have the hardihood to deny that it would have been a very good thing for this country if that Amendment had been carried? I venture to say, as a matter of fact, that if it had been carried we should eventually have had an Old-Age Pensions Act very much better and more economical than that which now exists. However, it is no use crying over spilt milk, so I will say no more about the past.

The noble Marquess who leads the House, in his sympathetic reply to Lord Midleton, said he hoped and believed a great change was coming over public opinion, and that in the future more attention would be paid to public expenditure than in the past. I devoutly hope that the noble Marquess is right, but I confess I am not very sanguine. Thrift is by no means a British national characteristic, and probably no class of the community in this country from the Peer to the peasant is as thrifty as the corresponding class in Continental countries. However, we must hope for the best. At this hour I feel perfectly well assured that if anything is to be done in the way of effecting economy the example must be set by Parliament itself, and notably by the House of Commons. Of all the strange delusions that ever possessed the public mind, perhaps the greatest is that what is called a popular Assembly is an efficient guardian of the public purse. There are a great many arguments in favour of giving the control of the public purse to a popular Assembly. I do not think that any man would impugn such an argument; but it is a political argument. It certainly cannot be contended that a popular Assembly exercises its influence in the direction of economy. All history is there to prove exactly to the contrary. I am perfectly well aware that in past days there were individual members of the House of Commons—I remember one of them whom I used to hear a great deal of in my boyhood, Mr. Joseph Hume—who kept a vigilant eye on the Estimates and did a great deal in the cause of economy. But we look in vain for men of his type to-day. The House of Commons has never been economical except when swayed by the mind of one predominant Minister, such as Mr. Gladstone, who was himself a rigid economist. Latterly there has been no such economy. On the contrary, the country has had revealed to it the amazing sight of the Chancellor of the Exchequer, who ought to be a sort of Cerberus sitting at the gate of the Treasury and warning off intruders, coming down to the House of Commons to initiate great and costly schemes of reform. I am not going into the question whether those reforms are good or bad, but I do say that the Chancellor of the Exchequer is not the proper person to initiate them. What has been the result? The result has been that the Treasury has been turned into a spending Department. I hope that whatever else is done the present Chancellor of the Exchequer, when he has a little time to spare, will effect a reform which has been pressed upon him by very high financial authorities in this country, and that is to let the Treasury cease from being a spending Department and bring it back to its sole and proper function—the control of expenditure in other Departments. I think this is the first and preliminary measure necessary if we are really to enter into the paths of economy.

I quite agree that there are some satisfactory symptoms that we are really beginning to turn over a new leaf. In the first place the very lucid and straight-forward speech made by my noble friend Lord Hylton the other day, in answer to a Question by Lord Oranmore, showed clearly that the Local Government Board have seen the original error of their ways, and so far front pressing local authorities to spend money they are new doing everything they can to check extravagance. I shall have something to say in a few moments about military and naval expenditure, but these are all steps in the right direction. So far as my own personal experience in these matters is concerned—and I have had a great deal of experience—I have always thought that the greatest guarantee for economy in public expenditure was the presence of a strong man at the head of the Treasury who would have the courage to incur the unpopularity which is always incurred by saving "No" to all sorts of different demands. I do not say that the present Chancellor of the Exchequer does not possess that admirable quality, but he has yet to show his metal. I see opposite my noble friend Lord D'Abernon, who was instrumental in rescuing a country in which I was greatly interested at one time from bank- ruptcy. The noble Lord was then Sir Edgar Vincent, and he had a very simple system. He did not juggle with figures; he did not introduce remarkable changes in the fiscal or financial system of the country; his success, which was very remarkable, was entirely due to one cause—that was, he had the most phenomenal power of any one I ever met of giving a decided "No" to any one who wanted to get a £5 note out of the Egyptian Treasury. I do not think any one except myself agreed with what he did at the time, but he has had his reward, and his reward is that when he left the country he was able to point to the fact that the Egyptian finances were in an exceedingly sound state.

The difficulty of the Chancellor of the Exchequer in ensuring economy is enormous. There can be no doubt about that. Of course, every one agrees in principle with economy. I do not see my noble friend Lord Sanderson on the Cross Benches just now, but I am certain that if he were there he would concur in the statement that in a diplomatic conversation there is nothing more discouraging than to find a foreign diplomatist agreeing with you in principle. That has been my experience. I always shuddered when a foreign colleague told me he agreed with me in principle, because I knew what was coming afterwards. It is exactly the same in finance. If I may say so, we had a singular exemplification of this in the speech of the noble and learned Viscount, Lord Haldane, the other day. As I understood him, he entirely agreed with economy in the abstract, but with a proviso. He said, "You must not touch education." That is the Ark of the Covenant, on which the hand of no profane financier may be put for one moment. We all know the valuable services that the noble and learned Viscount has rendered to education. But the question is, Can we afford all this? The noble and learned Viscount carried me fully with him when he deprecated any diminution of expenditure on technical and scientific education. That is where the Germans have shown a certain amount of superiority over us, and I should regret to see any diminution in our grant under that head. But when he went on to express his dissent from what my noble friend behind me (Lord Midleton) said about spending so much money on educating children of three and five years of age, I rather hesitated to follow him. I do not challenge the validity of the noble and learned Viscount's arguments considered on their own merits. I have no doubt it would be desirable to bring children of three and five years of age within the influence of the Education Department. But can we afford it? My contention is that after this war, and for a good many years after, the whole efforts of Parliament and the nation will have to be devoted to one object, and that is to the maintenance of the financial equilibrium, and to making an endeavour to pay off some of the enormous debt which is accumulating. In order to effect that object everything will have to be sacrificed, and a great number of national luxuries will have to be abandoned or postponed. I cannot help thinking, however praiseworthy may be the plain submission of the noble and learned Viscount, it is in the nature of a national luxury which will have to go for the time being, much to my regret. There is another national luxury, and that is the £1,500,000 spent by the Road Improvement Fund, and which I believe was mainly expended upon improving the high roads of the country so as to adapt them to high-speed motor traffic. I was informed just before this debate started that the expenditure in that direction had been cut down, and that is an example of what will have to happen in many other directions.

I should like to say a word about the naval and military expenditure, to which the noble Marquess alluded. I quite understand that it is out of the question to have now a public inquiry into naval and military expenditure. I do not suppose any one would propose that, and I think what the Government have done—the appointment of a Departmental Committee, with the help of Lord Kitchener—is the best thing that could be done; but I hope the matter will be taken seriously in hand. There appears to be a sort of idea, not so much amongst the public but amongst the official classes I have come across, that when war once begins it is practically impossible to exercise control over naval and military expenditure. I entirely dissent from that view. I believe it to be as wrong as anything can possibly be, and I am perfectly certain it is not the principle on which our foes, the Germans, are acting. Many years ago when I was a young man employed at the War Office, it became part of my duty to look very carefully into the whole of the German military expenditure, and what struck me more than anything else, besides the amazing efficiency of the whole machine, was the most rigid economy that was exercised over every detail in the way of curbing expenditure. Why cannot we do the same? There cannot be a greater mistake than to suppose that extravagance is the handmaid of efficiency; it is the very reverse. My impression is that economy and efficiency go hand in hand together. If you have economy, it shows that the organisation is working smoothly; if you have extravagance, it shows exactly the opposite. I do not for one moment mean to say that any economy should be effected which would in any way impair the capacity of this country to carry on the war vigorously. Indeed, I may go further and say that to my mind the only real chance of a rehabilitation of the finances of this country and indeed of the whole world lies in continuing the war to the bitter end, with the result of crushing what I call "Kaiserism," a word I prefer to that misunderstood word "militarism." Unless that is done, and unless a real constitutional Government is substituted in Germany for the sham Constitution which now exists, we shall have fought in vain, and, apart from all other considerations, we shall be on the high road to financial ruin. For in that case the German Army will continue to be a constant menace to the world; any reduction of armaments will be impossible; the National Debt will not be paid off; social reforms will have to be abandoned; and no hope will be able to be held out that there will be any relief in taxation. But that is no reason why waste should not be put an end to, and certainly if one-half of the stories we hear current are true the waste in the Admiralty and the War Office has been perfectly appalling. I hope this will be taken in hand. I quite understand that the noble and gallant Field-Marshal who now presides with such ability over the War Office finds it difficult, amongst his numerous labours, to look into this matter, but if he would put his hand to it personally I know of nobody who could do it better than himself in the way of enforcing economy. I have a very lively recollection of the way in which this noble and gallant Field-Marshal conducted the war in the Sudan. That, of course, was a very small affair as compared with the gigantic war in which we are now engaged. But it was a very successful war, and it was a very cheap war. I do not think I was ever more gratified by a compliment than when the noble Earl, Lord St. Aldwyn, who speaks with unrivalled authority on these matters, complimented all in Egypt by saying that the Sudan War was the cheapest war we had waged. Therefore I hope all these matters of dealing with naval and military expenditure will be taken in hand.

I think this debate may be considered as a continuation of the very interesting discussion raised by my noble friend Lord Midleton the other day. If, therefore, I do not weary your Lordships I would ask the same indulgence to be extended to me as was extended to him, and to be allowed to make one remark on the subject of revenue. I am an old Free Trader, and I have frequently advocated the cause of Free Trade in this House. Neither have I seen anything in recent events which at all checks my adherence and loyalty to Free Trade principles. At the same time I quite agree that with altered circumstances there must be an alteration in the application of those principles. It is because I am a Free Trader that I want to express my entire concurrence in the observations which fell from the noble Earl (Lord St. Aldwyn) the other day on the subject of indirect taxation. The attitude of Free Traders on the question of indirect taxation is often rather misunderstood. Some people imagine that they object to indirect taxes being imposed under any circumstances and for any purpose. I dare say some of them do, but I am not one of those, and I do not think the noble Earl, who is quite as staunch a Free Trader as myself, is one either. So-called reasonable Free Traders have always held that indirect taxation may be imposed for revenue purposes; and it is perfectly well known that in the past Governments, whose loyalty to Free Trade principles was absolutely unimpeachable, have imposed such taxes. I am strongly of opinion that the time has come when those taxes ought to be imposed, and I think it is a matter for great regret that they were not imposed some time ago. How they are to be imposed is a matter of great difficulty, and I will not go into it now. But my personal opinion has been that the least objectionable form of indirect taxation would be to impose a low duty on all imports coming into the country, whether manufactured, unmanufactured, raw material, or food; and I believe it would yield a large revenue. There were other remarks about direct taxation which I should have liked to make, but that would carry me far away, and I will not weary the House with them. I thank your Lordships for the way in which you have listened to my remarks, and I would only in conclusion say that I believe the people of this country are fully determined to carry this light on to a finish and will not object to any burden that may be put upon them to accomplish that object, and at the same time may I agree with the remark that was made by the noble Earl who said that some assurance was wanted that the money would not be wasted. I therefore hope that the Government will take this matter up seriously, and not only make every endeavour to ensure economy but before very long lay before Parliament evidence that their efforts have been successful and that I very substantial economies have been secured.


My Lords, I should like to say a few words in general agreement with the remarks of the noble Earl who has just sat down. The noble Earl called attention to the fact that when economy was advocated in this House the other day in that interesting debate started by the noble Viscount opposite (Lord Midleton) the noble and learned Viscount, Lord Haldane, said that whatever we did we must not have economy in education, because that would cripple us after the war. But any amount of things may cripple us after the war. The whole of this expenditure is going to cripple us after the war; the loss of young life is going to cripple us after the war; but, after all, what we have to do is to win the war, and we cannot do that unless we are economical everywhere. For my part I am not worrying so much about money spent on education. I want to see this country so carry on the war that when it is over you will not have compulsory German taught in your schools; and the people who do not realise that that is what we are fighting for do not yet understand how this war should be waged.

The noble Marquess who spoke for the Government this evening told us that the Committee which they are setting up is to apply to civil expenditure only. As it is a Committee of inquiry I suppose that is inevitable. But although the Committee may, and I have no doubt will, do most useful work which will lead to considerable economies and probably result in the case of the Post Office in an augmentation of revenue, I beg to point out, as I did a few days ago, that economy in civil matters deals with £200,000,000 only, whereas economy in war matters would be dealing with £900,000,000; and if you are to win this war it is economy in connection with the £900,00,000 that you must look to, or you cannot carry it through. The noble Marquess said that you could not have an inquiry into Admiralty and War Office expenditure because an inquiry of that nature denoted an element of hostility, and that you would have officials setting themselves against it. I, for one, do not want inquiry. What I want is to see that the War Office and the Admiralty get extra help. I do not believe there are ten men living who can spend £900,000,000 per annum without waste—terrible, extravagant waste, ruinous to the country. However able may be the man you have at the head of the War Office, and however able may be the man you have at the head of the Admiralty, those men ought to be reinforced, or this waste we most of us know about will continue. It has to be stopped.

I made a humble suggestion to the Government the other day. I put it to them that it would be well that a Committee should be set up merely for the purpose of receiving public suggestions of economy and forwarding them to the Departments concerned. The Government promised that they would think over that matter, and I must say I would like to know what their view is. I see that in the meantime a kind of Suggestions Committee has been set up by a newspaper. It has produced a large result in correspondence, and I venture to say that a great many of the suggestions made are valuable and ought to be considered. I wish the Government would again think over the suggestion I made to them the other day and consider whether something of the kind ought not to be done. The noble Marquess who spoke for the Government to-day said that he was sure the War Office was not indifferent to economy. I feel convinced that the noble and gallant Earl at the head of the War Office is most anxious to economise in every possible detail, but we can see for ourselves the difficulty which the War Departments of this country are in. There is one thing in which they cannot economise. They cannot economise in the supply of material; that is obvious. The quantity is a thing in which you cannot economise. You can economise in the purchase of it, of course, and you might economise to a considerable extent in salaries. But I think if a Committee inside the War Office were set up they would find, if they inquired, that there are a very large number of soldiers in this country doing civilian work at this moment, work which might quite well be done by civilians and at a lower salary, and very often for nothing at all by voluntary help. Voluntary help ought to be much more used throughout this war than it is being used to-day. Take an illustration. There is a most expensive staff conducting the Censor's Office. If you had half-a-dozen soldiers at that Office to lay down the policy, can any one tell me that a great deal of the work of that Department now being done by soldiers could not be done by civilians?

I should like to call the attention of the Government to this question of voluntary work, and to give them an illustration in fact, which is worth a great deal of theory. They have in these new offices set up through the war many volunteers who have come forward—rich men, or men of independent means—and who are serving for nothing. I will tell you what is happening to-day. One of those men, a man of independent means, was asked in the office, where he had been working purely out of patriotism, whether he had come there permanently or temporarily. He said he had only come temporarily, and then they said, Your salary is so much. He remonstrated, but he received his salary nevertheless. He received a cheque, and he told me the other day that he had returned it because he did not want it. It is a pity that such a case, which I am sure is one of hundreds, should exist in these times. We must be economical. We ought to do all we can by voluntary service. I am sure there is a great well of patriotism in this country which the Government have not exploited, and I ask them to use it. This is not the time when economy is merely advisable; you have got to economise. We know that the war is going to be a long war. The resources of this country are enormous, but those resources can only carry us through to a successful conclusion of this war if economy is drastic, if economy is everywhere. I do not feel convinced vet that the Government have mastered the seriousness of the situation. I want to see them do a great deal more to be economical and to convince the public of their desire for economy than they have yet done. I desire not to hamper the War Office, far from it; I desire not to hamper any of the Departments of State. But I do say that economy is vital, and every man who speaks in public ought to do his best to enforce it.

VISCOUNT PEEL had the following Question on the Paper—

To ask His Majesty's Government whether, in view of the statement of the Prime Minister that in order to meet the naval and military requirements of the country the utmost economy should be practised by individuals, the Government by advice and suggestion will indicate and define in what directions these economies can best be carried out, having regard to the necessity of securing the financial position of the country, avoiding unemployment, and maintaining our export trade.

The noble Viscount said: My Lords, I have a Question on the Paper dealing with another aspect of this subject, the individual aspect as against collective responsibility for expenditure. But I should like to make one or two observations on the existing discussion, because it embraces largely the subject with which I was going to deal. We have heard as to the composition of this new Committee and that it does not deal with War Office expenditure. I think it is common knowledge that a great many of the statements made by the noble Lord who has just spoken about voluntary aid are perfectly correct, and I know myself of many cases where those who have received considerable salaries would have been perfectly willing to do the work for nothing. I do not say that people ought to be employed for nothing, and I quite understand the desire of Departments and officials that men should receive salaries in order that they may have a hold over them. But I am certain that a great deal of money could be saved by giving somewhat less than is sometimes forced into their unwilling hands.

I do not pretend to have that knowledge of the administration of the Admiralty and the War Office which some of the noble Lords who have spoken possess, but it is common knowledge that, you have at the War Office now an expenditure certainly two or three times as great as the whole of the expenditure to which we were accustomed in the last few years. That, perhaps, is inevitable. But my point is this, that you have a Treasury adapted and designed to criticising expenditure on a certain scale. Now is the Treasury as at present constituted able to exercise that most necessary criticism over this gigantic naval and military expenditure? I am not saying that any one is wasting money or anything of the sort, but it is quite obvious that there must be some difficulty in a Treasury constituted to criticise a small expenditure exercising the same duties over a very much larger expenditure. Therefore I should like to urge that the Treasury should be strengthened by bringing in people from outside, and experienced officials, in order to cheek and criticise this vast expenditure by the War Office.

I cordially agree with all that the noble Earl has just said about the impossibility of relying on the House of Commons to bring about economy, and I think it is rather hard to ask them to do it, because it requires almost a hero in a constituency to advocate that certain classes of his constituents should get less payment than in recent years. It is almost incredible that a man should be so foolish as to make such a suggestion having regard to his political prospects. And as regards these bodies of officials and servants, they are very well organised avid know how to use their powers. We shall have to look to other quarters for effective action in the matter of reducing expenditure. I listened with interest to the noble Marquess's statement as to the area over which this Committee is going to operate, and I do not want to go back into the vast figures which are familiar to all of us and which tell their own tale as to the effect they will and must have on our expenditure in the future, because I am of opinion that something far more is necessary than these reductions which are suggested in the expenditure of public Offices.

First of all, this war has disturbed every old formula applied to previous wars, and one of these formulæ is that countries recover rapidly from war. That theory will be entirely destroyed by the results of this war, and we have to look forward in this country, and in Europe to a state of things which will make it impossible to regard this war as an interlude and to go back to anything like the scale of expenditure we were dealing with before the war took place. I think that is patent and obvious to all. That being so and the addition to our expenditure being gigantic, I will not say we shall be a poor country, as was said just now, but certainly an impoverished, country, somewhat in the position of a man who may still be rich but whose property is heavily mortgaged. There must be something far more than a reduction of expenditure. There must be a general reconsideration of the whole scale of payment of our Civil Service employees, and so on, throughout the country. I do not think that is an unreasonable thing to ask for. Possibly it cannot be done at once. What I am certain of is that it will have to be done when the war ends. I am not sufficiently acquainted with the administration of the country to know whether it is possible to do that, but one would like it to be done if it could be done. And as we shall have to meet these tremendous payments at the end of the war one would rather have it clone with a certain seemliness now than during the crash and rush as soon as we find ourselves in a worse financial position.

The trouble is that we were rather bewitched by our wealth before the war. We had the statisticians going about saying our income was £2,400,000,000 a year and multiplying that by twenty-five, which made people think our wealth was limitless. Meantime our expenditure was increasing rapidly, so that we have not only to arrest that rapid upward rush, but to push it down to something like it was ten or fifteen years ago. I am very much afraid, however deliberately and vigorously the noble Viscount below me (Lord Midleton) addresses himself to this Committee, that by mere reduction he will find it extremely difficult to arrive at that necessary amount of saving of expenditure which I consider to be absolutely essential. One is very glad to hear that the Local Government Board has checked local expenditure, largely in the way of loans; but much more is necessary to be done in that way. We have to alter the whole scale of our ordinary local government expenditure, a far more difficult thing, as your Lordships know, and one which will meet with very great resistance. I should like, if it were possible, for this Committee to give some instructions to the public Offices under which they should apply something of that urgency of suggestion towards reduction of expenditure which in the last ten or twelve years they have urged for increase of expenditure. Then something valuable might be done, I think.

Nothing has impressed one all through these strikes and difficulties more than the fact—and this bears closely on the point of my Question on the Paper—that many people think they are going to get a great deal out of the war and ought not to suffer by the war. In connection with the London tramway strike the demand was not that the men should not suffer through the war but that they should be put in a better position, thereby showing the necessity of giving them some education in the art of the reduction of expenditure. The difficulty I see is that an example ought to be set in high places. I think it would be a good thing if the scale of Ministerial salaries was revised. These salaries cost us about £190,000 a year. I am not saying whether that is too much or too little, but I think there should be some reduction—I would not like to suggest the percentage—but some reduction in that amount. That would have an enormous effect upon those who are looking for a lead to the Government in the reduction of expenditure. No one minds Members of Parliament having £400 a year in ordinary times, but in these times one is glad to see that there is a strong movement in the other House towards the reduction of those, salaries—a reduction which will enable hon. Members to speak with great force when they are engaged on this campaign of economy which is going to start all over the country. Lord Cromer referred to the fact that we are not a very saving or sparing people. That is true. That has been unfortunately enhanced during the war, because although many have suffered through the war very large classes have had their incomes increased and do not feel the pressure and necessity for economy which otherwise they might. Take the small shopkeepers in the towns where masses of men have been billeted. I know cases where shopkeepers who were taking about £4 or £5 a week have recently been taking from £50 to £60 a week. We have heard of the lady who described her position in receiving £1 a week without her husband as "Heaven." That has gone on in various parts of the country owing to our peculiar method of recruiting. I do not want to refer to this except to mark this point, that owing to that peculiar method of recruiting we have to pay a far larger amount in the way of separation allowances than would otherwise be the case. The other day I read in The Times that orders were sent to recruiting officers in Birmingham that persons with slight physical defects should be I received into the Army. The result of that is that men are enlisted who are bound to suffer under the stress and strain of a campaign, and in that way these very large allowances are increased.

There are two other directions to which I should like to refer where our civil administration might be criticised. First of all there is the land valuation, which I think might be swept away altogether. It is surely ridiculous that you should have I men going about valuing the land from 1909 knowing what the shifting of values is owing to the war, and that instead of there being any increment there will probably be a large decrement in the elaborate calculations they have made. Then I think this Committee might look into the overlapping of the administration of some of the new Acts which have come into force in the last few years—the Insurance Act and others, where there is room for reduction. I should have thought also that in the Insurance Office, where they had to deal with many difficult problems at first but where the machinery is running much more smoothly now, it would be possible to have a considerable reduction. These are some of the difficulties which you have to meet when you are trying to appeal for individual economy on the part of people of this country. They have not seen in their rulers, and they have not seen in the Administration, any very steady movement in that direction. But, even so, they have been warned by the Prime Minister that they must reduce their expenditure. But the difficulty is this, that these general warnings addressed to the people have much the same effect upon them as general sermons. You invite people to be good, but unless you direct them to the specific method in which to be good they are apt to take the invitation as more applicable to other people than to themselves.

Take a point of this kind. We are told that we must reduce the purchase of things we import because our exporting power has fallen off, partly owing to the war and partly to the fact of so many men having been taken for soldiers, and for making munitions, and so on. The difficulty is that many people do not know what are imports and what are not. I have been much struck in the last few months in talking to householders to find that they were surprised at the enormous number of things they could not purchase because they came from Germany, showing that knowledge of the exact source of the articles they purchased was very difficult for them to ascertain. This relation, therefore, of exports to imports, the necessity of paying for imports with exports, and the fact that shipping is diminished—all these are matters which want explaining to the ordinary man and not leaving to his intelligence. One has to remember that he has to make an entire revolution in the whole of his ordinary expenses; that he is having an economy pressed upon him at variance with his ordinary open-handed generous nature. That even if he knows what, are imported articles, he is again very much puzzled. I will take one or two examples; they are homely matters, but they are useful with regard to the individual. Take people who buy wine. By buying wine they may be buying imports, but if they do not buy it their action may affect some of our Colonies and some of our Allies. Take the question of tobacco. Should they cease smoking? I believe that some of my friends have dropped smoking cigars because they are imported. On the other hand, the tax upon tobacco is about eight times the value of the article, and in that case the State may suffer.

Even where people are quite aware of the necessity for checking expenditure, such as in the case of petrol or in the case of coal, I think they might be warned rather more fully than they are whether they should practise total abstinence or moderation. Or take the question that comes more before housewives, the question of the purchase of meat. We are told that the price of beef is going up, and the noble Earl, Lord Selborne, brought in a Bill the other day to check the killing of calves. Possibly these considerations do not weigh so much with regard to mutton as to beef, and the housewife has to consider whether she should buy mutton or beef. Then there are certain industries which have to be kept up for our export trade. Those are the ones that ought to be stimulated; those are the industries the products of which the people ought to buy; yet they have to be told what those special articles are. There are many details of this kind with which I do not think the public or the individual is sufficiently supplied with knowledge, but that knowledge might be supplied by the Government; whether I by leaflet, notice, or speech, is a matter for the Government themselves. But so important and so necessary is it, both for the reason of the export and the import trade and the necessity for saving all the money we can for the next Loan, that one would like the Government to I take it up with far more energy than they have displayed in the past. The public are accustomed to the energy, the force, and almost the ferocity with which different causes are advocated. One would like to see this advocacy of individual economy followed with the same energy and force with which a great political campaign is launched and thrust through the country, because we want economy to be practiced while there is yet time. One is afraid that if we wait much longer economy will be forced upon us in a far more onerous and exacting way than if we practised it when there was some opportunity of doing so without loss. I beg to ask the Question standing in my name.


My Lords, I should not have dared to enter into this debate if it had confined itself to the Questions asked by Lord Ribblesdale, but the noble Viscount who has spoken has touched upon what I consider to be just as important a subject as the previous one. Lord Peel urged that the utmost economy should be practised by individuals, and that the Government by advice and suggestion should indicate and define in what directions these economies can best be carried out. We are not a thrifty nation, and the practice of thrift does not come naturally to the English or the Irish, though perhaps it may to the Scotch, and if victory is to crown our arms it is in my opinion imperative that as a people we should go to school in this matter and learn as quickly as we can to avoid waste. This question of personal thrift seems to me to be one of first-class importance. Let us remember that widely-extended personal economy is really national economy, and unless you can get the people of this country in large numbers to realise that the safety of the Realm depends upon their individual economies it will he> very difficult indeed for the Government to do anything in that matter. This question of personal economy seems to me nearly as important as the speedy and continuous supply of men, munitions, and money, and not a moment should be lost by the Government in taking every step to make waste difficult and the practice of thrift easy, whether by imposing extra taxation on the articles in which economy should be exercised or by other means. National waste, then, must be stopped and stopped quickly, or irreparable mischief may be done.

As national habits are very difficult to alter quickly, it may be found necessary to hasten reform by means which will compel even the most thriftless to save. I rejoice to learn that the Chancellor of the Exchequer is contemplating the taxation of war profits, but it is not only the employer who is in some cases profiting by the war. Wherever a man's or woman's income is larger than last year's in consequence of the war, he or she should in my opinion be asked to contribute some portion of the increase to the State for combatant purposes, but in addition to this I think it would be a wise precaution in view of the inexpressible seriousness of the war, to require that every man or woman who receives over a certain minimum salary or wage shall be compelled by law to accept a portion of it in War Loan vouchers, which shall not be transferable during the continuance of the conflict, and employers should be held responsible that payment be thus made. There should be no grievance in such legislation if care be taken to fix the limit of exemption from such compulsory thrift sufficiently high to ensure that no one shall be compelled to save until his or her income is above the amount which may be considered by the Government to be a fair living wage considering the person's circumstances and mode of life in previous years.

The Prime Minister lately mentioned certain imported articles such as tea, tobacco, wine, sugar, and petrol, in which economies should be exercised by the public. The list was, of course, not in- tended to be exhaustive, and could easily be added to. Indeed, Mr. Asquith went beyond importations, and suggested that I economies might be made in such articles as are not necessary to life, such as beer, and perhaps lie might have added spirits. The object of my remarks to-day is to press upon His Majesty's Government the urgent necessity of not leaving the public without assistance in making up their minds to effect economies, but to show them by example, by organising a thrift campaign throughout the country and by the application of wise pressure, either through extra taxation or otherwise, how these economies can be effected with the least amount of inconvenience. At present a good deal of ignorance exists in regard to what is wise and what is unwise economy.

Some patriotic individuals, in their zeal to assist the State, are putting themselves to unnecessary inconvenience and even suffering through their ignorance of the requirements of the State, whilst others are taking no thought for the future, and some, owing to the unaccustomed expansion of their incomes and to lack of thought or of patriotic feeling, are indulging in luxuries and extravagances to which previous to the war they were entire strangers. As regards the waste of petrol mentioned by the Prime Minister, there appears to me to be a very strong case for some action on the part of His Majesty's Government. It is impossible to close our eyes to the fact that immense quantities of petrol are being consumed unnecessarily by the public. The success or failure of the war might quite conceivably result from the abundance or lack of this article, which is nearly as necessary to the Army and Navy as is coal. Prompt action should, therefore, in my humble opinion, be taken to prevent all unnecessary waste of petrol.

The people need guidance, encouragement, assistance, or restraint; and considering the importance of the subject and the awful results which failure to bring the war to a successful end would entail on the people of these islands, on the Empire, and on the entire world, I do not hesitate to urge His Majesty's Government to take the matter of universal personal economy throughout the United Kingdom into their most serious consideration, and to take such steps as may seem to them most advisable and most likely to lead to the general adoption by the people of a wise and patriotic national economy.


My Lords, I do not rise to enter into the general field of this debate. I am conscious of the very generous hearing given me a few days ago. But there are two points which I should like to make before the noble Marquess the Leader of the House rises to reply. The first is this. Several speakers to-night, including the noble Viscount behind me (Lord Peel) who spoke so forcibly, have rather despaired of much being done owing to the restricted nature of the Committee that has been appointed, and about which the noble Marquess opposite (Lord Lansdowne) spoke with his customary caution. I would refer to this one fact, that it is but a fortnight since this House voted the Resolution. That Resolution has already brought great fruit. It has brought this Committee, which has at its head the Chancellor of the Exchequer. It has also produced the amount of feeling which was shown by a great meeting of bankers in the City, 300 in number, who appointed a deputation to the Prime Minister, and which was shown in the House of Commons on Thursday night last, when what I think is unprecedented in living memory took place—namely, the withdrawal of two Votes brought forward by the Government, one of them amounting to £250,000 for unemployment, which was criticised in your Lordships' House a short time ago.

The other point is with regard to the limitation of the Resolution, as the noble Marquess said. He stated that I had carefully restricted the discussion to civil expenditure. But I think he was the first to recognise that I did so for obvious reasons, of which he and I have had only too much experience in the past. In conducting a war it is desirable that as far as possible anything like an inquiry of this kind should not be made applicable to the military or naval Departments. At the same time I did go out of my way to express the hope that something definite would be done, and would be done by the Government themselves. It would not be acting frankly by your Lordships if I did not say that since then I have received from every part of the country the strongest possible protests and statements as to unnecessary expenditure in connection with the military forces. I only mention that because I am sure that the Government feel that if their action were, to stop at the appointment of this Civil Committee, it would greatly disappoint and fall far short of the expectation of the country.

I am emboldened to point out that so great is the naval and military expenditure that whereas a fortnight ago we were discussing £3,000,000 a day, we ought now to be discussing something nearer £4,000,000 a day. If that be so, it only needs a glance at the clock to see that since we began this discussion this afternoon, an expenditure of £500,000 has taken place on the military and naval forces. We are expending at the rate of £500,000 every three hours, and therefore the necessity for economy is very great. I am not going into what branches of economy are possible. I am making no attack upon the War Office; I believe they have done really extraordinary work. But I say that some reinforcement of financial control is not merely essential in the interests of the country, but that if it is not applied now by the Government themselves most I assuredly public opinion will force it upon them before long. That is one point. The other point which I think calls for their special attention is that so long as there is the impression in every locality where troops are that avoidable expense is going on, so long will the appeals for individual economy fall on deaf ears. Therefore while I fully appreciate the reasons why the Government have, set up this Committee, I hope we may hear from the noble Marquess some vigorous expression of their determination themselves to deal with whatever economy can be brought about in the naval and military Departments.


My Lords, as was almost unavoidable these two Questions have formed the subject of a single debate, and before saying a word about the Question of the noble Viscount opposite (Lord Peel), to which my reply ought strictly to be limited since my noble friend behind me (Lord Lansdowne) dealt with the other side of the question, there are one or two points referring to Lord Ribblesdale's Question on which I ought to say a word. First, there is the point which was mentioned by my noble friend opposite and also by my noble friend here—that is, the control over naval and military expenditure during the progress of the war. It appears to be generally recognised by noble Lords opposite that anything in the nature of a formal inquiry into the expenditure of those Departments so long as the war continues is not desirable or practicable. But both the noble Viscounts inquired whether some stricter form of Treasury supervision over the expenditure of the War Office—I think that was the only Department they mentioned—might not be instituted. In reply to the Question of Lord Peel, I understand that the personnel of the Treasury has been strengthened since the beginning of the war by the admission to the Department and the securing of the co-operation of some very competent gentlemen, and I have every reason to suppose that the supervision exercised over the War Office, which, as Lord Peel observed, becomes of course infinitely more difficult now owing to the gigantic increase of scale on which all the operations both here and abroad are being conducted, is carried out, so far as supervision takes place, as in ordinary times. But I will see that the, views of the two noble Lords are brought to the particular notice of my colleagues at the Treasury, who I need not say have this matter of the supervision of expenditure most deeply at heart, and I am certain, if they think that some further help is needed to secure the object we all have in view, that so far as is possible in the circumstances they will desire to secure it.

It is quite true, as Lord Peel and a great many other speakers have said, that in this country economy has never been popular, either in or out of Parliament, and, as I think Lord Cromer observed, it has only been under the influence of special individuals of strong character and great reputation that the practice of economy has been forced upon the country. Mr. Gladstone is, of course, a great instance. It is impossible to forget also the instance of Lord Randolph Churchill, who was a most genuine economist, and he did not succeed in the particular enterprise for saving in which, as we know, his political career became compromised. Lord Peel also stated, with great force and, as I believe, with absolute truth, that at the close of this war it is quite evident that the scale of expenditure, both public and private, all over Europe is bound to be thoroughly revised. All the beliefs that we have almost instinctively held as to the possibilities of expenditure in this country will have to be most thoroughly gone into and revised. It is, of course, impossible to foretell the future, but I entirely disagree with any belief that there is likely to be a great rebound after this war; a reassumption of great prosperity anywhere is altogether, in my belief, unfounded.

I have no desire to enter into a general discussion of another point which was raised by the noble Viscount—namely, the possibility of large reductions in the Civil Service after the war. To traverse that ground at all thoroughly would obviously take us into contentious matter because the existence of Civil Servants for certain objects can scarcely be dissociated from a predilection for, or a dislike to, the particular objects which the particular Civil Servants are designed to effect. I will merely say this, that although some such reductions may be possible and may be found to be absolutely necessary, we have to bear in mind that the scale of payment of individual Civil Servants has always in this country been low in proportion to the scale of remuneration obtainable by other means. So long as the great landed fortunes and the great mercantile fortunes exist it will not, I think, be easy to persuade the public that the salaries of individual Civil Servants ought to he subject to any considerable reduction, although their spending power may, of course, be reduced by the share they may have to pay of taxation; and it will not be until after the rich man's Income Tax and Super-Tax has exceeded 5s. in the £1, in my view, that great attention is likely to be paid to a demand to decrease the salaries paid to individual Civil Servants.

Then the noble Viscount spoke forcibly of the possibilities of a general reduction in national expenditure which would be forced upon us. To one possibility of reduction he made no allusion, but I think we must all agree that if after this war is over, and, as we hope, victoriously ended by us, we are to look forward to a perpetual expenditure of £80,000,000 a year on the defence of the country a great many people will feel that the war has been fought in vain. To suppose that there should be any sudden or dramatic reduction of either naval or military expenditure immediately after the war would no doubt be infinitely too sanguine, but a great many people will be found to hope that a new spirit in Europe will lead to a gradual, and, as I should hope, a progressive, reduction in the forces that the Great Powers find it necessary to maintain for the purposes of defence.

Next I come to the subject-matter of Lord Peel's Question, that of personal economy, and as ho himself, I think, indicated, the subject is one on which it is not easy for the Government to give precise advice. Such advice is, as I think he said, more often associated with the pulpit, or sometimes with the domestic circle, in which fathers and sons, and husbands and wives, in different cases, take the attitude of the prosecutor or of the defendant; and when the noble Viscount asks us to take some action as a Government towards the inculcation of habits of personal economy, I cannot help thinking that this is precisely one of the matters in which that voluntary aid for the use of which tire noble Viscount pleaded can do more than can be done by any Government Department or by the Government as a whole. The practice of economy is infinitely more likely to be inculcated by example than by any amount of precept, and not only in the case of those who are members of this House but of all members of the wealthier classes, and by graduation down through the ranks of the merely well-to-do to the scale of those who are just able to live in comfort, more, as I believe, can be done by setting an example than any of us can do, or than the Government can do, by setting out any number of fads and figures in Parliamentary Papers or in leaflets. If it should be found that the distribution of any simple form of information might prove of benefit to those homely people of whom the noble Viscount spoke— and certainly no apology was necessary from him for speaking of them—I have no doubt the Department would consider whether any such steps could be taken.

We all know that there are two reasons why personal economy is advised by the Government. In the first place, all the public according to their respective means are incited to save so that they may have money either to invest in Government securities as they are issued or wherewith to pay the taxes on the higher scale which is now in force and which, if the war is continued, is, as we know, liable to be increased in the future. That is one, and a very obvious reason. The other reason—mentioned by my noble friend opposite, but of course infinitely less clear and obvious to the ordinary citizen—is the effect of economy on foreign exchanges and the balance of trade. It is too much to hope, I am afraid, that people in the country generally can be brought to any genuine knowledge of those questions, which in their entirety are familiar to very few and in their general outline are only understood by a quite limited number of His Majesty's subjects. We all know that in this country there is in ordinary times what is called, in the familiar jargon of Exchange language, a balance against this country—that is to say, a large balance of imports over exports. We also, as the noble Viscount indicated, know that that difference is in ordinary times met in several different ways, partly by the earnings of the mercantile marine, partly by interest on the vast investments we have abroad in foreign countries all over the world, and partly by other services rendered to foreign countries, such as, for instance, the not inconsiderable sums spent by tourists in travel. And, of course, it is obvious that in these times the adverse balance is bound to be enormously augmented.

In the matter of freights, it is very difficult to say what the precise position is. Of course, the quantity of ships available for our mercantile marine is vastly reduced; on the other hand, the scale of freights is greatly enhanced. But it is quite safe to say this, that even if the actual loss in that respect has not been large, there certainly cannot have been any gain. On the other hand, when you come to the figures of interest on foreign investments and the other services there is a general reduction. A great number of credits have been called in from foreign countries, and in addition to that a large amount of the actual securities in foreign countries held here have been sold. Therefore our ordinary machinery for this purpose has got out of gear.

It was said by my noble friend on the Cross Benches, and said with great truth, that we have not been in the past at all an economical people. It is no doubt true that the scale of living and the employment of various services has been higher in this country among the well-to-do than, as far as I know, in any other country in the world. When you come to very rich people I dare say there is not very much difference. The millionaire class over the world is not a very large one, and in different countries it probably lives on much the same scale. But I think there can be no question that in this country those who may fairly be called wealthy expend on their daily living, on their amusements, and in the purchase of articles of luxury, more in proportion than do the people of similar means in other countries. I think it would be difficult to dispute that proposition.

The question then arises, as my noble friend very reasonably pointed out, if personal economies are to be made, more especially in the purchase of imported goods, in what direction are they to be effected and with what hope of achieving a good result? If we look at our own main subjects of import, in an ordinary year we import about £48,000,000 worth of wheat and flour and it is not to be supposed that any considerable reduction is likely to be made in that amount. As we know, the price of both has risen considerably, and although some economies may be found possible in the use of wheat and flour, I do not know that very much can be hoped for in that direction. Our average imports of meat, including bacon, in the course of the year have been about £45,000,000 worth. There, again, there has been a rise in price; and of course a very large proportion of the imported meat now goes to the use of the Armies in the field, probably a far larger consumption per head of meat than those particular individuals serving in our Forces were able to obtain in civil life. But certainly nobody would be found to grudge them that extra quantity, or to say it is not put to the best possible use. The amount that it is possible to save in this country by the reduction of meat consumption by private individuals, although I have no doubt that from the general point of view some such reduction is desirable, cannot, I feel, be held to be likely to have anything like a serious effect upon the amount of imports to this country.

Then we come to other articles of consumption—£24,000,000 worth of butter, and from £7,000,000 to £8,000,000 worth of cheese. It is not unlikely I should think, certainly in the case of butter, that there will be attempts to economise in their use. Then we come to the various dutiable articles—fruits (not, of course, all dutiable, because that includes both fresh and preserved fruit), altogether they amount to £25,000,000 roughly; tea, £13,000,000; wine, £4,000,000; and tobacco, £7,000,000. It is quite evident, and my noble friend opposite quoted what the Prime Minister said on that subject, that upon those there is real room for economy. I think it is reasonable to say that neither of the two considerations which may be advanced against economy in these directions—one was mentioned by my noble friend opposite, namely, the possible effect in refusing an article of import which either our Colonies or self-governing Dominions or our Allies export; and the other, which might also be employed as an argument in the contrary direction, namely, that by diminishing the consumption pro tanto you diminish the tax which forms part of the revenue of the country on which you rely—that neither of those considerations can be taken as supplying an argument against general economy in the consumption so far as possible of all these articles, some no doubt more than others. You cannot put sugar or even tea on quite the same level as either wine or spirits or tobacco. But, speaking generally—speaking from the pulpit—I think that the advice would be to exercise economy in all these dutiable articles.

Next I come to a list of articles not subject to duty, but in the main articles of luxury. First, £16,000,000 worth of silk; that is not, of course, all used for what would be called luxurious purposes but no doubt a considerable part of it is. One would like to think that there the balance of trade might receive a substantial reduction. Next, £6,000,000 worth of wearing apparel, whatever that may cover. There, again, one would hope that a reduction might be made. Motor-cars and parts of motor-cars, £6,500,000. There, again, I have no doubt we should all say that the lower the degree to which the purchase of motor-cars, for anything but in the first place Government service and afterwards the carrying on of certain kinds of business, could be reduced the better. Then there are imported into this country some £20,000,000 worth of rubber and £10,000,000 worth of petroleum in ordinary years. My noble friend opposite mentioned one form of oil product—namely, the petrol spirit which is used for motor-cars; and what I have said about motor-cars applies also to the employment of petrol for other than public purposes or for certain purposes of business.

I notice that my noble friend, Lord Peel, in the course of his Question, refers to the maintenance of our export trade. It is, of course, highly desirable so far as possible to keep our exports going, and that, as is no doubt quite familiar to him has supplied one of the most difficult considerations in the question of the regulation and organisation of labour. Our ordinary export of coal is some £45,000,000 worth a year; and we should all, I think, realise the extreme importance, in view of maintaining a considerable proportion of these very heavy exports, of continuing to export coal in such quantities as may be compatible with the maintenance of a reasonable price in this country. Those two considerations ought not, as I should hope, to be found incompatible, but they are liable to become so, and there has been some misunderstanding in the public mind or the subject. I only mention this by way of caution in order to show that the simple remedy, as it appears to some, of keeping the price of coal down at home by exporting little or none is not a remedy which it is possible, or if it were possible, which it would be wise to take.

Then you come to our greatest export—£100,000,000 worth of cotton manufactures; and we should all agree, subject to the paramount consideration which we were discussing the other day of keeping raw cotton and cotton waste out of Germany, and subject, of course, to not employing to a greater extent than can be helped in the cotton trade labour which can be directly employed either in the Army or in the manufacture of war munitions, that the greater extent to which we can keep the Lancashire industry going the better, not merely for those engaged in it, but for the country at large. I will not spend any time on wool or various other commodities on which I might say a word, but I think it ought to be evident from the facts and figures with which I have troubled the House that the economy of individuals can have a direct bearing upon this matter of decreasing the adverse balance between imports and exports. That is a fact which I quite agree with the noble Viscount ought to be brought home to every householder in the Kingdom—that apart from the advantage there may be of saving for the purpose of investing, saving in ail these imported commodities, which cover, of course, the greater part of the expenditure of all households both large and small, is of direct benefit also to the country at large.

We may go on to point out in the matter of services, that all services which are directed to the personal use and comfort of individuals and which might be employed on Government work or in assisting to produce the necessaries of life are subject to similar considerations. Of course, it need hardly be said that that argument might be ridden to death, and the qualifications with which it is accompanied have to be carefully noted in dealing and considering individual cases. But the public must also realise that most holidays and most amusements are in themselves for the present purposes of the war uneconomic. The going of a journey by train, the travelling in a motor-car, whether it be private property or a taxicab or a motor omnibus, even a journey on a tramway unless any of them are undertaken for a specific purpose connected with the war, have the same prejudicial effect on the finance of the country that the use of luxuries has in the manner in which I have endeavoured to describe. So with the use of electric light or of gas beyond what is actually needed for the purposes of illumination. Those are produced in the first instance by coal—the power is in most cases produced by coal—and it is obvious, according to the strict rules which I have mentioned, that their consumption ought to be cut down to a low figure. The general effect, therefore, of what I have been saying is that it is hardly possible to prescribe any sort of limit or to suggest any very special direction for personal economy.

At the same time it is clear that it would be useless even if it were sensible, which it is not, to attempt to lay down a kind of Trappist rule of self-denial from every kind of enjoyment or diversion which may not be economic in the sense that it may cost money and does not assist towards the prosecution of the war. In the first place, the minds of people demand and deserve some diversion. It is impossible to suppose that the spirit of the country could be properly sustained without some forms of relaxation and even of amusement. According to the absolutely rigid rule to which I have alluded and which might be laid down, every theatre and every cinematograph house would have to be entirely closed. He would be both a rash and a foolish man, in my opinion, who were to advocate any such action. As to the amusements of the wealthier classes. I believe and fervently hope that there is little, if any, artificial rearing of game carried on in this country now; but it would be equally foolish, in my judgment, to grudge a man a day's partridge shooting or rabbit shooting if he is in a position to take advantage of it.

On one point I am entirely in accord with my noble friend on the Cross Benches, and this I believe is a text on which a valuable sermon could be preached to every class—the need for scrupulous avoidance of waste of all kinds in our households and elsewhere. In the past a certain dignity has sometimes been held to attach to a certain degree of waste. The old English traditions in many cases were held to forbid a too close scrutiny of personal and domestic expenditure; but, as I firmly believe, it will be astonishing to find how much money can be saved all over the country, in large and in small households and in the ordinary concerns of life, if waste is regarded as something which is not merely foolish but positively wrong under existing circumstances.

The only other matter to which my noble friend (Lord Peel) alluded was that the country, as he thought, needed some guidance as to the direction in which economies can be effected without causing distress through loss of employment. That is, of course, a very important consideration, and it applies to a great deal of expenditure which at such a time as this would be called luxurious and unnecessary. The most important consideration appears to be that it is useless to attempt to proceed by sudden strides and by theatrical action in these matters by the sudden dismissal of large numbers of persons or by the sudden closing of any enterprise. What is required, and what I hope is being attained to some extent, is a system of general organisation whereby people can be transferred from a useless employment to a useful one, and by that means I should hope the ultimate object may be to a large extent attained with a minimum of hardship to individuals.

I am afraid I have not been able to give my noble friend opposite anything in the nature of very authoritative guidance on the matter on which he has inquired in the public interest. This path of personal economy is open in varying degrees to all, to a much larger extent to some than to others; and it is also I think clear, as I said at the beginning, that those who are in a position to set examples in this respect have a great opportunity and may be able to do much of great benefit to the country. Those who steadily bear in mind that the one criterion is the effect in assisting or in retarding the prosecution of the war of anything that they do and of any expenditure of money which they may incur are, as I hope, not likely to go far wrong, and as the months proceed I believe that we shall see throughout the country at large a general and an increasing sense of the need and of the wisdom of personal economy.