HL Deb 16 June 1927 vol 67 cc718-40

VISCOUNT ELIBANK had given Notice to call attention to the statement of the Chancellor of the Exchequer in his Budget speech that during the present financial year arrangements will be made to terminate the separate existence of the Overseas Trade Department, and to move a Resolution as follows:—

That this House views with concern the proposal of His Majesty's Government to terminate the separate existence of the Overseas Trade Department and urges the Government to reconsider that proposal, and to retain that Department as at present constituted, whilst at the same time adopting such measures as may be possible for the reduction of both the Departmental and overseas staffs in order to effect the required economy.

The noble Viscount said: My Lords, as this is the first occasion upon which I have had the honour of addressing your Lordships' House I hope that you will accord to me the usual indulgence. I think that an apology is due to your Lordships for having put down a Motion of this importance on a day when there are such other attractions outside. I should like to say that when I realised that I had put down this Motion for such a day I did my best to get it changed, but owing to the pressure of business that lies before your Lordships in the next few weeks I was unable to do so.

The Chancellor of the Exchequer, Mr. Winston Churchill, in his Budget speech April 11, made use of the following words:— During the present financial year, arrangements will be made to abolish the Ministry of Transport as a separate Department, while retaining the Roads Department in full activity. The Prime Minister has also decided that arrangements shall be made during the present financial year to distribute the functions of the Mines Department and to terminate the separate existence of the Overseas Trade Department. My Motion deals specifically with the last Department mentioned in that paragraph, and I should like your Lordships particularly to note that the Chancellor of the Exchequer does not say that the Overseas Trade Department is to be abolished, but that its separate existence is to be terminated. I ask your Lordships to observe this point, because I have noticed in the public Press and elsewhere that there is considerable misconception upon it and that it is suggested that the Department is to be abolished altogether.

In dealing with this question, the Chancellor of the Exchequer started off by saying that suggestions had been made, notably by Lord Oxford and Asquith in your Lordships' House, that the new Departments created since the War should now be abolished. He went on to say that the Government had taken note of those words and had considered the whole subject; and he concluded by stating that the Government had come to a decision to abolish two Departments and to terminate the separate existence of the Department of Overseas Trade. I cannot help thinking that this decision was arrived at rather hastily at a moment just before the Budget speech was to be delivered, because, from the instant and clamorous opposition that arose to that proposal from the commercial community, it is perfectly obvious that the Government could not have canvassed (if I may use that word) that community, which, after all, is most directly interested and affected by this suggested action, or have ascertained what their views were before they came to a decision.

I think that, in order to place the matter more clearly before the House, it is necessary to review the circumstances which led up to the formation of this Department. I shall do so as briefly as I can, but the review is connected with the case that I wish to make. Before the War there was a constant demand for alteration in our commercial representation overseas and a demand was made that a Ministry of Commerce should be set up which should take under its wings all the various functions performed by these overseas officers. It was not possible to accede to that. War broke out. After the War conditions remained the same, but from the point of view of commerce there were greater difficulties. There was great change in Europe. Europe had been re-apportioned, economic conditions had changed, there was much more severe competition, and taxation was overloading everyone. Consequently a fresh clamour arose on the part of the commercial community for an alteration and the demand was once more made for the establishment of a Ministry of Commerce.

The Coalition Government of the day were not prepared to accede to that request, but they set up a Committee, under the presidency of a member of this House, Lord Faringdon. That Committee recommended the establishment of an Overseas Trade Department as a compromise upon the suggestion for the establishment of a Ministry of Commerce. That Department was established under the leadership of a Parliamentary Secretary, who was responsible both to the Foreign Office and to the Overseas Trade Department. In a very short time the traders of this country found that at last a Department had been established which was filling the rôle which they had advocated for so long. A slump in trade occurred and the Geddes "Axe" Committee was set up. Naturally, that Committee recommended that the Overseas Trade Department should be abolished. There was an instant cry from all those interested and the Government appointed another Committee, this time under the able Chairmanship of the noble and learned Viscount, Lord Cave, the Lord Chancellor, who recommended that the Department should be maintained. The Government accepted that recommendation and the Department remained in spite of the recommendations of the Geddes Committee.

But there is an interesting thing to note in connection with that. At that time the present Prime Minister, Mr. Stanley Baldwin, and the President of the Board of Trade, Sir Philip Cunliffe-Lister, were respectively President of the Board of Trade and Parliamentary Secretary of the Overseas Trade Department, and we know from their utterances and from their actions at that time that they were in full sympathy with the maintenance of the Department and that it was largely due to the active part which they took at that time that this Department was maintained, and maintained on the basis upon which it exists to-day. I can only believe that the Chancellor of the Exchequer, in his earnest pursuit of economy—a pursuit with which I have the greatest sympathy—flung a Daniel to the lions, and I hope that, like Daniel, the Department will not be devoured but will be returned to us on April 11, made use of the following sound and whole of limb.

That may be as may be. What we have to consider to-day is what would happen if that Department were terminated in its separate existence. First of all we have the chambers of commerce throughout the country passing resolutions against the termination of the Department. I think that it would be sufficient if I were to quote only one of these, and I will quote from a resolution passed by the Association of British Chambers of Commerce at its annual general meeting on May 23 last. In the course of that resolution, dealing with this particular subject, it says:— The Association is not clear what this proposal may imply, but it would urge upon His Majesty's Government that it is very important that the valuable services previously rendered by the Department should continue to be adequately performed and trusts that it is not proposed to revert to the dual system by which two independent Departments of the Government were both dealing with questions affecting assistance to trade and which proved so unsatisfactory before the creation of the Department of Overseas Trade. Other resolutions of a similar nature have been passed, and in another place we have the Industrial Committee doing all they can to impress upon the Government, with all the knowledge they possess of the position and of the conditions, that this disastrous step shall not be taken.

With some little knowledge of the City, I venture to say that if you were to take a plebiscite of the merchants and traders engaged in international trade in the City, and in this country generally, you would find that they would plump by a large majority for the retention of the Department upon its existing basis, and that they would do this on the ground that the information which they have received from the Department has been of the most practical value, and, furthermore, that the accessibility of the officials of that Department has been, and is, a very important factor in obtaining information expeditiously and in the form in which it is required.

What is the procedure, to-day, under which that Department is adminstered and under which information is obtained? The Department has a staff of officials in London and overseas, in Europe and other foreign countries, it has responsible to it thirty-two or thirty-three commercial secretaries, who are attached to the various Legations or Embassies, as the case may be, and in addition some 375 consular officers and thirteen trade commissioners, who are living and working in the different Dominions and, in some cases, Crown Colonies. When a trader desires any information to-day upon a matter of business in any one of these places he either goes or writes to the Department in London, and that Department has now, after three or four years, accumulated a large store of information and knowledge, and is able, more often than not, to reply at once and give the information required. On the other hand, if the information is not available at once it communicates with its officials in the particular place, and with the least delay possible the information is returned to this country and is imparted to the trader concerned. Again, it may happen that the trader wishes to visit the place in connection with that business. He is given letters of introduction to the commercial secretary, consular officer, trade commissioner, whoever it may be; he arrives there, and he is immediately put in touch with the problems with which he is associated, or the people whom he desires to know, and in a few hours he probably accomplishes more business than he was able to do in a week or a fortnight or three weeks before.

That is very important, and what is just as important is that these officials, on their side, to-day feel that they have a Department which understands, their needs. They have a Department which is under a unified control. Formerly they applied perhaps on a particular question to the Foreign Office and the Foreign Office had to refer to the Board of Trade. On the other hand, if they applied to the Board of Trade the Board of Trade had to refer to the Foreign Office. I venture to say, with some knowledge of these questions, that there was a good deal of inter-departmental jealousy and friction between these two Departments which did not lead to the efficiency of the service. What have we to-day? A Department with a single Parliamentary Secretary at the head, who looks to the Foreign Office on the one side and the Board of Trade on the other, gets his advice or assistance from whichever Department is most helpful to him at the moment, and is regarded—and this is most important—with the most friendly eye by both the Foreign Office and the Board of Trade. In fact, the Overseas Trade Department forms a bridge between the Foreign Office and the Board of Trade. It is a bridge which, if I may put it so, is flexible, and its flexibility is its greatest strength.

I have had a considerable experience of the working of the Overseas Trade Department during the past three or four years, not only in this country but abroad, in Europe, and I have observed the working in both places. It has on numerous occasions been most helpful to me and some of those with whom I am associated, and I should like to take this opportunity publicly to pay a tribute to the work done by that Department and by its present head, and also to those who are doing its work overseas. All those with whom I have come in contact overseas are men who are to-day alive to the interests of British trade and the interests of British traders. And I have never on any occasion found anything but the greatest assistance and the greatest help when I have gone out to enlist it.

And there is another point. It is this: if it is proposed to terminate the separate existence of this Department, to which Department are you going to attach it? Are you going to attach it to the Foreign Office, or are you going to attach it to the Board of Trade? If you attach it to the Board of Trade, then there are some 300 or so officials who are to-day attached to the Foreign Office and to whom great prestige is added in the discharge of their duties abroad because they are attached to the Foreign Office. My experience in travelling in those countries has taught me that the Board of Trade is little known there, whereas the Foreign Office is constantly in their eye. Therefore if you make these officials—I am not talking of the trade commissioners at the moment—responsible to the Board of Trade, without any disrespect to the Board of Trade I say that they will immediately lose prestige in the eyes of the countries where they are representing our interests. To-day, in Europe, every diplomatic representative of foreign Powers is a commerce-getter, and I am glad to think that our own diplomatic representatives have acquired a similar outlook upon their duties. If you pass the Department over to the Board of Trade the officials of that Department by losing prestige will immediately be less helpful in the countries where they are representing our commercial interests. If you terminate its separate existence the only thing is to go back to the conditions which prevailed before the War, that is, to have half your officials with the Foreign Office and the trade commissioners with the Board of Trade. You thus return to a position which is admitted on all sides, from every part of the country, to be one which cannot be maintained.

What is the cost of this Department to-day? I find on looking at the Estimates that the cost of the London end is £130,000 in round figures. The cost of the overseas officials and their expenses is in the neighbourhood of £650,000; approximately a total of £800,000. Our export trade to-day, including re-exports, is roughly £800,000,000; that is, the cost of this Department is one-tenth of one per cent. of the whole of our export trade. Furthermore, it is one-tenth of one per cent. of our Expenditure, because our Expenditure in round figures is £800,000,000 per annum. I am just as much a believer in economy as any one of your Lordships, but there are occasions when it is unwise to economise in a certain direction. This is an occasion on which, in my humble opinion, it would be very unwise to do so. The traders of this country produce the revenue of this country and, unless they can have proper assistance and help in obtaining trade under the very difficult conditions which exist to-day, revenue is bound to suffer and, if revenue suffers, then the collection of taxes suffers as well. Consequently, I cannot think that in any case it would be proposed to cut down any of the services now performed by the officials overseas. If that is so, then we come back to the expenditure in London, which is about £130,000 a year. It is not proposed to end the Department altogether, but only to terminate its separate existence and therefore it will not be possible to save all that £130,000. If you terminate its separate existence and add it to another Department you will still have to retain many of the present staff, and, if you save £20,000 or £30,000 a year or, as somebody put it, the salary of the Parliamentary Secretary to the Department and his private secre- tary, you probably will not save very much more.

I suggest that the arguments which I have put forward are so strong that the Government ought very seriously to consider them before they go further in this rash step. I would ask them, when they are considering the matter, whether they would consider a suggestion to charge a scale of fees to the traders who are using this Department. It is quite usual, and it has been the custom for many years, to charge Consular fees and traders understand that thoroughly. I do not believe that there is a single trader in the country who, if asked to pay a reasonable fee for the very valuable assistance and advice that he is getting, would decline to do so. I know it may be difficult to set up such a scale of fees, but where there is good will and co-operation there is always a way. This might be a method, whilst maintaining the Department on its present basis and maintaining its separate existence, of reducing its cost to the country while placing the charges for it more directly upon the shoulders of those who are using it.

It might be necessary to set up a small Committee to consider that question and perhaps the Government at the same time might ask that Committee to take evidence from the trading community in this country as to their feeling upon the proposal before us. I predict that, if the Government in their wisdom—or I would say unwisdom—go forward with this proposal and terminate the separate existence of this Department, very few years will elapse before this Government or the next Government will have to reverse that policy and to reestablish that Department again upon the basis on which it exists to-day. I hope that these remarks, which may have seemed rather long, will be received by the Government, not as delivered in any spirit of opposition, but only with a desire of placing before the Government the case as it has appeared to me after considerable experience of that Department and its operations.

Moved to resolve, That this House views with concern the proposal of His Majesty's Government to terminate the separate existence of the Overseas Trade Department and urges the Government to reconsider that proposal, and to retain that Department as at present constituted, whilst at the same time adopting such measures as may be possible for the reduction of both the Departmental and overseas staffs in order to effect the required economy.—(Viscount Elibank.)


My Lords, may I say at the outset how glad I am to welcome for the first time in your Lordships' House my noble friend as a contributor to our debates. He and I are old political friends. We have for many years worked together in pushing forward causes in which we were both interested. I am very glad to be the vehicle for conveying to my noble friend our congratulations upon the admirable speech which he has just delivered. I was specially glad to welcome the closing words of his speech in which he assured us that his observations were not made in any spirit of hostility to the Government but in order that he might have the opportunity, which he was thoroughly qualified to take, of laying before us the strong view which he and others for whom he speaks take of the proposed abolition of this Department.

We feel to the full the cogency of most of what he has put before us. We do not suggest for a moment that this Department is a useless Department. I agree with my noble friend that, in the pursuit of economy, a mistake may be made if you injure machinery which is really of great value. If agree that there is a false economy which must be avoided. I would say, however, that in the pursuit of that very difficult object, public economy, we want all the sympathy and all the co-operation which it is possible for your Lordships and the other House to give us. We do not pretend for a moment that economy is easy or that you can economise without a certain amount of loss on the other side. No doubt there are economies to be made, that is to say, in the abolition of pure waste, of which even in the best regulated countries there are examples, but if you intend to make full economy you must go further than that.

As regards the Department of Overseas Trade, great representations have been made to His Majesty's Government from very influential quarters asking us to reconsider the decision which was announced by my right hon. friend in his Budget speech. I need not say that we should be the last Government to desire to do anything to injure British trade. We recognise as much as anybody else can possibly recognise that if we are once more to be a wealthy country it can only be by means of industry and trade, and therefore anything which seriously injures trade would be contrary to the objects that we hold before us. This particular Department undoubtedly has received a good deal of favour from the trading community. It has the opportunity of disseminating a great deal of most valuable knowledge on trade subjects and it is accessible to traders in this country and to our agents abroad. That is very valuable. It has stimulated the consular service into being more vigorous in the pursuit of British trade. May I say to my noble friend that all this is under consideration? I do not want him to think that any of the contentions he has put before us will be ignored, but it would be premature if I were, at this moment, to announce any departure from the policy which has been laid before the country.

Do let us remember how vital to us economy is. Expenditure can be of three kinds. It can be necessary expenditure—that is to say, expenditure without which the affairs of the country cannot be carried on. It can be wasteful expenditure, which ought to be abolished as soon as we can lay hands upon it. Between those two extremes, however, there is a large area of expenditure which, though useful, is not necessary. In the pursuit of economy it will not be sufficient merely to abolish that which is wasteful. If you are going to make anything like a considerable economy you must infringe upon the central area to some extent; you must touch those things which, though useful, are not absolutely necessary. It is a very difficult and delicate matter when you enter upon that area to determine how far you can go. Obviously you must be very careful in every step you take. It must be a question of degree. It is precisely in finding this very difficult path that we ask for the co-operation of your Lordships.

I am aware that my noble friend said, and I am sure said truly, that he was in favour of economy. I know he will forgive me for saying that I have heard so many people say they are in favour of economy who, when it comes to the point, are not able to suggest any particular direction for economy to take, that I do not welcome his assurance with the same enthusiasm which I might have done a short time ago. I am sure my noble friend is in favour of economy, but we must be prepared to pay the price of economy. I should like to give your your Lordships an example of what I mean by expenditure which is useful but not necessary. In order to avoid any difficulties that my words might involve I will take an expenditure which is not in existence at this moment, but which might be in existence. Let me take the expenditure which would be necessary to raise the school age. For many years I have been in favour, personally, of raising the school age if it could be done upon reasonable terms. I believe it is most important in the true interest of this country that the school age should be raised sooner or later, but I am quite sure we could not afford it at this moment I am not sure that public opinion is ready for it, but I will rely on the other argument that we could not afford it at this moment. That is an illustration of what I mean by expenditure which is very useful (in this particular in the highest degree useful) but which is not necessary, and until the country is very much better off than it is we shall not be able—at least that is what we think upon this side of the House—to undertake expenditure of that description.

That illustrates what I am trying to contend, that we must be prepared to touch objects which in many respects would be thoroughly approved of by your Lordships but which in the present state of our finances the country cannot afford. I do not want to apply my parable to the Overseas Trade Department. I quite agree that my noble friend has established a very strong case for it, and what he has said, and what others have said, on the subject will be considered by the Government. The Government are making every effort to economise and the policy they have announced to Parliament includes amongst its provisions the abolition of unnecessary Departments, and whatever may be decided ultimately about this particular Department we are not prepared to recede from the policy which we have announced.


My Lords, the statement of the noble Marquess is in one respect one of extreme interest. It is perfectly clear from what he has said that the Government have no real defence to offer of the decision which was taken a few weeks ago to abolish this Department. The noble Marquess scarcely attempted any such defence. But the point of importance which it is, I think, highly desirable to get quite clear is this. The noble Marquess on several occasions in the course of his speech referred to the matter as being now under consideration. With regard to the decision which was announced by the Prime Minister only a few weeks ago—quite definitely announced—that this Department together with two others would be abolished—are we now to understand, so far as this particular Department is concerned, that that definite statement of the Prime Minister does not hold good and that this Department is at any rate temporarily reprieved and is at the stage of being under consideration as to whether it is to be abolished?


I am much obliged to the noble Lord for giving me an opportunity of explaining rather more clearly what is under consideration. What the Government are considering are the difficulties in carrying out the announcement of the Prime Minister to which my noble friend in his speech called attention. The Government do not recede from the policy of abolishing the surplus Departments, but they are considering all the circumstances attaching to the question of readjustment of functions and so on, particularly in respect of the Department of Overseas Trade.


Obviously the Government must be considering the question of the ultimate destination of these Departments if they are to be abolished. If I may say so with respect to the noble Marquess, that really does not carry us much further. I think—I am within the recollection of the House—that the impression which the noble Marquess gave in his speech was that the decision as regards this Department was under consideration. I now understand that that is not the case and that the decision holds good.


May I intervene for one moment? I think the noble Lord is talking about abolishing the Department. The Chancellor of the Exchequer stated that the separate existence of the Department would be terminated. The other two Departments were to be abolished.


I am obliged to the noble Viscount for his intervention, but again with respect I do not think it helps us much. I used the word "abolish" because the noble Marquess used it. We all of us know that the Department is not to be abolished. Neither is the Ministry of Transport to be abolished in the sense that no officials will be left to carry on the work of that Ministry. Neither is the Mines Department to be abolished in the sense that no officials will be left to carry on the work of that Department. But so far as the statement of the Chancellor of the Exchequer goes—it was the statement of the Chancellor of the Exchequer, not of the Prime Minister, but he used the Prime Minister's authority when making it—


That correction ought to be made. I am obliged to the noble Lord.


The Chancellor of the Exchequer spoke with the Prime Minister's authority. It comes to the same thing. I presume the Government are all agreed about it, at least that is usual. His statement as regards all three Departments was that they were all to be done away with so far as their separate existence was concerned, and something was to be done—we do not know what—so that in some way their functions would be carried on. What is the motive behind all this? I should like to try to get the matter a little more definite. Of course this decision arose out of what has been called the economy campaign. That being so I think it is highly pertinent to ask—because there has never been any information given about this at all either in another place or here, not a syllable has been said about it—what amount of money is, as a matter of fact, going to be saved by terminating the separate existence of this Department. Seeing that the alleged object is economy, that really is the test which we ought to apply. What is the amount which is going to be saved? No answer has been given. The noble Marquess did not attempt to answer it. He never used a single figure in the whole of his speech relating either to this Department or to the total National Expenditure.

It is well known that this decision of the Government was a hurried decision taken really in response to Press clamour. That is what it was. We all know that perfectly well. The noble Marquess says this Government would not do anything to injure trade, that the last thing in their minds is to do anything to injure trade, but I have pointed out on repeated occasions ways in which they have injured trade. Another step they have taken which has injured trade—taken only a few days ago, again in response to Press clamour—was to sever relations with Russia. As regards the work of this Department, that is highly important and the noble Viscount who opened this debate covered a great deal of ground, if I may be permitted to say so, most admirably in that regard. There were one or two points, however, which he did not touch upon and I should like to refer to them. The Overseas Trade Department is really the only publicity department for our trade that we have. It gathers, as the noble Viscount said, economic information from all over the world, reports about conditions in other countries and reports about markets in different parts of the world.

These things are of the greatest value, but, in addition, this Department has organised trade fairs, it has had to do—and very important it is—with the question of Government activities in relation to exhibitions, and it also had to transact the work of export credits so far as the Government are concerned. Now, I say deliberately that so far as these activities are concerned we do not want less but more of them. They pay for themselves, and more than pay for themselves. The noble Marquess used the words "false economy." This proposed step is worse than false economy, it is bogus economy. There is no economy in it at all. If the separate existence of this Department is terminated, if its functions go back to the other two Departments, or whatever may happen, if any money is saved by that—and it can be very little—it will be done at a cost which is greater than anything which can be saved so far as the national balance sheet is concerned. There will be, as a matter of fact, as a result of this operation, a loss. Let me take another point about which nothing at all has been said. The Overseas Trade Department, though it is really not its main work, has to do work in connection with emigration to our Dominions and so forth, a most important matter. What is to happen to that work? That cannot go back to the Board of Trade or the Foreign Office.


indicated dissent.


Surely I am right in saying it is in part the work of the Overseas Trade Department?


No, it belongs to the Dominions Department and partially to the Colonial Office.


If I am misinformed I withdraw that. The point I was going to make was that the Colonial Office is overworked and it could not be put back there, although the ultimate authority rests with the Colonial Office. The work of the Overseas Trade Department is highly technical. What we want to know is whether it is to go back to the Foreign Office and the Board of Trade. The main portion of the work must go back, as it seems to me, to the Board of Trade. I really do not think it can go anywhere else. But no one acquainted with the facts believes that the work can be as well done by the Board of Trade as it has been done by the Overseas Trade Department. That really cannot happen. I do not wish to say anything disrespectful of the Board of Trade, though to be candid it is not the most efficient of Government Departments. I think it is plain that there would be in many ways considerable disadvantage in returning the major part of the work of this Department to the Board of Trade. There would be loss of specific direction in controlling affairs and also undoubtedly there would be, in many important decisions, delay. There are great advantages in having a separate Department from the point of view of swift decisions, and swift decision in matters of commerce is often more important than anything else. The noble Viscount has referred to the fact that the officials are at the present time very accessible, probably more accessible than the officials would be at the Board of Trade. That also is important. Decisions can be taken more quickly when you have a Department presided over by a Minister who has earned encomiums in another place and by a civil servant of great distinction, with other able civil servants, and, frankly, I think that it would be a great pity that they should be moved to another Department.

Looking at the finance of the matter, the noble Viscount who introduced this Motion gave your Lordships certain figures. He said that the total cost of the Department came, broadly, to £800,000. I do not quite follow those figures. He told us that the cost of the London office was £130,000. The figure given in the latest available returns that have been brought to my notice for the cost of this Department was £377,000.


May I say that the figure of £800,000 included the consular figures as well, and that a number of the consular officers' salaries appear on the Foreign Office Estimates?


The point that I am really arriving at—and there will be no difference of opinion about it; I only want to get at the facts—is that the cost of the London office is about £130,000, and my submission is that the area for economy, if there be any, lies in that £130,000. You are surely not going to cut down your Consular Services or your officials overseas. No real economy is possible there. Accordingly the possible saving is obviously extremely small, and that is the pertinent point of the whole matter. The same consideration applies—though I cannot go into that question to-day—to the Mines Department and the Ministry of Transport.

The noble Marquess touched upon the general question of economy, and I think I shall be in order if I say a few words on that general question before I sit down. I wish to say that, in this matter of searching round to save money, the Government are on the wrong tack. They have not realised the fundamental factors of the problem. I have pointed out before, it has been stated again and again and is in their own White Paper, that out of a total Expenditure of £830,000,000 about £650,000,000 offers, under existing circumstances, practically no scope for retrenchment, and that the area where perhaps you might retrench, and where in some respects I think that you could retrench, covers about £160,000,000. In the debate that has taken place to-day and in the debate that was initiated by the noble Earl, Lord Midleton, noble Lords opposite seemed to be interested only in one form of expenditure—namely, expenditure on the Civil Service. That is where I think that they make such a great mistake. The total cost of the Civil Service proper in this country is about £20,000,000 a year, which includes the cost of the Revenue and Customs and Excise Departments, which comes to about £10,000,000.

You are not going to save on that £10,000,000, because, as one of the great authorities in these matters not long ago pointed out, any retrenchment there would be more than counterbalanced by loss of revenue. The result is that all that you have is a gross sum of some £10,000,000, which includes the cost of the Overseas Trade Department. That £10,000,000 has been "axed" two or three times, and obviously the most feasible retrenchments have already been made to an extent which, in my view, actually interferes with efficiency. That was my experience at the Colonial Office, as I said when I spoke on this matter before. I gave high praise to everybody there. They are all working admirably and doing their best in every way, but the truth is that there are not enough of them and that in some respects the office is under-staffed. That is what I meant by saying that these things are not merely false economy but that some of them are bogus economy.

The real direction in which retrenchment could be made, and ought to be made, is in the cost of armaments, which amounts to £115,000,000 out of the £160,000,000. The Government say that they cannot do this. The noble Marquess himself said so, and I can quote his words if he is sceptical about it. It is true that they are taking part in the Naval Conference, and I hope very much that something will come of it and that the proposal made by the Labour Party in another place will be put forward at Geneva. That proposal was afterwards approved—I do not say this because the Labour Party made it—by no less an authority than the noble and gallant Earl, Lord Jellicoe. It is here, in my view, that economies can best be effected. The noble Marquess seems to think of little or nothing but the Civil Service. If retrenchment can be wisely achieved in the Civil Service, let it be done, but obviously the scope is extremely limited.

When the matter was last discussed, I pointed to the great charge that was made by the Bank of England for working the Government Debt, and I put figures before your Lordships' House which, I think, called for some comment at any rate. But no reply whatever was made from the Government Bench, although what I had said was fully justified by the statement made in another place a few days later. The noble Marquess made no reply and did not even say that the matter would be looked into. He thinks only of the Civil Service, and he tried to counter my remarks by talking about the Labour Party's attitude to economy. I will not go into that point to-day, but I will say three things in conclusion: (1), the Labour Party, when they were in office, reduced Expenditure; (2), they did not break their promises in regard to economy; and (3), they did not attempt to deceive the country by making people believe that something was being done in respect of economy when, as a matter of fact, nothing was being done. That is the principal charge that I bring in regard to this proposal—that it is a make-believe and that there is no real economy in it; and that this is so was, I think, abundantly evidenced by the speech from the Government Bench in defence of the proposal.


My Lords, perhaps your Lordships will allow me to say a few words upon this subject. Let me begin by congratulating the noble Viscount, Lord Elibank, upon the very admirable, clear and practical speech that he delivered. He spoke with great knowledge of the subject, and, though I gather that he has had no conversation with the body with which I am particularly associated, the Association of British Chambers of Commerce, the views of every member of that Association could not have been stated more clearly than he has stated them to-day. I am also pleased to think that the noble Marquess received his suggestion in a very sympathetic way. I do not think he had the smallest intention of suggesting that the matter would not receive further consideration. He admitted that the Department was of great value and he said that the matter was still being considered.

On that point I can quote the President of the Board of Trade himself in support of the statement of the noble Marquess, because I had the honour of going to him with an important deputation on this subject only a few days ago and, at the conclusion of his observations, though he did not enlarge upon the subject himself, he said that the Prime Minister was anxious that the Treasury and the Foreign Office, as well as the Board of Trade, should hear the views that the Association had put before the Government, and that it was unnecessary to say that they would receive the careful consideration of the Government. This shows that the door is not closed in any way. I shall not attempt to go into details in this matter for they are all before the House: they have been published and are available for the information of the noble Marquess, who will find an excellent agreed Report.


I have read it.


I notice that the noble Marquess showed great sympathy with the considerations put before him, and I do not think he suggested, or intended to suggest, that the matter was closed. I had an opportunity at the end of the proceedings to which I have referred to say a few words and I asked whether I was to understand that the President was going to consider the matter. The deputation was coming to an end, and I wished to know whether we were to understand that the Minister was going to report to the Government for their consideration. He said that was the case. I said that the Chambers of Commerce had pressed for a Ministry of Commerce for many years, and had been given the Department of Overseas Trade, which was not as much as they would have liked, but which had been very successful, and in respect of the work of which there had been no complaints. I said that the Department was in its infancy, and that it would be a great mistake not to give it a longer term of office in which to carry on the good work it had been doing.

The excellence of that work was referred to and confirmed at the annual meeting, at which there were representatives from all parts of the country—England, Scotland and Ireland—and a unanimous vote was given in support of the Department and its work. I may say that this independent Ministry has been urged upon successive Governments for thirty or forty years, and any decision to go back to the old unsatisfactory system, or lack of system, which prevailed before the War, would, in our opinion, be a retrograde step. That is what we want to impress upon the Government. Further, I would like to ask the noble Marquess, Lord Salisbury, whether he is aware of the existence of a very important Committee, presided over by Sir Arthur Balfour, which is doing great work. Has that Committee made any Report upon this particular branch of organisation?


I am afraid I cannot answer that.


I believe the Report of that Committee has not been issued yet, but I should think that such a Committee, consisting of business men, must have dealt with this subject in some way or other. If it has dealt with it perhaps the noble Marquess might give me a little sop of comfort by saying that a recommendation coming from such a body would not only receive attention, but very serious attention, with every desire to carry out the views of such eminent business men. I may say this in regard to the Association of Chambers of Commerce, that we never allow Party feeling to be introduced into our discussions, and therefore such advice as we may give may be deemed to be even better than that which the Government might get from my noble friend Lord Arnold, because it is independent of Party feeling.

Here you have tried an experiment. Business men say that it has been a great success, and from the point of view of economy we are of opinion that there will be no real economy if the Government adhere to their expressed intention and terminate the separate existence of this Department. Before this Department came into existence there was always discord between the Foreign Office and the Board of Trade. This was a bridge of peace, and as such it has been successful. The trial has been successful and the Chambers of Commerce consider that it ought to be continued a little longer, in order to see definitely how it works. It must be remembered that we are living in a time of very bad trade. There never was a period in the history of this country when our overseas trade needed looking after more than it does to-day, and this is the moment chosen by the Government to destroy a Department which is of real help to trade and therefore indirectly of help to the Treasury. The present, with its trade depression, is in my opinion not a fair time in which to judge of the success or otherwise of a new Department. I was very glad to hear from the noble Marquess that he wants our sympathy and consideration. I think I can promise him that, and I think he will agree with me that I am justified in thinking that the words uttered by the President of the Board of Trade, the other day, were not intended to convey that the matter was closed, but were intended to convey that the Government are really anxious to know what are the views of business men upon this subject.


My Lords, I regret that it discloses a point of difference between my noble friend and myself, but I cannot deny myself the pleasure of coming to the support of the noble Marquess opposite. I think it is important that we should make, it plain that in wishing to end the independent existence of this Department we are in no way attacking the work which has been done. It has been very good work indeed, and although I have not the pleasure of the acquaintance of Mr. Samuel, even by sight, I have been able to assure myself as to the fact that he has been doing excellent work in the Department. There fore this is no sort of attack upon the work of the Department, but really a question of efficiency. I think it is certain that in a great, many cases the existence of a large number of small, separate Departments is to be deprecated. Very often a number of small, separate Departments are less capable of doing good work than one big Department, and I can quite imagine that the Overseas Department, working in the future under the Board of Trade, will be able to exercise more influence in the future than it has done in the past.

I believe that the amalgamation of some of these small Departments will really be a step in the direction of efficiency. I hope that when re-organisation takes place the Department will be placed under the same roof as the Board of Trade. If it is maintained in a separate place, obviously we shall be paying extra rent for it, and it will be greatly to the advantage of efficient working if it is placed under the same roof as the Board of Trade itself. We shall get economy and also efficiency. I do not think that there is any subject too small for economy to-day. Some noble Lords believe that we are well able to spend this money, but if it is repeated 100 or 200 times it becomes difficult to arrive at any economy. What we want is economy in even the smallest items of expenditure, and in every direction where it is possible to save even a little. A little money saved in a hundred directions is going to effect a big economy in the end, and it is because they are trying to bring about such economy that the Government have my support.


My Lords, I only rise to refer to the description which the noble Marquess gave of expenditure as either necessary or unnecessary. Surely there is quite another point of view from which to look at expenditure, and that is as to whether it is productive or unproductive expenditure. This country lends to the Dominions many millions every year for the purpose of productive expenditure, and I believe that not one penny piece of that would go to those Dominions if it were not guaranteed that the money was going to be used productively. The noble Viscount who introduced this Motion emphasised the fact that this Department was of such great use to the commercial community that it actually produced trade, and therefore produced revenue. From that point of view I think the Government should think twice before interfering with the activities of this Department. The noble Marquess said he thought it was premature to ask the Government what their intentions were with regard to this matter. It will be interesting to know from the noble Marquess when he thinks the matter will have to be brought forward.


There will have to be legislation.


My Lords, a noble Lord said to me the other day that he thought that if there were more Divisions in the House of Lords it would be a livelier place. He spoke as an old member of the House of Commons, and he asked me whether I proposed to divide on this Motion. He said he hoped I would, because then he would have the opportunity of voting against it. I do not propose to afford him that pleasure, because, after the speech of the noble Marquess, I am inclined to view the attitude of the Government as one of friendly outlook towards the Motion which has been put forward to-day. I do not read the same interpretation into the remarks of the noble Marquess as has been placed upon them by the noble Earl, Lord Beauchamp. It is for that reason that I believe this debate will be of great assistance to the Government in clarifying their ideas on the subject, and I hope that at the same time it will lead them to come to a somewhat different conclusion from that at which they have arrived already. It is for that reason that I propose to withdraw the Motion and not go to a Division.

Motion, by leave, withdrawn.