Lords Sitting of 10 May 1927

Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.

INDIAN CHURCH BILL. [H.L.]
THE SECRETARY OF STATE FOR INDIA (THE EARL OF BIRKENHEAD): My Lords, I ask leave to introduce a Bill to make provision incidental to and consequential on the dissolution of the legal union between the Church of England and the Church of England in India.
Moved, That the Bill be now read 1a.—(The Earl of Birkenhead.)
On Question, Bill read 1a, and to be printed.

ABERDARE URBAN DISTRICT COUNCIL BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.
GOVERNMENT OF INDIA (INDIAN NAVY) BILL.
House in Committee (according to Order): Bill reported without amendment.

NATIONAL EXPENDITURE.
THE EARL OF MIDLETON THE EARL OF MIDLETON rose to ask His Majesty's Government What steps are being taken in pursuance of the Resolution of this House of March 22 last in relation to economy in Public Expenditure. The noble Earl said: My Lords, I should not trouble your Lordships with any remarks in putting this Question to the Government with regard to the debate which took place in this House nearly two months ago, but for a great deal that has happened in the interval which bears upon the Resolution we adopted. We have had not merely the ingenious and illuminating Budget speech of the Chancellor of the Exchequer, but also the announcement in that speech with regard to one of the points pressed upon your Lordships on that occasion, notably by my noble friend, Lord Oxford—namely,

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that new Departments established since the War should be cut down in the cause of economy—that three of those Departments would be done away with.
I could not help congratulating myself on the balm given to the soul of my noble friend Lord Salisbury, because the abolition of one of those Departments indicates the exact nature of the influence which this House has tried to exert upon Expenditure. Some time ago when the Coalition Government proposed the establishment of the Transport Department, my noble friend Lord Salisbury headed a large body of Peers, not in opposition but in an appeal at all events to the better instincts of the Government of the day, and he only differed from myself in regard to the Transport Department in that his language with regard to it was much more decided and incisive than that which I was able to employ. We called upon a large body of Peers to oppose the measure, and we should undoubtedly have thrown it out had it not been that Lord Curzon, who was then Leader of your Lordships' House, rose in his place and assured us that, so great was the emergency, the Government would not hesitate even to go to the country were the Bill rejected by the House of Lords. Here we have the fact that after four or five years experience it is found by the Government of the day that the Transport Department, which has cost the country millions of money, should be abolished, with the exception of the Road Board.
If I were to trouble the House with remarks upon the other Departments which are to be abolished I have not the least doubt I could make out a similar case. All I desire to press upon my noble friend now is not his own prescience in the matter, but the assurance that these costly blunders are not appreciated by the country, and are not viewed with equanimity. Since the debate in this House I have received a large number of resolutions and letters from all parts of the country, denouncing in the strongest terms the extravagances which are going on and urging your Lordships' House to take every opportunity in its power to lessen those extravagances.
I hope that the Government will realise that this is a really serious matter
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from the point of view of their own personal popularity. I know it is said that economy is unpopular. The enormous taxation that we are now bearing is infinitely more unpopular, and I would suggest that there is nothing which has contributed more to the present position of Mr. Lloyd George than the fact, as I would say even if he were present here, that there is no man in my recollection in public life who had less sense of public economy. Great as are his talents and great as is the amount of backing which he enjoys, he has but an exiguous following in the House of Commons. The one point I would venture to make with regard to his position is the fault into which I fear this Government will fall. Quiet men in the country are determined that this reign of extravagance shall be brought to an end.
I should like to make three proposals to the Government, with all of which, I should hope I might expect the concurrence of my noble friend. The first is without regard specially to any of the new Departments which have been established, the new Services which have been voted by Parliament, that there is a very large surplus of highly paid posts, of posts more highly paid at present than the same posts were paid in 1914, and that that surplus requires to be reconsidered by the Government and to be diminished. Those posts should be scheduled and should not be filled up on the next occasion that they are vacated. The second point is one to which I also ask for my noble friend's concurrence and it is a point on which I think all the business men in your Lordships' House will agree. It is that no attempt is being made to stop absolutely useless work. I am not in the least endeavouring either to prove that our Civil Service is apathetic or that civil servants do not discharge their duties with fair zeal and assiduity. What I submit is that the whole system of the work they have to do requires to be considered from top to bottom.
During the last debate my noble friend quoted—and I was unable to answer him because I had exhausted my right of speaking—Sir Alan Anderson's Report. He said that Sir Alan Anderson, Sir Herbert Lawrence and one other colleague made a complete examination of the

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public Departments. But that was not so at all. Not only was their examination not complete but their reference would not have permitted it. They were asked to decide whether the pay was adequate or whether it was excessive. They were asked to decide whether or not full work was given for the pay as far as they could see. Let me read two paragraphs from that Report. They were convinced
"that it was impossible to press home this inquiry so far as to cut down work or even effectively to examine the ground unless the full authority of Parliament was applied."
So they did not attempt it.
They speak also of the great accretions of unnecessary work. The Chancellor of the Exchequer, I think, treats this subject more lightly than we have a right to expect. He naturally thinks in tens of millions, with the enormous charge which he has to meet. But the sum involved is not inconsiderable. The present pay of the civil servants in this country amounts to £75,000,000. Sir Alan Anderson says:—
"We are full of respect for the work of civil servants but in a business which expends £75,000,000 per annum in pay, and where the pay roll has increased in nine years by £44,000,000"—
which is more than 100 per cent.—
"there must be great accretions of unnecessary work."
I want the Government to give us a promise that they will deal with these accretions of unnecessary work. We could not ask for a better principle than that contained in Sir Alan Anderson's proposal. What happens to a commercial firm if they find that their business is not increasing, their returns are not increasing, and their staff is continually growing larger? Sir Alan Anderson says:—
"They instruct the executive to survey the duties undertaken by the company and to recommend which of these duties, choosing preferably the most expensive, can be closed down without danger to the whole."
I think that ought to be undertaken at once. And it can only be undertaken in one way, for reasons that I will give.
The duties performed in any public office, when you come to take the amount which requires to be cut down, fall under three heads. The first is under the head of Returns ordered by Parliament; the second is investigations, very intricate at
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times, which, at some time or other, have been ordered by the Treasury; the third is business which existing or previous Secretaries of State have ordered to be undertaken as matters of policy. With regard to the first head, I can assure your Lordships that many of these Returns ordered by Parliament are of forty, sixty, eightly, and one hundred years standing. I will not say that they have never been reviewed, but they have never been effectively reduced. With regard to the investigations ordered by the Treasury, I have no doubt that the Treasury themselves would forgo them if they were brought to their notice. Nobody has any idea how far the system can go of carrying on work ordered for quite a different purpose, and now entirely unnecessary, unless he has served in a public office.
I remember having a striking little fact brought to my notice once when I was trying to find out the facts in reference to a medical report that the health of the Guards quartered in London was very much impaired by the amount of night sentry duty. I asked the Commander-in-Chief to make an investigation to see whether all these sentries were really necessary for the proper protection of the Sovereign, and whether some did not date from a period when buildings had to be protected for some special purpose. When he brought me the report—which, by the way, showed a very large reduction—there came to my notice from the Intelligence Department a fact which showed that we were not the only people who went astray in matters of this kind. It was a case from Russia where an Empress had noted a particular flower in the centre of a garden plot at one of the palaces and told the gardeners not to touch the flower until it withered. For fear the Imperial mandate should be neglected a sentry was put on to patrol this particular spot. One hundred and forty years later somebody inquired whether it was because of Nihilists or for some other reason that this particular part of the palace gardens required to be so carefully guarded. It was then discovered that for 140 years, night and day, a man had tramped up and down there, although the purpose which had to be served had passed away in a few days.
Your Lordships will find in every public office matters, not perhaps such as that to which I have just referred but matters

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that are completely out of date and yet are still being carried on as though they were vital to the country. My noble friend can rest assured that he will find other things that will astonish him. Within the last fortnight I have learned from a very old public servant that in one Department it is not a question of finding men to do the work but of finding work for the men to do. The heads of the Department have voluntarily banded themselves into a small committee to find the necessary work in order to employ the men. That is one case. Then a few days ago somebody spoke to me with great interest on this question of economy, and said: "Within the last few days I met a young fellow, a very nice and very energetic young man, belonging to a well-known public Department. I asked him how it was possible that he could extend his luncheon hour from one o'clock to three o'clock every day. He replied: 'Well, the trouble is that I should get into bad odour in the Department if I went back before three o'clock because they have so much difficulty in finding me anything to do.'" There is a vast economy to be effected by reducing the work and by insisting that clerks should be transferred to another Department if there is not work for them to do in the Department in which they now are.
There is one other point to which I ask the special attention of my noble friend. The noble Marquess, Lord Salisbury, congratulated the House—and I am not sure that the noble Earl, Lord Oxford and Asquith, did not also do so—that there was no longer between the Treasury and the other Departments the tension which exists when one Department is continually hauling up another Department for its excesses. I think they were relying on the fact that the Treasury now has in each Department what is called an Establishment Department. I believe the Establishment Department is the greatest fraud as regards economy that ever was foisted on the taxpayers by any Government. They carry on a sort of bilateral work. They have correspondence with trade unions or others outside upon any question arising and they also carry on correspondence with the heads of the Department with regard to appointments to be made. The result is that a staff of clerks has to be kept in order to
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answer questions and carry on correspondence with the Establishment Department. If what the Establishment Department would save in any Department were ten times what the Establishment Department itself costs it would be worth while employing it, but I have grievous doubt whether one-tenth of their cost is saved by these Establishment Departments. Clerks in an office mostly serve about thirty years. Therefore, where you have three hundred clerks, the vacancies would be about ten a year. How, then, can the Establishment Department be always earmarking work for gentlemen whose time comes to an end? The idea of an Establishment Department was an excellent one, but from the point of view of economy I believe it to be quite useless.
I would urge your Lordships to press upon the Government that they should take one course with regard to all these matters. The powers of this House are strictly limited in regard to finance. It is, of course, possible to appoint a Select Committee of this House which could send for Papers and records and be able, after a long examination, to arrive at some general principles, but I would be the last to ask your Lordships to take the step of appointing any Committee of that kind, because I believe it would be neither speedy nor effective. On the other hand, in the House of Commons, it has been proposed to appoint a Financial Committee of the Cabinet. I think that members of the Cabinet are extremely hard worked at the present time and, although there is no doubt that the high authority of the Cabinet would give a great impetus to any action, I should doubt whether that is the manner in which to deal with this question. What I would press upon the Government is that they should appoint a small Committee of three, one of whom no doubt should have Parliamentary authority and experience, but the other two should be either business men or ex-civil servants. With a thorough knowledge of all the facts as put before them and the advantage of the investigation made by Sir Alan Anderson's Committee and other Committees, they would decide what work can be combed out and then what individuals can be combed out.
I am sure I shall have your Lordships with me when I say that the Govern-

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ment should not break contracts with any class of men—except Irish landlords, about whom we shall hear to-morrow. But the Government, if they have to keep contracts, could scarcely have contracted to keep a man who is surplus in the office or Department of which he is at present a servant, and if you once had an authority higher than the heads of Departments you would at once be able to make an exchange of servants who are surplus in one Department to another Department where they are required. You could also make effective the Chancellor of the Exchequer's promise that the entries to the Civil Service should be lessened, if not altogether checked, for a certain period. I wish to pass no reflection upon individuals. My reflection is upon the system. The system has naturally grown up out of the enormous demands arising from the great developments of the War. I ask my noble friend to give us some assurance that the system will be combed out in an effective manner and that the authority of Parliament and the traditional economy of the British Public Service will be restored.
THE EARL OF PLYMOUTH: My Lords, when the Resolution to which the noble Earl's Question refers was passed on March 22 the Estimates for the Vote Services in the coming year had already been announced. The Estimates for the Consolidated Fund Services were lacking, but there could not be in them anything very different from what was expected. That indeed proved to be the case. The Chancellor of the Exchequer in his Budget statement in another place completed the balance sheet for the year and the estimated Expenditure came to £833,000,000 approximately. The only matter at all unexpected to be noted was that the contribution to the Sinking Fund was raised to £65,000,000.
Before I deal with the economies which it is hoped to carry out I want to make one small comparison to try and make the position a little clearer. The Estimates for 1924—I take the year 1924 because the Expenditure in that year was the lowest reached since the Armistice, since the large Expenditure of the War—were £790,000,000 and in this year 1927 they are £833,000,000. No doubt this increase of £43,000,000 does at first sight seem somewhat alarming, but in
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order that a fair comparison should be made between these years there are three important points which must be taken into consideration. The first is that the actual Expenditure for 1924 was nearly £799,000,000 and not £790,000,000 as was estimated. If we want as a criterion the year in which the lowest Expenditure was incurred since the War we must obviously take that figure and not the figure of the Estimates. Of course it may be argued that in that case you ought to take the actual Expenditure for this year, but that is not possible. In that connection I would like to point out that since the War there has been, according to the Public Accounts Committee of the House of Commons, a progressive improvement in the accuracy of estimating. In fact the percentage of error in estimating in the various Departments, apart naturally from unforeseen circumstances, is less now than it was before the War. Apart from the expenditure in China, which it is impossible to estimate at the present moment, there is every reason to expect that the actual Expenditure for the current year will approximate closely to the Estimates.
The second consideration which must be taken into account is that in the present year £20,000,000 more has been allotted to the Sinking Fund than in 1924. In that year the contribution was £45,000,000 and in this year it is £65,000,000. The third consideration I want to put before your Lordships is that, as I think the noble Earl, Lord Oxford, and others have pointed out, it is really wrong to include the Expenditure on remunerative Services, such as the Post Office and the Road Fund. Since 1924 the increases in Expenditure on these Services have been £11,000,000 and in Revenue there has been an increase of £15,000,000, so that there is a credit balance. I think it is generally agreed that it is wrong for purposes of comparison to take into account these Revenue-producing Services. If allowance is made, therefore, for the greater Sinking Fund and the increased Expenditure—namely, £11,000,000—on these remunerative Services the increased Expenditure since 1924 is not £43,000,000, as the total Estimates would show, and not £34,500,000 if one starts from the actual Expenditure, but about £3,500,000.

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Assuming that the Sinking Fund of £50,000,000, which is the statutory amount, is reverted to next year—that is £5,000,000 more than in 1924—it would therefore need a reduction in Expenditure of £8,500,000 to bring the total, apart from the Post Office and the Road Fund, to the lowest figure for any year since the War. In reference to this point I can only repeat what the Chancellor of the. Exchequer said in substance in his Budget speech in another place—namely, that it is essential to the finances of next year that there should be definite reductions, apart from the increases in the Post Office and the Road Fund, in the total Expenditure, and also that there should be savings this year. The Government has a programme of economies upon which it is working. If that programme produces £8,500,000 of effective economies in 1928, it would reduce our Expenditure that year to the lowest level of any year since the War; that is, I repeat for the sake of clear ness, leaving out the Post Office and the Road Fund. The Chancellor of the Exchequer added that the Government were already doing everything in their power to effect these economies.
Now I turn to that part of the Resolution of March 22 which referred to Government staffs and with which the noble Earl, Lord Midleton, is most closely interested. As your Lordships know, considerable pressure has been brought to bear upon the Government both in this House and outside to abolish the post-War Ministries. Those, your Lordships will remember, are five in number—the Ministries of Labour, Pensions and Transport, and the Departments of Mines and of Overseas Trade. For practical reasons and for reasons of policy it has not been possible to abolish the Ministries of Labour and Pensions, but it has been decided to abolish as separate Departments the three others—namely, the Ministry of Transport and the Departments of Mines and of Overseas Trade. The methods by which these changes are to be achieved are still under consideration. I cannot give any definite information to your Lordships at the moment on that point, but these changes will in any case require legislation, and Parliament will have a full opportunity of considering that legislation.
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With regard to further entrants into the Civil Service, about which we heard a certain amount when we last debated the subject in this House, it has not been found practicable to lay down an absolutely rigid rule. I think your Lordships will realise that a certain amount of latitude is absolutely necessary and must be allowed. I will take as an instance the extension of Old Age Pensions to men and women at the age of sixty-five, which comes into operation in January next. That must necessitate an increase in the staff at the Ministry of Health. In spite of the fact that a certain latitude must be allowed it is nevertheless the definite intention of the Government to effect a marked contraction in the number of new entrants into the Civil Service for the remaining years of this Parliament. I think it only right to point out, as the Chancellor of the Exchequer did in another place, that neither the absorption of Departments nor the restriction of new entrants will in themselves lead to a large and immediate diminution of Expenditure. That is not possible, but it will strengthen the hands of the Government to a very considerable extent.
The noble Earl brought forward three points for the consideration of the Government; in fact, he urged them to carry out those three suggestions. I am afraid it is not possible for me here and now to give the noble Earl a definite undertaking on these subjects, but I have authority naturally to assure him that anything which he brings forward will receive very careful consideration indeed. I can assure the noble Earl that the Government are fully aware of the need for economy. They are really doing a very great deal to see that economy is exercised to the greatest possible extent in all Government Departments. I think a few points which I can bring to his notice may perhaps influence him. Excluding the industrial staffs, the total staffs of Government Departments on April 1, 1927, numbered 296,887. This figure shows a drop of 1,428 from the figure for January 1, 1927. Apart from an increase in the Post Office, which can fairly be described as a Revenue-producing increase, it is a fact that the non-industrial staffs of Government Departments have now reached a substantially lower level than at any time since the Armistice.

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Then again, every possibility of introducing labour-saving and other mechanical devices is being constantly examined by an expert staff of the Treasury. The value of work of this kind may be illustrated by a few examples, extracted from a statement compiled in December, 1925. One Department involved was the Post Office Savings Bank. There was to be a staff saving in 1926–7 of £26,000, for an original capital expenditure of £6,000, with ultimate further savings reaching £126,000 and a capital expenditure of £23,000. The capital expenditure, of course, does not recur, while the saving is very often recurring. These are economies that have actually been carried out. Then again in the Post Office (telephone accounting, postmasters payrolls, engineering department, costing, etc.) there was to be a saving of 248,000 for the year 1926–7 with a capital expenditure of £7,000. I could mention other instances. In the Board of Trade there was to be a saving of £12,500, with a capital expenditure of £600; and so on. Still further economies in these Departments, aggregating probably £50,000 per annum, will be effected during 1927–8. As the result of the introduction of machines, further considerable economies have recently been secured or will shortly be secured in the War Office, Board of Trade, Air Ministry, Customs and Excise, Registrar General's Office, Probate Registry, Stationery Office and Ministry of Health. I do not think that there is any further information that I am in a position to give your Lordships at the moment.
THE EARL OF MIDLETON: Will my noble friend mind my asking him one question before he concludes? Do the Government propose to take any action on Sir Alan Anderson's recommendation regarding attendance? He said:
"The normal attendance should in our view be eight hours, including three-quarters of an hour off for luncheon."
The present attendance, I believe, is thirty-three hours a week. Is there any intention of dealing with that point?
THE EARL OF PLYMOUTH: I am afraid I cannot answer that question on the spur of the moment, but I will make it my duty to find out and inform the noble Earl. As I was saying, I am afraid there is no further information that I can give at the present moment. I can
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assure the noble Earl that every possible step is being taken to ensure the economies that he suggests, and I think I am quite justified in saying that already the Government have taken a definite step in the direction of effecting those economies that were called for in the Resolution to which the noble Earl's Question refers.
LORD ARNOLD: My Lords, the speeches of the noble Earl who has just spoken and of the noble Earl who asked this Question call for some comment. Before I come to the main question at issue, I should like to make one observation about the point that the noble Earl, Lord Plymouth, made with reference to the Sinking Fund. He said that if next year the Sinking Fund reverted to £50,000,000, which is the statutory limit, there would be a saving in next year's Expenditure of £15,000,000, because this year the Sinking Fund is £65,000,000. That is perfectly true, but I think it necessary to point out that, if the Sinking Fund does revert to £50,000,000 next year, there will still be a very considerable amount of the deficits of the last two years which will not have been made good, and therefore, in effect, the statutory limit will not have been maintained by this Government; and this really does amount to something which is almost a breach of faith with the holders of War Stock. It is all very well for the noble Earl to tell your Lordships that the Sinking Fund stands at £65,000,000, but that money has not yet been found. The noble Earl who spoke informed your Lordships—and indeed we all know it—that there is no allowance whatever in the Budget this year for the cost of the China Expedition. According to all expert opinion, it is extremely doubtful, to put it mildly, whether the £65,000,000 will be forthcoming at all. It is extremely likely that next year, especially in view of the cost of the China Expedition which, with a recklessness almost inconceivable, has not been provided for at all, there will be another big deficit.
The noble Earl who asked this Question made the point that the three post-War Ministries, the Overseas Trade Department, the Mines Department and the Ministry of Transport were to be abolished, and the noble Earl Who spoke for the Government also referred to this fact with, I think, quite undue satisfaction. Let us look at this point. The

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noble Earl was very caustic about the Ministry of Transport. He said that he opposed it from the start. But what is the cost of the Ministry of Transport? The total cost of the Ministry of Transport, salaries and expenses, is about £124,000 a year—that is the latest figure—or, in other words, about one seven-hundredth part of our total National Expenditure. Further, the duties performed by the Ministry of Transport are very largely duties which must compulsorily be performed by somebody or other in the Government service, because they very largely carry out the provisions of various Statutes that have been passed. What is going to be saved by abolishing or transferring the Ministry of Transport to some other Department? The noble Earl never told your Lordships that. The combined cost of the Ministry of Transport, the Overseas Trade Department and the Mines Department is £688,000 out of a total Expenditure of £834,000,000. How much of that £688,000 is going to be saved? The noble Earl did not tell your Lordships, and the Chancellor of the Exchequer did not tell the House of Commons. The late Chancellor of the Exchequer, however, speaking in another place, suggested that when all this had been done the probable saving will be only £10,000. I do not necessarily endorse that figure, but everybody knows that the saving will be quite negligible in comparison with these huge sums.
I hope that no noble Lord will get up and say that we must save all the small amounts that we can. Of course we must, when we can do so wisely. But what was said by the noble Earl, who has now left the House, about the Civil Service? He told us that the total cost was £75,000,000. In a sense that may be true, but in another sense it is grossly misleading, for the figure includes the cost of the Post Office. The noble Earl himself said—and I agree with him, as I think most noble Lords will—that the Post Office ought not to be included in these calculations at all because it is a self-supporting Service. Indeed, I believe that the noble Earl who has just left the House said "Hear, hear!" in regard to that remark of the noble Earl, Lord Plymouth. Then why include the Post Office in the cost of the Civil Service? It ought not to be there at all.
What is the total cost, salaries and expenses, of the Civil Service of this
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country? The total cost of the Civil Service is somewhere in the neighbourhood of £20,000,000—that is all—out of an Expenditure of nearly £834,000,000. How much are you going to save by this economy, this raking and axing and so forth, that is recommended? The axe has already been used three times. How much are you going to save? Supposing, for the sake of argument—I think it is extremely unlikely, and, if it were done, it would only be at the cost of a great loss of efficiency—supposing that you saved 25 per cent.—that is, £5,000,000. That sum is well worth having if you can save it wisely. But in this case you cannot. It is all very well for the noble Earl to come here and pick out isolated cases and present them in debate, as he did a few weeks ago. His speech on that occasion received, I thought, if I may say so with respect, far too much commendation, for he never came to grips with the real problem.
I will tell your Lordships an experience of my own. In matters of this kind it may be that a personal experience will not be without its modest use. When I was appointed Under-Secretary of State for the Colonies in the late Government, I went to the Colonial Office—I had never been in office before—and I naturally expected to find that an efficient service would be available for me. I am not saying a syllable against the civil servants or, indeed, against anybody in that office. They all did their very best, and with regard to the Civil Service proper I have no complaint to make. Indeed I have nothing but high praise for everybody there. But there is a certain form of subsidiary service which it is essential that a Minister should have performed for him. I found in a day that that service was not being really well performed for me. I spoke to my secretary about it. I was not complaining, for the individual in question received a salary so small that you could not expect to receive really efficient, first-class service. The service rendered was very good for the salary paid, but it was not first-class service, and here was I, as a young Minister, hampered in my work, and the public service, I say without question, suffered because the Treasury, as I was told, had cut down that particular form of service to that limit and would pay no more for it. I was told that if I wanted anything better I could pay for it myself. I said

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that as a matter of finance I should not mind paying for it myself, but that as a matter of principle it was monstrous that a Minister should pay anything for service in a Government office. That is the kind of thing which follows upon the speeches and Resolutions of the noble Earl. A lot of his recommendations would only be carried out at great cost of efficiency in the Public Service, and I say that in many respects his suggestions are unwise and, indeed, harmful.
Let me pass from that. It was pointed out in the debate a few weeks ago that of our total National Expenditure of about £833,000,000, under present circumstances £650,000,000 admits of hardly any reduction at all. The noble Earl never mentioned that when he cast about for economies.
THE EARL OF MIDLETON: With great respect what I stated was that the difference between £75,000,000 and £31,000,000, an increase of £44,000,000, was well worth the attention of anybody, even including the Chancellor of the Exchequer.
LORD ARNOLD: I believe the noble Earl was out of the House when I was referring to that point. He is including there the Post Office. I am dealing with Civil Service expenditure proper, and I say that the total salaries and expenses come to only about £20,000,000 a year, and possibly two or three millions less, although to be on the safe side I will take it at £20,000,000. You cannot get away from the fact that the great hulk of the Expenditure, £650,000,000 out of £833,000,000, admits of no reduction at all under existing circumstances. That is the central point of the whole problem, and you may talk about cutting down and lengthening hours, and appointing Committees, but it will not make any difference to the central problem.
The Chancellor of the Exchequer never told the House of Commons what would be saved by the abolition of the three Departments. The Mines Department is very largely carrying out statutory duties and provisions laid down by Statute. We really ought to spend more upon the Mines Department. More inspectors are required. What about the explosions recently? There are explosions which could be prevented by better inspection. As I have stated, out of our total National Expenditure of £833,000,000, £650,000,000
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admits under present circumstances of no appreciable reduction. Of the balance £115,000,000 is for the cost of armaments. There, in my view, there is a possibility of very substantial saving. What did the Government say in reply to the remarks which were made by Lord Beauchamp? All they said was that the Government could not retrench upon those matters, and were not going to do so.
Since that time Lord Jellicoe has made a speech. Speaking at the Royal Academy banquet Lord Jellicoe made an important suggestion. He is reported as follows:—
"Were he (Lord Jellicoe) asked to advise on disarmament he would say 'Limit the size of your ships, arrive at some limitation of the size of your vessels.' One of the greatest mistakes made at the recent Washington Conference in his opinion was placing the size of cruisers at 10,000 tons. There was no reason why a much lower limit should not be settled upon."
That is exactly in accordance with the proposal made by Mr. Lees-Smith, speaking for the Labour Party in another place. Of course the proposal put forward from the Labour Benches was received with contempt by the naval experts in another place, yet here we have this great authority, Lord Jellicoe, coming forward and recommending precisely the same thing, and I would like to ask whether the speech of Lord Jellicoe has been taken note of, and whether it will be borne in mind at the forthcoming Naval Conference.
Before, sitting down I want to refer to a matter which is never mentioned in debates, but which is worthy of attention. That is the charge made by the Bank of England for their services in connection with the Government Debt. There was a letter in the Nation recently—about a fortnight ago—from Mr. J. Keynes dealing with the very point. He points out that the Bank of England charge for services in connection with Government Debt was in 1925–6 £1,095,199. What was the cost in the same year for salaries and expenses of the Treasury, Home Office, Foreign Office and Colonial Office? It amounted to £1,067,329. Therefore the amount paid to the Bank of England for their services in connection with the Debt exceeds the total cost of those four Departments by nearly £30,000. I think that wants looking into, and I speak

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with experience on the point because there was a Committee set up during the War to go into the matter. It was a Sub-Committee of the National Expenditure Committee, and was set up to investigate the charge made by the Bank of England for services in connection with the Debt.
We found a state of things which I do not think it is going too far to describe as astonishing. I can put in two or three sentences the position. In 1892 an arrangement was made with the Bank of England for their services, and they were to be paid in all about £200,000 a year for the working of the National Debt. Even before the War that amount had risen to some extent, but in 1916–17—I know of course that the Debt was then very much bigger—the amount which the Bank of England were to be paid for their services in connection with the Debt came altogether to about £1,500,000. Well, the Sub-Committee of the National Expenditure Committee naturally protested against what seemed to it to be a quite unreasonable sum for the services rendered. At first our protestations fell upon deaf ears, but, armed as we were with the potential weapon of publicity, we found that we were able to effect in time—it was not very easy—what I think your Lordships will agree was a very remarkable saving. In the end, under the pressure which we exercised, armed as we were with the weapon of publicity, the Bank of England agreed to reduce their charge by about £750,000. That reduced their charge by about half. And I will undertake to say that, if it had not been for that Committee, which went into the matter and brought pressure to bear, no such reduction would have been made at all—I question whether a penny piece would have been reduced.
The amount last year, 1925–6, was £1,095,199. In 1916–17, as the amount was a million and a half it was agreed to reduce it by about £750,000. Although the Committee did not say that that was an adequate reduction—we had some doubt about it—it would appear that the amount ought to have been reduced to £750,000, and I do not quite understand why it has now got up to £1,095,199. But what profit do the Bank make upon this? I hope that in this matter I may have the sympathy and
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support of the noble Lord, Lord Ban-bury, because he is an economist in certain matters. What profit do the Bank make on it? If it be the case, as it may be—I am bringing no definite charge about that, because I do not know—but if it be the case that the Bank is not making a very big profit now I do submit that the work is being done extravagantly. I certainly think it ought to be possible to perform that work for a sum distinctly less than £1,095,199.
I have told your Lordships what happened in 1918, and how we got the big reduction of £750,000 off the charge which the Bank of England was making, and I therefore do submit that there is a strong case for investigation, and I think the Government ought to direct their attention to it. I do not ask them to reply to this point to-day, because I have not given them notice that I was going to bring up this particular matter, and it is one which requires a good deal of information. But I should like them to go into the matter, and I should like to know how it stands now, and in particular I should like to know whether the arrangement which was made as a result of the representations of that Committee in 1918 about the reduced rate of interest on Ways and Means advances to the Government—that is, reduced as compared with previously—still holds good. I do not expect a reply to-day, but I give notice to the Government, and also to the Bank of England, that these matters are being watched. It may be that what was done before may be done now. It may well he that under the weapon of publicity, which Parliament gives, some reduction may be effected in the charge which the Bank are at present making.
The only other point I should like to bring up is this. This may be one that can be replied to, because the matter is probably well known to the Government—perhaps too well known. I should like to know what is now the weekly cost of our Expeditionary Force to Shanghai. How much is it costing the country per week?—the net cost, if you like, because it might be said that the men would have to be kept somewhere. What is the additional cost, over and above the Estimates, per week that is being incurred in this country in respect of these men?
LORD STRACHIE: My Lords, it so happened that I went into another place before I came into this House, and there I heard the Minister of Transport saying that he was giving a funeral oration on the Ministry of Transport. I understood him to say further it was going to do very little good from the point of view of economy, because the amount over which the Minister had any control was only the trifling sum of £90,000 a year, and I rather gathered that very little was to be expected from this reform. But, of course, the real point is whether the Government mean to be serious in this matter, and really to control the various spending Departments, because it is quite clear from what has been said to-day that the Treasury are not like the Treasury of the old days, when they were a watch-dog and very carefully scrutinised every Department. I believe that what happened during the War was that the whole of the Treasury was put under the orders of some Department at 10, Downing Street, and the result has been that they have never gone back to their old plan of scrutinising every single item. I had the honour of representing a Department in another place, and then one was always being told: "You cannot do this," and "You cannot do that," and "You cannot make even the expenditure that may be necessary because the Treasury will not allow it, and they are always wanting to cut down everything." It is not the fault of the House of Commons; it is the fault of the Government who control the House of Commons.
THE MARQUESS OF SALISBURY: The Government does not control the House of Commons.
LORD STRACHIE: I am surprised at the noble Marquess saying that the House of Commons and his own Party, who form an immense majority of that House, are not controlled by the Government; every one knows the influence of the Government Whips. Then, as regards what has been said by the noble Earl about the excessive number of Ministries, the very large increase of salaries, and the large number of high officials, undoubtedly Departments like the Ministry of Health and the Treasury itself have largely increased the number of their staff, and the salaries paid to them. I will take the case of the Ministry of Agriculture. In the old
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days the Permanent Secretary had £1,500 a year; he now has £3,000 a year. I do not object; he is a most able man, and deserves the increased salary. But I do take objection to the large number of Under-Secretaries. You have a scientific adviser at £2,000 a year, and a Fisheries Secretary at £1,500 a year; and then you have seven Assistant Secretaries at £1,200 a year. In the old days only the Permanent Secretary had £1,500 a year. Both in regard to the number of officials and the amount of their salaries there has been an enormous increase. If that has happened in one small Department what must have happened in the Departments taken altogether?
We were told by the noble Earl, Lord Plymouth, who represents the Treasury in your Lordships' House, that there were going to be all sorts of economies. We are accustomed to hearing the Chancellor of the Exchequer making promises that things are going to be done. We were told several years ago that there was to be an annual reduction of £10,000,000 in the National Expenditure, but instead of a reduction, it is much more likely that there will be an increase of £10,000,000. The noble Earl also said that savings were secured, or would be secured, on certain offices. It is very curious that with all these savings the Expenditure goes up all the time. It is no use making savings if nothing is saved in the long run. We are not only suffering at present from this heavy taxation, which is so very bad for trade, but we also find our local rates going up in the same way, and a great deal of it is owing to the pressure put upon local authorities. As a member of a local authority I know that the Government Departments are continually pressing them to spend money from the local rates.
The noble Earl, Lord Plymouth, very naturally said that he was unable to speak with any authority on this question. He can give no answers to the questions put to him by the noble Earl, Lord Midleton; he had no authority to do it, and he was unable to make any particular statement. I hope the noble Marquess who leads the House will make some reply to the most important speech made by the noble Earl, Lord Midleton. So far we have had no pronouncement from the Government which is in any sense authoritative and we are left entirely in the dark as to

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what the Government really mean to do, whether they mean to have a real reduction and not merely to make promises such as have been made by the Chancellor of the Exchequer.
THE LORD PRIVY SEAL (THE MARQUESS OF SALISBURY): My Lords, I do not complain of the kind of criticism which has been made upon the Government tonight, because I believe that all complaints, even irrational complaints, will subserve the cause of economy ultimately; but I must confess to a certain feeling of disappointment as I heard the speeches which have been delivered from various quarters of your Lordships' House this evening. The noble Earl, Lord Oxford and Asquith, a very important member of the Party to which the noble Lord who has just sat down belongs, urged upon the Government a few weeks ago that they should abolish the superfluous Ministries that have been established since the War and should restrict the entrants into the Civil Service. I understand that was one of the points which also was very much favoured by my noble friend, Lord Midleton. Then came the Chancellor of the Exchequer's statement that the Government were going to abolish some of those Ministries, that they were going to abolish the Transport Ministry, the Department of Mines and the Overseas Trade Department. Did we receive any congratulations for that? Not at all. I am not sure that we were thanked by my noble friend behind me.
THE EARL OF MIDLETON: I expressed my sense of what has been done, and I only hope you may go a little further.
THE MARQUESS OF SALISBURY: I agree with my noble friend; I hope we shall go further; but as far as the noble Lord who has just sat down is concerned he seemed to think it was an insignificant matter altogether that we had followed the advice of his Leader—I am not sure he is his Leader now, but at any rate he is a very prominent member of his Party.
LORD STRACHIE: I do not think the Minister of Transport thinks much of the change.
THE MARQUESS OF SALISBURY: I think the noble Lord would find that the Government would act with all the greater confidence in this matter of
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economy if they were occasionally praised for following the advice which was given to them instead of being criticised in the way in which the noble Lord criticised them. Then came the noble Lord opposite (Lord Arnold). He was in a furious rage about something, but I could not quite make out what it was. He was very angry with us, I gathered, because we had said that we had made economies in the Civil Service and he held up all the economies that we suggest to contempt. That does not appear to me to be a very rational way of looking at things. He himself showed that the limits within which economy could be practised were very restricted and instead of complaining of our having made economies in the matter of the Ministry of Transport, the Mines Department and the Overseas Trade Department, he ought to have expressed his approval of our action.
LORD ARNOLD: I have always been against it and said so.
THE MARQUESS OF SALISBURY: Then I must take it that the noble Lord is against economy.
LORD ARNOLD: Against that form of economy.
THE MARQUESS OF SALISBURY: Of economy in the Civil Service.
LORD ARNOLD: Not necessarily.
THE MARQUESS OF SALISBURY: Any one who listened to his speech would conclude that when he becomes responsible for affairs again he will not study economy in the Civil Service.
LORD ARNOLD: I distinctly said that any wise economies that could be effected should be effected.
THE MARQUESS OF SALISBURY: That is a generality which may do the heart of the noble Lord good but will not minister to the cause of economy in the least. There is no value in that kind of observation. The real point is that the cause of economy is a very difficult one. I do not say it is an impossible one; I say it is a difficult one and it can only be approached with success if it is approached with good will. For my part I do not believe the Labour Party care twopence for economy. They are for Expenditure. I do not mean to say that

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I despise their view. I think there is something to be said for it in argument; but I do not agree with it. But please do not let them pose as an economy Party again. We know quite well that when they come into office, so far from the Expenditure of the country being reduced it will be enormously increased. The noble Lord said that at any rate we could economise in armaments. Why should he scold us so? Have we not taken part in a great Disarmament Conference in Geneva? Are we not about to take part in a very much more important Disarmament Conference with the great naval Powers of the United States and Japan? Why is he so annoyed with us? What have we done of which he complains so much? We are doing our very utmost to economise and we shall continue to do so.
My noble friend Lord Midleton is much more helpful than our other critics, but even he was not satisfied with the new arrangement under which establishment officers of the Departments are provided. I am not, neither are my colleagues, responsible for that particular policy, but we certainly thought it was a useful policy. Instead of the Treasury and the Public Departments being enemies they are now allies. My noble friend thinks that leads to extravagance. I think he is wrong. I have always thought that the old Treasury spirit under which no other Department helped the Treasury but all were in league against it and, if possible, defeated it—which was the kind of thing existing when I was in office before at the beginning of the last century—should be got rid of and that if it could be it would be a distinct benefit. Now you have a representative of the Treasury in every Department and all my noble friend can say about that is that it has increased the correspondence.
THE EARL OF MIDLETON: I said it increased the expenditure and I asked my noble friend and the Government whether the expenditure on these Departments was not immensely in excess of any economy they were able to make.
THE MARQUESS OF SALISBURY: I cannot certainly answer my noble friend upon that statistical point here and now, but I do say that to have representatives of the Treasury in every Department
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does seem to me a very useful check upon the expenditure of the Department. If it be true, as my noble friend says, that that only leads to more extravagance, all I can say is that it shows hew very hard the task of the reformer is and that whatever he tries to do seems to turn round upon him and make the expense even worse than it was before. Then my noble friend says he has a plan. His plan is to have a Committee of three who, I suppose, are to have dictatorial powers to cut down Expenditure wherever they please.
THE EARL OF MIDLETON: Subject, of course, to the control of the Cabinet. No one would propose that the three gentlemen should have the power to do anything, but they would have the power to draw up a scheme and then the responsibility would rest upon the Cabinet if they did not make the economies which were suggested.
THE MARQUESS OF SALISBURY: I was not going to repudiate my noble friend's scheme. Like everything he says it seems to me full of pregnant suggestion. It may be a good plan: I am not quite sure. The Geddes plan was not, very unlike it and I am not sure how far it succeeded, but at any rate it is worth consideration. The real point is that my right hon. friend the Chancellor of the Exchequer, his Budget, did show that the Government were determined to cut down wherever they could, to approach the question of the new Ministries and to check the entry of the candidates for the Civil Service so that a reduction might ultimately be worked out on these lines. He showed that in every respect the Government were always on the watch to carry out economies. I should be very sorry indeed if the country or your Lordships thought that we had finished our task. We are very far from that. Other economies must be carried out and I have no doubt that when we carry them out the noble Lord, Lord Strachie, will get up and abuse us for the particular economies we do carry out.
LORD STRACHIE: Why?
THE MARQUESS OF SALISBURY: Because you did it to-night.
LORD STRACHIE: No. I referred to what the Minister of Transport said.
THE MARQUESS OF SALISBURY: But I gather that the noble Lord approved this criticism. We shall not be deterred by that kind of carping observation. We shall do our utmost to economise and whether or not we receive the praise of our critics in this House at any rate I believe we shall earn and deserve the approval of our friends in the country.
LORD ARNOLD: Would the noble Marquess reply to the question I raised about the weekly cost incurred in China?
THE MARQUESS OF SALISBURY: I am afraid I cannot do that straight off, but if the noble Lord will put a Question on the Paper I will do my best to satisfy him.
EARL BUXTON: My Lords, there is one thing in which I agree with my noble friend opposite and that is that these discussions regarding economy are of great value. I also agree with what my noble friend Lord Midleton said in his speech, that economy in the country is popular. If the Government would appreciate that and undertake it in a really practical manner, instead of losing popularity as they seem to think they would in my opinion gain it. I think therefore that the House is again obliged to my noble friend for raising this Question. I rose really because of the observations made by the noble Marquess who leads the House. He seems to consider that those with whom I act, having made certain suggestions and those suggestions having been accepted, ought to be more grateful and give greater praise to the Government. I think he misunderstands the position. Our position is that there is a Government in office who have undoubtedly increased the Expenditure of the country and the noble Lord who represents the Treasury endeavoured to show by various figures that the increase is not so great as appeared on the face of it. That undoubtedly is true, but he admitted that there has been considerable increase in Expenditure since the present Government came into office. We have to remember that when the Government came into office they gave a definite pledge through the Chancellor of the Exchequer that Expenditure would be reduced by £10,000,000 a year.
THE MARQUESS OF SALISBURY: There was no definite pledge. My noble friend is a most fair critic and I am sure he would not persist in that. There was no definite pledge. It was a hope expressed and a hope falsified.
EARL BUXTON: If the noble Marquess likes to put it like that, the Chancellor of the Exchequer informed the country when the Government came into office that they hoped—and very strongly hoped, otherwise it would not have been mentioned—to be able to reduce Expenditure by £10,000,000 a year. We have now had the great advantage of having this Government in office for some time, and so far from there being any diminution there has been a considerable increase in Expenditure. I do not think that hope ought to have been held out by the Chancellor of the Exchequer unless he saw his way to carry it out. It was neither fair to the country nor to his Government. My noble friend the Earl of Oxford, in his speech when this subject was debated on a previous occasion, suggested general economy in various ways. He also made the suggestion of the transfer of the Ministry of Transport and of the Department of Mines to the Board of Trade and, I think, the abolition altogether of the Department of Overseas Trade. Surely the noble Lord cannot take much credit to himself nor to his Government for having adopted these proposals. Quite clearly it is the Government, and the Government alone, that can effect economy. If they had been real economists they would themselves have carried out these particular economies to which reference has been made.
I will not say we are grateful, but we are glad that the Government has adopted these suggestions, but I do not think they can really take much credit to themselves as economists for having adopted them. I am bound to say so far as these particular Departments are concerned, that I agree with what was said by my noble friend on my right, and I think by my noble friend Lord Midleton, that there is very little economy in regard to them. The noble Lord who represents the Treasury spoke of their abolition. Abolition, of course, means that you abolish a Department and save the whole expenditure. What is going to be done, however, in regard

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to these Departments is that they are being transferred from one Ministry to another. When I had the honour of being President of the Board of Trade before I went to South Africa, the Transport Department, the Mines Department and the Labour Department were all under the Board of Trade, and I will undertake to say that they were carried on not only by a smaller number of officials but much more efficiently than has been the case since they were turned into separate Departments.
I look at this matter of Departments much more from the point of view of efficiency than that of economy. There is an advantage in all economy just now, and I believe there is economy to be gained not only by the re-transfer of these Departments but by the various suggestions made by my noble friend Lord Midleton. But I am convinced also that the War, unfortunately, did upset the general system under which our Departments were managed. The idea was that if you set up a new Department, and employed a large number of men or women to control it, you would have greater efficiency. I believe that idea to be entirely false and that these larger numbers have led much more to inefficiency than to efficiency. On that ground one is glad that these Departments have been abolished. But may I say that I was disappointed that the noble Marquess and the noble Lord who represents the Treasury had nothing further to suggest in regard to reduction of Expenditure? They expressed a desire for economy, but they did not on this occasion even express the hope that they would be able to attain it. They had nothing practical to put before us. They based their economy on suggestions made here by my noble friend the Earl of Oxford and others, which they have carried out, and I am glad that they have done so.
I think my noble friend Lord Midleton made reference to Treasury control and matters of that sort. I believe there is no blame to any particular Government that Treasury control is not so great as it was. It is the effect of the War. In the old days Treasury control was really effective, but now it has almost ceased to be effective. It was said of Mr. Lowe, when he was Chancellor of the Exchequer—I am bound to say that his action did
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not, make for his popularity—that he told the officials of his Department (I am not sure that he did not put it into a Minute): "If a Department writes to ask for money for some purpose, say you will give it consideration. Do nothing. If they write again, say you are giving it consideration. If they write further, tell them to go to blazes." I believe that a rather warmer place than "blazes" was put in the Minute. That was real control over other Departments. It is no blame to any particular Government, but I am afraid it has ceased to a large extent and that is one of the reasons why it is difficult to obtain economy in various Departments.
My noble friend suggested, apart from minor matters, that we should again, I understand, have a sort of Geddes Committee to go through the Estimates of various Departments, a sort of super-Geddes Committee, consisting of three persons who would apparently have no control but would make their recommendations to the Government who, on matters of policy, could either accept them, or reject them or accept portions of them. I really think that there is a great, deal to be said for that proposal. We all admit that we are much indebted to Sir Eric Geddes and his Committee for what they did. They produced real economies and the Government of the day were able to act with public approval in consequence of their Report. That is some years ago, and I cannot help thinking that, if a fresh Commission or Committee were appointed of a similar nature, they would be able to discover various ways in which economy might be effected. Accordingly I think that the proposal is well worth consideration.
I do not wish to lay blame upon any particular Government. The great mistake that was made in regard to economy in the Civil Service generally was that after the War the Coalition Government, instead of practising very strict economy, encouraged excess in various ways, saying that the country was very prosperous and that further prosperity was coming. I admit that it is easy to criticise after the event, but I feel that this was the initial fault. If the Government had been very drastic in their economies they could have carried them out more easily than can be done to-day, and with very little serious injury to those concerned.

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When we are talking of economy we always mean that somebody will have to leave the Service and that the work is to be done with fewer persons. Immediately after the War we were prosperous and there was no unemployment, and any one who had been removed from the Service at that time could have obtained work. From this point of view it has become increasingly difficult to carry out any drastic reductions, because they mean throwing a certain number of persons upon the street. I would appeal to the Government to consider, at all events, the proposal of my noble friend for a fresh inquiry into these matters.
I admit that it is very difficult for the Government to make large reductions unless it has public opinion behind it. The Report of Sir Eric Geddes' Committee gave it the support of public opinon, and a new Committee or Commission would also tend to enlist the support of the public for its recommendations. The Government have obtained this support in regard to the minor matters of the Departments that have been mentioned and, with the assistance of another Report, they will be able to pursue further economies with public opinion behind them. If we could have a super-Geddes Committee I am certain that the Government would obtain support for the economies which I am quite sure they are anxious to carry out. Accordingly I would support the proposal of my noble friend Lord Midleton in that respect, and I thank him, and I think the House generally thanks him, for having again raised this matter, for the more that public opinion is drawn to this question the more likely are we to obtain some really efficient measure of economy.
VISCOUNT NOVAR: My Lords, I should like to ask my noble friend the Leader of the House whether the Government proposes to take any action on the Blanes-burgh Report regarding unemployment insurance. I think there will be general regret that assurances so friendly to economy as those given by the Government are so indefinite.
LORD OLIVIER: My Lords, I wish to refer to one or two comments that were made by the noble Marquess the Leader of the House. He expressed his anticipation that when the Labour Party came into power they would be opposed to all
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economy. I should like to make perfectly clear the position that I and my colleagues adopt in that regard. I think that the Labour Party, if and when it comes into office, will find itself with regard to the Civil Service in very much the same position as that in which I apprehend that His Majesty's Government find themselves now. They have gone very carefully into the present position of the Civil Service and they find that they cannot make any substantial economy without sacrificing efficiency and leaving undone work that has been provided for and is required to be done. I believe that the result of the two or three efforts that have been made to economise on the Civil Service has been to bring down the ordinary working Departments of the Service to a very close cut machine. I think that this is what His Majesty's Government find.
I am glad to hear from the noble Marquess that he is satisfied with the working of the arrangement now in force between the Treasury and the other Departments of having a Treasury representative assigned to deal with the expenditure of each Department. Ten years ago, during the War, I went to France to examine the French financial system and found that they had a Treasury official in each Department. This system itself tends to efficiency, because the Treasury officer continually watches the work of the Department and he is in a good position to discover whether there is surplusage. I am glad to hear that the system has been put in force here, and I agree with the noble Marquess in thinking that it will lead to a very much better and more effective method of economy combined with efficiency than our old system, in which the Treasury and the Departments were "Pull devil, pull baker" one against the other. You will really get intelligent criticism from the point of view of the Treasury. I am not so sceptical as many noble Lords appear to me to be regarding the desire of the Treasury for economy. I believe that they do intelligently seek economy, and that the very useful work that has been done since the War in bringing down staffs has given us better value for our money than we had before.
In regard to the three Departments that have been mentioned, and the five

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Departments of which the noble Earl, Lord Oxford and Asquith spoke, I understand that the Government have come to very much the same opinion that I think the Labour Party would have come to. I think the Labour Party would have found that it is not possible at present to abolish the Minister of Pensions or the Minister of Labour, but that it may be possible, without sacrificing work which Parliament and the nation wants to have done, to get rid of a special Parliamentary Head for the Department of Overseas Trade, the Mines Department and the Ministry of Transport. As regards the Parliamentary representation of those Departments, there may have been some real room for retrenchment. But we have not had any assurance, and I do not think that we are going to have much assurance, from, His Majesty's Government that they are going to retrench very largely in relation to the work that is now done by the Department of Mines, because, as my noble friend Lord Arnold pointed out, and as was acknowledged by the noble Earl, Lord Oxford and Asquith, we need to have more inspectors than we have now. As regard the Department of Overseas Trade, I should be sorry, having some knowledge of the work that has been done by that Department, to think that this work was going to be substantially reduced.
I am afraid that the noble Marquess and the noble Earl, Lord Plymouth, who replied for the Government, find themselves in the position, as regards economy, that my own Party would find themselves iii—that is to say, they have come down to bedrock so far as the Civil Services are concerned, and, if anything more is to be done, economy must be carried on along the lines which the Labour Party desire. I confess frankly that the Labour Party would desire to economise in the military Services. The noble Earl, Lord Midleton, who has left the House, made a very special attack two or three months ago upon the over-staffing at the War Office. From his paint of view the War Office was sometime ago overstaffed in the interest of a system which my noble Leader, Lord Haldane, and I and many others thought, if it had been put thoroughly into operation, would have conduced to economy in the War Office. Your Lordships have heard me
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at some length on this subject, and I will only say that I refer to a system whereby financial responsibility would be brought much more closely home to executive officers by the establishment of a proper accounting system. That has been largely scrapped, and I gather that Lord Midleton desires that more of that staffing at the War Office should be broken down. In its present half-and-half condition I cannot say that I feel any great enthusiasm in defending what relics there may be left of that staff. I do not know whether any further reductions could be made on those lines.
As regards other Departments, I think that the Labour Party would find, as the noble Earl, Lord Plymouth, probably found, that for the efficiency of the work now being carried on there is no superfluity of civil servants, but that as regards the large spending Departments and the charges of the Bank of England, referred to by Lord Arnold, there is room for economy by cutting down certain Services which are now being given, while as regards several other Departments that probably it is desirable to increase the Civil Service, because the needs of the nation demand more service than is now being given. I cannot join in any substantial complaint against the Government for not promising that they will introduce a fresh Geddes axe in connection with the permanent Civil Service.
LORD GAINFORD: My Lords, I want to refer to a very remarkable fact given us by the noble Earl who introduced this discussion, and that is that the Civil Service has increased from £31,000,000 a year to £75,000,000 a year in the period from immediately before the War up to the present time. He also gave us during the late debate figures showing a large increase in the personnel of various Government Departments. I rise because I was rather surprised when Lord Arnold said that if you eliminated the cost of the Post Office, which was a Department which made a profit in connection with its transactions, the cost of the Civil Service would be brought down to £20,000,000 a year. Having been at the Post Office I felt sure that the cost of the Post Office was nothing like £55,000,000 a year—the difference between £75,000,000 and the £20,000,000 which Lord Arnold mentioned. I find that in

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the Estimates for 1926–7 the cost of the Post Office is given as £35,000,000, instead of £55,000,000; in other words, Lord Arnold is £20,000,000 wrong in under-estimating the cost of the Civil Service. The fact that the Civil Service is now costing £44,000,000 more than it did in 1914 is surely a fact which ought to justify the Government in realising that they must reduce personnel as well as expenditure in the various Departments.
THE MARQUESS OF SALISBURY: Perhaps I may be allowed to make one observation in reply to what I understood Lord Novar to say with regard to the Blanesburgh Report. The matter has been receiving very careful consideration, and I am sure your Lordships will find that that consideration will not be fruitless. I am, however, unable to say anything more at the present moment.
House adjourned at five minutes before six o'clock.