Sitting of 25 May 1925

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

UNION OF BENEFICES AND DISPOSAL OF CHURCHES (METROPOLIS) MEASURE.
THE EARL OF CRAWFORD: My Lords, I beg leave to present a Petition asking that the City churches scheduled in the Union of Benefices and Disposal of Churches (Metropolis) Measure, 1924, be not demolished. The Petition is signed by the Royal Academy of Arts, the Royal Institute of British Architects, the National Trust, the Society for the Protection of Ancient Buildings, the Sociey of Antiquaries and other societies and institutions. I ask that your Lordships' House may take this Petition into its cognisance, in view of the fact that the Bill raising this issue is now before a Joint Committee of the two Houses. Technically, the Bill has not yet been before your Lordships' House, but it is none the less desirable that those members of your Lordships' House who are serving on that Committee should be made acquainted with the views of the Petitioners against this portion of the measure.
Petition read, and ordered to lie on the Table.

POOR LAW EMERGENCY PROVISIONS CONTINUANCE (SCOTLAND) BILL.
Brought from the Commons; read 1a; and to be printed.

MINISTRY OF HEALTH PROVISIONAL ORDERS CONFIRMATION (NO. 6) BILL. [H.L.]
THE LORD PRIVY SEAL (THE MARQUESS OF SALISBURY): My Lords, f beg leave to introduce a Bill to confirm certain Provisional Orders of the Minister of Health relating to Beckenham, Brighton, Bury, Richmond (Surrey), Southend-on-Sea, and Swindon; and to move that it be read a first time.
Moved, That the Bill be now read 1a.—(The Marquess of Salisbury.)
On Question, Bill read 1a; and to be printed.

MINISTRY OF HEALTH PROVISIONAL ORDERS CONFIRMATION (NO. 7) BILL. [H.L.]
THE MARQUESS OF SALISBURY: My Lords, I bog leave to introduce a Bill to confirm certain Provisional Orders of the Minister of Health relating to Birstal, Bournemouth, Huddersfield, Kettering Joint Hospital District, South Staffordshire Joint Small Pox Hospital District, and Worcester; and to move that it be read a first time.
Moved, That the Bill be now read 1a.—(The Marquess of Salisbury.)
On Question, Bill read 1a, and to be printed.

MINISTRY OF HEALTH PROVISIONAL ORDERS CONFIRMATION (NO. 4) BILL. [H.L.]
Read 2a (according to Order).

CIVIL SERVICE EXPENDITURE.
LORD BANBURY OF SOUTHAM LORD BANBURY OF SOUTHAM rose to ask His Majesty's Government whether they are aware that the Civil Service expenditure, omitting War Pensions, is three times what it was before the War and five times what it was before 1906, and when they propose to reduce it by a substantial amount. The noble Lord said: My Lords, I am well aware that the Chancellor of the Exchequer in another place stated that he had agreed with the Government to appoint a Committee to look into recurring blocks of expenditure and that he hoped he would be able to reduce the Supply Services by some £10,000,000 a year. He added, in reply to an interruption, that this was to be a progressive diminution, and he further stated that he looked for a diminution of expenditure amounting to something like £5,000,000 a year from savings to be made out of the National Debt expenditure. It is not quite clear whether he intended that that £5,000,000 should be part of the £10,000,000, or was to be an addition to it, but presuming, for the sake of argument, that the sum is £15,000,000 and not £10,000,000, I venture to say that that is a very small amount of reduction when one considers the enormous Expenditure to which we are committed at the present moment.
It must be remembered that in this year's Budget the estimate of Expenditure for the year is between £9,000,000 and £10,000,000 more than the estimated Expenditure for the year when the Labour Government were in office. It is quite true that, whether by extravagance or bad budgeting, or probably from both causes, the Labour Government spent between £6,000,000 and £7,000,000 more than they said that they were going to spend, and that consequently the estimated Expenditure this year is only between £3,000,000 and £4,000,000 above the actual Expenditure of last year. The fact remains that the estimated Expenditure of this year is nearly £10,000,000—one of the amounts which the Chancellor of the Exchequer says that he is going to save—above the estimated Expenditure of last year.
I have taken some figures showing the expenditure on certain Civil Services this year and in 1914. I find that in 1914 the Board of Agriculture cost £309,000; now the Ministry costs £2,840,000. Salaries and wages at the Board of Agriculture in 1914 were £121,000; now these of the Ministry are £405,000. In 1914 education cost £17,600,000, leaving out Ireland; now, leaving out Ireland, it is to cost £40,600,000. It may be very well to increase the expenditure on education if we have the money, but, so far as I am concerned, I cannot see that there is any justification for such an enormous increase as that. Moreover, I see that the Minister of Education talks about spending more money. In fact, while I am on that point, I might observe that I cannot see in the speeches of any single Minister anything that foreshadows any economy of any sort or kind. The Minister of Transport is going to adorn all the new roads with trees—a nice thing to do if we had money with which we did not know what to do and thought that we should like to make the roads look pretty, but at the present moment the efforts of the Government ought to be directed to saving money in every possible direction and not to spending it. The Local Government Board in 1914 cost £294,000; the Ministry of Health now costs £19,500,000. Salaries and wages in that Department in 1914 were £138,000, and now they are £1,228,000. It must also be remembered that £7,800,000 has gone in
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subsidies to housing. Whether the taxpayer will ever get anything back out of that is, I think, extremely doubtful, but, apart from that, the expenditure is still £11,700,000 as against £294,000 in 1914. If you go back to 1905 you will see a still greater difference.
Now I come to the Navy and the Army. I am very much against any reduction in expenditure either on the Navy or on the Army. I look upon expenditure in that direction as being an insurance against future expenditure should the League of Nations, unfortunately, not fulfil all the expectations which some people entertain regarding it. But I do not think you ought to spend money if you can possibly avoid it on the civil part of the Navy and the Army. Take the Navy. The Admiralty Office in 1914 cost £450,000; it now costs £1,172,000. The salaries of the office keepers and messengers in 1914 cost £18,000; and now they cost £57,000. There can be no reason, with a smaller Navy, why we should increase the clerks and the messengers in the Admiralty Office. The War Office in 1914—I am dealing only with the civil part—cost £443,000; it now costs £1,186,000, and we have a smaller Army. The salaries of that Department in 1914 cost £34,000; they now cost £350,000. I may point out that the total number of men in 1914 was 799,000, and is now only 520,000.
I am sorry that my noble friend Viscount Inchcape is not here to make a speech in support of my Question, but he wrote a letter to The Times which appeared on Saturday, addressing attention to the Speech from the Throne this year. He recalled that the King, in his most gracious Speech, said, in December last:—
"Every effort will be made to reduce public expenditure to the lowest possible limit consistent with the security and efficiency of the State. The present heavy burdens of the taxpayer are a hindrance to the revival of enterprise and employment. Economy in every sphere is imperative if we are to regain our industrial and commercial prosperity."
It was because I saw no signs of these excellent intentions being carried out that I put upon the Paper the Question which appears in my name, and I think that it is very opportune that this matter should be considered at the present moment when one comes to remember

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that the Government are venturing upon a vast unknown field of expenditure, which is put by the Chancellor of the Exchequer at a capital value of £750,000,000. Before the War our total Debt was, in round figures, £650,000,000 and now, though the object may be quite laudable—I am referring to the Pensions scheme—we are going to enter upon an expenditure which is estimated by the Chancellor of the Exchequer at a capital value of £750,000,000.
That expenditure is based upon reports by actuaries. I was, for a great number of years, Chairman of the Great Northern Railway Superannuation Fund and our actuaries made a report every five years. Every single five years their report was wrong, and our actuaries were not exceptional. It was the same with every other railway company in the kingdom. Always something turned up, which they had not expected, with the result that our fund, like the fund of every other company, was insolvent. We solved the difficulty by increasing our own contributions and reducing the benefits of new entrants, but I venture to say that in these days no Government would be courageous enough, in the event of the actuaries' estimates turning out to be illusory, to reduce the benefits which had already been in operation and which were expected by the people who thought that they were going to enjoy them. That is always supposing—and your Lordships must remember this—that the benefits are not increased and the contributions are not diminished.
Now I find in The Times of May 19 a letter signed by seven ladies and one man—namely, Nettie Adler, Violet Bonham-Carter, Henry Cavendish-Bentinck, K. D. Courtney, Julia Denham, Lettice Fisher, A. Maude Hoyden, and Margaret Wintringham. They write:—
"We feel very strongly that the proposed rates of pensions for the dependent children of widows are totally inadequate for their needs. What we had hoped to secure for the family of the widowed mother was an income sufficient to avoid her having to face the hitter alternatives of an appeal to the Poor Law or of entering the labour market, already overcrowded. Five shillings for the first child and three shillings for each sub-sequent child clearly do not amount to a sum which is sufficient for such a family to live on. … We emphatically urge that pensions should be such that the widow with her children can live without further assistance."
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I wonder whether the Government have asked the actuaries to ascertain what the result would be if such an amendment were carried. Once you enter upon a path of this sort you may be quite certain that you are not going to stop there.
I was one of the thirteen members, including my noble friend who sits below me (Viscount Cecil of Chelwood)—I am not certain that it was not at his instigation—who voted against the Old Age Pensions. We were told that the cost would be £6,000,000 a year, and also that that would be considerably reduced because of the diminution in the cost of Poor Law relief. I think I am right in saying that instead of £6,000,000, Old Age Pensions this year amount to £27,000,000, and Poor Law expenses have also increased. I think that same argument was used in another place when they proposed their new Pensions scheme—namely, that it would result in a diminution of the Poor Law expenses. I do not believe it for a moment. The only result will be the same as with the Old Age Pensions. Old Age Pensions were intended to be a certain small help to people to save. As a matter of fact they have come to be looked upon not as an incentive to saving, but as something which would enable the recipient to live without work, and without saving, in a comfortable manner. Now I have ventured to show that six or seven ladies and one man have already asked for an increase in the amount of money to be given to widows, and the Labour Party—I think I am not misrepresenting them—have said that the employer and the employed are not to pay any contribution.
LORD ARNOLD AND EARL DE LA WARR: Hear, hear.
LORD BANBURY OF SOUTHAM: What the result of that will be to the State I do not know—it is almost impossible to say—but I have here the report of Mr. Churchill's speech, and I see he says that eventually he hopes that the new scheme will be self-supporting, so far as regards the employer and employed, but that the State will still have to contribute £90,000,000 a year, or very nearly the total expenditure of the State when I first entered the House of Commons. Moreover, we have already Amendments put down in another place to increase the

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benefits and reduce the contributions, both of which will tend to make the figures of the Chancellor of the Exchequer utterly illusory. Then the Chancellor of the Exchequer says that the diminution in pensions granted to the survivors of the War will eventually make good the money which he will have to spend upon his new Pensions scheme. I do not think that that is quite correct, because, so far as I know—I am not speaking from actual authority for the moment—the cost of War Pensions is £70,000,000, and the cost of the new scheme, according to the Chancellor of the Exchequer, will in the future be £90,000,000. But where did we look for relief, unless it were that War Pensions would be gradually diminished? If, after the War, the Chancellor of the Exchequer is going to say that because, owing to the effluxion of time, there are certain savings on burdens put upon us by the War, that money is to be used for other purposes, where is the taxpayer going to get anything, and where are the sentiments expressed in the gracious Speech coming in?
I am sorry to see that the Chancellor of the Exchequer has allowed himself to follow the bad example of Mr. Lloyd George. The Chancellor of the Exchequer was always supposed to be the watchdog of finance and the guardian of the public purse. His duty was to criticise all expenditure brought to him by other Departments, and not to initiate expenditure himself. That very excellent precept was departed from by Mr. Lloyd George when Chancellor of the Exchequer, and the Treasury became a spending Department instead of a Department for regulating and reducing Expenditure. I am sorry to see that Mr. Churchill has followed the bad example set by Mr. Lloyd George, by introducing, in the Budget, an enormous new scheme for bestowing pensions upon various people. I took out from the Budget the amount of money paid annually by the Income Tax payers, Super-Tax payers, and the payers of Death Duties, and it came to £426,000,000. It must be remembered that out of a population of 45,000,000 the Income Tax payer—I do not mean the people subject to Income Tax returns, but the Income Tax payers—only number something like 2,500,000. Therefore, more than half the Expenditure of the
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State, which is roughly £800,000,000, is taken out of the pockets of 2,500,000 people, out of 45,000,000.
Of course, I know perfectly well that a Member of Parliament who goes down to his constituency (except in the City of London) and foreshadows expenditure at somebody else's expense is sure to be popular, but are not the Government committing themselves to a sort of auction? They have proposed pensions. Is it not as certain as that I am addressing your Lordships that at the next General Election members of the Labour Party will come forward and say: "If you will only return us we will increase the benefits which you are going to get." There is no gratitude, for anything that has taken place in the past. Gratitude is the sense of favours to come. And being desirous, as I am, of seeing the Conservative Party in office, I think they have gone the very way to lose the next Election by putting forward schemes by which the thrifty and hardworking are to keep the less thrifty and less hardworking portion of the population and by laying themselves open to the retort: "Your contribution are not large enough and if people will vote for us we will give a larger sum."
I have some figures hero with regard to the number of persons employed at the various Ministries, but I do not know that it is worth while giving them, because I have already stated the differences in cost. Bit before I sit down I would impress upon the Government that we are now a poor country. The deadweight Debt is, I think, £7,600,000,000, or twelve times the amount that it was before the War. The annual Expenditure is £800,000,000, or four times what it was before the War, and there is no sign whatever of any reduction. Trade is bad, unemployment is rife, and what are1 we doing? In private life, or in private business, does anybody who finds that his debts have increased twelvefold and his expenditure fourfold think that he will put himself right by spending more money? What is absolutely necessary at the present moment is to impress upon everyone that, owing to the War, and perhaps to other causes afterwards, the country is poor, that it cannot maintain this enormous burden of taxation, which is reducing the capital by which enterprise is carried on and sustained, and that, if the same spendthrift, policy goes

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on, it is certain, as Lord Inchcape said in his excellent letter in The Times on Saturday, that we shall come to a very serious position—Lord Inchcape said, as bad as that of the Bolsheviks in Russia. I do not go so far as that, but, nevertheless, we shall come to a very serious position.
I do not know that the few words that I have said will have any effect upon the Government, or whether they are not too late. I remember reading the book of Mr. Page, who was the American Ambassador in London. He gave as one of the reasons for the prosperity of England that she was living upon an accumulated capital of many hundreds of years, while in America they had not got that accumulated capital. But, he said, "We shall get it in a certain time, and when we do we shall be able to compete with England." We are doing all we can to diminish our capital, and I am very much afraid that America is increasing its capital, and is therefore becoming a still greater competitor with this country.
LORD ARNOLD: My Lords, I do not intend to intervene for many moments today, because I am hoping to have the opportunity of addressing your Lordships on financial matters, though from a different angle, on Wednesday. Before I come to the noble Lord's Question I should like to deal with the figures which he has given with reference to Income Tax and Super-Tax. He informed your Lordships that, if you take the amount which is being paid in Income Tax and Super-Tax and Death Duties the sum came to £426,000,000. I think he is in error. I have just made the calculation myself, and, omitting the Excess Profits Duty and the Corporation Tax, which are coming to an end, I think he will find that the amount is £385,000,000. There is not a great difference, but as the noble Lord is very punctilious about minutiæ I think he will agree that the difference is worth noting.
LORD BANBURY OF SOUTHAM: I was quoting from Mr. Churchill's statement. The figures are:—Death Duties, £62,000,000; Income Tax, £289,000,000; Super Tax, £70,000,000.
LORD ARNOLD: I have in my hand the White Paper with the estimated Revenue for 1925–6. The Income Tax is £262,000,000; the Super-Tax £63,000,000
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and the Death Duties £66,000,000. These are different figures. They have, however, further to be reduced because these are the figures for the current year. They do not include the remissions which have been made this year, or not to the full extent, and which next year will become fully operative. If all these reductions and so forth are made, and allowance is also made for the Excess Profits Duty and Corporation Tax, which together come to £13,000,000 and both of which are coming to an end, I think the noble Lord will find that the amount is about £385,000,000. However, there is not a great deal of difference between us. What is more important, the noble Lord does not tell us that on the other side of the national account some £300,000,000 is going back into the pockets of the direct taxpayers in the form of interest payments on the National Debt, and if the noble Lord will do me the honour of being present on Wednesday I think I can prove to his satisfaction that, although direct taxpayers are paying very much more than in pre-War days, the indirect taxpayers are also paying a great deal more. And looking at both sides of the national account, not merely Revenue but Expenditure, as we ought to do, the position of the wealthier classes to-day, as compared with that of the poorer classes, is pretty much the same as it was in 1913–14.
Now I come to the Question of the noble Lord about economy, and, in view of his reputation as an economist, it is natural enough that he should have put this Question on the Paper. Nothing which I will say is intended in the smallest degree to check zeal in the direction of wise and prudent economy, if wise and prudent economy can be achieved. At the very outset, however, I challenge the reputation which the noble Lord has come to have as an economist. That reputation has come to be taken so much for granted that I am afraid even I have occasionally been deceived by it and have used words which appeared to support the view. As a matter of fact, the noble Lord is not a really consistent economist at all and he has proved it to-day. His activities are mainly directed to cutting down wages and salaries and to cutting down social reform schemes which will do something to ameliorate the

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lot of the poorer classes. On the other hand, not very long since in your Lordships' House, the noble Lord was urging the Government to admit claims which might have involved an expenditure of £18,000,000 and the persons who made these claims had no mural title whatever to the money. I do not call that economy.
Leaving that aside, however, let me come to the position in regard to the current year. The Expenditure in the current year is estimated to be £797,000,000. I want to deduct from that the Post Office expenditure because the noble Lord has not referred to it and the Post Office pays for itself. I will also deduct two or three other items, which I need not mention, because they are not material to the argument. When these deductions are made you are loft with, an Expenditure of £697,000,000. That sum of £697,000,000 is made up, broadly speaking, of three classes of Services. There is, first, the National Debt charge, which conies to £355,000,000; secondly, there is the cost of armaments—that is, the Army, the Navy and the Air Force—which comes to £120,000,000; and, thirdly, there is the cost of the Civil Service, including War Pensions, which comes to £222,000,000. If these are added together they make a sum of £697,000,000. In regard to the first two of these items—that is, the National Debt charge of £355,000.000 and the cost of armaments of £120,000,000—the noble Lord has never really shown any economising zeal at all. In fact, so far as I can remember, and I have heard a great many speeches from the noble Lord in the last ten years, it is the first time I have heard him criticise at all any section of expenditure on armaments. As a rule he does not care a scrap what we spend on armaments; the more we spend upon them the better ho seems to be pleased. If you add these two sums together you will find that they amount to £475,000,000, or more than half; in fact, it is about two-thirds of the £697,000,000.
We are left with £220,000,000 for the Civil Service Estimates. I deduct from that £66,000,000 for the cost of War Pensions, because the noble Lord agreed that that should be done. If we deduct £66,000,000 from £222,000,000 we arrive at £156,000,000. There are three more items which I personally desire to deduct. They are items for social services and they are—first, the cost of education, £49,000,000;
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secondly, the cost of housing in this year, £9,000,000; and, thirdly, the cost of Old Age Pensions, £26,000,000. So far as we in the Labour Party are concerned we are not prepared to cut down these items, and I do not think that noble Lords who sit on the Liberal Benches are prepared to cut them down either. In fact, I really think that very few of your Lordships are prepared to cut them down though, of course, the noble Lord is. If I understand his position, we should not spend a penny on the education of tile poorer classes. He informed your Lordships, and he appeared to be rather proud of it, that he voted against Old Age Pensions when they were first introduced. He voted against that beneficent reform which has done something to cheer the old age of the poor.
If you add £26,000,000 for Old Age Pensions to £49000,000 and £9,000,000 you arrive at the sum of £84,000,000. If you deduct that from £156,000,000 you come down to £72,000,000, and without making too close an analysis of a number of other items, which I need not name because it is scarcely worth doing so and I do not think there will be very much dispute about it, there is an amount of £22,000,000 which, again, offers practically no field for economy and, therefore, that £22,000,000 has to come off and you arrive at a sum of £50,000,000. At last we have the figure, and that is the figure of £50,000,000, of the potential area of savings of money which is being spent on the Civil Service which offers some field for retrenchment. I do not know what your Lordships' opinion may be, but I suggest that if that £50,000,000 could be cut down by 20 per cent, it would be taking a rather optimistic view. But assuming that it could be cut down by 20 per cent, that £50,000,000 would come down to £40,000,000 and, therefore, the saving would be £10,000,000. I believe that probably represents the balance, because certain things will increase the limit of potential savings in the; Civil Service Estimates, and this figure would appear to be borne out more or less by certain words used by the Chancellor of the Exchequer in his Budget speech with regard to the expectations of retrenchment. Although I agree with the noble Lord—and I am sorry to say it—that the Chancellor of the Exchequer is not lucid, that he does not make his points clear

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and that it is impossible for any one to understand what he really means in this matter, yet it looks as though the figure I have given is more or less supported by what he said.
I am not suggesting for a moment that a saving of £10,000,000 is not worth making. Of course it is. It would amount to rather less than twopence on the Income Tax, and it is a saving which should be achieved if it can be achieved. At the same time, even such a saving as that, I am afraid, cannot be made without a certain amount of loss. We must remember that the retrenchment which was made under the "Geddes axe" has meant cost to the country in other ways because a large number of people were thrown out of employment. In one way or another that has meant cost to the country. However, I agree that if £10,000,000 can be saved by all means let it be saved; but I suggest to your Lordships that the very simple analysis which I have made rather points to the conclusion that in his desire for retrenchment the noble Lord is not exploring a very hopeful avenue along the lines of the Civil Service Estimates. There is great room for retrenchment on armaments. As I have said we are expending £120,000,000 on armaments, despite the fact that we have won the War and that there is now no German Navy for us to prepare against. If you regard the expenditure on armaments as an insurance, we are spending more than we were in the last quarter of the last century, when we spent about 2 per cent. of the total national income. Now we are spending 3 per cent. of the total national income, and I do not think fliers is any need for spending so much.
In conclusion. I submit that when we are discussing these Civil Service Estimates and the possibilities of retrenchment we must come down from the region of vague generalities to something concrete. I have tried to do that in the course of a brief speech. I have tried to show that probably the limit of retrenchment is somewhere in the neighbourhood of £10,000,000. I know the noble Lord will rejoin with his usual gibe about Labour extravagance: in fact, he introduced that into the beginning of his speech this afternoon. There is not the slightest justification for any such phrase and the noble Lord himself gave the answer to it. This
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Conservative Government is spending more this year than the Labour Government spent last year. In view of these facts it is simply ridiculous, in my opinion, to talk about Labour extravagance. It is simply a disregard of the facts. According to this year's Estimates the present Government is going to spend this year more than the Labour Government spent, last year. How has that come about? It has not come about because of increased expenditure on the Civil Service. It has come about because of increased expenditure on armaments. That is how it has come about.
Before I sit down I will anticipate the usual criticism that is made when any Labour speaker alludes to retrenchment in armaments. I will anticipate the hackneyed criticism which, no doubt, will be made again to-day: "How about the five cruisers?" We are always asked about the five cruisers. I will undertake to say that practically any Government which had been in power last year would have sanctioned these five cruisers. But that does not alter the fact that we did attempt, and effected, retrenchment in armaments, and had we been in office longer undoubtedly we should have effected considerably greater retrenchments in armaments. I believe that it can be done. Our position in a word is this. So far as Civil Service Estimates pure are concerned let us economise if it is possible, and as far as it is possible. So far as social services are concerned, which go to help the poorer classes, we are not prepared to economise. So far as armaments are concerned we are prepared to economise, and we believe that a good deal can be done in that direction. We believe that economy could be made there, and that it ought to be made.
LORD JOICEY: My Lords, I have listened to the noble Lord with very great interest, but I cannot say that his arguments are likely to have very much force so far as I am concerned, because he represents a Party which certainly does not believe in economy. In all that I have read I have always found that the Labour Party are going to be great spenders, but how they are to get the money to spend I cannot tell. I do not intend to go in great details into figures, but I will say that so far as the noble

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Lord, Lord Banbury of Southam, is concerned, I think he has done well to bring this question before your Lordships' House I know that throughout the country, amongst the taxpayers, this is a very serious and interesting question. When a Conservative Government got into power with a large majority, the country expected that great retrenchment would take place, and I am bound to say that there is deep disappointment that that has not been the result. And we do not see that any great saving of expenditure is likely to take place in the immediate future. Far from that being the case, the Government seems to have adopted, to a large extent, many of the Socialists' views, and seem disposed to bring in legislation and taxation very much upon the, lines against which every Conservative member spoke strongly at the last Election.
I happen to have an interest in one industry of the country, and I can speak upon that with some degree of accuracy. I refer to the coal trade. I must say that I am rather shocked to find that so many members of the Government—the Chancellor of the Exchequer in particular—seem to look upon an £800,000,000 Budget as a normal Budget. The Chancellor of the Exchequer certainly has made no serious effort whatever to reduce the taxation. Take the coal trade, which at the present time is in a very seriously depressed condition. I have been associated with that trade for sixty years and I have never seen such a state of depression in it as to-day. I have always been able to see my way through difficulties, and to have confidence that ultimately things would come right, but at the present time I confess that I have the greatest difficulty indeed in knowing what the future is likely to be. It is not only from Imperial Taxes that we suffer, but we suffer also from the local rates Men have got so much into the habit of spending public money, both in Parliament and in connection with local authorities, that they do not seem to realise that every penny which they spend has to be earned—that somebody has to make it or there would be no revenue.
I will give an example drawn from my own concern. What we paid for rates, compensation, welfare and insurance was last year five times larger than it was in 1913. I doubt very much whether we
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have had five times the benefit from that expenditure. I do not hesitate to give these facts. The workmen are just as much alarmed as we are at this increasing expenditure. With regard to the new scheme of insurance, which so many speak of as though it were a light matter, our increased cost in respect of it will be no less than £43,000 a year, while the relief we shall get from Income Tax will be only £11,000, leaving us an increased net tax of £33,000 per annum. Bearing in mind that rates and the various things I have mentioned come to something like £200,000, this means £233,000 in taxes upon the collieries which we own. This cannot but be a very heavy handicap indeed when you have to compete with countries where longer hours are worked and lower wages paid, and where in some cases, like America, the coal is very much more easily worked.
During the last century we have had the advantage in this country of cheap coal. Cheap coal has been of immense advantage to our industries; it has enabled us, with the hard-working men that we have in this country, to beat other countries in production, and to export coal and our various manufactured articles to pay for the food which we have to import. What has been the effect of the high price of coal upon the iron trade, the steel trade, and the ship-building trade? Cheap coal means cheap production in these trades, and dear coal means dear production. It is largely owing to the price of coal, and sometimes to action on the part of His Majesty's Governments which have gone before the present Government, that we find ourselves in this position at the present time. It is a very serious matter, while we are straining every nerve in order to reduce our costs of production, that His Majesty's Government should ignore our efforts, and that while the collieries are losing thousands of pounds a month they are to have this additional tax imposed upon them by the new insurance scheme.
When I see it stated that the Pensions are to be a liability on this country of something like £750,000,000 I wonder where our economists have gone. It seems to me that economy forms no part of the programme of any of the political Parties of this country. I am getting on in years, and I shall not see much of the mischief that this heavy taxation will do.

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It will not affect the rich classes, of whom the noble Lord spoke, but it will tell upon the poor. Unless this country can compete with other countries there will be no means of employment for the people. Going through the Wembley Exhibition I have been staggered to find there machinery that has been manufactured in our Dominions, machinery certainly as good as ours if not better, and machinery that we have been accustomed to supply to our Dominions and to various countries. Now they are beginning to make their own machinery, and to work their own mines. The result is that we are going to have such competition in this country that I do not know how we are to find employment for our people and to feed them. We are going to have such competition as we have never had before at any period in this country's existence.
The Government is to some extent liable for many of the troubles that exist at the present time. I cannot forget that the coal trade got practically no excess profits, while every other industry in the country got 60 per cent, or 40 per cent., and the farmers paid no Excess Profits Duty at all. Why the coal trade should have suffered that fate I am unable to fathom. I have been obliged to come to the conclusion that it was to please the Miners' Federation, and if the Miners' Federation could give a second opinion I am quite sure that opinion would be against the taking of all excess profits from the mines. The noble Lord spoke of excess profits, and asked why they were not paid. The reason is the mine-owners have not the money with which to pay them. They lost so much money during the last six months.
LORD ARNOLD: I did not refer to the excess profits in that sense. I said that we could not count on them as a future source of revenue.
LORD JOICEY: Then the Government brought in a seven-hours Bill for mines, which means that a man works only about five and a half hours per day at the "face." No other country has a seven-hours Bill for coal mines. Germany has not; America has not; Belgium has not; and it puts this country at an immense disadvantage. The result is that we have to employ 25 per cent, more men to do
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the work, and that 25 per cent, do not increase the output of coal by one ton. That is am immense handicap to us, and unless we either extend the hours or reduce the wages' cost, it does not matter what people may think, we shall never recover our trade until we are in a position to compete in price with our competitors.
I had the misfortune to have to close a pit not long ago. It is a most unpleasant thing to do, especially when you have to discharge men who have worked at a pit all their lives. I explained the position to the men. I said, "Our costs are so much, and our competitors' costs are so much. How do you propose to bridge that difference?" None of them could answer. Unless some means are found of cutting down expenditure we shall never be able to compete, with our foreign competitors. The Government also brought in an eighth hours Bill for railways without consulting the railway people themselves on the subject. There are many places on our railways where only two or three trains a day pass, but we are obliged to keep two shifts of men in order to do the work. That is an enormous handicap, and the result is that our traffic has to pay about twice the amount per ton that it paid before the war.
I cannot understand why the Government should not make a serious effort to cut down Expenditure. Every employer has had to do it, and I have always found that when people make up their minds to effect a certain thing there will have to be very great difficulties in the way to prevent them accomplishing it. I know that politicians are keen promisers. All Parties are much alike in this respect. We passed the Corrupt Practices Act to prevent a man offering £1 to another man to vote for him, yet we have politicians going round the country whenever there is a General Election, promising all kinds of things out of the public purse. Surely the corruption in one case is just as bad as in the other.
The noble Lord said something about the direction in which we could look for a reduction of Expenditure. Let me tell him of one reduction which could be quickly and easily made, and that is in connection with the "dole." I am the last person in the world to refuse to give

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any man and his family help when he is out of employment, but from what one reads in the newspapers it would appear that the "dole" is most shamefully abused. I am sure that there are thousands of people receiving the "dole" who have no right to it whatever; and the Government have scarcely said a word about it. It is left to the Socialist Mr. Lansbury—all honour to him—to bring the question before the country. Surely there should be a very careful examination into the administration of the "dole." From what we see in the newspapers there are cases in which there undoubtedly is fraud, cases where the "dole" should not be given. If there was a proper administration of the "dole" it would, in my opinion, save a good many millions of pounds and be also of benefit to the character of the people of this country. The "dole" is destroying our working power. One man gets the "dole" and keeps his family without working. His next-door neighbour sees this, and says: "Why should I work when my neighbour is doing without work?" There are thousands of such cases, and I hope that the Government, when looking for some means of cutting down the Expenditure of the country, will go very carefully into this question.
I sometimes think the Government do not realise the serious position of our industries. At the present time our industries are in such a condition that unless some relief is given, unless our people work harder, unless we cut down our costs, I cannot see how we are going to compete with our foreign competitors and pay for the food which this country wants. The Question which the noble Lord has brought before your Lordships' House this afternoon will, I hope, receive the serious consideration of the Government. I hope they will make up their minds to cut down and reduce this expenditure. If there is one man who dislikes the "dole" more than another it is the industrious working man who knows what is going on, and I am sure the Government would get the support of the best of the labouring classes if some attempt were made to look into the administration of the "dole." I hope we shall see a great change in regard to Government expenditure; if we do not, my own opinion of the future is a very bad one indeed.
LORD HUNSDON OF HUNSDON: My Lords, my noble friend Lord Banbury of Southam has called your Lordships' attention to the fact that about 2,500,000 persons pay about half the Revenue of the country. The noble Lord opposite will agree with that. I can call your attention to a more startling fact. I calculate that the remainder of the electors—namely, about 85 per cent, of the electorate—pay less than the Super-Tax payers, who constitute less than one-half of 1 per cent, of the electorate. and I am convinced that it is idle to expect any Government to economise while such a disparity exists between these who control taxation and these who pay it.
THE EARL OF CLARENDON: My Lords, I am afraid that in reply to the Question addressed to His Majesty's Government by the noble Lord, I shall have to inflict upon you a somewhat voluminous mass of figures, but in doing so I will endeavour to be as brief and as explicit as I can. It is not much use making a mere mathematical comparison of the money figures in regard to the expenditure upon the Civil Services of this country without having due regard to two important factors: first, the change in the value of money; and second, the change in the scope of expenditure, whether by a transfer from other public authorities—namely, local authorities—or in respect of new social services. The total Estimates for the year 1905 amounted to £28·6 millions; in 1914, that is to say in the pre-War period, they were £57·1 millions; and in 1925–6 they amount to £222·6 millions, and that last figure, of course, includes, as I think the noble Lord opposite pointed out, £66,000,000 in respect of War Pensions.
It must not be inferred that since the War there has been nothing but an increase of expenditure in so far as the Civil Services are concerned. The contrary is the case, as I think I can prove to your Lordships by giving you the figures from 1919 up to the present day. In 1919–20, when Votes of Credit ceased, the actual expenditure amounted to £557·3 millions; in 1920–21 it amounted to £448·8 millions; in 1921–2 to £437·9 millions: in 1922–3 to £290·6 millions; in 1923–4 to £246·2 millions; in 1924–5 the Estimates, including the Supplementary

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Estimates, amounted to £238·8 millions; and in 1925–6 they amount to £222·6 millions. To strike a fair comparison between the figures which prevail to-day and figures which prevailed before the War—and the whole of my argument is based upon this—we must add to the latter an increase of 75 per cent., which is the increase in the prices which obtain to-day in so far as the money value is concerned. The reason for this is simply that it costs more by that percentage to acquire the same quantity of goods and services as could be acquired in 1914–15, and let me make this further observation that the State is no more exempt from conditions of this kind than are private individuals.
To obtain the true comparison between the figures obtaining to-day and the figures obtaining in 1914–15, let me give your Lordships the following figures, which take into account the increase of 75 per cent, to which I have referred. In 1914 the Estimates, as I have already told your Lordships, amounted to £57·1 millions. If you add to that the 75 per cent, that I have mentioned, the figure reaches a total of £99·9 millions, as compared with the Estimates in 1925–6 of £222–6 millions—or, in other words, an increase of £122,000,000, or 120 per cent. What is the explanation of this increase of £122,000,000 in real cost, as distinct from money cost? My noble friend who sits behind me quite rightly omitted from his calculation the War Pensions, to which I have referred, amounting to £66,000,000, but he did not, so far as I understood him, add another figure which should be taken into account—namely, the figure of £10,000,000 incurred in respect of certain War charges—charges in respect of mandated territories, amounting to the figure of £5,100,000; charges in respect of training and resettlement of ex-Service men, amounting to £2,300,000; charges in respect of the War Graves Commission, amounting to £700,000; and various miscellaneous charges amounting in all to £1,600,000; making a total, in round figures, of £10,000,000.
We can set these extra War charges off against the saving on the social services in so far as Ireland is concerned, which may be computed quite fairly to-day at an amount of £12,000,000 annually. These services, as your Lordships are aware, were borne by this country in 1914 and
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are now borne by the Irish Free State. If the Irish services had remained, this figure of £122,000,000 would have been increased to £134,000,000, from which we set off £66,000,000 for War Pensions and £10,000,000 for the extra War charges which I detailed a moment ago, leaving a balance of £58,000,000—an increase, be it noted, on the adjusted comparable figure of 1914 of something less than 60 per cent., rather than the figures which my noble friend Lord Banbury gave. Of this £58,000,000, a sum of £20,000,000 is in respect of grants to local authorities, which they did not receive in 1914 and which to-day go towards the relief of the local ratepayers. This is additional to the relief given by the increase of previously existing grants—grants, for instance, for such purposes as education and health.
Now, let me give some particulars of this £20,000,000. First of all, included in this year's Estimates is a figure of £7,000,000 in respect of grants to the police. In 1914 the only contributions to the police were made from the Consolidated Fund through the Local Taxation Accounts, and nothing appeared in the Estimates except a very minor grant in respect of the Metropolitan Police. The contributions to the Local Taxation Accounts are now supplemented by grants voted by Parliament towards covering half the cost of the local police. In 1914–15 the State did not subsidise local authorities in regard to housing. In 1925–26 the Estimates include a figure for such purposes of £9·1 million. In 1914–15 the State did not incur expenditure towards the relief of unemployment. In 1925–26 the Estimates included a figure of £3·8 millions in respect of this.
I turn next to the balance of £38,000,000 and this is accounted for by the real net increase on the Services which I mentioned not very long ago—namely, education, unemployment insurance contributions, and Old Age Pensions. To that must again be added, of course, the increase of 75 per cent, for the increase in the cost of these Services to-day. Education, excluding Ireland, was in 1914–15, with the 75 per cent, added, £30·1 millions as compared with £46·4 millions in 1925–26, or an increase of £16·3 millions. In regard to unemployment insurance contributions, the amount in 1914–15 was £1,000,000 sterling as compared with £l3·1

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million in 1925–26, or an increase of £12·1 million. Old Age Pensions, again excluding Ireland, in 1914–15 accounted for £17·8 millions as compared with £26·8 millions, or an increase of £9,000,000. In round figures that makes up the increase of £38,000,000.
During the course of this debate the fighting Services have been referred to by various noble Lords, and it might not be inappropriate if I gave your Lordships quite briefly some figures with regard to them. With regard to the Army in 1914–15, again adding 75 per cent., the Estimates amounted to £50·4 millions as compared with £41·5 millions to-day. The cost of the Navy in 1914–15 was £90·3 millions as compared with £ 60·5 millions to-day. For the Air there is an increase of £15·5 millions. In other words the total net decrease represents a figure of £20·2 millions. In laying these figures before your Lordships, I have taken absolutely no account of a factor which I think I should be justified in taking into account were I to present a really comparable statement, a really comparable picture, of the Expenditure to-day and the Expenditure in 1914. I refer to the increase in the population since the war, which has amounted to about five per cent. It is very natural, therefore, that in view of that increase the cost of the main Civil Service has proportionately risen.
My noble friend Lord Banbury, in the course of his remarks, did not, I think, indicate to His Majesty's Government any course of action, or even make any suggestion, as to how he himself would effect reductions. He went on to say that he had not seen from the speeches of His Majesty's Ministers that he had so far read any proposals or suggestions in regard to the question of economy. But during his observations he drew your Lordships' attention to two facts which the Chancellor of the Exchequer mentioned in his Budget speech in another place. The Chancellor of the Exchequer has announced that it is the intention of His Majesty's Government to set up a Standing Cabinet Committee to overhaul all the existing blocks of expenditure, and secondly, that it is the desire of His Majesty's Government to reduce the Supply Services by £10,000,000 per annum.
LORD ARNOLD: Will the noble Earl permit me to interrupt? I have looked again at the words of the Chancellor of the Exchequer, which are singularly lacking in lucidity, unless he is misreported in the OFFICIAL REPORT. Does he mean that there is to be a progressive decrease year by year, or does that £10,000,000 include the expected decrease in the cost of the Debt Charge as well? And if he is speaking of the Supply Services alone does that include also the Army, Navy and the Air Force? The Chancellor of the Exchequer did not make clear what he meant. Is this progressive decrease of £10,000,000 a year expected to be made in the cost of the Supply Services quite apart from the £5,000,000 to be saved in the Debt Charges?
THE EARL OF CLARENDON: The noble Lord is quite correct in his assumption. The Chancellor of the Exchequer, so far as I understand him, intends that the £10,000,000 saving shall be effected, so far as the main Supply Services are concerned, quite irrespective of the £5,000,000 which it is anticipated will be saved so far as the public Debt is concerned.
LORD ARNOLD: If that is so, the Chancellor of the Exchequer was singularly infelicitous in the way he made his observations. May I ask the noble Earl this further point: Does that include armaments?
THE EARL OF CLARENDON: Yes. Now, my Lords, I only have two or three more words to say Every one naturally in this country, including His Majesty's Government, is desirous of practising economy. The only real trouble and difficulty is that no one exactly knows at the moment how to put it effectively into practice, and naturally there is no desire to act precipitately for fear of creating a state of chaos which would be far worse than the state in which we exist to-day. But I should like to assure your Lordships of this fact, that His Majesty's Government is not unmindful of its duties and obligations in this respect, and intends to travel along that road as far as is practically possible.
THE LORD BISHOP OF DURHAM: My Lords, before this subject passes from your Lordships' attention, I desire to address just a few words to you as the Bishop of a diocese which, I suppose, is more grievously affected by the economic

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depression which afflicts the whole country than any other part of the Kingdom. Both the capital industries of Durham, shipbuilding and mining, are grievously stricken. That is the title by which I venture for a moment to interpose in this debate. I desire to join most earnestly in the noble Lord's appeal for economy, but I do it with a difference. I do not think it is sufficient to put before your Lordships, or before the country, comparisons of Expenditure. You must also take account of the fact that between 1914 and 1925 there has been a great shifting of public opinion on the whole conception of what is the national obligation with regard to the poorer members of the community. We may think—I am one of these who do think—that that change has not been altogether wisely expressed, and I am too well aware of the fact that it may easily lend itself to most perilous developments. But I do not think it would be right for us to let it go out, even by a misunderstanding of our purpose, that this House was looking mainly to Expenditure, and was not thinking far more of what the real interests of the community, and therein of the poorest members of the community, really are.
The noble Lord, Lord Joicey, who addressed your Lordships just now, speaks with the authority not only of a great mine owner but also of a very just and public-spirited employer. Lord Joicey speaks of what he knows, and I do not think that this House or the country can attach too much importance to what he said. There are two particular points to which I think the attention of all of us ought to be directed. First of all, it is not merely the increase of Imperial taxation, but the increase of the local rates which is telling upon the thrift and comfort of our people. In the North we used to be proud of the fact that we had hundreds of thousands of workmen who were owners of their own houses. Now these men are finding themselves chargeable with an amount of rates which equal and exceed what they once contemplated as the probable burden of rent. Thrift is being hopelessly discredited by the enormous burdens which are now being placed upon the locality. If we could do anything to reduce that burden we should do a great stroke of business for the country.
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I want to say a word upon the "dole." What Lord Joicey said, that the "dole" is being widely and grossly abused, is quite true. But do not suppose that the great mass of these who are receiving the "dole" do not feel, and feel acutely, the humiliation of having to exchange their living for that pittance. I am in the position—your Lordships must pardon me for this egotistic reference—of living in the midst of a great coalfield, in which there are thousands of honest workmen who have been accustomed all their lives to work, who are now recipients of the "dole." I go out into the park and meet these people and talk to them. What I find is that the humiliation of having to receive the "dole" is acutely felt by many of them, and that anything that we could do to improve the industries of the country, so as to set the wheels of industry in motion again, and enable these people to work instead of receiving the "dole," would be of inestimable advantage. I believe that the enormous burden of taxation at present is a real drawback upon industry, a drawback so severe that it is hindering the renewal of industry. I was almost going to say something very extravagant—that I believe it would be almost worth the country's while to incur another great burden of debt if we could only relieve taxation to the extent of setting the wheels of industry going to-day. Anything is better than having our streets walked by thousands of young men who have never done a stroke of work for four years. We are ruining the economic capacity of our workmen for the future. That is the weight of the argument for economy which I feel.
For the rest, I welcome heartily the great scheme of insurance which the Government have projected. I am very grateful to them personally for having done it. I quite realise the great burden of expenditure involved, but it was worth doing, and it was right. I do not anticipate that much can be done in the way of economising on education. There you touch a subject very closely related to our economic efficiency. Education is very dear to the masses of our people. The idealism of popular life gathers about education in a way that we perhaps hardly realise, and therefore I do not wish for much economy there, although, if I might confess it to your Lordships,

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I think that the money that we do spend might be very much more wisely spent in some other ways. However, let it go forth that our desire for economy is a desire to lift the burden not from one section, and that the wealthier section of the community, but from this great working machine of industry, by which our people live, and which, when it ceases to operate, throws them into the melancholy position of being chargeable, like paupers, upon public "doles" which they resent, and justly resent, and which we ought to do all in our power to help them to avoid.
THE MARQUESS OF SALISBURY: My Lords, I am very glad that the right rev. Prelate did not let this debate come to an end without adding the observations which he has made. I think all your Lordships will agree with him in his urgent plea for economy, and in his belief that if we could only get rid of what is called the "dole," it would be an immense thing, not only for the taxpayer but for the working classes themselves. He spoke, in the course of his speech, of the heavy burdens which are thrown now upon the local authority and the local ratepayer, and it is perfectly true. I cannot help saying, however, that I think his criticism that a good deal of the money we spend might be better spent—which is a true criticism—is at least as applicable to the expenditure of the local authority as it is to Imperial Expenditure.
I only speak as one of your Lordships having a very common experience, but I doubt whether there is any real desire for economy in a great many of the local authorities of this country. Some of my noble friends differ from me. Their experience may be different from mine, but certainly what I think is much more present to the mind of the local authority is to raise the standard of efficiency rather than to economise. That, of course, is not altogether to be criticised; but in these days of shortness of money it undoubtedly confronts us with a very formidable result. As we watch local expenditure rising year after year—it is always, or nearly always, going up—I do not believe there is any real desire for economy as compared with the raising of the standard. Your Lordships have heard from my noble friend who represents the Treasury in your Lordships' House, that
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a large part of this extra expenditure is due to increased subventions to local authorities. Even after all the figures have been adjusted, a sum of £20,000,000 is to be assigned to that cause and that cause alone. That £20,000,000, of course, corresponds to another and local £20,000,000, for these sums always balance. That will give your Lordships some idea how large is the increase in local expenditure. For these reasons I think that anybody speaking with authority ought to try to do his utmost to impress upon all concerned, not merely the Imperial Government but the local authorities as well, the need for economy.
So far as the Imperial Government are concerned, I do not think that sufficient justice has been done to my right honourable friend the Chancellor of the Exchequer for his very substantial expression of a desire to save at any rate £10,000,000 on the Supply Services, if he is able to prevail. I do not know whether the noble Lord opposite really appreciated to the full what that meant. He thought that my right hon. friend had not explained himself clearly. I hope he now appreciates exactly how that matter stands. I do not know exactly the direction in which the noble Lord who spoke from the Front Opposition Bench looks for his economies.
LORD ARNOLD: I distinctly said where I looked for them. I look for them on armaments, and I said so three times.
THE MARQUESS OF SALISBURY: Yes, but the noble Lord does not seem to appreciate that there has already been a great economy in armaments. Perhaps he did not listen to the figures given by my noble friend.
LORD ARNOLD: As a matter of fact, the expenditure on armaments is very much more this year than it was last year. There is no economy in that.
THE MARQUESS OF SALISBURY: There is a very substantial economy in armaments as compared with the pre-War expenditure, if you allow for, the difference in the value of money, which is fundamental in all these discussions.
LORD ARNOLD: There is no German Navy now.
THE MARQUESS OF SALISBURY: May I venture to remind the noble Lord that he has had an opportunity of making a speech already? I think your Lordships will understand what the figures are. There is an economy of £6,000,000 on the Army and of £30,000,000 on the Navy, I hope the noble Lord will observe, as compared with pre-War expenditure, and though that is set off to a certain extent by an increase on the Air Service of £15,000,000, yet I do not think there is any noble Lord in the House who will call into question the necessity for that Service. But even allowing for the increase of £15,000,000 on the Air Service, there is a very great economy in the Navy and Army as compared with the pre-War expenditure, when you allow for the change in the value of money. I noticed that the noble Lord opposite did not suggest that economy was to be gained by nationalising various Services. I had expected to hear from that Bench that this was the direction in which he looked for improvement. But even the noble Lord's courage failed him when it came to suggesting that any economy would arise from nationalising industry.
The right rev. Prelate said that what was more than ever important was to increase the volume of work. I need not tell your Lordships how fully His Majesty's Government agree with him, and in the Budget there has been an attempt to do the very thing which he desires. The remission of taxation upon the Income Tax and the Super-Tax are both designed—and I hope they will be effective for that purpose—to ease the wheels of industry by giving an opportunity for a much larger investment of capital in industry by means of these remissions in taxation; so that I hope he will allow me to say that something is being done in that direction.
As to the great policy of the Government in respect to Pensions, that is undoubtedly expensive and I do not attempt, of course, to go into it at this moment. But it is at any rate an assurance that the Government have deeply at heart the real hardships of the people and the real sense of insecurity which weighs upon them. I do not think there can be any doubt from henceforth that that is deeply at the heart of the Government, that their strong desire is to do something to convince the people that in the Government they have a
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friend of all that goes to reduce these hardships and to restore a sense of security. I need not say that we hope for a response from the people. We earnestly hope the result may be that not only will the wheels of industry be eased by the remission of taxation, but that all classes, including the working class, will be able to increase the vigour and the zeal of their efforts in the public cause. Work of whatever kind is, after all, the public cause. So long as it is good work it is vitally in the interests of the country. If we could only persuade all classes to do their utmost to get rid of petty friction in industry, not to think so much about their own interests but to co-operate in a great effort by working harder and harder to raise the prosperity of the country, that is the real and the only solution fundamentally. Governments can do a little. It is on the people that the real responsibility lies, and the whole object of the financial policy of the Government is to promote, if possible, that effort of all classes, and upon that we rely finally to rescue this country from the undoubtedly serious position in which its finances stand.
THE DUKE OF BUCCLEUCH: My Lords, I am sure your Lordships are very glad to learn that the leanings of the noble Marquess and of the Government are towards economy. At the same time, when the noble Marquess speaks of the benefits which the Government desire to confer upon the country, he will reflect that unless proper economies are effected the country will not return them at the next Election. The particular point on which I desire to speak was raised by the noble Earl, Lord Clarendon, in his most able defence of what I might call, perhaps, the extravagance of the Government, though we all hope it will not be so next year, and was further emphasised by the noble Marquess—namely, the grants given in relief of rates. Your Lordships are quite well aware of the chief reason why these grants have been given, and know that they have been the cause of very much greater expenditure which has been forced by various Governments upon the ratepayers of the country. It is no good having any illusions that these grants have been any economy to the ratepayers. Quite the opposite has been the fact.

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I have been connected with certain local authorities for many years, and they have always tried to be economical. We have also aimed at efficiency, but that does not mean unnecessary expenditure or extravagance. What has been the great difficulty, especially of late years, is that, in spite of these grants, the rates have gone up and up. That is due very largely to legislation (which is always being enacted) forcing the local authorities to expenditure, and putting Government Departments over them, in many cases Departments—certainly in Scotland and, I suppose, also in England—which are not particularly competent, and which know nothing like so much about such affairs as housing, public health, and so forth, as do these who have to administer these things locally. If you do not trust the local authorities you will not get proper economy or efficiency from them, and one of the first things towards economy, in my opinion, is to increase the responsibility of local authorities, and to give them greater powers.
There is another aspect of the matter that must be looked at. The second Income Tax on real property in the way of rates is becoming very serious, and I do not think I am wrong in saying that at the present time it is considerably increasing the cost of home-grow a food. We may let in foreign food cheaply, but home-grown food has, to pay heavy rates. Every sheep, every bullock sent to market has its cost increased by those rates, and over and above that the pressure of the rates is draining country districts of money. It has a good deal to do with the depressed state of agriculture, diminishes the amount of money spent on repairs and upon houses, and to a certain extent affects the rural population. It may be said that a grant is given in relief of rates, but the real point in regard to the rates is to see that you rate people only for what is fairly rateable as local service, and not to rate them for national needs. Moreover, you ought not to make grants to local authorities and force them in consequence to increase their rates. Not only is that not economy, but in my opinion it is extravagance.
EARL DE LA WARR: My Lords, I did not intend to speak in this debate, but I must enter a most emphatic protest
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against the suggestion made by the right rev. Prelate the Bishop of Durham, when he referred to the abuse of what he was pleased to call the "dole," and what I was sorry to hear the noble Marquess, the Leader of the House, also call the "dole." In another place, Mr. Churchill, the present Chancellor of the Exchequer, was shouted down for making the suggestion that the right rev. Prelate has made, and I think it would at least have been in good taste—
THE LORD BISHOP OF DURHAM: I made no suggestion; I made a statement of fact.
EAEL DE LA WARR: In another place, when the Chancellor of the Exchequer was speaking on this subject, he did not produce a single piece of evidence in support of his statement. He said he was going to appoint a Committee to investigate the matter, and to try and collect evidence, but he brought forward no evidence during the course of the debate in which he took part, and in which he could have produced any evidence had he possessed it. But he had not got it. I say most emphatically that that statement is a false statement, and I appeal to noble Lords not in future to talk about the "dole." The "dole," as you call it, is something that has been paid for by every one of these men. There is the exception of the uncovenanted benefit, where they have fallen in arrears with their payments, but that is counted up against them as a debt. I say emphatically that it is not a "dole," and I appeal most earnestly to noble Lords not to call it so, for it causes the greatest bitterness amongst these men who, for years, have been paying their contributions.

CHURCH OF SCOTLAND (PROPERTY AND ENDOWMENTS) BILL
Read 3a (according to Order), and passed.

APPRENTICESHIPS.
THE MARQUESS OF SALISBURY: My Lords, before the House adjourns I desire to call attention to an Order which is on the Paper for tomorrow. It is in the name of my noble friend Lord Biddulph. It addresses to His Majesty's Government

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a Question with regard to associations which undertake to apprentice boys in various trades and asks whether the Government could see their way to help such operations. I understand that my noble friend is about to ask your Lordships' leave to postpone the matter until after the Whitsuntide Recess, but the responsibility for that decision really rests upon us, and not upon him. The, fact is that my noble friend Lord Cecil of Chelwood, whose business it is to reply upon that particular subject, is obliged to attend a very important Committee to-morrow. I have done my best, I can assure your Lordships, to postpone the Committee, hut it finally came to this, that either the Question must be postponed or another noble Lord from this Bench would have to undertake the duty of replying. My noble friend Lord Biddulph intimated that he would prefer that Lord Cecil of Chelwood should reply, and so he has elected to postpone the Question. I am very grateful to him, but I was anxious your Lordships should know the facts so that the House should not assemble under a misapprehension to-morrow.
LORD BIDDULPH: My Lords, I am quite willing to postpone my Question until another day.
[From Minutes of May 21.]

BLACKPOOL IMPROVEMENT BILL. [H.L.]
Reported from the Select Committee, with Amendments.
NOTTINGHAM CORPORATION BILL. [H.L.]
Reported from the Select Committee, with Amendments.
ECCLESIASTICAL COMMITTEE.
Fourteenth Report, being the Report by the Ecclesiastical Committee upon the Interpretation Measure, 1924: Laid before the House (pursuant to Act) and to be printed.
INTERPRETATION MEASURE, 1924.
Text of the Measure: Laid before the House (pursuant to Act) and to be printed.

AIR MINISTRY (CROYDON AERODROME EXTENSION) BILL.
Committed for Tuesday next.
House adjourned at ten minutes past six o'clock.

MINISTRY OF HEALTH PROVISIONAL ORDERS CONFIRMATION (No. 6) BILL. [H.L.]
Referred to the Examiners.
MINISTRY OF HEALTH PROVISIONAL ORDERS CONFIRMATION (No. 7) BILL. [H.L.]
Referred to the Examiners.

KILMARNOCK GAS AND WATER PROVISIONAL ORDER BILL.
Brought from the Commons; read 1a; to be printed, and referred to the Examiners.
SOUTH WALES ELECTRICAL POWER DISTRIBUTION COMPANY BILL. [H.L.]
GREAT WESTERN RAILWAY BILL. [H.L.]
LLOYD'S BILL. [H.L.]
Returned from the Commons, agreed to.

AIRE AND CALDER NAVIGATION BILL. [H.L.]
Returned from the Commons, agreed to, with Amendments: The said Amendments considered, and agreed to.
NEWQUAY WATER BILL. [H.L.]
The CHAIRMAN OF COMMITTEES informed the House that the Promoters do not intend to proceed further with the Bill: Ordered, That the Bill be not further proceeded with.
HOUSE OF LORDS OFFICES.
Second Report by the Select Committee made, to be printed, and to be considered on Wednesday next.
FORMER ENEMY ALIENS (DISABILITIES REMOVAL) BILL.
To be read 2a on Tuesday, June 30 next (Viscount Peel.)