Lords Sitting of 7 July 1920

Preamble
The House met at a quarter before four of the clock, The LORD CHANCELLOR on the Woolsack.
BRIDLINGTON CORPORATION BILL.
Read 3a, with the Amendment, and passed, and returned to the Commons.

MINISTRY OF HEALTH PROVISIONAL ORDERS (No. 5) BILL.
Moved, That the Order made on the 29th day of April last, "That no Provisional Order Confirmation Bill brought from the House of Commons shall be read a second time after Thursday, the 17th of June next," be dispensed with in respect of this Bill; and that the Bill be now read 2a.—(Viscount Astor.)
On Question, Motion agreed to, and Bill read 2a.

MINISTRY OF HEALTH PROVISIONAL ORDERS (No. 5) BILL.

  MARRIAGES PROVISIONAL ORDER BILL.
  LOCAL GOVERNMENT (IRELAND) PROVISIONAL ORDERS (No. 2) BILL.
  PILOTAGE PROVISIONAL ORDERS (No. 1) BILL.
  PIOLTAGE PROVISIONAL ORDERS (No. 2) BILL.
  GAS PROVISIONAL ORDERS BILL.
  House in Committee (according to Order): Bills reported without Amendment.

  MARRIAGES PROVISIONAL ORDER BILL.
    MINISTRY OF HEALTH PROVISIONAL ORDER (NEW WINDSOR EXTENSION) BILL. [H.L.] MINISTRY OF HEALTH PROVISIONAL ORDER (CHESTERFIELD EXTENSION) BILL. [H.L.]
    Read 3a (according to Order) and passed, and sent to the Commons.
    OSBORNE'S DIVORCE BILL. [H.L.]
    Amendment reported (according to Order).

    DUPLICANDS OF FEU-DUTIES (SCOTLAND) BILL.
    Order of the Day for the Second Reading read.
    VISCOUNT HALDANE: My Lords, this Bill ought not, I think, to detain your Lordships more than a very brief period. First of all, let me give a word of explanation as to how it comes here. The Bill has passed through the other House by general agreement. It was introduced by a group of eminent lawyers who support the Coalition, and who included one of great distinction, the Solicitor-General for Scotland. It was supported by the Front Opposition Bench generally, including Sir Donald Maclean and the Independent Liberals, and by the Labour Party. I am told that the Bill is also smiled upon by the Government, subject to the omission of a clause which I propose to move in Committee shall be omitted. Therefore, I may deal shortly with the nature of the Bill.
    In Scotland, as your Lordships know, land is conveyed in a somewhat different fashion from that which obtains in England. When a conveyance is granted, it is usually by way of a feu-charter, and the feu-charter provides for an annual payment called a feu-duty. There are also what are called "casualties." They are in course of abolition under an Act which your Lordships passed several years ago, but they still exist in feu-charters. These feu-duties have added to them, under the Scottish practice, what are termed "casualties," which are payable on the death of the grantee, and the entry of his successor, or on the death of an heir, or, occasionally at fixed intervals. There are clauses in which these reservations, called duplicands, occur. "Duplicands" means the occasion on which the casualties are payable with something added. These duplicands are expressed in clauses of great variety, and the purpose of this Bill is to give a canon of construction which will enable these clauses to be construed.
    It does not seek to alter contracts. What it does seek to do is to lay down a plain rule of construction under which people may know what these clauses mean. The Bill is, therefore, supported, as one would expect, by the great majority—indeed, I know no exceptions—of the prominent legal bodies and business people in Scotland. At present you have often to resort to litigation to determine whether a casualty,
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    which is called a duplicand, consists simply of a repetition of the ordinary feu-duty—if that be so, double the feu-duty is payable—or whether what it means is that the duplicand payable is twice the amount of the feu-duty added to the feu-duty that is due on the occasion. In the latter case three times the amount of the feu-duty is payable. That is a question of great nicety and great difficulty at times, arising on the meaning of the words, and your Lordships have in the recent case of Waddell's Trustees interpreted the charter in such a way as has convinced the public in Scotland that it is desirable to have some plain rule down for construction.
    We do not propose to interfere with anybody's liberty to contract differently—if he can get people to contract differently. What we propose is to say that the ordinary words, unless there is something very plain and express, are to mean that the duplicand is to be just what it says—twice the amount of the feu-duty, and not three times the amount of the feu-duty, as it has been construed to be in some cases, and construed not to be in others. It will be a plain rule of construction, which will be excluded if the matter is left in dubio; and, instead of having the expense of litigation, which may come up here and lead to a difference of judicial opinion, there will be a plain statutory rule, or canon of construction, which will regulate things.
    As the Bill was drawn there was a clause—and it is in the Bill as it has come up from the other House—making this operate retrospectively, so that, where people have already paid on a construction different from that which will be the construction in the future, should your Lordships pass the Bill, the amount could be got back. But we think it would not be right to take away from people what they have got, and I understand the Government prefer (and it is my own view) that it is better to confine this Bill simply to what it purports to be—a rule of construction, to guide people in their transactions and interpretations—and not as a provision which will make anybody pay back anything he has got, whether he ought to have got it or not. For that reason, when this Bill goes into Committee, I shall move to omit Clause 6, which makes it retrospective. For the rest, the Bill is confined to the canon of construction of which I have spoken, and

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    I ask your Lordships to give it a Second Reading.
    Moved, That the Bill be now read 2a. —(Viscount Haldane.)
    THE LORD CHANCELLOR (LORD BIRKENHEAD): My Lords, the purpose of this Bill is expressed in Clause 4. Your Lordships, sitting in your judicial capacity, arrived at a conclusion in the Waddell case which involved extensive enquiries into the matters which are dealt with by this Bill and the results of those enquiries as embodied in the judgment of your Lordships' House point to the necessity for this Bill. The cases to which the noble Viscount has referred are sometimes no one side of the line and sometimes on the other, and there has been a great opening for legal dissertation and for legitimate division of opinion, even among competent judges, and it is therefore, I think, a great advantage, as the noble and learned Viscount has suggested, that a clear rule should be laid down which might exclude the possibility of doubt in the future. I assent to the methods which it is proposed to adopt in this Bill. I certainly could not have agreed to the proposal that it should be made retrospective in its operation, but the noble and learned Viscount has explained to your Lordships that he is prepared in the Committee stage, if your Lordships give the Bill a Second Reading, to put down an Amendment excluding any possibility of retrospective effect. In these circumstances I would respectfully advise your Lordships to give this Bill a Second Reading.
    On Question, Bill read 2a, and committed to a Committee of the Whole House.

    ECCLESIASTICAL TITHE RENTCHARGE (RATES) BILL.
    Order of the Day for the House to be put into Committee, read.
    Moved, That the House do now resolve itself into Committee.—(Lord Lee of Fareham.)
    On Question, Motion agreed to.
    House in Committee accordingly.
    [The EARL of DONOUGHMORE in the Chair.]
    Clause 1:
    Partial relief of ecclesiastical tithe rentcharge from rates.
    1.—(1) The owner of tithe rentcharge attached to an ecclesiastical corporation or benefice shall not be liable to pay, in respect of any rate made on or after the first day of April nineteen hundred and twenty, and before the first day of January nineteen hundred and twenty-six, which is assessed on him as owner or that tithe rentcharge, an amount in excess of such an amount as would have been payable by him if the rate had been made at such amount in the pound as is equal to the amount in the pound (to be ascertained in accordance with the rules set out in the Schedule to this Act) at which the corresponding rate was made in the year nineteen hundred and eighteen, and the excess shall be deemed to be irrecoverable. Where the owner of tithe rentcharge attached to a benefice, before payment of the amount payable by him in respect of any such rate as aforesaid, produces to the collector of the rate a statutory declaration made by him in a form prescribed by the Minister of Health showing that his total income from all sources for the year ending on the fifth day of April preceding the date at which the rate was made, estimated in accordance with the provisions of the Income Tax Acts, did not exceed three hundred pounds, or, if it exceeded that sum, did not exceed five hundred pounds, the owner shall be entitled to such relief or abatement in respect of such rate as follows, that is to say, if the total income from all sources did not exceed three hundred pounds the owner shall not be liable to any payment in respect of the rate, and if it exceeded that sum, but did not exceed five hundred pounds the owner shall be allowed an abatement of one-half of the amount which would otherwise be payable be him in respect of the rate having regard to the preceding provisions; and the amount of any relief or abatement in respect of a rate given by this section shall be deemed to be irrecoverable.
    A statutory declaration made for the purpose of this section shall be exempt from stamp duty.
    Nothing in this Act shall affect the allowance to be made in respect of rates in the assessment of tithe rentcharge for any rate or tax.
    (2) Any amount paid by the owner of tithe rentcharge in respect of any rate to which this Act applies in excess of the amount which he is by virtue of this Act liable to pay shall be recoverable on demand made within six months after the passing of this Act as a debt due to him by the, collector of the rate, and such amount shall be so recoverable notwithstanding that the statutory declaration required by this Act to entitle the owner to exemption or relief was not produced to the collector of the rate before payment of the rate if such declaration is so produced on or before the demand for repayment.
    (3) In this Act the expression "ecclesiastica corporation" has the same meaning as in the Episcopal and Capitular Estates Act, 1851; the expressions "benefice" and "owner of tithe rentcharge" and "tithe rentcharge" have the same meanings as in the Tithe Rentcharge (Rates) Act, 1899; and the expression "rate" means a rate the proceeds of which are applicable to public

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    local purposes and which is leviable on the basis of an assessment in respect of the yearly value of property.
    LORD PARMOOR LORD PARMOOR moved, in subsection (1), to leave out the first "April" and insert "October." The noble and learned Lord said: My object is to obtain an explanation from the noble Lord in charge of the Bill. As the Bill stands there will have to be supplemental rates, because all the rates cannot be levied under the April charge. It is a great inconvenience—all the Poor Law unions feel it—that there should be this system of supplemental rates, but I dare say it cannot be avoided. The noble Lord can perhaps tell us how the matter could be dealt with. There is another point. At present clergymen are being summoned for payment of rates for which they will not be liable if this Bill is passed. They are only nominally liable at present, because, if this Bill stands in its present form, the remission will date from April, and every one knows that, when rates are once paid, it is extremely difficult to get the money repaid, although technically no doubt the clergyman would be entitled to get repayment. If the noble Lord gives me a satisfactory answer to these two questions I dare say it will not be necessary to press the Amendment.
    Amendment moved—
    Page 1, line 7, leave out ("April") and insert ("October").—(Lord Parmoor.)
    THE MINISTER OF AGRICULTURE AND FISHERIES (LORD LEE OF FAREHAM): I quite recognise that there will be certain inconveniences in the course which is provided in the Bill, but I am afraid they are unavoidable. Certainly to postpone the operation of the Bill, and apply it only to rates made after October, would materially diminish the relief which is contemplated by the Bill in this most critical year and would be very strongly resisted by clergymen and those who have the right to speak for them in your Lordships' House. The position is somewhat illogical, but I believe that in practice no great difficulty need arise. It may be necessary in some cases to make a supplementary rate, or possibly there may be some adjustment when the next half-yearly rate is fixed. But, as for the clergy being summoned for non-payment of rates, I cannot believe that when this Bill has become law and the intention of Parliament has been made plain, any such action would, as a matter of fact, be taken, and I feel
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    sure that rate collectors would be reasonable, and recognise that in the circumstances it would be most inconvenient, if not absurd, to exact this rate from the clergy, and then to throw upon them simultaneously the duty of recovering. I agree that there is a difficulty, and that there will be some trouble and inconvenience, but I hope it can be met, and I think it is the lesser of the two evils.
    LORD PARMOOR: After what the noble Lord has said I do not propose to press the Amendment.
    Amendment, by leave, withdrawn.
    THE LORD BISHOP OF NORWICH THE LORD BISHOP OF NORWICH moved, in subsection (1), to substitute "nineteen hundred and seventeen" for "nineteen hundred and eighteen." The right rev. Prelate said: I believe the intention of this Bill, in selecting the particular period named in it, is to fix the standard year so as to bring the adjustment of rates into correspondence with the date on which the limitation of tithe rentcharge came into force. But tithe rentcharge is not collected in all parts of the country on the same date, and it comes about, therefore, that a certain retrospective air belongs to the standard rate as set down in the Bill, because it will be operative in regard to tithe rentcharge which becomes collectable after January 1, though it really becomes due in many parts of the country on the half year that begins in October. If, therefore, the intention of the Bill is to make the standard rate correspond with the losses which the clergy have suffered through the fact that the tithe rentcharge no longer arises in the way laid down in 1836, the result will be that they will not be compensated as the Bill stands unless the rates and the tithe are brought into uniformity by this Bill applying to the latter part of the year 1917. Without going into a precise date, I thought it was wiser to ask whether the Government would accept the year 1917 instead of the year 1918, with the idea that what is given back by this Bill towards the losses that the clergy have actually sustained by the fact that their tithe rentcharge was reduced in January, 1918, may retrospectively apply to the three months at the end of the year 1917.
    Amendment moved—
    Page 1, line 15, leave out ("eighteen") and insert ("seventeen").—(The Lord Bishop of Norwich.)
    LORD LEE OF FAREHAM: This Amendment did not appear on the Paper, and I am therefore somewhat in a difficulty about replying to it in detail as I have not had an opportunity for consultation with my advisers on the subject. Whilst I agree that all through this Bill there are many illogical situations, the tithe rentcharge was stereotyped at the rate prevailing in 1918, and the corresponding rate is consequently quite properly the rate of 1918. We have taken that year as the basis of this wholly temporary arrangement, and I hope that the right rev. Prelate will not find it necessary to press his Amendment. I am informed that there has been a considerable amount of discussion on the subject and that this matter was resisted in another place, and I do not think it would be desirable that your Lordships should insist on making this Amendment to the present Bill. After all, this is frankly a temporary measure, and the whole question will have to be reconsidered and dealt with on broader lines. In the meantime, I can only say that, as at present advised, I am not in a position to accept the Amendment.
    LORD STUART OF WORTLEY: While the noble Lord has said that this is a temporary measure there is nevertheless absolute justice in the Amendment proposed by the right rev. Prelate; because, although the Bill stereotypes the poundage rating fixed in 1918, that had the effect of operating on tithe which incumbents did not receive in fact until probably six months or more afterwards. It is obvious that the Amendment has in it a great deal of substantial justice not apparent in its form.
    THE LORD BISHOP OF NORWICH: After the speech of the noble Lord, Lord Lee, and after his pointing out that this is but a temporary measure, I do not wish to press my Amendment. But I think it is proper for it to be understood in the House that the Amendment does involve a certain larger or smaller injustice.
    Amendment, by leave, withdrawn.
    LORD PARMOORhad an Amendment on the Paper, after "rentcharge," ["tithe rentcharge attached to a benefice"], to insert "or any payment in lieu of tithe." The noble and learned Lord said: I have had an opportunity of speaking to the
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    noble Lord, Lord Lee, and I understand that the corn rents to which any payments in lieu of tithe would be reparable are not included in the 1918 Act. If that is so, I do not press my Amendment.
    LORD LEE OF FAREHAM: That is so.
    LORD CHARNWOOD LORD CHARNWOOD moved, in subsection (1), to leave out "his total income from all sources "and insert" the total income arising from the benefice." The noble Lord said: I need not trouble your Lordships with the reasons why the word "earned" has found its way into the Amendment as it stands on the Paper, but I have come to the conclusion that it is quite superfluous. The object of the Bill being to mitigate or to remove an admitted hardship, I could wish that the relief which it gives had been co-extensive with the hardship, and that this relief from rates had applied to all persons whomsoever affected by the Act of 1918 fixing tithe rentcharge. I understand that the Government do not see their way to, that. What I suggest to them by my Amendment is that, in deciding who shall or shall not have the benefit of this relief, they should adopt as their test not the poverty of the individual incumbent—which may be a difficult matter to inquire into—but the poverty or otherwise of the benefice, which is a patent fact known to all the other ratepayers concerned.
    Other Amendments appear on the Paper dealing with the same point. The right rev. Prelate, the Bishop of Norwich, and my noble friend Lord Stuart of Wortley, have down an Amendment limiting the income of the incumbent which is to be taken into account to his earned income. They will see at once, I think, that my Amendment goes a little further than theirs, and if the Government are prepared to accept it probably they will be content. On the other hand, my noble and learned friend Lord Parmoor proposes that the test taken shall be the income derived from tithe rentcharge. That goes a little further than my proposal; but it might be suggested that account should be taken of the whole income which the parson derives as parson, which may in part come from glebe and other sources and not solely from tithe rentcharge. Therefore, I take it that my Amendment is, perhaps, more logically defensible than his, and may possibly prove itself more acceptable to the

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    Government—not, of course, that I have the slightest hostility to the noble and learned Lord's Amendment.
    If the Bill remains as it stands without this Amendment I think you arrive at several objectionable results. In the first place, if the Bill passes unaltered the incumbent who is ruled out of this relief by reason of his total income exceeding a certain limit, will have this peculiar theoretical grievance, at any rate, that he, and he alone of all mankind is, in effect, paying a rate upon his income; at all events, he is paying a rate which is determined by his total income, which comes to the same thing. That is a new principle in local taxation, and I think the Government may see some objections to it.
    There are also, however, certain technical inconveniences and hardships in the precise proposal of the Bill as it stands. It is somewhat objectionable that the parson's total income, or that its passing or not passing a certain figure, shall be made public to the overseers of his parish and to all the ratepayers of his parish. We go on the principle that a man is entitled to keep the amount of his income dark, except from a few privileged and confidential people concerned in assessing and collecting the Income Tax. Why people should be so concerned about it I have never been able quite to understand, but, at any rate, there is a very wide-spread and deeply-rooted feeling, regarding it as almost indecent that the extent of one's income should be known to his neighbours. The provisions of the Bill require that all the parish shall know how much the parson sets from private sources. Besides that there is a certain objection, in my mind, to inviting statutory declarations as to the amount of one's income, which, from carelessness or other motives from which even some of the clergy may not be exempt, may be somewhat inaccurate and for which, as I understand the Bill, no test is provided.
    Then, again, there is a case of real hardship which would arise under this Bill, and would equally arise, may I observe, under the Amendment of the Lord Bishop of Norwich. Take the very common case of a parson in a small parish, with a considerable command of leisure and with a very small stipend, who tries to keep the wolf from the door by various odd sources of emolument, such as taking a backward youth to bearlead or, if he be a man of attainments, coaching for various univer-
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    sity examinations, taking in pupils, or by writing more or less assiduously for the Press. It is wholly desirable that the parson should have these bye sources of income; it is good for him, and good for his parishioners. Heaven knows how hardly lots of the clergy do eke out a poor subsistence by efforts of that sort. It really would be a hard case that a man, by diligent efforts of this sort, should just succeed in working himself out of the scope of the relief which is given by this Bill. On all grounds I rather hope that the Government may see their way to accepting the somewhat more benevolent provisions which I suggest by the Amendment I am moving, in place of the provision that actually stands in the Bill.
    Amendment moved—
    Page 1, line 21, leave out ("his total income from all sources") and insert ("the total income arising from the benefice").—(Lord Charnwood.)
    LORD LEE OF FAREHAM: The noble Lord who has moved this Amendment has somewhat anticipated the course which I proposed to suggest; that is, that these Amendments which stand in his name and in the names of the right rev. Prelate the Lord Bishop of Norwich and Lord Stuart of Wortley, and Lord Parmoor should be considered more or less together. They are really all on the one point, only they suggest different alternative methods of dealing with the position. Your Lordships are aware, of course, that the Bill as originally introduced merely preserved the status quo as it was in 1918, so far as the payment of rates was concerned. Subsequently, at the instance of a private Member in another place, an Amendment was accepted giving additional relief or total exemption from rates in the case of very poor incumbents, and it was based upon their particularly hard case. It was illogical, no doubt, but at the same time the case was felt to be strong enough to call for this exceptional treatment.
    The question is whether in any sense it can be properly extended. Lord Parmoor's suggestion, which goes farthest in this respect, is that the additional relief should be based upon the income derived from tithe rentcharges only instead of total income. But I must point out to your Lordships that there are many livings with very considerable incomes where the tithe rentcharge represents but a very small proportion of the income, and it would be

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    hardly appropriate that the special exemption proposed by the Bill should be extended to such cases.
    Then there is the intermediate course proposed by the right rev. Prelate the Bishop of Norwich and by Lord Stuart of Wortley, in which they seek to extend it to earned income from all sources. That, as I think has been pointed out, might include income derived from literary or other work quite outside this question of tithe rentcharge altogether, and that should not properly be made subject to this special concession. But personally, on behalf of the Government, I do not feel the same difficulty about an exemption or relief which is really based upon the poverty of the living instead of the poverty of the incumbent. I quite agree with the noble Lord, Lord Charnwood, that it really would not be convenient that incumbents should be called upon to state the whole of their private position to the local rate collector. It would place them in a very invidious position as compared with anybody else.
    Therefore, in view of the fact that I do not think the Amendment moved by Lord Charnwood would involve any serious extension of the relief or exemption, and that it would undoubtedly meet some really hard cases, if your Lordships and the movers of the other Amendments would be willing to accept that as sufficiently satisfying the case which they put forward, I shall certainly not resist it on behalf of the Government.
    LORD PARMOORhad an Amendment on the Paper, in subsection (1), to leave out "total" ["his total income from all sources"]. The noble Lord said: I might say, on behalf of the Amendment which I have on the Paper, that I certainly accept what has been said by the noble Lord, Lord Lee. I do not think I need state again what I stated on the Second Reading of the Bill, that I do not like a Rating Bill of this kind put on anything but what I call a sound basis, and I think that would have been done by the Amendment I proposed; but I do not press it.
    VISCOUNT HALDANE: There is one question I would like to ask, not in a hostile spirit at all, but merely for information. Clause 1 applies tithe rentcharge to an ecclesiastical corporation or benefice; the Amendment, in the part of the Clause with which we are dealing, refers to tithe
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    rentcharge attached to a benefice. In the case of some of the cathedral endowments the incomes are very small and the tithe rentcharge is in just as bad a position as the tithe rentcharge attached to benefices. I want to know whether this is a deliberate distinction drawn between the two cases, or is it merely a matter of drafting which could be put right?
    LORD LEE OF FAREHAM: I am afraid it is deliberate. This relief is intended to be given only to the very poor incumbents, and it is not felt that an ecclesiastical corporation is in quite the same position, even though its income may be small.
    LORD STUART OF WORTLEY: I hope that is not the last word which will be said on the position of an ecclesiastical corporation. Their case, I understand, will be raised by a later Amendment. My object in rising now is to thank the noble Lord for the decision at which he has arrived. It is a more favourable decision than that which is achieved by the Amendment standing in the name of the right rev. Prelate and myself. We proceed in this matter from a basis of illogicalities to illogicalities, and the Amendment which the noble Lord has accepted practically says that if a man is well enough off he shall suffer an injustice. But when you are moving in an atmosphere of illogicalities you must drawn an illogical line somewhere, and I think the line that the noble Lord has drawn will achieve the greatest amount of justice.
    LORD SHEFFIELD: I hope the noble Lord will tell us what will be the operation of the Amendment in increasing the burdens of other ratepayers. If you exempt absolutely from rating incomes derived from tithe rentcharge up to £300 a year, and exempt also from rating half the whole income of the benefices derived from tithe rentcharge up to £500, it seems to me that you will exempt from rating probably more than half the tithe rentcharge incomes in the country. Perhaps the noble Lord can give us some approximate idea (when we are giving away what belongs to a certain section of ratepayers) what is the amount of money we are giving away.
    LORD LEE OF FAREHAM: I am not in a position to give the exact amount but I am advised that it will be extremely

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    small. With the solitary exception of the noble Lord there has not been a single protest made by the general body of ratepayers against this concession. I gather that your Lordships' House is in favour of the concession being made.
    On Question, Amendment agreed to.
    LORD CHARNWOOD LORD CHARNWOOD moved, in subsection (1), to leave out "income from all sources ["if the total income from all sources"] and insert "income arising from the benefice." The noble Lord said: This is a consequential Amendment.
    Amendment moved—
    Page 2, line 1, leave out ("income from all sources") and insert ("income arising from the benefice").—(Lord Charnwood.)
    On Question, Amendment agreed to.
    LORD PARMOOR LORD PARMOOR moved, at the end of subsection (1), to add: "and in the estimation of the net annual value of the tithe rentcharge or any payment in lieu of tithe for such assessment the deduction in respect of rates to be allowed from the value of the rentcharge shall still be the full amount of the rates assessable upon the owner of the tithe rentcharge or payment in lieu of tithe."
    The noble Lord said: This is a matter on which I want to ask the opinion of the noble Lord. It has been pointed out to me that it is uncertain, on the face of the Bill, whether the same deductions under the Act of 1899 will be allowed to be made after this Bill is passed. There is the further complication that they all depend on the continuance of the 1899 Act, which is only renewed from year to year. Perhaps the noble Lord will explain whether there is a doubt, and, if there is, whether he will allow the insertion of words to make it quite clear.
    Amendment moved
    Page 2, line 14, after ("tax") insert the said words.—(Lord Parmoor.)
    THE EARL OF SELBORNE: My noble friend, Lord Lee, is no doubt familiar with the fact that the practice of all assessing authorities is not the same. Some of them carry out what is the plain intention of Parliament by giving the incumbent the full benefits of the Act; others have really deprived them of a large portion of the benefits Parliament intended to give them, and the matter has never gone to the
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    Court of Appeal or to the House of Lords to be settled. If the noble Lord can make it clear it would be a great advantage.
    LORD LEE OF FAREHAM: I think the Earl of Selborne has correctly stated the anomalous position, namely, that the practice of local authorities is different with regard to this matter. The Amendment on the Paper proposes to establish by Statute the principle that in estimating the net annual value of tithe rent the full amount of rates shall be allowed. It is generally believed, if not contended, that there is legal authority for this practice. If that is so the highest legal authority could undoubtedly be obtained, if the persons concerned thought fit to bring the matter before the Courts.
    THE EARL OF SELBORNE: They cannot afford it.
    LORD LEE OF FAREHAM: I rather agree, and I dislike the idea of forcing people to ascertain what is the true position at great expense to themselves. The real objection to the Amendment, I am advised, is that it is quite inappropriate to what is a purely temporary measure. If the legal position is to be established it should be done when the whole position comes to be dealt with on a permanent basis. It would be extremely inconvenient if we proposed to remedy this and possibly other doubtful points in connection with what is an extremely complicated subject, and I hope, therefore, the Amendment will not be pressed, although I have some sympathy with the point.
    LORD CHARNWOOD: It seems to me that the noble Lord's objection is a slightly, pedantic one. I cannot see what objection there can be to removing a case of admitted injustice by this Amendment. After all, the testing of the meaning of an Act of Parliament may be an enormously expensive concern to the people who are most practically affected by the alleged injustice. It is not as if we were pressing a large number of other points of this nature. As a matter of fact this is the only point which we are trying to get into the Bill, and I hope the noble Lord who has met us so liberally may see his way to accept the Amendment.
    LORD LEE OF FAREHAM: I hate being accused of being pedantic. It is not a defect of which I have been charged hitherto,

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    although I have other defects. But this is an extremely technical subject and I hesitate to express any further opinion upon it. I will say this, that in the interval between now and the Report stage I will take an opportunity to consider this matter further, without giving any sort of pledge that I shall be able to accept the Amendment, but merely to give me the opportunity of removing from my nature that streak of pedantry to which he objects.
    THE EARL OF SELBORNE: I am very much obliged to my noble friend, and I am sure that my noble friend who moved the Amendment will be satisfied with the assurance, but, as I understand it, there are two points. One is the existing grievance in the practice of the assessing authorities, which will be put right by this Bill, and the other is the fear that these same assessing authorities may repeat, when the Bill passes, and in connection with the relief given under the Bill, the same practice, and thereby largely destroy the relief which the Government and Parliament intend to give under this Bill.
    LORD PARMOOR: I am very grateful to the noble Lord for what he has said although he has not held out any great expectation, and I hope that he will realise that litigation in matters of this kind is extremely costly, and that if the matter can be put right, if he is so advised, he will at a further stage accept an Amendment substantially in this form.
    Amendment, by leave, withdrawn.
    Clause 1, as amended, agreed to.
    LORD STUART OF WORTLEY LORD STUART OF WORTLEY moved, after Clause 1, to insert the following new clause—
    "Amendment of 62 and 63 Vict., c. 17, in favour of ecclesiastical corporations.
    "2. In respect of any rate to which this Act applies the provisions of the Tithe Rentcharge (Rates) Act, 1899, shall apply to the owner of tithe rentcharge attached to an ecclesiastical corporation in like manner as to the owner of tithe rentcharge attached to a benefice."
    The noble Lord said: The broad effect of this new clause is to admit Deans and Chapters, in respect of applications towards the cathedral fabrics and the conduct of their services, to the same relief, besides the relief which this Bill gives them, as was given to incumbents of benefices by the Act of 1899. I am anxious to save
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    your Lordships' time, as you are all waiting for a very important debate, and I will therefore limit myself to saying that I foreshadowed this Amendment on the Second Reading. I then observed that there is a close analogy between the case of tithe rentcharge payable to incumbents of benefices—on the one hand—and ecclesiastical corporations on the other, and that that close analogy is admitted upon the face of this Bill. Secondly, I argued that it was not beyond the proprieties of legislation to re-open the settlement of 1899, because that settlement is re-opened by the further and more extensive relief given to the incumbents of benefices by this Bill.
    It remains to me, having established those two points, which were not at that time contested, to point out further that you need not be deterred by apprehensions about the far-reaching and wide financial effects which might follow upon the adoption of this new clause. Of the tithe rentcharge which is payable to ecclesiastical corporations—and in that phrase is comprised Deans and Chapters, who get about £90,000—about £2,000 a year goes, the greater part of it, to what are called Vicars Choral, very deserving officers of cathedrals—about £1,700 a year—and the rest, a negligible quantity, goes to the episcopal estates. The estimated tithe rentcharge received by incumbents of benefices is about £2,400,000 a year. To translate those figures into the sums which have to be provided out of the Local Taxation Account, in order to give effect to the remedies provided in the Act of 1899, I think it will be found that incumbents get the benefit of about £340,000, and that if this Amendment was passed the corresponding sum payable for relief to capitular bodies would be no more than from £10,000 to £13,000. Lord Sheffield, as he always does, has thrown out a little shaft intended to pierce something. He said that this money, if granted at all, has got to be found by other ratepayers to whom it belongs. We say it never did belong to them, and that they have been benefited through an injustice inflicted upon the clergy and other ecclesiastical corporations.
    There is only one other point. I dare say some of your Lordships may have been brought up to form some of your ideas from the works of the late Anthony Trollope, and have derived the idea that capitular bodies are little coteries of persons with high pay and small duties to discharge.

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    If ever that was the case, it is not so now, because it is only too easy to point out that the increased cost of material for fabrics, the increased cost of labour, the increase of taxation, and all the other influences at work, have reduced the resources of the capitular bodies to such a point that it is almost impossible for them to contemplate the effectual discharge of their duties; and the difficulty is the greater for them because, when it becomes a question of economising resources, there is only one way in which it can be effected, and that is by asking the Deans and Canons to submit to a reduction of their by no means too ample stipends, for, of course, they must keep the cathedral standing and the services going with some kind of approach to the beautiful standard reached in the past. The only way of doing that, if they are not to suffer a most cruel reduction, is to cut down the by no means magnificent pay of such officers as the minor canons, the organist, the choristers, and other humbler officials. Therefore, I hope that this Amendment will not be received unsympathetically, but that some of your Lordships at all events will give me such support as may persuade the Government that this scheme is one not undeserving of their sympathy.
    Amendment moved—
    After Clause 1, insert the said new clause.—(Lord Stuart of Wortley.)
    LORD SHEFFIELD: The noble Lord has charged me with sending out a little shaft which is intended to pierce somebody, but I would point out that he has thrown out a saying which seems to me to hit at the basis of security of most property, because he seems to have said that other ratepayers have no right to this money. I think they have a statutory right, because whether we go back to the Act of Elizabeth or to the tithe commutation, there is not the least doubt that there is a statutory charge upon these ecclesiastical endowments towards the rates, and if he thinks that a claim based upon a statutory right is a claim which has no validity at all, I rather tremble at the security of property should this revolutionary doctrine be accepted by your Lordships. I would also point out that my noble friend, as I understood him, in moving the Amendment said that it was intended to relieve funds which were applicable to the maintenance of fabrics and the maintenance of the services.
    LORD STUART OF WORTLEY: Yes, and other objects.
    LORD SHEFFIELD: He did not say other objects.
    LORD STUART OF WORTLEY: Indeed I did.
    LORD SHEFFIELD: I did not hear him, and he said that if they retrenched at all the Chapters must cut down salaries, which reminded me of Sidney Smith's description of the Synod of Dort, when the richer and more important clergy pacified the mob by throwing out the dinners of the inferior clergy. The way by which the Deans and Chapters are to get over the difficulty apparently is by cutting down the salaries that they are bound to pay. Most of these charges for choristers and vicars choral are made statutory charges on the revenues. My noble friend contemplates in his proposal making good the loss that the Deans and Chapters themselves have experienced from having to pay these sums. As a matter of fact the Deans and Chapters are getting a perquisite out of the Bill, because they are getting the rate that they have to pay fixed at what it has been in a particular year, and it is not to go up. My noble friend is now asking to put in a benefit which they have not had by the Act of 1894. He is seeking to put them on the same footing as the parochial clergy, and to exempt them from the rates. That is relieving property of a statutory burden, merely because you feel sympathy with the receivers.
    THE LORD BISHOP OF NORWICH: I ought to mention that the most rev. Primate would have been in his place to-day were it not that he is presiding over a great gathering elsewhere. That does not mean that I pretend to voice his views, but I thought it proper that I should make some such statement. With regard to what the noble Lord has just said, I ventured last week to offer some rejoinder to it. This is a subject of an extremely historical and technical character, and I do not think I should be popular with your Lordships if I attempted to repeat what I then said. It is not supposed that this is a complete and comprehensive Bill dealing carefully and, as my noble friend Lord Stuart of Wortley suggested, logically with all aspects of the question. It is a

    29
    temporary Bill and is introduced to meet a difficult situation, which we trust will be temporary.
    I think that a strong case has been made out for the Deans and Chapters to come in and gain fuller benefits under this Bill. How far the interests of the Deans and Chapters extend may be misapprehended. I believe that there are only seventeen Cathedral Corporations which own tithe rentcharge, and of these six may be left out as having only a very small holding. Cathedrals are often thought to be wealthy corporations. As a matter of fact, they are not. I am afraid, also, that they are sometimes considered to be rather useless bodies—places where men seek for quiet retirement, and hope to end their days enjoying the emoluments without performing any duties. That again is a caricature of the work that is done by our cathedrals at the present time. I would say, on the contrary, that they are very much alive, and that their work is felt throughout the whole diocese in which the cathedral stands. They maintain the dignified services for which in most cases, if not all, they were originally established.
    It is not commonly remembered how many are the minor officials connected with the cathedrals whose salaries and wages are dependent on the income of the Deans and Chapters. It is only now and again that it is recalled to us how very great are the expenses of maintaining our cathedral fabrics. In the last few days we have seen a stirring and spirited appeal in The Times from the Dean of Westminster, for a large sum of money for the repair of the Abbey fabric. The same amount of money, and the same sort of work has to be sought on the one hand and carried out on the other hand in connection with all the cathedrals that have come down to us from antiquity, and which need constant supervision and repair. The money, therefore, that is paid to the cathedral Chapters and cathedral officers must be regarded as money paid for services rendered as truly as it is the case with the incumbents in our parishes, and when this Bill sets out to help the latter I shall be glad indeed if the noble Lord in charge of the Bill can see his way to include in it this further benefit to the Deans and Chapters.
    LORD LEE OF FAREHAM: I have listened with great attention to the speeches which have been made in support of this new clause, and I should be sorry to be
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    drawn on this occasion into the somewhat wider and more explosive controversy which appeared to be developing between my noble friend Lord Stuart of Wortley and my noble friend Lord Sheffield. That, I think, should be postponed to a more suitable opportunity. Nor do I think it is necessary that I should express my agreement, which is quite sincere, with the general panegyric of the great and beneficient services of the Church and of the Deans and Chapters in their respective dioceses. This Bill deals with a very narrow point, and the objection that the Government have to this particular clause is that it is really outside—if not the strictly legal scope, at any rate the scope and intention and purpose of the present Bill. My noble friend seeks to amend the Act of 1899, whereas the intention of the Bill is really to deal with the position created by the Act of 1918.
    The noble Lord's Amendment seeks to extend to ecclesiastical corporations the benefit of the contribution of half of the rates of the tithe rentcharge, and that really will introduce complications with the local taxation account which I do not think we should be justified in facing in connection with a very limited and temporary measure of this kind. The monies which are paid into that account pass to local authorities for various purposes, and I have good reason to believe, and indeed to know, that, those authorities would strongly object to any farther reductions being made from the amount. It is undoubted that ecclesiastical corporations are suffering like all others from the great increase in the rates, but there are other corporations, such as colleges, whose funds are equally applicable to the payment of salaries—very often, too, of quite small amounts—and who are in precisely the same position, and are not given even the measure of relief that is accorded to ecclesiastical corporations under this Bill. It is, indeed, very doubtful, I am advised, whether the provision asking for payments out of local taxation account, could properly be regarded as in any way within the scope of this Bill. In the circumstances, while I feel a general sympathy with the object that noble Lords who support this proposal have in view, I am afraid I could not accept this new clause on behalf of the Government.
    On Question, Amendment negatived.
    Clause 2 agreed to.
    Schedule agreed to.

    NATIONAL EXPENDITURE.
    THE EARL OF MIDLETON THE EARL OF MIDLETON rose to call attention to the great increase in the estimated "normal" expenditure of the country, and to move—
    "That it is incumbent on the Government to reduce the present undue strain on the resources of the country, and to appoint Special Commissioners with power to wind up existing Departments for special War Service, and to reduce other inflated Establishments to a normal level."
    The noble Earl said: My Lords, this subject has been under discussion in this House on several occasions in the last two years, and I think it is due to those who have brought it forward—to Lord Inchcape, Lord Faringdon and Lord Buckmaster—to say that I think it would be difficult to find in any of their speeches anything which the Government could now say had been falsely prophesied. Indeed, the prophecies they made have become facts, and we are at this moment in a difficulty because each successive White Paper issued by the Treasury goes further to substantiate the figures given to us by speakers and critics in this House, and gets further from the expectation of the Government, as advanced by the Chancellor of the Exchequer. I hope I am not saying anything which will in any way annoy any member of the Government, but it is now universally admitted that Government Departments are being run on an extravagant scale, and that the Government itself seems to have no power to check extravagance.
    I have no doubt of the academic desire of the Government in that particular, but the members of the Government themselves, and more especially the members of the Cabinet, are so overworked and over-occupied with other affairs that their control over expenditure has absolutely been abandoned. Indeed, the Chancellor of the Exchequer practically admitted it last night, for, in answer to a question, he said they were attempting to form seven Committees to investigate seven Departments. Of course, he would not take that step unless he were persuaded that there was abundant reason for economy. I submit that that procedure will be wholly inadequate, and will produce nothing. I have myself been a member of the Retrenchment Committee formed
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    after the Motion in. this House in 1915. It sat for three months; it had the then Chancellor of the Exchequer, Mr. McKenna, for its Chairman; it had picked representatives, both of the Government and of business; and yet the majority of its recommendations were wholly set aside. My first point is that no Committee which is simply to investigate is of the smallest advantage. Any of your Lordships who would take the Papers which are put before you could carry out that investigation.
    The reason why I think it is now urgent to trouble this House again is that the reaction which was particularly foretold by Lord Inchcape in a speech made, I think, nearly two years ago, has already set in. Some of the advantages which were hoped for at the close of the war have been realised. The hours of workmen are shorter, and wages are infinitely higher, but output is infinitely less, prices have become exorbitant and there is now a congestion of supply because people, under the increased taxation and the enormous prices, are unable to buy. The result of that must be seen very shortly in large losses to those who are holding great stocks, and ultimately in a fall in wages, unless there is to be great unemployment in the coming winter. Those facts alone, I think, constitute a case of urgency for our immediate demand on the Government for a decrease of the national expenditure.
    I am not by any means charging against the Government the whole of what is taking place, but I submit two points. The first is that in every single case in which they have been either forced to interfere or have interfered with the ordinary laws of supply and demand, and have undertaken, as national services, services which could be well carried out by ordinary endeavour, they have added to the difficulties of the country. The second point is that there is no genuine action in the direction of economy of expenditure. Neither Lord Milner nor Lord Peel, who have answered us on previous occasions, is present. But I wish to say, in reply to Lord Milner's statement, twice made in this House, that we ought not to be afraid of spending in these days in order to create fresh wealth—in proof of which he cited the instance of Lord Cromer in Egypt—that I think those citations are not worth repeating to this House unless they are accompanied by the conditions which Lord

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    Cromer imposed in Egypt, which Lord Kitchener and Sir Reginald Wingate imposed in the Sudan, and which have been imposed by countless Finance Ministers in India—namely, that if you are to spend to create fresh wealth, you can only do it if you insist on the utmost economy in every Department. That is exactly what the Government are not doing. If you will spend to create fresh wealth, and you do not enforce economy in any Department, you come to the position which has brought all the South American Republics in succession to confusion, and almost to bankruptcy.
    I cannot help asking whether this is not a dangerous situation. I apprehend that the danger of the situation at this moment is that the manufacturers of the country in a great many trades are leading public opinion to believe—what is no doubt their awn conviction—that it is the continuance of the Excess Profits Duty which is really handicapping output, and keeping up prices. The Excess Profits Duty is a large subject into which I shall not go, except to say that it is admitted on all hands that the sooner the Government are in a position to pay their way by reducing it the better. But what is really handicapping industry at this moment is the immense pressure of ordinary taxation. Take the receipts of the Exchequer in the last three months. In that period in 1919 the revenue was £186,000,000; in the last three months, to June 30, 1920, the corresponding period, the revenue was £315,000,000. That is a very blessed position for the Chancellor of the Exchequer. But what does it mean in common English? It means that £130,000,000 more has been taken out of the pockets of the people in three months, and that, as the law of supply and demand enforces a buyer as well as a seller, buyers are reduced in this country by £130,000,000. You cannot have it both ways; and, of course, there will be a scarcity of purchasers and a scarcity of employers if you insist upon taking into the Exchequer a very much larger portion of the annual income of every man.
    One other point. Before the war taxation in the United Kingdom was £3 10s. per head. It is now £21 6s. In France taxation has gone up four times; in Italy about two and a half times; here it has gone up nearly six times. There is only one remedy for this state of affairs—you must stop spending. It is impossible to
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    continue at the present rate. I will trouble the House with as few figures as possible, but what do we find as compared with the period when we were discussing this question last year? In those days we had before us the Budget Estimate of the Chancellor of the Exchequer for a normal year, and the figures are most instructive. We have had a fresh normal year Estimate published three or four days ago. Mr. Chamberlain estimated last year for Consolidated Fund Charges, £400,000,000; this year, £372,000,000. But, further down, he gives a balance for Debt redemption. His estimate for the fighting Forces was £110,000,000; he now estimates them at £135,000,000. lie estimated the Revenue Services—the Post Office, Customs and Excise—at £53,000,000, he now estimates them at £68,000,000. With the fullest knowledge he estimated the Civil Services at £190,000,000; he now estimates them at £305,000,000. That is an increase of £115,000,000 in one year in his view of what the normal expenditure of the country will be practically for all time. That Estimate in itself would justify the House of Commons giving up the whole month to this question and your Lordships any time which is necessary.
    I now propose to examine, in as little detail as I can, the Civil Service Estimates. I may say that even those figures are not final because a fresh Paper was issued on June 30 giving some gross totals which seem even to inflate that large total; but for my purpose you will, perhaps, allow me to take the figures as I have them. With regard to all the other figures I will submit only one observation—namely that the sum of £135,000,000 for the fighting Forces, as against a sum of £110,000,000, will not nearly suffice if we are to continue to police practically the whole of the Near East. I do not want to go back on what was said when the matter was amply discussed on the Motion of Lord Islington a few days ago; but, unquestionably, that figure will be enormously increased unless the Government can see their way to make fresh arrangements in the Near East. But when we come to the Civil Service Estimates I am not going to trouble you with any trifling figures. I regard as an entire fallacy the method of argument by which some people, on behalf of the Government, have said, "When you are talking in all of £1,000,000,000, what is the use of telling us how we can save a million here and a million there; it is a question of £50,000,000

    35
    or £100,000,000." You will never get to the £50,000,000 unless you begin with the £1,000,000 or £2,000,000.
    What are the facts? The Civil Service, at the moment the war was over, comprised, without counting the Post Office, about 69,000 persons. It now has 158,000 persons. There are 90,000 more civil servants to-day than there were at the time of the Armistice. No wonder the expenditure has gone up by £100,000,000. In London alone there are at this moment 77,000 civil servants within five miles of this place, as against 30,000 before the war. And remember that the whole of those extra 47,000, if you maintain them, have to be housed. At present they are in wooden buildings; and, as a fore-runner, we see an item in the Estimates for £425,000 for a site at Bloomsbury for putting up public buildings, on which I have no doubt, if we allow this number to go in, we shall have to expend £20,000,000 or £30,000,000. Therefore, it is not a trifling question.
    There are three classes with regard to which I would ask your Lordships to listen to an instance or two. There is the class of merely inflated public offices which have simply, owing to the war, become much larger without many fresh duties, and which want pruning down. There are the ambitious schemes which the Government have entered into as part of their reconstruction and of which I complain that, however desirable each may be individually, the nation must cut its coat according to its cloth and cannot enter into all of them at once. There are the War Ministries which, I submit, ought to have been brought to a close before now. As an instance of the first class, the Home Office has gone up from 248,000 to 467,000. The Revenue Buildings have gone up from 640,000 before the war to 1,631,000; and the Irish Land Commission, which has practically nothing whatever to do at this moment, has gone up from 671,000 to 1,118,000. The only commentary I would make on those subjects is that the expert Committee, of which the late Chancellor of the Exchequer was Chairman, condemned every one of those cases of expenditure, and every one of those increases has been entered into in the face of the recommendations of that Committee. That makes your Lordships see what is likely to be the value of the Committees which Mr. Chamberlain last evening proposed to set up.
    Then there are other questions on which, if we only had someone in this House who had the time or who was specially connected with these subjects, we might well ask for an explanation. The Admiralty Staff has gone up from 4,400 before the war to 12,800 in the present Estimate, while the number of men voted has gone down from 149,000 to 132,000; so that, although there is less work to be done, there are more than twice as many people to do it. About the Army I say less, because, although the number of men is supposed to be only a little more than double what it was before, immense work is being carried on in all parts of the world, and the staff is four times as great. The Labour Department has doubled its staff since the Armistice. On that I venture to submit that, if we are to have labour exchanges all over the country at the present high rate of wages, a very small fee, paid by employers and employees in each case, would seem to me to show what is the value of a particular exchange—of which there are far too many—and would, in cases where exchanges are really needed, amply cover the expense of setting them up. An old friend of mine crops up here in the same category—the Stationery Department. We used to have £1,000,000 worth of stationery before the war; now very nearly £5,000,000 worth is used every year. These increases are beyond human possibility to cope with, unless they are drastically dealt with. The mere making of a report upon them will carry you very little further.
    But they are put into the shade when you come to the second class. The Ministry of Health have, at the same time, an ambitious health policy, an ambitious housing policy, and an ambitious education policy. In addition, there are great policies for transport, for labour exchanges, for railways, and for coal mines. They cannot drive all those omnibuses abreast through Temple Bar without causing a complete dislocation of what is the real traffic, in finance—namely, what people are able to afford to spend; and they are heading direct to a crisis, I submit, by attempting it. Even so, I suggest two or three cases in which there might be reductions. Take agriculture. Agriculture has gone up from £264,000 in 1913 to over £4,000,000 in 1920. The training and land settlement of ex-service men cost £2,000,000. In addition to having to do that, we are now spending on agriculture and fisheries research

    37
    £325,000, and on dairy education another £325,000. It is absolutely impossible to undertake every service at the same time, when you have to settle all these men upon the land. Then education, which cost £18,000,000 in 1913, is costing the country £55,000,000 now, and the normal expenditure is put at £73,000,000. I know that I shall bring an avalanche about me if I say a word about education, and, therefore, I only state that if we have progressed to the extent of 200 per cent. in our expenditure in the course of five years, we might well rest on our oars until we have further money to spend.
    As regards transport I can only congratulate, your Lordships that every word that was spoken in this House last July has already come true. A large body of members of this House voted for dividing the Transport Bill and for postponing the inordinate expenditure which was proposed under it. We were met by the Government by a clear statement that they would take the opinion of the country if we stood in the way. There is not one man in the House of Commons, outside the Government, who stands up now for the expenditure which has been incurred by the Ministry of Transport, and I do not think I am mis-stating that case.
    One word on the Services which ought to die out. I am sorry to intrude so many figures into these remarks, but it is difficult otherwise to deal with the subject. Take the Ministry of Shipping. I have had to deal with a good many Estimates in another place, but I never saw such an Estimate as that for the Ministry of Shipping. The Ministry of Shipping turned over—and this is the only way in which you can really estimate commercial results—this year £26,500,000 worth of stuff in sales, purchases and the conduct of the business. Last year that Ministry turned over 1118,000,000. The staff last year was close upon 200,000, but the staff this year, when they are doing one-sixth of the work, is 18,00) higher. It is absolutely impossible, and any business house would have to close its doors in a couple of years if it went on in that way. If you want a contrast take the sale of ships. The noble Lord, Lord Inchcape, came forward, as we saw in the papers, for the purpose of relieving the Government of the great difficulty of getting rid of £35,000,000 worth of ships, and he concluded the whole of that business, without attempting to
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    take money from anybody, at an expenditure, not of £200,000 a year, but of £850. The debt which the country owes the noble Lord is very great in other respects, but honestly I think he has shown what can be done by private endeavour, which really encourages us to hope that in regard to the Disposals Board to which I come next, the Government will yet see wisdom.
    The Munitions Department is still costing us £27,000,000 a year, although all munitions provisions should have been closed up in the last eighteen months. It is true that the 3,000 persons, each of whom is drawing over £350 a year in the Munitions Department, have been reduced by half; but immediately 650 of them have been taken on by the Disposals Board, which is now costing £413,000 a year. I have no time to do it, or I would like to give your Lordships instances of how, in France, dumps are deteriorating by thousands of pounds daily whilst the Government will keep them and will wait for a period before selling, instead of clearing them out and relieving themselves of expenses which run up in three or four months to more than the whole value of the articles.
    I hope it will be considered that I have made some case regarding the first object of the Government—to attack these inflated Estimates. They are by no means finished. We have not got to the end. Each time that a Budget comes out, it is full of fresh charges. I think in the last ten days we have heard of the following. First £26,000,000 extra to finance overseas trade. Secondly, I was in the House of Commons a few days ago and heard a proposal to vote £1,750,000 a year for pre-war pensioners to raise them to a higher scale. Thirdly, £250,000 for Civil Aviation, against which, I understand, the military aviation authorities have strongly protested. What nest week will bring forth we cannot tell, but it seems to me that we are heading for a position in which, in order that no one shall suffer, everyone will be suffering.
    My reason for moving the motion is that this nation has shown itself most willing and capable of making great efforts in the national cause. When I was listening to the debate which took place on ecclesiastical rates I could not help thinking of the number of men of moderate means who are at this moment tilling their own land without assistance and whose wives

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    are doing the whole of their own cooking; of the number of men of superior means who are at this moment reduced to absolute poverty and unable to keep open the houses in which they live; and I submit that men will not grind and save and struggle in order to keep this horde, this army, of civil servants engaged in labour which they had much better give up for more productive work.
    When the Chancellor of the Exchequer says that he will propose to form Seven committees in order to investigate I would like to use the old House of Commons form with which we were familiar for many years and move that this army of civil servants be reduced by 50,000 men. It can be done, and the country would have the advantage of their having to find productive employment. I dare not go so far as that to-night, but I urge your Lordships to pronounce unhesitatingly, not that there should be committees to investigate but that the Government itself—the members are too busy to come down to listen to this debate—should appoint three persons in whom they have confidence, with power to act and reduce before the winter these exaggerated numbers. I am actuated by no hostile spirit to the Chancellor of the Exchequer. I recognise the high purpose and courage, and to a large extent the foresight, which have been shown by Mr. Chamberlain in doing what every financier who has spoken from this side of the House in the past declared was absolutely essential—namely, that we should incur high taxation. But that must be tempered by a most inflexible purpose—to reduce expenditure. I am convinced that when the time of trial comes, as it will very shortly, when reduced power of purchasing and reduced output is followed by reduced wages, and possibly by a good deal of suffering, the one salvation of the Government will be that they can come here with clean hands and tell us that, while obliged to make these large demands on the country, they have administered the national resources with vigilance and with prudence.
    Moved, to resolve "That it is incumbent on the Government to reduce the present undue strain on the resources of the country, and to appoint Special Commissioners with power to wind up existing Departments for special War Service, and to reduce other inflated Establishments to a normal level."—(The Earl of Midleton.)
    LORD INCHCAPE: My Lords, on August 5, 1918, your Lordships were good enough to listen to some remarks I made in your Lordships' House, when I ventured to strike a note of warning as to what would happen in the event of our embarking in all sorts of schemes involving expenditure which had nothing to do with the war. I raised no objection to spreading ourselves out to win the war; that was our objective. At any cost we had to win—and we have won. But now that we have won, we ought to look our finanical position fairly in the face. In speaking two years ago, I estimated that if the war came to an end in March, 1919, we should be left with a national debt of not less than £6,000,000,000, and that our annual expenditure would be not less than £700,000,000. I ventured to say we should have difficulty in getting rid of our floating debt. A noble Lord who followed me said I was pessimistic; also that the floating debt could be funded. Some months later he was generous enough to say that I had not overstated my case. I tried to avoid overstating it, and I will endeavour not to overstate it to-day.
    We have a national debt now not of £6,000,000,000 but of £8,000,000,000, on which the interest alone, of £345,000,000, is about double our whole national expenditure of seven years ago. The Chancellor of the Exchequer estimates that in a normal year our expenditure will amount to £1,000,000,000, or five times what it was in 1913. He may be able to raise it. I hope he will. I do not want to see the country having to repudiate its obligations. But I cannot help thinking the day is not far distant when the revenue from Income Tax, Super-Tax, Corporation Tax and Excess Profit Duty (even if it is continued at 60 per cent.) will shrink in its yield. There are not wanting signs that the trade boom is collapsing. Income Tax, Super-Tax and Death Duties are now bringing in £432,000,000 a year. This is a large figure upon which to rely. Big incomes are paying, including their proportion of death duties, 16 s. in the £. They cannot pay very much more.
    If the revenue from direct taxation falls away, what is to take its place? It may be said that there are always general Import Duties to fall back upon, and that there is a revenue in reserve in these. Import Duties were advocated at one time in certain quarters because it was hoped

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    they might lessen direct taxation. If they have to be put on in addition to the direct taxation now imposed, I am not sure that they will have quite the same welcome. My Lords, we ought to realise that as a, nation we are £7,000,000,000 poorer than we were six years ago; that our expenditure in a normal year will be £800,000,000 more than it was before the war; and that we cannot afford to embark on grandiose schemes or fling money about. Of all the questions that are crowding the political stage this one of finance is by far the most important. Nothing can be right with a country if its finance is wrong; the evil effects of Government prodigality, of excessive taxation and of a deranged credit system are felt, sooner or later, in every home and every industry in the land.
    Do these phenomena obtain in Great Britain at this moment? Are we spending more money than is necessary? Are we for this purpose raising more by taxation than industry can afford to pay or than the social wellbeing and contentment of the people can fairly support? I agree with every word the noble Earl has said on that subject. And are our methods of taxation and our administrative policies such as to discourage that spirit of enterprise which, when all is said and done, is the only thing that can keep this or any other country commercially prosperous? I am afraid that all these questions have to be answered in the affirmative. We had from the Chancellor of the Exchequer the other day a revised forecast of the national balance-sheet for a "normal" year—a year in which the Excess Profits Duty and Governmental trading and control in foodstuffs and shipping and all subsidies and donations will have ceased, and we shall all have returned to a state of economic sanity. He did not mention the precise year in which this recovery may be expected. There are, so far, very few signs of its approaching advent, and unless we radically change our present procedure—and above all, the spirit in which we approach these grave problems—I fancy it will be a close thing between a "normal" year and the Greek Kalends.
    But I would ask your Lordships to note that even. in this hypothetical year, when the fiscal débris of the war has been swept away and a thrifty Government and a reduced bureaucracy are once more resuming acquaintance with the elements of
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    sound economics—even in this halcyon period the amount to be raised in revenue is put at over £1,000,000,000. That is to say, one quarter of the entire income of the nation is to be taken and spent by the Government. Before the war the amount so claimed was not put, I believe, by any economist, at more than one-twelfth. The first fruits of "normality," therefore, will be that we shall be required to devote to the service of the State a percentage of the national income three times as great as was demanded of us before the war. You may say that the change in the value of money vitiates this comparison. I do not agree, though I admit at once that it affects it. If pre-war standards of expenditure were to govern the "normal" year, then 15 per cent. of the national income, certainly not more, might properly be seized by the tax-gatherer.
    There is one other point in the Chancellor's forecast that I would ask your Lordships to note. It is over £70,000,000 higher than his Estimate of eight months ago. I am afraid of two things—first, that the "normal" year will still be a visionary "perhaps"; and, secondly, that the amount needed to finance it' will have to undergo another enlargement. I am afraid I distrust these problematical balance sheets, drawn up for an undated year of unforeseeable circumstances. I think they are apt to distract us from the immediate and imperative duty of fighting extravagance here all now. They make people think that extravagance will diminish of its own accord, if only we say nothing about it and fix our minds resolutely on some nebulous future period, about the proximity and character of which we know nothing at all. But what is it that actually happens? Why is it that with all the present outcry against reckless public expenditure there would seem to be no power strong enough to check it? Your Lordships know how the thing is worked. A Minister in charge of a Department brings forward some scheme for which there might be a good deal to be said if only the country were in a position to afford it. Despite the protests of the Chancellor of the Exchequer, he gets the Cabinet's blessing for it. It goes before the House of Commons with the Government's imprimatur; the Whips are put on, and the country is saddled with another huge burden of expenditure.
    This way of doing things is bound to lead to a catastrophe. We have got to

    43
    realise that, though we won the war, it has been at the cost of something very like a financial breakdown; that the national resources have been heavily mortgaged; that our financial reserve has pretty well disappeared; that the debt is thirteen times greater to-day than it was six years ago; that our currency is debased and our circulating medium is at a severe discount in gold-using countries. These are the facts that should govern our financial conduct. We must, as a nation, do what under similar circumstances each individual would do if he were honourable and desired to avoid bankruptcy—we must retrench. We must get clear away from the spending atmosphere that has prevailed throughout the war. We must revive what I may call the old Gladstonian conscience in regard to the public purse. Short work should be made of the new war-born bureaucracy, and the Offices of State should be reduced to something like their pre-war proportions. We should not tolerate the presence of thousands of men and women in the Public Departments, who, to a great extent, are compiling statistics and doing similar ornamental work that adds nothing to the productive power of the nation. We ought to recognise that the sense of prosperity, engendered by our borrowing and spending lavishly for the war, was never anything but a mere hallucination, and that now, when credit is drying up beneath our eyes and when the mainsprings of industry are becoming clogged, the salvation of the country and its commerce depends on a rigid and relentless economy.
    Yet the spectacle we are actually witnessing is hardly one that suggests economy. The Government is launching out into new Departments, giving doles and subsidies all round, as though the people of these Islands had a bottomless purse. To take one instance—the work that was previously done by a Secretary in the Railway Department of the Board of Trade is now done by a full-blown Ministry, which will cost the country many hundreds of thousands a year. And, incidentally, did your Lordships notice what happened the other day? It was typical and suggestive. This new Ministry submitted some Estimates of its administrative expenses. They were so staggering, the outcry against them was so loud and instantaneous, that they were withdrawn, revised, and sent in again with a saving of some £70,000. At that rate they would only have to be returned to the Ministry four or five times
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    for the discovery to be made that the country could get along quite well without it. What good the Ministry is to do I honestly do not know. The head of it is probably one of the ablest railway men in the country. The Ministry is really his creation, in the sense that if he had not happened to be on hand no one would have thought of establishing it. But how long he will retain his present position is a matter of complete uncertainty. He has done great public service. Within the last few years he has been a railway manager, a Major-General, an Admiral, and he even aspired to be a shipbuilder. He "collared" for the Government what was to be a national shipyard at Chepstow. Your Lordships will forgive me if I speak with some feeling here. He ousted the shipbuilders who really knew something about their business, and, after millions of public money were spent on the yard, the undertaking has been sold, if I am rightly informed, for, comparatively speaking, "an old song," and report goes that even the old song will never be sung.
    The omen is not an auspicious one. Sir Eric Geddes is undoubtedly a most capable man, but even with the assistance of his numerous and many-titled Directors-General and lieutenants, it is no disparagement to ask, what can he teach the managers of our great trunk railways about their business? What can he teach Lord Ash-field about the management of the Underground? No more, I am afraid, than he could teach the shipbuilders at Chepstow what they did not know about shipbuilding. This huge and expensive Ministry of Transport, in my judgment, will prove in the end to be little more than a mere Post Office through which the Government and the railways will conduct an ever-lengthening correspondence on all railway questions. I am credibly informed that the statistics already required to be furnished by the Railways to the Ministry of Transport are costing £1,000,000 a year to supply. This £1,000,000 a year will not drop from the heavens, nor will it well up from the earth. It will come from the pockets of the public who use the railways. We got along quite well before the war without these statistics, when railway managers were free to attend to their proper business instead of being called upon to dance attendance at Whitehall, as they now have to do. We had a railway system then that was cheap, expeditious, solvent, and in no need of subsidies. To-day,

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    solely as the result of State management, and State interference, we have a system that is expensive, congested, and very far from paying its way.
    What is true of the railways is equally trite of the mining industry. Five years of Government control have brought it to chaos. Bunker coal is costing £5 a ton, and our magnificent export trade in coal is a thing of the past. Take the case of the Land Valuation Department. The taxation of land values has gone by the board, and rightly so, and with it the Department should have been thrown overboard too. But nothing of the kind. It is to be kept in existence at a great annual cost, because it will, forsooth, be able to collect information which it is thought may possibly be of some service a hundred years hereafter. We cannot at the present time afford to indulge in such luxuries as these. Look at the labour exchanges with their great buildings and huge staffs. They have proved, with their burdensome mechanism, to be a superfluous futility, and they should be scrapped.
    We used in this country to have a large trade that was interested in building houses. If we had left it alone we should to-day have had twice as many houses built, or in course of erection, without any subsidies, and at one-half the cost, as we have under the force of the State Housing scheme. As a business man, I am free to say that I do not know a single principle of business and common sense that has not been violated by the Government from the first fatal moment when it thought it could build houses better or more quickly, or at less expense, than the men in the trade. Both the taxpayers and the ratepayers will have to pay through the nose for this supreme example of Departmental megalomania. We want to get rid of the excrescences in St. James's Park, which are making ducks and drakes of the people's earnings, and we want to see the water inhabited again by live birds, which are much more ornamental and less expensive to feed than the present occupants.
    I have complete confidence in the recuperative capacity of these Islands, in the powers of organisation of the captains of industry, in the skill, the energy and the law-abiding disposition of 99 per cent. of the people, knowing as they do that the avenues of advancement are open to all, but unless we get the industries of the country free from the sterilising and
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    damaging effects of bureaucratic control and interference, unless we get rid of the functionaries and parasites who are feeding on the public and holding all enterprise in check, we will never recover that prosperity which enabled us to forge ahead and to build up the wealth of the people, which is the wealth of the country, and which provided us with the Empire's first line of efence—and that is solvency. I have spoken more strongly than is customary in your Lordships' House, but I have spoken from earnest conviction. I have endeavoured to avoid saying anything disagreeable and I hope I have succeeded. I must apologise for having intruded at such length on your Lordships' time, and I thank you for the courteous hearing you have given me.
    LORD BUCKMASTER: My Lords, I have so often trespassed upon your patience in discussing the financial position of this country that I might well hesitate this afternoon before I repeated the offence, but I cannot refrain from the temptation afforded by the Motion of the noble Earl who sits by me to beg your Lordships once more to consider how serious is the financial position in which we stand, and how completely unable the Government appear to be to realise its result. Industrial discontent is due to financial disorder, and you will never still it by merely providing from time to time that the increased difficulty of the situation in which labour stands should be met by the provision of a larger wage. The only means by which it can ever be properly and successfully attacked will be by restoring stability to industries, reducing the inflated currency, and establishing our financial position upon such a basis that people may have some reasonable prospect of looking forward to reduced instead of to increased taxation.
    I believe that to be of enormous consequence, for this reason. Taxation at the present, moment is being met to a large extent by the use of capital assets. There are numbers of people who are quite unable to meet the burden of the expense that is thrown upon them by the existing system of taxation without using the resources that they have accumulated in better years, and as that goes on it follows that the resources from which taxation can be drawn will dwindle and grow less and less, and the productivity of the taxation of this country will be seriously menaced. But if that happens,

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    how are the expenses to which the Government are committed to be met, unless instantly a close and rigorous system of economy is established? I ventured, more than eighteen months ago, to urge the Government to what I believed then, and believe now, to he the only course of safety—to obtain an exact return from a body of people competent to advise as to the amount of taxation that this country could bear without injury to its industries, and, having provided that, to compel all the Departments to come within the allotted share of that amount for their annual expenditure. It is quite useless to proceed the other way. If you are going to ask each Department what they want to spend and then add up the total, you will reach a sum which will be far in excess of the ultimate taxable capacity of this country.
    The Government never appear to me to give any serious attention to this matter at all unless they are stimulated, not by discussion in this House, or even by discussion in another place, but by a discussion in the newspapers. It is the only thing that ever seems to bring home to their minds the knowledge of the grave position in which, as I think, we stand. And when that does occur you find an inspired paragraph stating that the Prime Minister is giving this matter his personal consideration, and the next thing you hear is that he has sent round a letter to all the Departments telling them that they must spend less. And then the matter ends, unless, indeed, a debate is raised in this House, and then any person who attempts to point out the gravity of the position in which we stand is invariably chidden by the representative of the Government, who points out that we ought to feel great regret for having expressed such views on the matter.
    This is what happened in the last debate which took place in this House in March of this year. That was a debate instituted by myself, in which I asked your Lordships to agree, among other things, that it was essential in the national interest "that the expenditure for the ensuing financial year should be brought within the compass of the year's revenue." The Government accepted the Resolution—accepted it without putting it to a Division. Having done that, within a week or two weeks they bring forward their Budget, which shows on the face of it that the revenue is
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    £72,000,000 short of the expenditure. It is obvious that the Government paid no attention at all. It did not matter to them. They had got over the accident of a Division in which there would have appeared a hostile majority against them. They accepted the Resolution and let it pass.
    There is one other view which is equally possible, and that is that really the financial advisers of the Government do not know where they stand. That appears to me to be a very possible explanation of what they do. In March of last year a normal Budget sheet was brought forward by the Chancellor of the Exchequer, making the total of our annual expenditure £766,000,000. In October of last year that Estimate was revised and the total was brought forward at £808,000,000. It was that figure, that I questioned, and I pointed out—and was subjected to some reproof—that it was inadequate, and that nothing short of £1,000,000,000 would really meet the situation. And within little more than six months that is the new revised Estimate. If the Government's expenditure is to be conducted on the footing that they are unable to estimate what is to be the normal annual expenditure of this country, without making a mistake of £230,000,000 a year in one twelve months, what trust or confidence can we possibly have in the judgment which they put forward in the figures which we are now asked to accept?
    The matter appears to me to be even more serious than that, because there are numbers of these figures which you would have thought, they would have recognised could not possibly be at the amount at which they brought them forward. Let me take one example. In October, 1919, a figure was brought forward as the Estimate for public health, and it was set down at £11,000,000. A further Estimate of £10,000,000 was brought forward for housing, making a total of £23,000,000. At the present moment the Estimate for these figures, as brought forward, is, I think, no less than £34,000,000. All that has happened in the space of little over six months. What justification can the Government have for under-estimating an expenditure connected with public health—which was then started, and the matter was therefore well understood—to such an alarming extent?

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    The thing becomes more striking still when we consider the Estimate for a matter like education. Education was originally estimated at, I think, £35,000,000. It then came forward in the present Budget at £56,000,000, and to-day it is to be £70,000,000. That has happened within the passage of a few weeks. And you can take one figure after another—and it is not an uninteresting occupation, though it has rather melancholy consequences—and you can find figures upon which all the information ought to have been in possession of the Government at the time that they introduced the Budget, which are now enormously increased in the Estimate for the normal year. In truth, these succeeding Estimates for the "normal" years arc nothing but milestones that mark the progress of the Government along the road which leads to disaster.
    There are other things in the present figures which certainly require investigation. I should like to ask whoever will answer on behalf of the Government a question, which is apparent on the. very face of the final balance-sheet published for the year. The National Debt services are brought forward at £345,000,000, or roughly £24,000,000 inside the fixed Debt charge, and £320,000,000 outside. Is there included in them the interest that is payable on the loans owing to America? Is there any member of the Government who can answer that? Apparently it cannot be answered.
    THE CHANCELLOR OF THE DUCHY OF LANCASTER (THE EARL OF CRAW-FORD): I do not think so. An effort will be made.
    LORD BUCKMASTER: I would like to know one or two things about it. if it is not included, it is obvious that this Return is £60,000,000 a year wrong. If it is included, is it not true that an arrangement has been made by which that interest is foregone for three years, and accumulated? And, if so, how is it shown there at all, and why? And, if it is not introduced because it is kept outside, the only meaning of that is that you are increasing your capital liability by £60,000,000 a year, and the Budget does not show it. I am inclined to think that is probably true. It is a very important matter, because, if you are going to upset your annual expenditure by £60,000,000 a year at the outset, your ultimate figures will be dislocated throughout.
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    And the same thing is true with regard to another item to which I invite attention. There is £302,000,000 brought in here as representing the sums that we shall receive from reliable capital assets. I should like to know whether that is the gross figure or the net, or whether that is the figure after further sums have been received and have been carried to the credit of some of the expenditure accounts; because, again, if that is the case, the Estimates of expenditure in this Budget are all inaccurate; and it looks to me, from the last Paper published, that this is probably what occurred. I notice that while the Ministry of Munitions is down as £21,000,000 in this account, it is down in the last account as £65,000,000. It seems to me the only explanation of this is that in the first it was introduced as a net figure and in the last as a gross figure. The difference will not appear in any balance sheet at all, and certainly not in the £302,000,000.
    Supposing we accept the inevitable and take £1,000,000,000 as the Budget which we have annually to meet, I have said before, and I repeat, that I do not believe that this country can continue permanently to pay such a sum. It is a much easier thing to raise the money at a moment like the present when industry is beginning to prosper, when trade is beginning to grow brisk, and money is comparatively plentiful, than it will be in the days which are most certainly coming when industry will begin to flag, when trade will cease to prosper, and when money will begin once more to grow scarce. Unless we take this opportunity for compressing our expenditure within the limit that we shall be able to reach in times of difficulty as well as in times of success, the day will come when the Chancellor of the Exchequer will be bound to meet the House of Commons and say that he knows no means by which he can raise the revenue to meet the expenses to which he is committed.
    LORD CLIFFORD OF CHUDLEIGH: My Lords, there is one great question which, perhaps, is not sufficiently considered in this matter of cost and that is that every excess of expenditure that is not productive must be reckoned in the death-rate of the population. So nearly is this balanced that from 1870 to 1910 a fluctuation of 6 per cent. in the production of any country was followed by a similar fluctuation in its population. Example is always better than precept. So long as the Government

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    are practising unheard of extravagance in regard to employment that is not productive of the absolute necessities of life, you cannot expect the mass of the people to study economy in the absolute necessities of life. In ten or twelve years this extravagant expenditure in connection with official bureaucratic work will react upon the people by leaving us with a few millions of the population doomed to starvation for want of employment. If we cannot keep control in Ireland at the present time, when there is no such poverty and no such want of employment, I ask, What power on earth is going to keep order and prevent civil war in England ten years hence if we do not study economy now and ensure that we have not then a large number of starving people? When it comes to an impossibility to produce, or to get sufficient employment to keep the population alive trouble is bound to happen.
    Throughout the whole course of the world's history, a starving man has always been found to fight before he will lie down and starve. Such questions as distribution by wages or profits or prices are immaterial. They do not affect the average wealth-giving power of the community in the least. But when want of employment reduces the position of the community things will right themselves, because a man will always take a lower rate of wage rather than die of starvation. But expenditure in unproductive ways must be reckoned in the death-rate: and when a large number are reduced to living below the standard which will keep them in the necessary state of health wholesale disease passes through the country as it has done in centuries gone by: just as the poverty which the people voluntarily accepted during the war brought about the epidemic of influenza after the war. We may be willing to take such burdens on our shoulders in order to preserve our national greatness and to win a war; but the nation is not willing to take a like extravagance on its head simply to create a bureaucracy which is not a necessity or a requirement.
    We are again nearing in the course of history what happened between 300 and 500 A.D. when the Roman Empire bureaucracy grew to such an extent that in 200 years it broke up, accompanied by starvation throughout the whole of Western Europe. The same thing is before us in the next 200 years if we do not economise
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    to the utmost extent of our ability. In the whole of my life I have never found that you are able to re-establish your capital or your trade by increasing your expenditure when you are living above your income. That is the state in which we are at the present moment: and the sooner we begin to retrench the less chance there is of our finding ourselves in a few years with a large number of the population. in bankruptcy and without any means of livelihood.
    THE LORD CHANCELLOR: My Lords, I very greatly regret that public engagements have made it impossible for my noble friend Lord Milner, who is so great a master of this subject, to undertake the heavy burden of replying to the criticisms which have this afternoon been directed at the policy of the Government. He would have been able to give your Lordships a larger degree of assistance than I can hope to do. But I will attempt, after making one or two general observations, to reply to such specific complaints or criticisms as have been made.
    I commence by saying that I welcome every debate on this subject which takes place in this House. I heard my noble and learned friend Lord Buckmaster say a few moments ago that the invariable progress of such debates was that those who raised them were scolded by the spokesman of the Government. My noble and learned friend must allow me to say that he can take pretty good care of himself in these matters and, if there have been scolding in the course of these debates, it has most assuredly not all, or even the very great proportion of it, proceeded from that side of the House opposite to my noble and learned friend. I am not conscious in any debate of any spokesman of the Government who has not replied with courtesy and respect according to the measure of his capacity, to the very drastic and unsparing criticisms in which the noble and learned Lord has from time to time indulged. I remember reading in the old Dialogues of Plato of one who was very harshly rebuked, turning round to him who so rebuked him and saying; "Teach me a little more gently, O my friend." I am not at all sure that my noble and learned friend's admonitions, valuable as they often are, would not bear a richer harvest of fruit if occasionally he remembered that, after all, it is human to err.

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    In reply to the noble Earl, let me say that too frequent debates cannot take place, either in this House or in the House of Commons, on the necessity of economy. But I feel that there is a tendency on the part of some of those who have spoken in this debate to talk as if Ministers were resolutely determined, either through megalomania or through some other form of mania, to plunge the country down a slope which will inevitably conduct it to financial ruin, and that they are doing this with vivacity. I should like to point out that you must not put Ministers on the one side and all the rest of the population on the other. It certainly is not reasonable to assume that the whole of the common sense, the whole of the caution, and the whole of the prudence is to be found amongst those, who, at the moment, do not happen to be Ministers of the Crown. Ministers of the Crown themselves are, unfortunately, liable to pay income tax. Most of them are comparatively poor men. Taking the majority of them, and excluding exceptional cases, there is no class of the population on whom this burden of taxation presses very much heavier than it presses on Ministers themselves.
    I do not wish to be guilty of the fault of talking about myself, but there are circumstances in my own position in relation to that of my predecessors which, I assure your Lordships, lead me, at every Cabinet meeting at which finance is discussed, to be as vigilant a custodian of every pound that is spent as any one of your Lordships who has been so forward in criticising the Government to-night. We do not, when we meet together in the Cabinet, vigilantly examine the whole field of political action in order to ask ourselves the question: "Cannot we spend another million here? Cannot we throw away ten millions there?" We meet together in Cabinet when these financial matters are discussed, as a body of anxious, harassed men who are as deeply concerned in trying to reduce the expenditure of this country as any equal number of men coming from any quarter of your Lordships' House would be in discussing these financial matters. It will be said:— "You have not been, by any means, extraordinarily successful." That may very likely be the case, but in listening most carefully to what has been said in this House to-night, I missed from the criticisms which have been made—I missed most particularly from the criticisms offered by my noble and learned friend, Lord Buck-
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    master—the slightest appreciation of the difficulties with which the Government have been faced during the time which has succeeded the Armistice.
    I wish to make one other observation of a general character before I approach the particular subject of this debate in its details. All his colleagues most deeply resent the personal attack which a section of the Press has made upon the Chancellor of the Exchequer.
    NOBLE LORDS: Hear, hear.
    THE LORD CHANCELLOR: If he has been wrong, and so far as he has been wrong, we have been wrong too. His responsibility is our responsibility. I hope I do not betray a single Cabinet secret. when I tell your Lordships that the, principal picture which I have in my mind of the Chancellor of the Exchequer in the last twelve months is that of a man resisting, and always resisting, proposals for expenditure made by his colleagues. in the Cabinet. When I say proposals made by his colleagues in the Cabinet, I am not blaming any particular colleague Each Department has occasion for expenditure which is considered to be of great importance in that Department alone, and the Minister who is at the head of that Department brings it forward to the Cabinet and attempts to procure Cabinet sanction. I can think of fifty occasions in which I can see the Chancellor of the Exchequer resisting, and very often successfully resisting, such proposals, even where one has found it difficult to give him support, because the immediate proposal seemed to have such strong reasons behind it. I think that your Lordships will most generously realise that the fault, so far as there has been a fault, is not an individual fault but one for which the whole of the Government must be criticised, and by which the whole Government must he judged.
    Lord Midleton has based his arguments, as other speakers have done, on the current Estimates for 1920–21, and on the tentative Estimates for the normal year, which were contained in the Command Paper issued last week. I shall have a word to say, if I may, upon those Estimates, but before I do so I would call attention to a very important document, the further White Paper which was issued on Monday to both Houses of Parliament, entitled

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    "A Memorandum upon the Present and Pre-War Expenditure." Your Lordships, I think, have seen that Paper, which at least entitles me to found upon it a claim that we are doing our best in this matter to take the whole country into our confidence as to the actual situation. The first table in that Memorandum deals with gross expenditure over a series of years. This table shows, in the first place, that the increase of expenditure in the war years was gradual, and that it reached its maximum in the year 1918–19. It is very important, for those who wish to judge of the position fairly, to remember that in many branches the full development of output had not even been reached at the end of the year 1919. To reverse this process must inevitably take time and involve expenditure of a very important character.
    The noble Lord spoke with great animation about the staff that was maintained at the Admiralty. Let me tell your Lordships the reason for the increase of the staff at the Admiralty. On a moment's reflection it will be seen that it is very easy for the noble Earl to create indignation among your Lordships by pointing out that there has been an increase of staff at the Admiralty although the war is over. Your Lordships need not be surprised at that increase. The whole of the increase in the Admiralty staff is due to necessary efforts to wind up. They have discharged many men of the 304,000 who, during the war emergency, joined the Navy. That means paying gratuities, and arranging discharges on an enormous scale. The Admiralty have to scrap ships which are on the Estimates; they have to arrange the disposal of vessels which are saleable and, if the noble Earl will go to Southampton, he will see hundreds, almost thousands, of vessels with the disposal of which the Admiralty is charged. If they fail in their prudent stewardship the cost to the ratepayers would be enormous. I do not know whether the noble Earl has thought of the number of factories on the most elaborate scale which the Admiralty have to scrap; and they have also to liquidate an enormous number of war contracts.
    All this means a large temporary staff, and if such a staff were not employed the loss to the taxpayers would be very great. Indeed, I marvel that any one of the experience in these matters of the noble Earl should believe that any Government is so wicked or stupid—and they are alter-
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    natives—at the moment when the Navy has happily ceased to be belligerent because the war has come to an end, as wantonly to increase the staff of the Navy or wantonly to retain persons who have no right to be employed there. I select this as a particular illustration because the noble Earl dealt with it in great detail and it is, believe me, typical of every one of the War Services. The work of liquidating our commitments and obligations, of extricating us from circumstances under which the whole activities of the nation were harnessed for war purposes, is one which has necessitated, and will continue to necessitate for a considerable time, an undue inflation of these particular Departments.
    The noble Earl knows, though in the criticisms which are made in the Press the circumstance is almost invariably overlooked, that a very large reduction has in fact taken place in spite of the fact that certain charges—Debt Charges and War Pensions—must increase. In 1918–19 the gross expenditure, in round figures, was £3,146,000,000. In 1919–20 it was estimated at £2,103,000,000, and in the present year, 1920–21, it is estimated at £1,282,000,000. Your Lordships who are interested in this subject—and who is not? —who will be good enough, now or hereafter, to look at Table II of the White Paper to which I have referred, will be rewarded. It deals particularly with the Civil Service Estimates, comparing the pre-war Estimates of 1914–15 with those of the present year, 1920–21. Observations have been made on these contrasts and I shall ask leave to recur to them later.
    I want to make an observation first on Table III of the White Paper because that has been the principal subject of the indictment to-night. It gives particulars of the personnel of the Army, Navy and Air Force, and of the clerical staffs of Government Departments. Let me give your Lordships some figures on that. The fighting Forces have decreased from 4,075,000 at the Armistice to 565,000 now. Departmental staffs have decreased from 418,000 at the Armistice to 369,000 now, of which the Post Office accounts for 210,000. That represents a decrease of 49,000, in spite of the inevitable increase in the Post Office and Inland Revenue and Customs, which were very much below strength during the war. Your Lordships

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    will not forget that an entirely new Department, the Ministry of Pensions, is at the present moment engaged in permanently fixing pensions which hitherto have been fixed on a temporary basis, and I cannot exaggerate the financial misfortune which would result to this country if the extraordinarily competent and experienced people who have been dealing with pensions were dissipated at the moment when this critical and anxious process is being adjusted. I do not think any one who has given any attention to this subject would suggest, until this process is completed, that any reduction at all should be made in the personnel of the Ministry of Pensions which is responsible for much that has been criticised in the matter of Departmental personnel.
    The noble Earl spoke of reducing the strength of our Civil Service by 30,000. I did not gather in the whole of his speech any recognition at all of the prodigious and changed situation which has been caused by the obligations and the commitments of the Ministry of Pensions. It should also be observed that the Ministry of Munitions staff has decreased by 55,000 since the Armistice, in spite of the very large transactions in connection with disposals with which they still have to deal. The noble Earl said that he knew, or others knew, of enormous dumps in France in which material was being ruined day by day, week by week, and month by month, because no effort was made to dispose of them; apparently, they were overlooked. If there are such cases I profoundly regret it, and I confess I should he filled with indignation and, so far as my influence is concerned, I would attempt to make the proper person responsible for what on that hypothesis is a most wanton and wicked squandering of the nation's resources. I ask the noble Earl to inform me of any specific cases which are within his own knowledge and I assure him I will bring them to the knowledge of the Cabinet and attempt to make whoever is responsible for it so responsible.
    THE EARL OF MIDLETON: If the noble and learned Lord will only send across to the War Office and ask, for his own personal information, for the suggestions made by General Officers commanding in France in the last year he would get more information than I could give him.
    THE LORD CHANCELLOR: The noble Earl is inviting me to embark on a vague inquiry, but, nevertheless, I will prosecute it. I gathered that there were cases known to the noble Earl, or to some other person, but I will certainly undertake such an inquiry though couched in general terms. I turn to the Civil Service Estimates around which so much criticism has settled. The net Civil Service Estimates for 1920–21 are £497,000,000, and, as has been pointed out, there is a considerable difference between this sum and the Estimates for a normal year of £305,000,000. It is quite true that the difference between the two figures is enormous, and the difference is almost unspeakable between these figures and the pre-war Estimates for 1914–15 which amounted to £57,000,000 only.
    The noble Earl approves of my exhibiting these figures in contrast. The very fact that I do so exhibit them is designed to make it perfectly plain that there is no Minister who does not desire that the House of Commons and the whole country should realise them, and no Minister who does not desire to take the opportunity, when it offers, of pointing out that nearly every proposal in the direction of increasing expenditure proceeds from Parliament itself. Your Lordships are not great offenders in this respect, though I could give a few illustrations, during the short time I have occupied my present office, of proposals embodying considerable expense being pressed on the Government by your Lordships. But the House of Commons is a grave offender in this respect, and you will find Members, instead of pressing economy on the Government, rather advocating schemes which involve expenditure. This circumstance, undoubted as it is, ought not to be made a subject of special indictment against this House of Commons. I see noble Lords sitting on the Benches here who sat with me for some years in other Houses of Commons, and it is equally true of them that the private Member of the House of Commons is never an economist, except in general. He is never an economist when concerned in any scheme in which he or his constituents take an interest. Then, again, it is a circumstance to be steadily borne in mind, that when people speak of the Civil Service Estimates they mean the Estimates for all the civil activities of the State, as distinguished from the Naval and Military Services. It does not mean Estimates for Civil Service officials, and only a relatively small part is composed of the

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    salaries of officials. Yet any one who listened to the indictment of the noble Earl would think that these enormous sums were largely explained by the salaries paid to Civil Servants.
    Now, my Lords, let me ask you to pay attention to what really are the formidable items, and to see how far those items are capable of being dealt with by the greatest economist in this House. There is, in the first place, War Pensions, £123,000,000. That is an item which does not seem to me to be likely to be much extinguished or diminished, except by the ordinary process of nature. Then there are the grants for the education and settlement of ex-soldiers. That, I think, does not call for much comment. Loans to Allies and for relief, £36,000,000. Those who have investigated this item know how exceptional were the circumstances in which loans have been made since the Armistice. The next item is Railway Agreements, £23,000,000. That sum of £23,000,000 does not represent a subsidy to the railways, but it is a sum expressive of the war liabilities under the Agreement with the companies for maintenance, and which was deferred during the war period. Now I have been present at many interviews between the Government and the railway directors, and the noble Lord who spoke second in the debate, and who brings a vast authority when dealing with financial problems, spoke strongly of the evil consequences of the connection of the State with the railways and mines, but I did not gather from his speech, which he had evidently prepared with great care, that the noble Lord means to suggest that in the actual circumstances of the war the Government were wrong to assume control over all the railways and mines. The noble Lord most candidly intimates to me that that was not his meaning. This is a commitment which springs out of that war association, which the noble Lord who has examined this question will admit to be entirely necessary.
    The next time is the bread subsidy, £45,000,000. Now, my Lords, that question raises an issue of the greatest difficulty and of the greatest delicacy. It is one which cannot very conveniently be fully discussed in public at this moment, for reasons which may be conjectured, but the arguments on the matter have been examined, and, indeed, re-examined, by the Government, and I cannot exaggerate the attention and
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    care and expenditure of time given to this question. I may safely assert that I have among my colleagues many men of great experience, and your Lordships may take it from me that the arguments in relation to the retention of the bread subsidy, at the time when the decision was reached by the Cabinet, were such that a number of sensible, well-intentioned and not wholly inexperienced men found to be overwhelming. I may add that it is not the intention of the Government, under any circumstances which we may foresee, to act on that subsidy, and that the matter, I will not say is receiving the constant attention of the Cabinet, but is being re-examined at such times as seem convenient and desirable.
    Now I pass to the item of the housing subsidies, including the £250 subsidy to the private builders. The figure is nearly £16,000,000. The noble Lord, with the approval of many of your Lordships, said that if the matter had been left to private enterprise the housing problem would have been much nearer solution. He touches on an extraordinarily obscure and difficult subject, and I am not convinced that the noble Lord is altogether prudent in announcing so dogmatic a conclusion. I am not sure that the noble Lord brings to the housing question such admittedly expert knowledge as he does to many other subjects. I have attended Cabinet meeting after Cabinet meeting, at which we have had the advantage of considering, discussing and weighing the opinions of the greatest experts in this country upon the question of housing, and I can only tell your Lordships quite plainly, that while there was profound difference of opinion as to where the original responsibility rested for the decay of initiative which preceded the outbreak of war, I do not recall that there was the slightest difference of opinion as to the completeness of the process which had taken place, partly owing to conditions operative in pre-war days, and partly to the cumulative arrears which had arisen in the course of the war. There was a complete consensus of opinion as to the chaos with which we were confronted after the Armsitice. I tell the noble Lord quite plainly that unless he has some real reason, founded upon expert opinion, for supposing that the matter would have been dealt with by private enterprise, I wholly reject that view, and I believe that if the matter had been left, under existing conditions, to private enterprise, we should

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    have had neither a house nor even the prospect of a house.
    The next matter is Old Age Pensions, £20,000,000, and I do not think I am expected to deal with that. Then there are Grants for Education, which amount, for the year which is contemplated, to £53,000,000. Now, much has been said about the education question. Here again I was, I confess, astonished that this should be put forward for the purpose of censure, and that at least it should not apparently have been mastered, or that it should not have been thought necessary to expound to those who had not given special attention to this individual item, that there were allowances and qualifications which would be made by any fair-minded man. The increase in education represented by this item is not a very large one, and it is almost entirely explained by the enormous increases which have proved to be necessary in the salaries of the teachers, and in the outgoings and expenses in the general change that has taken place in valuation since 1914.
    I spoke to my right hon. friend who is the President of the Board of Education in relation to these figures and I asked him what was the explanation that he gave of them. I have carefully considered the proportion of this sum which has been the subject of so much indignation to-night, and I assure your Lordships that there is nothing left which you would think it worth while to spend an hour in debating. The provision for the actual salaries of officials, which looms so largely in the speeches of critics probably does not exceed £20,000,000 out of the whole total of £497,000,000, and I will undertake to say that any one who reads the speeches or who reads the newspaper Press, could fail to derive the conclusion that the swollen hoards of unnecessary officials who could be usefully at any moment be diverted to productive work for the benefit of their own health and the interests of the country are accounted for by the sum of £2,000,000 out of this immense total. Let me make an observation upon the criticism—which sounds appalling when one states the figures plainly—that the Government are spending £497,000,000 this year against a pre-war expenditure of £97,000,000. I will prefacé my observations by saying that this is an appalling circumstance; it is a circumstance which should be in our minds by day and by night, which should be as constantly in
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    our thoughts as is our anxiety with regard to our own private affairs. No one would suggest a contrary view. But analysis is required here, and it is very necessary that those who address themselves to that analysis should be specially careful to retain their sense of proportion. What is the reason for this great increase? There are, of course, two main reasons. First, the Estimates for this year—and no one has made any reference to this—include a very large amount of what we may call expenditure arising out of the war which will not, of course, be permanent. Omitting the large item of £123,000,000 for War Pensions, the greater part of which will obviously be payable for many years, the total war items in the amount of £497,000,000 are not less than £250,000,000. I regard that as a very significant circumstance, and one that ought to be brought into somewhat greater prominence.
    Tedious as figures are, I feel that tonight at the end of this debate, having been liberally pelted with figures, I may be allowed, if only in self-defence, to give the items which make up this £220,000,000. The figures are startling. They are:—Ex-soldiers' grants for training, etc., £27,000,000; loans to Allies and for relief, £36,000,000; railway agreements, £23,000,000; canals, etc., £2,500,000—this sum, I agree, might be criticised as coming under what is known as the grandiose Ministry—bread subsidy,£45,000,000; housing, £11,500,000; Ministries of Munitions, Ships and Food, £15,000,000; coal mines advances, £15,000,000; minor Services, such as the Treasury Securities scheme, Foreign Office war services, war hospitals and Trading Services, £15,000,000. Those items make up a total of £220,000,000. That is the first serious qualification which has to be borne in mind.
    The second is that the index figure of retail prices, with which all are now familiar, shows that those prices have gone up since July, 1914, by approximately 150 per cent. The Government is no more exempt from the consequences of such prices than are private persons. It must pay more for its supplies; it must pay more to its employees. Is it unreasonable, with such an increase in prices, that Parliament should have raised Old Age Pensions from 5s. to 10s. a week? Will noble Lords tell us that, however praiseworthy an object may be, we cannot afford it, and we are

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    not to carry it out? Will they say that now, under the conditions of the moment, it would have been right to refuse to increase the Old Age Pensions from 5s. to 10s.? I should be astonished if that view were taken, or at least if it were generally taken. In the next place, is it unreasonable. that the educational grants should have been given in order to enable local authorities to increase the salaries of elementary school teachers? I may ask further, can it be expected that civil servants are to do their work with the real value of their salaries diminished by over 100 per cent.? I may make this observation in that connection. The result of more direct contact between civil servants and the business world during the war hardly supports the view that civil servants before the war were overpaid.
    I made an observation at an earlier stage on the subject of Table II of the Memorandum, and if any noble Lord who has the tables in front of him will glance at Table II, or will be so good as to do so hereafter, he will see that the increased expenditure on all the items which are properly comparable with the pre-war £57,000,000 is a sum of £98,000,000. That is a most striking figure, and I think I can make it good. If it be so, your Lordships see how much of the case that is made so forcibly against us completely disappears. I think I can show your Lordships, within £1,000,000, that the comparable figures are £57,000,000 and £98,000,000, and that is an increase which any man who has experience in these matters would a priori have predicted as the automatic result of the increase that has taken place in the cost of living.
    Owing to changes in policy between 1914 and now largely increased grants have been given for the police. The expenditure in 1914 in Great Britain under this head fell upon the local authorities. The insurance grants and education grants have been extended, and I cannot but think that any one who takes the trouble to go through the processes which I have gone through, or who cares to take the accuracy of the figures that I have attempted to explain, will feel that in these days when Ministers stagger under a burden of anxieties that never seem to disappear, one chasing another over the political stage, they have not deserved to have these charges made against them by those who, after all, have not undergone the anxieties and the responsibilities which fall upon a Minister.
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    It is right that I should say a word about the question of the normal expenditure. The first observation to be made in regard to that is, that it shows a very considerable reduction in relation to the present year—a reduction of no less than £192,000,000—in spite of the fact that it includes allowances for many items, such as housing and education grants, which have not in 1920 and 1921 reached the full maximum. In the second place, I would call attention to the analysis of the so-called Civil Service expenditure given on page 4 of the Table. From this analysis it is clear that out of £305,000,000 no less than £120,000,000 goes to War Pensions, and £28,000,000 to Old Age Pensions, while nearly £118,000,000 consists of grants for Education, Insurance, Police, and for housing subsidies. Only a very small fraction of the whole is due to the general expenses of administration.
    The Motion, and indeed the speech, of the noble Earl referred to the great increase in the estimated normal expenditure of the country. The noble Earl may mean by this the increase over the tentative normal year estimates of last October, and, indeed, he pointed out that the total expenditure, as then estimated, was £808,000,000, as against £880,900,000, an increase of about £70,000,000. As this has been commented upon, I will state what the reasons for this increase are. In the first place, the increased grants to the Road Improvement Fund, consequent upon the new road taxation introduced in this year's Budget, and, in the second place, the various increases in Supply Services set out in the Note that has already been circulated. These increases are the result almost entirely of other legislation—for instance the Old Age Pensions Act, 1919—which has been passed since October last, or of increases resulting from higher prices—for instance, the increased cost of building a house, and the increase in the war bonus. I will also point out that the normal year made no allowance for the special War Departments to which Lord Midleton specially referred, as it is anticipated that they will long since have ceased to exist.
    More than one speaker has called attention to individual Ministries, and indicated that the time has come when they ought to disappear, and it is the special object of the noble Earl, Lord Midleton, to provide machinery which, in his judgment, will bring about their disappearance. Let me

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    make an observation on the subject of the Transport Ministry. That was criticised with great severity by the second speaker, and I am not sure that he had very closely present in his mind the necessary changes produced by the Governmental assumption of control which the noble Lord himself has justified in the House to-night. The position is that the control and audit has become necessary as between the Government and the companies of sums of money which must be put, at a moderate estimate, at a figure of about £600,000,000. The actual expenditure of the Ministry on audit may be taken as about £150,000, which is a figure which is not yet reached, but which may be exceeded by the end of the year. Taking the figures, as they must be taken before the thing can be liquidated—before we can, so to speak, do what we should like to do and walk out—the cost works out at £25 per £100,000, or ·025 per cent. That is the total charge of all the audit, which is so great a part of the Ministry.
    I cannot discuss to-night with the noble Lord, though I will gladly do so on another occasion, the broad and general question as to whether, in all the circumstances of the case, the Ministry was necessary at all. I can only tell him that, when a proper occasion arises, I shall be pleased, according to the measure of my capacity, to attempt, to make plain to him, and to make plain to noble Lords, the reason which led the Government, after very long consideration, to come to the conclusion that this Ministry would justify its existence and, in the end, effect very great economy. Then, I think the noble Lord mentioned the question of the Ministry of Shipping. I think I am not violating any Cabinet secret when a say that so short a time as, I think, a week ago—
    LORD INCHCAPE: I said nothing about the Ministry of Shipping.
    THE LORD CHANCELLOR: I beg pardon. Then some other speaker did. The Ministry of Shipping was discussed by the Cabinet a week ago, and, though I do not know that a final decision was reached, I am quite sure of this, that either the Ministry of Shipping will in the very near future disappear, or we shall be able to state in this House very adequate reasons, and reasons which your Lordships will accept, for its maintenance. Lord Buck-master asked me a question as to whether
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    the figures under the head of munitions were gross or net figures. The figures are gross, the whole amount being paid into the Exchequer, and, though my noble and learned friend is not in the House to near the answer to a question which, he loudly proclaimed, no one was in a position to answer, I may say that normal Debt Charge does not include interest on debt held abroad and that if the noble and learned Lord had carried his researches as far as paragraph 4 of the Memorandum, he could have discovered the information in even an easier fashion. Provision is not made in this year's Budget for the debt owing to the American Government, for reasons which appear to me to be adequate, as the interest is being postponed, and therefore there is no change this year.
    I find no difficulty in assenting to the earlier part of the noble Earl's Motion. I rather like its phraseology. It is short and clear. He says:
    "That it is incumbent on the Government to reduce tile present undue strain on the resources of the country."
    Well, I think it is incumbent upon us to do so, if we can, and I have no objection to take to that part of the Motion. Then he continues:
    "And to appoint Special Commissioners with power to wind up existing Departments for special War Service, and to reduce other inflated Establishments to a normal level."
    THE EARL OF MIDLETON: Hear, hear.
    THE LORD CHANCELLOR: The noble Earl, with the partiality of a parent, cheers the last few lines of the Motion. He will forgive me if I say I do not by any means share his enthusiasm for it. What does this proposal mean? It is put forward in competition with an undertaking given by the Chancellor of the Exchequer to the effect that seven Committees are to be set up, consisting of a business man, a member of Parliament, and an expert, to deal with certain Departments. Your Lordships may care to know what the Departments are the—Board of Trade, the Department of Overseas Trade, the Board of Agriculture and Fisheries, the Ministry of Labour, the Ministry of Munitions, the War Savings Committee, and the Sugar Commission, Such is the proposal made by the Chancellor of the Exchequer. The noble Earl substitutes for that proposal one under which certain Commissioners

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    are to be given power "to wind up existing Departments for special War Service, and to reduce other inflated establishments to a normal level."
    I say boldly that not only is this a proposal which this Government cannot entertain, but that it is one which no Government that existed in this country at any period since Cabinet responsibility was understood could possibly, in any circumstance, accept. What does it mean? It means that these Commissioners, who are responsible to nobody, are to usurp and undertake the responsibility of the Cabinet. It is not by those methods that we have arrived at our present understanding of the Constitution of this country. We have arrived at it by the gradual evolution of the theory of the responsibility of Cabinet to Parliament. If a Cabinet commits error, Parliament can withdraw its confidence, and can destroy it. Here it is proposed that a body of men for whom nobody will be answerable in Parliament will be imposed on the Government against their consent, or at any rate without their consent—because their consent will never be given—and this body of men, who are not answerable to this House, and not answerable to another place, for the decisions which they take—for the discretion, or the indiscretion, which they exercise—will be made responsible for the functions which must belong to a Cabinet. I earnestly entreat your Lordships not, for a single moment, to accept the specific proposal contained in the latter part of the Motion.
    If the present Cabinet is in all these respects guilty of negligence or incompetence, the sooner they realise that they have not the confidence of this House, or the confidence of another place, and the confidence of the country, the better; and let them be replaced by men who are more competent to discharge the immensely formidable problems which confront us all to-day. But let us be sure that those who offer themselves to undertake these functions, whether they do so under the style of Commissioners or under any other style, will be any more competent than we are to deal with problems which cannot be exaggerated in their gravity. I have detained your Lordships long, but the indictment is a grave one; and I would at least ask you to believe this of me—that I care more for this than for any other point I have taken to-day—there has never been a
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    moment since the Armistice when the Government has not been as deeply alive to the gravity of this question as any one, and the one advocate in the Cabinet who fights greatest in the cause of economy is the Chancellor of the Exchequer, who has been so unfairly and so ignobly attacked.
    THE EARL OF MIDLETON: My Lords, I hope you will pardon me for a moment if I reply to the Lord Chancellor's request that I should truncate this Motion in such a way as to render it absolutely innocuous for any purpose. The Lord Chancellor, in endeavouring to make his case, has mistated—though I am sure without intending it—the whole purpose and object of my Motion. The last part of the Motion declares that it is incumbent, not on the House but on the Government, to appoint special Commissioners for this purpose. There is nothing whatever to prevent the Government from appointing one of themselves as one of these special Commissioners—there is a Minister without Portfolio—with two business men who are competent for the task.
    I ask your Lordships to take from the Lord Chancellor's own lips the condemnation of the Government in this matter. We all know how over-worked the members of the Government are. The noble and learned Lord told us that they have the best will in these matters; and he went on to say that he could remember fifty occasions on which the Chancellor of the Exchequer had heartily opposed measures for increased expenditure, in regard to which he did not obtain the support of his colleagues. Either the Chancellor of the Exchequer must have the support of the Prime Minister and his colleagues in this matter or it is his duty to resign; and I say that, in the present temper of public opinion, if he did resign he would be back in a week. Unless some measure of this character is taken—a measure which can be taken perfectly constitutionally by the Government—to appoint one of themselves with certain other persons with full powers to carry out this retrenchment, I cannot gather from the speech of the noble and learned Lord—capable as he is in making good a bad cause—that any steps whatever may be anticipated. He has justified the present condition of affairs and the Estimates which have been submitted to us. As do my noble friends who have also spoken, I regard those Estimates as ruinous to

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    the country; and I hope your Lordships will support me when I ask you to divide on what alone would be a satisfactory and effective means of bringing about what we desire.
    Resolved in the affirmative, and Motion agreed to accordingly.

    COUNTY COUNCILS ASSOCIATION EXPENSES (AMENDMENT) BILL.
    House in Committee (according to Order): Bill reported without amendment.
    On Question, That the Motion be agreed to—
    Their Lordships divided: Contents, 95; Not-Contents, 23.

    CONTENTS.

    Bedford, D.

    Falmouth, V.

    Kenry, L.

    Northumberland, D.

    Haldane, V.

    (E. Dunraven and Mount-Earl.)

    Sutherland, D.

    Hambleden, V.

    Lawrence, L.

    Hampden, V.

    Monckton, L. (V. Galway.)

    Crewe, M.

    Hutchinson, V.

    Monson, L.

    Exeter, M.

    (E. Donoughmore.)

    Montagu of Beaulieu, L.

    Lincolnshire, M.

    Knollys, V.

    Mowbray, L.

    Salisbury, M.

    Muir Mackenzie, L.

    Zetland, M.

    Ampthill, L.

    Nunburnholme, L.

    Ashton of Hyde, L.

    O'Hagan, L.

    Abingdon, E.

    Askwith, L.

    Oranmore and Browne, L.

    Aneaster, E.

    Avebury, L.

    Penrhyn, L.

    Clarendon, E.

    Barrymore, L.

    Pentland, L.

    Fortescue, E.

    Brancepeth, L. (V. Boyne.)

    Redesdale, L.

    Harewood, E.

    Carmichael, L.

    Roundway, L.

    Lindsey, E.

    Cawley, L.

    Ruthven of Gowrie, L.

    Lucan, E.

    Chalmers, L.

    Saye and Sele, L.

    Malmesbury, E.

    Charnwood, L.

    Southampton, L.

    Manvers, E.

    Chaworth, L. (E. Meath.)

    Southborough, L.

    Mayo, E.

    Clifford of Chudleigh, L.

    Stanley of Alderley, L.

    Midleton, E. [Teller.]

    Crawshaw, L.

    (L. Sheffield.)

    Morton, E.

    Denman, L.

    Strachie, L.

    Mount Edgeumbe, E.

    Deramore, L.

    Stuart of Wortley, L.

    Northbrook, E.

    Desborough, L.

    Sumner, L.

    Powis, E.

    Desart, L. (E. Desart.)

    Swaythling, L.

    Selborne, E.

    Dynevor, L.

    Sydenham, L.

    Shaftesbury, E.

    Douglas, L. (E. Home.)

    Tennyson, L.

    Stanhope, E.

    Ebury, L.

    Tenterden, L.

    Waldegrave, E.

    Farrer, L.

    Treowen, L.

    Gainford, L.

    Vernon, L.

    Bangor, V.

    Glenarthur, L.

    Vivian, L.

    Chaplin, V.

    Hastings, L.

    Wavertree, L.

    Cowdray, V.

    Inchchape, L. [Teller.]

    Whitburgh, L.

    Devonport, V.

    Islington, L.

    Wolverton, L.

    NOT-CONTENTS.

    Birkenhead, L. (L. Chancellor.)

    Burnham, V.

    Harris, L.

    Knutsford, V.

    Hylton, L.

    Dufferin and Ava, M.

    Milner, V.

    Ranksborough, L.

    Bradford, E.

    Peel, V.

    Rathcreedan, L.

    Eldon, E.

    Sinha, L.

    Sandwich, E.

    Annesley, L. (V. Valentia.)

    Somerleyton, L. [Teller.]

    Vane, E. (M. Londonderry.)

    Clwyd, L.

    Stanmore, L. [Teller.]

    Colebrooke, L.

    Wigan, L. (E. Crawford.)

    Farquhar, V. (L. Steward.)

    Ernle, L.

    MAYOR'S AND CITY OF LONDON COURT BILL. [H.L.]
    Read 3a; Amendment (privilege) made; Bill passed, and sent to the Commons.
    House adjourned at twenty minutes before eight o'clock.

    HOUSE OF LORDS.
    [From Minutes of July 7.]

    CRIMINAL LAW AMENDMENT BILL. [H.L.]
    CRIMINAL LAW AMENDMENT (No. 2) BILL. [H.L.]
    SEXUAL OFFENCES BILL. [H.L.]
    Message from the Commons that they have ordered that the Committee appointed by them to join with the Committee of this House to consider the said Bills do meet the Lords Committee in Committee Room C. on Thursday next, at Twelve o'clock, as proposed by this House.
    The LORD CHANCELLOR The LORD CHANCELLOR acquainted the House, That the Clerk of the Parliaments had laid upon the Table the Certificate front the Examiners that the further Standing Orders applicable to the following Bill have been complied with:
    Invergordon Harbour (Transfer).
    The same was ordered to lie on the Table.

    JUVENILE COURTS (METROPOLIS) BILL. [H.L.]
    Committee of the Whole House (which stands appointed for to-morrow) put off to Thursday the 15th instant.

    WALLASEY CORPORATION BILL.
    CENTRAL LONDON AND METROPOLITAN DISTRICT RAILWAY COMPANIES (WORKS) BILL.
    HASTINGS TRAMWAYS BILL.
    Committee to meet on Tuesday next.

    MINISTRY OF HEALTH PROVISIONAL ORDERS (No. 5) BILL.
    Committed: The Committee to be proposed by the Committee of Selection in regard to the Bradford Order.
    HARBOURS, DOCKS AND PIERS (TEM PORARY INCREASE OF CHARGES) BILL.
    Third Reacting (which stands appointed for this day) put off to Tuesday next.