National Expenditure.

Orders of the Day — CONSOLIDATED FUND (No.1) BILL. – in the House of Commons on 24 March 1920.

Alert me about debates like this

Photo of Hon. Edward Wood Hon. Edward Wood , Ripon

I beg to move, to leave out from the word "That" to the end of the Question, and to add instead thereof the words this House, before consenting to the Second Reading of this Bill, desires to be satisfied that no improvement can be made in the machinery for the control and limitation of expenditure, as well by the supervision of the Treasury as by the informed and effective exercise of the authority of this House. After the speech to which we have listened from the right hon. Gentleman, I feel a certain compunction in initiating a further discussion which will have the effect of inviting further remarks from him at a later stage, but I make no apology for doing that, because my view, and the view of those who are associated with me in this Amendment, is that the subject with which it deals is of such importance that no excuse is required for bringing it to the attention of the House of Commons. If it be true that finance underlies nearly all our problems to-day, it follows that the control of finance is a matter of not less importance. I ought, perhaps, to assure my right hon. Friend that I moved this Amendment in no hostile spirit to him or to the Government. Indeed, I think the terms of the Amendment are only such as were required to keep it within the rules of order, and I can assure my right hon. Friend that I, and those with whom I am associated, have no purpose but to offer him every assistance we can in the very difficult task in which he is engaged, and, may I add, for the discharge of which I. think this House owes him a very great debt of gratitude. The utmost, therefore, that I would endeavour to do, would be, as far as possible, to render him assistance in that task.

I might, perhaps, say that, since we decided to move this Amendment, there has appeared on the Paper a Motion in the name of one of my hon. and gallant Friends (Colonel Gibbs), moving officially for a Select Committee on this subject We decided to continue: with our Amendment none the less, for the reason, if for no other, that, if that Select Committee be set up, its opportunities for usefulness will, in our judgment, be very much hampered and impaired unless, at the same time that the work is going on, it is possible to produce a real sense of responsibility and co-operation in this House itself. My right hon. Friend has often reminded us of what, indeed, is only too obvously the truth, namely, that this House is a very inconsistent body in that it always preaches economy, and hardly less regularly practices extravagance. It is, I am afraid, also true that this House is open to the temptation under which all large spenders of money labour, of devoting its efforts to small economies. We all of us have heard of the millionaire who, when faced with financial bankruptcy, sought to redress the balance by writing his letters on half sheets of paper; and I remember one such who decided to reform his whole financial balance sheet by ceasing to take in "Punch." This House did the same thing when it refused the Lord Chancellor a bath, and, on a rather larger scale, when it interfered the other day with the building of a labour exchange, I think at Manchester. I do not say that those things are not good, but we fall into error if we think they are the most important things. For this House, I would suggest, there is rather more excuse than for the, ordinary individual, because it is much more difficult for the House to introduce and make effective a really sound system of financial control. I am bound to say that all my reflections lead me to agree with my right hon. Friend in what he has often emphasised, namely, that if we wish to pursue economy, we must build the greater part of our house upon the Treasury itself. I have heard him say on more than one occasion that the remedy is to strengthen the Treasury. I should like to ask him, when he comes to reply, if he could give the House some precise idea of what is in his mind when he uses the phrase "strengthen the Treasury"?

I do not know whether hon. Members have a very clear idea of the process by which financial expenditure is incurred, and perhaps it may not be without profit to attempt to follow an actual item of expenditure from what I may call the chrysalis stage, in the mind of some enthusiastic subordinate in a Department, until the moment when it becomes the full-fledged butterfly of an extra shilling on the Income Tax. I suppose it mostly starts somewhat in this way. An enthusiastic subordinate brings up a scheme to the departmental chief—a departmental chief, let it be observed in passing, who is probably overworked—who considers the scheme, mainly, I suppose from the point of view of policy rather than of finance. If he secures the assent of his departmental chief, which I suppose is not improbable if he presents his scheme well and is able to say that it will innure to the success and outward advantage of the Department, it goes, at some moment or other, to the Treasury for sanction. I am not very certain whether all schemes have to go to the Treasury or not, or at what stage a financial officer in the Department intervenes to exercise such control as may be within his power. I assume, however, that those stages are completed, and that the scheme is on its way to the Treasury. If the Treasury approve, there is no more to be said. If they resist, I suppose an opportunity will be found, if the ordinary channels fail, by which the Minister and the Chancellor of the Exchequer will meet and endeavour to arrange matters. Failing such an arrangement, I suppose the ultimate resort would be that the Chancellor would bring the Minister before the Cabinet. It is quite evident that no Chancellor, not even my right hon. Friend, can be habitually bringing Ministers before the Cabinet, even if the Cabinet had time for such business.


Or Ministers bringing the Chancellor of the Exchequer.

Photo of Hon. Edward Wood Hon. Edward Wood , Ripon

That no doubt is true. I should fancy the Chancellor would go before the Cabinet more willingly than the Minister. However that may be, that is reserved for extraordinary cases and therefore what I suppose would very often happen is that the Departments put up a scheme on rather more generous lines than they expect to get and the Treasury, for the sake of a quiet life, cuts it down a bit and lets it go. I have no special knowledge. I only suggest what I imagine would happen in any other walk of life. If it be true that the Treasury is the keystone of this arch of financial control, it cannot be expected to do its work properly unless, in addition to being strong itself, it can count upon what I may call the twin supports on each side of it: on the one side the Cabinet and on the other side this House. I would ask my right hon. Friend if he could give the House any information, without betraying secrets, as to what in fact the, much vaunted Cabinet control amounts to. Last autumn he referred to a Finance Committee of the Cabinet. Is that Finance Committee intended to be a permanent institution? Is it still functioning and, further, will he give us the personnel of it, as he did on that occasion, though he was careful to say it was to be no precedent for giving the names of Cabinet Committees. I ask because it was composed of five members. One was Sir' Auckland Geddes and another was Lord Milner, who has been absent from the country for a very long time, and it would interest the House to know whether the Finance Committee has been maintained in efficient working.

I should like to say a word or two about the other twin support, the House of Commons. I am quite definitely of the opinion that the House of Commons is useless at detail in finance. When they attempt to raise it they can be beaten every time by the Minister, and the only thing they achieve by raising detail is not to save that year, but to have such an intimidating effect, perhaps, upon some officials in some Departments that they are very careful what they put into the Estimates another time. I do not put it higher than that. Then there is the difficulty, at the other end of the scale, for this House really to maintain a comprehensive grasp of the whole financial picture from day to day and to form at all a correct appreciation of what is the effect on the whole financial situation of particular proposals pressed from one quarter or another every day of the week, and it is for that reason that I have always thought and said that the picture which my right hon. Friend drew of the normal year—it may be an actual forecast or it may not—and the same picture that he gave last week when he showed the House how far it had wandered from the high water level, is the kind of picture I want to see given as regularly as possible in order to enable the House to form a correct judgment of what it is asked to do. Unless this House can be an effective ally of my right hon. Friend he is very much in this position, that once his fire trenches, in the shape of the Treasury, are occupied, it is practically impossible for the troops in the support trenches—this House—to come into action at all. The importance of that is rendered greater by this, that my right hon. Friend has latterly taken to the course, which I rather deplore, of leaving the responsibility in matters of finance unduly to this House. It is not satisfactory for him to shrug his shoulders and say, "That is where your finance is. If you choose to do more, that is your lookout." I do not think that is a position which really can lead to economy or to this House assisting my right hon. Friend, but if that be so it is all the more incumbent upon him to suggest means and methods by which this House may help him by becoming properly informed as to the business with which they have to deal.

I had meant to say a word or two about the suggestion which has been frequently made about an Estimates Committee. I have never been able to accept the view that no Committee of that kind could do useful work without being allowed to deal with policy. It depends what you mean by dealing with policy. I do not want any Estimates Committee to deal with policy in the sense of directing policy, but it might be valuable to have an Estimates Committee which would be able to report on particular classes of Estimates and say, "We find that for the service that you demand to carry out a certain policy this is efficient and economic administration. We also point out that if you choose to dispense with such and such an item of policy you could save so much money," merely giving the House of Commons the information, on which they would then take the responsibility, if they chose to do it, of asking the Government to vary their policy. The excuse for this Amendment is to invite as full an expression of his views from my right hon. Friend as he feels disposed to give. I would ask him in particular to devote his attention to these points. The first is what exactly he has in mind when he refers us to the policy of strengthening the Treasury; what exactly, in fact, Cabinet control amounts to, whether the Finance Committee of the Cabinet is still in function and is intended to be a permanent institution, and to give the names of its members, and, lastly, what suggestions he has to make as to the best way in which he can invite the co-operation of this House to assist him in the solution of one of the most urgent problems with which we are confronted.

Photo of Sir Philip Pilditch Sir Philip Pilditch , Spelthorne

I beg to second the Amendment.

I desire to associate myself very fully with what has fallen from my hon. Friend, that it is in no sense hostile to the Government or that it means that we consider they have done badly, up to the present, in their effort to reduce national expenditure or that the Chancellor of the Exchequer deserves less than our full support in his fight to stabilise our finances. Such a protestation is hardly necessary for me, because a short time since, on a Motion which associated the Government with the rise in prices and the fall of our credit, I spoke and voted for them. The Amendment deals with the future, and is entirely born of the wish to help the Government in its difficult task. It was, in fact, on the Paper before we saw the notice which the Government put down for the appointment of a Select Committee. I congratulate them on their intelligent anticipation of what the House was thinking of, but the difficulty I am in in considering this Amendment and the proposal for a Select Committee is that I do not see in what way that Committee can possibly produce any Report which will be of use to us in connection with the finances of the coming year. The very first thing that is to be referred to the Committee is the question of seeing how far current expenditure can be reduced. That is the very first thing that is suggested in the reference to the Committee, "What, if any, economies consistent with the execution of the policy decided upon by the Government may be effected out of current expenditure?" I therefore hope the Chancellor of the Exchequer will consider the Amendment as one which is useful to him, because it will give him an opportunity of explaining how he proposes to deal with the question of control, whether by the Government, the Treasury or another Department, or by this House, in a way that we should probably have to wait months for if we waited for the Report of the Select Committee.

The Amendment and the proposal of the Select Committee, which I assume comes from the Chancellor of the Exchequer himself, deal with two forms of control, first of all a system of control in the Departments and a system of control by the Treasury, while the Amendment asks that the House should be satisfied that no improvement can be made in the machinery for the control and limitation of expenditure, as well by the supervision of the Treasury as by the informed and effective exercise of the authority of this House. I think the system of control in the Department itself is of the greatest importance. It is the very best means of control of expenditure in detail of all existing means if you can get it exercised. It is, in fact, economy at the source. The evidence there is before us seems to show that the Departments have become somewhat demoralised during the War. Thousands of amateurs have come in and diluted the trained staffs, and the withdrawal of Treasury control, which the War has brought about, has led each Departmental staff to become very much in the nature of a law unto itself, and I doubt very much indeed if they are not at this moment giving the Treasury much trouble in the resumption of Treasury control, which had to be practically done away with during the War. I have a feeling that it is no longer the good house dog that it once was, and that its functions as a controller of all expenditure, first confused when it became a great spending Department in connection with the Budget of 1910, and afterwards debilitated by the processes of the War during which it had no opportunity of exercising control, have practically ceased to function at all.

What the House would like to know, and certainly what I should like to know, is whether Treasury control is going to be set up or has been set up again, whether it is functioning as it did before the War on its one single-minded line of merely being a Department to control expenditure, and if those lines can be strengthened and improved? The proposals for the Committee to be set up include these things for inquiry. I do not know how long the right hon. Gentleman thinks the Committee will take before it can arrive at any conclusion and before it can give the House any help? It will probably be a good many months. I suppose the coming Budget—which is the most important thing before the country at the present time—is largely dependent upon it. The Government itself in some senses may be regarded as depending upon the result of the financial arrangements which it sets up for next year. We are all very conscious from the letters we receive daily or from the extracts from our local Press, which are showered upon us, that the nation is looking at the question of Government expenditure, and what they very often call, misguidedly, "Government extravagance," as the cause of high prices. I acquit the Government policy of operating in that direction, but when you have, as we had a few weeks ago, Estimates amounting to over £500,000,000, it must be recognised that they came as a great shock to the nation. Much as they were explained, and explained to my satisfaction, it does not go the entire length of satisfying those whom I represent. I hope, therefore, that, quite apart from the excellent motive of having a Select Committee to go into the whole question of the control that is to be exercised, the Chancellor of the Exchequer will be able to give us some information to-night as to whether the Treasury is really functioning again in all the Departments and how it is doing it?

A further point relates to the exercise of the authority of this House. Both the Amendment I am seconding and the proposal of the Government purport to deal with this point on almost identical lines. I am bound to admit as a new Member that I have felt myself perfectly fogged when I have endeavoured to get a coherent idea of the methods by which the House is supposed to have any kind of control over financial difficulties at the present time. I learn something about the difference between Ways and Means and Supply, but as soon as I have learned one bit I have forgotten bits that I had learned before. I do not expect, as a new Member, to learn these things all in a moment, but what I do hope is that one of the first things that this very desirable Committee will do will be to prepare for the use of the House a clear statement of the different stages in the progress of finance through the House, and how it is possible for the House to take an intelligent share in those stages. I am somewhat sceptical as to how far this House of 700 Members, directly or through any Committee it may set up, can exercise any really serious influence in the direction of economy. We are all very susceptible to the winds that blow from our constituencies. I have read with great interest the various suggestions made by the Noble Lord (Lord Hugh Cecil) on to-day's Order Paper, and I am glad that they will be a subject for examination by the Committee.

In conclusion, I wish to say something on a point dealt with very briefly by the Mover of the Amendment, and in doing so I am afraid I may be rushing in where he feared to tread. I refer to the question of Government or Cabinet responsibility for economy. I cannot help thinking that we shall get economy when and only when we have a Government and a Cabinet into whose very bones the need for retrenchment has entered, which feels that it is carrying out a national mandate, and to that end overriding all sectional demands to spend money on this or that excellent thing. We shall only get economy when we have a vigorously economical Chancellor of the Exchequer—which I am certain we have at this moment—backed by an economical Prime Minister—which I hope and believe we have got—and a Cabinet thoroughly seised of the fact that every Member of it is expected by the nation to assist the Chancellor of the Exchequer in keeping every Department within proper financial bounds, and not working on the theory that if you will scratch my financial back I will scratch yours. Whether we have such a Cabinet at this moment, and whether it sits to examine the general financial situation at the proper time, that is, before the Budget, as in the days of Gladstone, I do not know, but I am sure that whether the House appoints the Committee suggested or any other Committee or none, however long this Committee sits, however many volumes of evidence it publishes, however many reports it sends up to this House, nothing will bring about economy but a return to the old methods of Treasury and Cabinet examination of the financial situation whenever it is about to recommend a policy to this House.

Photo of Mr Donald Maclean Mr Donald Maclean , Peebles and Southern

I am sure that the small attendance of Members to hear this very important discussion does not really reflect the interest of the House of Commons in the subject. Subconsciously, perhaps, this House is trying to find its way back to the real origin of its powers in the control of expenditure. It may be of some interest to hon. Members who are not old Members to know that the original Resolution upon which the authority of this House is based was passed in 1707 and again in 1715, and shows the authority of the House over the expenditure of the Executive in these words: This House will not proceed upon any petition, Motion, or Bill for granting any money or for releasing or compounding any sum of money owing to the Crown but in Committee of the whole House. Upon that and two other Resolutions passed within 14 or 15 years of each other in the years 1700–1725, this House operated for many years. The old practice used to be, as perhaps some hon. Members may recollect, that supply was put down for every day, and every day if the Commons wished to proceed with other business it had to get Mr. Speaker out of the Chair. As matters developed our legislation became more and more contentious and embraced a much wider field, and that naturally lent itself to obstruction, and it was not until the year 1802 that the House finally consented to the rules of Supply under which it at present operates. In the old days the House had what my hon. Friend who introduced this Motion regretted we do not have at the present time, and that was a very meticulous examination of the Estimates, and it was upon that meticulous examination of the Estimates that' obstruction Was based. If a powerful and vigilant Opposition succeeded sufficiently to defer consideration of measures referred to in the King's Speech, then at a certain period of the Session there began a slaughter of the innocents, and the rest of the time of the Session was devoted to the granting of the very necessary supplies.

What a change since those days! How complex the whole of our national life has become! That, of course, is at once reflected in the procedure of the House of Commons. We now have no break-up in August to meet again in February. I do not know whether we shall for many years to come see the time when there will be no Autumn Session. Perhaps the hon. and gallant Member (Colonel Sir R. Sanders) has some hope that we shall have relief in August this year. I hope that will be the case. Let us all hope so. These circumstances show quite clearly that what used to satisfy the House of Commons previous to 1902 and from 1902 onwards in the control of expenditure wholly fail to meet the necessities of the case to-day. Not only are the Estimates swollen but they are immensely increased in number, variety and character, and what my hon. Friend has said is true that this House cannot seriously or effectively apply itself to an examination in detail of the Estimates. All we can do is to raise questions of policy and occasionally to fall upon some particularly glaring case, as we think, of extravagance in the Estimates; but the exigencies of time are such that the executive, whatever Government is in power, must have opportunities for carrying through its legislative programme, and that inevitably leaves the House, either in Committee or on the Report stage, a wholly insufficient opportunity of performing a real financial function as the effective guardian of the public purse.

8.0 P.M.

Many suggestions have been made. There is on the Order Paper a proposal in the name of one of the Members of the Government that a Select Committee be appointed. Among other things, it is suggested that this Select Committee should make recommendations so as to secure more effective control by Parliament over public expenditure. All I have got to say in regard to that is this. It is by no means comparable to the work which has already been discharged by the most efficient and individually powerful Select Committee which called before it, and had submitted to it, the opinions of high officers of this House and all the high officers of Departments, and Members of this House whose financial experience and parliamentary status no one would for one moment endeavour to depreciate. And we have from them a Report which still holds the field.

It is quite true that the Chancellor of the Exchequer has twice declined to carry that into effect, but I wish to let him know that we are not going to cease our efforts to obtain such an estimates committee, at any rate substantially in accordance with that report, no matter how often we may be rebuffed by the right hon. Gentleman or the Executive, because we believe that it is only through bringing into co-partnership with the Executive of the day a Select Committee which is representative of the general body of the House irrespective of party that that very desirable object can be achieved. And we are determined to continue our offensive until we reach our objective in some form or other. What can be done this Session? I fear very little. Only by continual discussions on any and every occasion on which we can reasonably raise it we will support any Member or body of Members in this House in urging the grave importance of this very serious question. If this Select Committee is set up, as I hope it will be, that is all we are going to get, and I strongly advise my hon. Friends who may be objecting to it to let the Motion go, because it is something anyhow; it maintains a useful precedent which was set last Session and the Session before. By all means let us use what we can get if we cannot get all we want.

But I want to draw the attention of my right hon. Friend mainly to this, that the most effective checks which are in practice applied are for seeing, after the money has been granted, that it has been honestly spent. Our real desire is to see that only what money is absolutely required for the service of the State shall be granted. We have very little doubt indeed that money once granted is honestly spent, and the Public Accounts Committee is a very efficient and, within its limits, a very effective body. It is before the money is granted that criticism should come into full play. I would respectfully recommend hon. Members who are really interested in this matter, in those rare moments of leisure which they can spare from the House of Commons or other attractive rooms within the ambit of the Houses of Parliament, to read Chapter 18 of Erskine May on the Crown and Parliament and charges on the people. You get there the foundation of the whole principle upon which Parliament has hitherto moved. I would urge upon my right hon. Friend—I will not say that the whole of this machinery, but that the whole spirit in which these matters are looked at from the point of view of the Executive, must be changed. Bring the House of Commons into co-partnership with them in economy.

I know that the right hon. Gentleman wants it, and no one needs it so much as he does. I am certain that if you do, very great things will be achieved. My right hon. Friend said the other day, "Point out to us somewhere where I can save £5,000,000." We know what happens here on the Floor of the House. It is quite impossible for us to make a proper examination of all the details. That can only be done, I think, by the recommendations of a Committee of this House. We can check that matter, I hope, with that knowledge which comes from the detailed work having already been given by witnesses who will appear before us and can tell us what the facts actually are, and not merely what an Estimate says, but what really lies behind the words and figures that are there used. My right hon. Friend, or whoever dealt with the matter, spoke of Treasury control. Unfortunately I was supporting the Government who brought about a change. Soon after 1906 the Treasury became, for the first time in its existence, a spending Department. There were brought within its ambit the old age pensions expenditure and the whole organisation with regard to that. That changed the spirit of the Treasury official. You cannot at the one time be based on all the traditions of economy and of the watch-dog of finance, and at the same time be responding to appeals from the House of Commons and the taxpayer for spending more money in connection with a Department which is peculiarly responsible, in every sense of the word, to the appeals of sentiment and the pressure of Members of this House. It is a most unfortunate thing, and I am glad indeed to know that, so far as that is concerned, that Department is no longer under the control of the Treasury. It affects the moral, so to speak, of the traditional attitude of the Treasury to public expenditure. The Treasury ought to have nothing whatever to do with the spending of money. I hope that we may have a change in that respect before long.

There is a real change in the House of Commons with regard to what we used to practise as "obstruction." I think that change is likely to continue. I believe that giving to the House of Commons more power in these matters will not be abused. Do not think that in the future the people of the country will stand what used to happen a good many years ago. On genuine differences let us disagree, but I hope we shall never go back again to the pettifogging, pin-pricking ideas which were supposed to be the only way of carrying on His Majesty's Opposition. The idea that the only object of the Opposition is to oppose is thoroughly unsound. When a measure is a good one and you can support it, do so. If you honestly differ about it, fight against it with all your might. That is the spirit in which we should carry on our work. I mention that only to urge upon the Executive that they can really trust an Estimates Committee representative of the House as a whole. I am certain that this House, in its uneasiness whenever this subject is mentioned, reflects the attitude of the public mind on the lack of control of Government expenditure. This Amendment is not likely to be pressed to a Division, for it has been moved only for the purpose of raising a definite discussion. I can assure the Chancellor of the Exchequer that any measure he may take which will help him further to control the spending Departments will have the heartiest sympathy of those for whom I can speak and of the whole House in general.


Let me say at once that I recognise the very friendly spirit in which my right hon. Friend opposite and the Mover and Seconder of the Amendment have spoken, and their real desire to assist the Government. We are, indeed, discussing a problem of equal interest to us all, and we are at one in the desire to help in its solution. Let me refer to my right hon. Friend's specific proposal. It is not that I refuse to entertain the object he set before me, but that I cannot bring myself to believe, with the advice I have received, that such a Committee really can be fitted effectively into our Parliamentary machine, or that it will aid us effectively in the manner suggested. The right hon. Gentleman says that what we require is an opportunity for the Committee to examine Estimates before the House is asked to vote upon them. How is he going to combine that desirable object with the control which the House has held in the past, and, as far as I know, desires to hold in the future, over expenditure. Money must be voted for the service of the year by a certain time. If you send your Army Estimates upstairs and the Committee's examination is not completed in time you will have to proceed by a series of Votes on Account or Votes of Credit for the Army. The same would be the case with the Navy. Then there are the Supplementary Estimates, always liable to the most searching criticism, which have to be got through. We try to have a Consolidated Fund Bill passed before the close of the financial year. I do not think it is possible for such a Committee as my right hon. Friend has suggested to examine with real care and detailed attention all the Estimates in the course of the Session. I am certain it is not possible to examine those Estimates effectively and to report upon them in time to enable them to be brought down here for discussion so early that the House can maintain its full rights of control and debate upon them.

My right hon. Friend alluded to what happened in days long gone by. When I first entered the House, which was a later period than that to which he was alluding, there used to be a good deal of detailed discussion, generally of a very petty and often of a nagging and obstructive character, mainly in the dog days. The Estimates were put off to the end of the Session when the House was thoroughly weary, and the Government, with such influence as it had, kept together a majority, and that majority beat down at length the persistent inquiries of certain inquisitive Members as to the number and salaries, say, of the ratcatchers at the Royal Palaces, the expenditure on the Royal Yacht, and things of that kind, which took up an infinite amount of time. I do not think that kind of control is useful or effective or to the credit of Parliament, or that we should attempt to re-establish it. What is proposed by the Government is that the Committee on National Expenditure should be set up again, that they should, as in former years, take, not all the Estimates presented, but whichever group or class they like, and examine them to see whether they can find signs of extravagance or possibilities of economy. I do not conceive myself, though I am not a competent person to interpret these matters, that there is anything in the terms of reference to that Committee which would prevent it from formulating such a report as that which was sketched by the hon. and gallant Gentleman who moved this motion, and in which they would say, "in such a Department there is no extravagance, given the policy on which His Majesty's Government is proceeding, but if you forego this or that service, then you could save this or that sum of money." It might be that a report presented in that way would sometimes induce the House to forego a service which they would otherwise approve of. My difficulty is that I do not believe that large sums are to be saved by petty savings. I think that large sums are involved in questions of policy, and that you have to change your policy, whether it be foreign or domestic, if you want to make large reductions. Let me say at once, I am not offering any excuses for the waste of a £5 note—not at all; but I believe that the control which affects a hundred pounds here or a thousand pounds there is on the whole well exercised at present.

Is a committee of the kind suggested without any special knowledge of the particular class of Estimate to go through them and say whether the salaries are extravagant, or the members of the staff are greater than the need, or whether in this or that little detail, or through this or that hole some money goes, or is it suggested that they should have an officer similar to the Comptroller and Auditor-General for the purpose either of seeking out possible scandals or difficulties or extravagances and drawing attention to them. The Comptroller and Auditor-General is not alone. He has a great staff. If he were a single officer trying to advise he could not in the least do what he does. He has under him a considerable trained staff working month in and month out in the Department. If you were to create any office for a com- mittee of the kind it must at least be a comparable to that of the Comptroller and Auditor-General and his staff, which costs the country £150,000 per year. I have said that I believe the control is small matters is well maintained now by the Treasury. An hon. Gentleman asked whether Treasury control had been revived. It has been revived, and I think it is as efficient as it has ever been. I do not say that expenditure can be treated by the Treasury now as it was in the days of Mr. Gladstone, and particularly in the years when he was Chancellor of the Exchequer. The idea intimately associated with Mr. Gladstone's form of financial control that the interference of the State was to be reduced to a minimum and its activities to a minimum, is now cherished in no quarter and among no party or section of a party so far as I know in the country. You cannot, when you have things like national health insurance, old age pensions, and a national unemployment scheme, and a national housing scheme, exercise or offer the same blunt and uncompromising refusal to proposals for new expenditure as you could in the days when it was accepted by all parties in the State that such matters as those were altogether outside the proper sphere of Government activities.

Where is the question of policy which is not settled by the Treasury, but which is a matter under Cabinet control. An hon. Gentleman asked what is the procedure, and I tried to illustrate it by taking the Army or Navy Estimates. The effective cost of the Army depends on the number of men you are going to keep, and of the Navy depends upon the Fleet you are going to keep or build. Those are great questions of policy, and are of world-wide importance, and have to be decided in the light of world-wide considerations, as the British Empire itself. They naturally come to the Cabinet. The general main features are laid down, whether it be in the form of a building programme for the Navy with the men required and all the accessories necessary to maintain a fleet of that size, or whether it be in relation to the number of troops to be raised in regard to the Army. In that way large questions of policy are settled by the Cabinet and Treasury control is exercised over the details. The fact that the Cabinet agrees to a block estimate of so many millions, does not mean that the Cabinet professes to control every item of ten thousand pounds running through those items. That is not the work of the Cabinet and ought not to be undertaken by it. That is done on examination by the Treasury. Sometimes we are convinced that the objections which we have raised are not well founded, and sometimes in the Department with which we are dealing, whatever it may be, there remains a difference of opinion which the Ministers immediately concerned are unable to settle by agreement. They go again to their colleagues in the Cabinet and take a decision of the joint, collective wisdom of that body, in which both concur. It is on those great principles that the rate of our expenditure mainly depends. When the other day I invited the right hon. Member for Peebles (Sir D. Maclean) to show me a saving of £5,000,000, I meant that he should show me where the policy could be altered so that that saving could be made. We were discussing Civil Service, Estimates, and I meant what was the service which my right hon. Friend thought could be foregone or that was so extravagantly managed now that that saving could be made. My right hon. Friend said it was idle to ask such a question. I think it is, and I do not believe you will find a service of which that can be said.

Photo of Mr Donald Maclean Mr Donald Maclean , Peebles and Southern

It was not possible, of course, to indicate the particular direction in which a saving could be effected then, because we had not got the Estimates before us. We were simply dealing then with the Vote on Account, which gives no details, but to show how that is so, the Department which leaps to my mind at once is the Ministry of Munitions. I only speak, I will not say from hearsay, but from what I read in the newspapers, having no other information at all, and I cannot have it until I have the Estimates before me.


My right hon. Friend will get the Estimates, and he will then exercise his ingenuity upon finding methods of economy. I do not think that he will find that the Ministry of Munitions is badly managed or that the reductions in staff that they have made have not been comparable with the reduction of the work since the Armistice was signed. That further reductions will be made is, of course, true. They are going on, I think, all the time, but you must remember that the Ministry of Munitions is carrying on the most gigantic business, often of a very complicated and technical character; that it is responsible, until it has disposed of them, for the custody of immense quantities of stores, and that it was responsible for the administering and winding up of running agreements made during the War which, in many cases, were only reaching their maximum speed when they were called upon to stop; and to grudge a proper staff to a Department doing that work is to save a few thousand pounds at a probable loss of millions to the State. I said that the Treasury control had been re-established and that I thought it was working efficiently. There are two great branches into which Treasury control may be divided in this matter—what I may call the examination of the administrative services and the control of the establishment. They are both important.

We now, as I told the House on an earlier occasion, have appointed, under the Permanent Secretary of the Treasury, three Controllers—the Controller of Finance, who is my principal adviser on what I may call Budget matters and about currency and matters of that kind; the Controller of Administrative Services, who, for instance, is my immediately responsible adviser in regard to all Army Estimates and Navy Estimates, and administrative services generally; and the Controller of the Establishment, whose business it is—that is an entirely new branch—to co-ordinate the Civil Services and to work the Whitley Councils in the Civil Service, which I think, with the assistance of the representatives of the Staff side, and particularly of the Vice-Chairman of the National Council, Mr. Stuart Bunning, he has been doing very successfully, and I hope with the prospect of improving the relations, or, I would rather say, of increasing the satisfaction with which Government servants serve the State. But that establishment branch is constantly watching the establishment of these different Government Departments. It is making suggestions to them for improvement, controlling and criticising any extensions, and, of course, coming to me on large questions of policy or on questions on which particular difficulty arises. I was asked what I meant by revising Treasury control. I think the first thing I meant was to make the machine of Treasury control efficient, and that, I think, we have done. I think we have got the right machine. We are building up the right staff, and I think we shall see the fruits of our work more and more as time goes on, but I am anxious—I think I have said so before—that this House should give no colour to the doctrine that economy or thrift is the sole business of the Treasury. It is the business of every Department, and no Department is entitled to say, "It is for the Treasury to control our expenditure," and to allow themselves any laxity or latitude on that account.

We had, by my hon. Friend the Financial Secretary of the Treasury, at the request of myself or the Government—I am not quite certain which of us acted in that case or from whom the direction came—summoned a meeting of financial officers of all the Departments and consulted with them as to the control which was exercised and as to any improvements which could be made. They reported, and certain decisions were taken, which I will summarise to the House. As regards the Service Department, they said that one of the most important functions of Government Civil Service is to secure economy in administration, and accordingly the Permanent Civilian Head of the Department must be made directly responsible to the Ministerial Head of the Department as to the control of expenditure, and should for this purpose be given the status of a full member of the Council or Board. Then, in dealing with the Civil Department, they said: For economy in policy and in management the permanent head of the Department must be ultimately responsible, under the Minister, and the inclusion on his staff of a finance officer who is his subordinate does not relieve him of his responsibility. In all matters of staff organisation and office management, the officer to be held responsible for economy by the Permanent Head of a Department is the Principal Establishment Officer. Then the Government decided that the consent of the Prime Minister, as First Lord of the Treasury, is required to the appointment or removal of permanent heads of Departments, their deputies, their principal finance officers and principal establishment officers. The House will see the importance attached by the responsibility of the finance officer and Government to the responsibility of the Permanent Head, and to the special the establishment officer in each Ministry or Department. They further direct that Questions involving finance were to be referred at an early stage to the Finance Branch of the Department, and correspondence with the Treasury on proposals involving expenditure was to be drafted or concurred in by the Finance Branch. There is a certain expenditure with regard to the establishment officer in view of the special responsibility attaching to him in his particular work which I have already described to the House. Lastly, they directed that Any case in which an accounting officer has, by the written direction of the head of the Department, made a payment to which he sees objection, must be notified by him to the Treasury, and the papers communicated to the Comptroller and Auditor-General. I think we have shown, by establishing that organisation and those rules, that we have, at any rate, laid a solid foundation for effective control both of expenditure and of saving within the Departments themselves, and an effective basis on which Treasury control can be exercised outside. As my right hon. Friend knows, I agree with him that the Treasury ought not to be a spending Department, that to make it a spending Department is to put it in a wholly false position when it exercises its other functions of control. It is not possible for my right hon. Friend to support me from that Bench when I not unfrequently enunciate the doctrine to which he has given such complete acquiescence and approval to-night. The Treasury, or, at least, the Chancellor of the Exchequer is responsible for Customs and Excise, and I remain responsible for the administration of pensions, but my right hon. Friend may remember that when there was a new Pensions Bill, I did not introduce it in the House or conduct it through its stages. I thought it very undesirable that I should take upon myself the promotion and pilotage of a Bill which involved a large additional expenditure, and I was very glad when one of my colleagues, the Minister of Pensions, undertook to be responsible for the conduct of the Bill through the House. So far as the actual administration is concerned, I, like my right hon. Friend, wanted to get rid of it, and the Board of Customs and their officers would be very glad if they could get rid of it, too; but, after examining the matter, I could not see any other agency sufficiently widely distributed all over the country to do the work, and to remove it from the Excise Officer, who is the Pension Officer, would be to duplicate to a great extent, and to create a new machine, when the House is anxious rather that some of the old machinery should be scrapped.

I have been asked by my right hon. Friend how the House could co-operate in economy. It is a delicate question. The first way in which this House could co-operate is, of course, by the exercise of self-restraint, by refraining from pressing new expenditure. That is the first advice I have to tender. I know it is disagreeable for the House, and my hon. Friend opposite observed the other day that if I disapproved of expenditure I ought not to come whining to the House, but should resign.

Photo of Mr Godfrey Locker-Lampson Mr Godfrey Locker-Lampson , Wood Green

I am quite sure I never said anything so offensive as that of the right hon. Gentleman; but I did say that, if the right hon. Gentleman did not agree to a Vote of this House with regard to expenditure, he had the remedy in his own hands so far as he himself was concerned.


I grant that, and if the House forced upon me a policy which I thought destructive, they would, of course, expect to see another Chancellor of the Exchequer. But I never thought that the Cabinet Minister, of whom I have read, of whose resignations the Prime Minister's drawers were full, was the most useful or helpful friend to his colleagues. At the same time, I do not think a Chancellor of the Exchequer who was always threatening resignation, on minor points in the House of Commons would be very helpful or very congenial to the House of Commons. I did not resign on the adverse Vote of 25th February. I did not think it was the occasion to do so. At the same time, I do not say that the first form in which the House can give assistance is by the exercise of self-restraint and by refraining from pressing new expenditure. Then I suggest to my right hon. Friend that every now and then the Opposition, who choose what Vote is put down for discussion, should choose a Vote where they feel that economies could be made, or where primâ facie there is room for economy, and should give a full Supply day to examine a Minister as to those possible economies. That is hardly ever done When you come to the Civil Service Votes the day is spent in invitations to the Minister to enlarge his activities, to be more generous than he has hitherto been, to show a little strength, and not to be browbeaten by the Chancellor of the Exchequer, but to get the money which everyone present agrees would be so well spent. With the Army or Navy the matter is simpler, if it is a question of large saving, to say in what portion of the British Empire the garrison is excessive for the work that has to be done and could be reduced or withdrawn; and in the case of the Navy to say by what number of ships the Navy which the Government proposes exceeds the requirements of the country.

I have failed to observe that there was any very fierce criticism on the Army Estimates and on the statement of my right hon. Friend the Secretary for War as he unfolded to the House the scheme which had received the approval of the Government. I do not think there was any serious question about the strength of the Navy when that was being dealt with. Doubts were expressed in some quarters as to whether enough money was being spent for the purpose, and there was no serious suggestion that these were bloated and excessive expenditures. I think that examination will show that the Civil Service Estimates have been framed with the same care, and are capable of the same test. I would ask the House, however, to be reasonable in any examination which they undertake. If they require witnesses, I would ask them to remember that they cannot expect the Minister to go into every detail of administration in his Department. He is not there to deal with detail. He is there to exercise a general supervision and to decide the larger questions. You may call the subordinates of the Minister before you. In doing so you take them away from their own special work to give answers to questions which you are pleased to put to them. You probably take up a great deal of their time, far in excess of the time they have to spend under examination, and you impose a great deal of labour and increased work on the Department itself. Some part, I know, is necessary, but I would appeal for some discretion as to how far this calling of witnesses should be employed; otherwise you will have the men who ought to be watching expenditure and preventing waste thinking about the answers they have to give to questions by Committees of the House, considering how they are to make the best of the case, and how best to meet allegations brought against them. I do not think you can expect their examination to produce any profound change in the amount of the Estimates which are put forward. But hon. Members serving on such Committees will, I think, appreciate the care with which these Estimates are framed and the reason for each particular item. I am inclined to extend an invitation to the right hon. Gentleman in front of me, and other hon. Members near him, to come to the Treasury and see the way the work is done, to see the work that comes in and the way it is attended to. If the right hon. Gentleman comes along he can see the Treasury dealing with the expenditure of any Department he likes to name. He will then see the amount of control exercised, what steps are taken to get information, the way matters are criticised, how in any particular case a decision is given. He may see whether the final decision has been in the hands of one of the permanent officials, or whether the matter has been brought to the Financial Secretary, or to the Chancellor of the Exchequer. I cannot help thinking, after listening to the speeches of hon. Members, that if they saw the work in progress they would be both astonished and pleased to see how much knowledge and zeal is applied to the consideration of these matters and how much care is given to them. They would then have, I believe, a more comfortable feeling about financial control. As regards the Committee of the Cabinet, on which I was asked a question, I may say that Committee continues in existence. Its composition has not been altered since I last spoke. It meets from time to time at the request of the Chancellor of the Exchequer or the Prime Minister, and when matters of sufficient consequence are ready for decision. I have answered various questions as to this Cabinet Committee, and I do not propose to answer on that subject again.

9.0 P.M.

Photo of Mr Godfrey Locker-Lampson Mr Godfrey Locker-Lampson , Wood Green

Like my hon. Friends who have Moved and Seconded the Amendment, I certainly do not rise in any hostile spirit so far as the right hon. Gentleman and the Treasury are concerned. I really believe, however, that the persistence of hon. Members of this House is beginning at last to have an effect upon the Government, and I believe they are taking some interest in the subject itself. I feel that this Debate will, at any rate, have this use: that it has given the Chancellor of Exchequer an opportunity of making a statement and giving a review of the whole situation so far as possible in his speech. I believe that the country is more interested in this question of expenditure and economy than in any other question at the moment. I think—quite wrongly—that the country believes that the rise in prices is due to the extravagance of the Government. It is only a cause, and it is not the chief cause. But I go so far as to say this, that if the Government is extravagant it must have an effect outside. It must lead people outside to be extravagant, and if everybody is extravagant there is no doubt it has its reflection in prices. I believe still, in spite of what the Chairman has said, that this House has no real control over the Estimates. I still believe that the Treasury has no real control over departmental expenditure. The reason, I believe, that this House has no real control over the Estimates is that they are produced from week to week, and from month to month, in a form which very few hon. Members can really understand. A great many of the items are treated in a very meagre fashion. A great many are treated in a very involved fashion. I guarantee there are very few here, with the exception, perhaps, of the right hon. Baronet (Sir F. Banbury) and one or two others who take a special interest in the matter, who really understand the Estimates placed before us. I believe that the Treasury has no real control over departmental expenditure. I listened very carefully to the Chancellor of the Exchequer when he was describing Treasury control over the various Departments, but I do not believe you will ever get proper control until you have a Treasury official inside each of the great Departments under the authority of the Treasury and responsible to them. At the present time all you have got is an accounting' officer who looks into the finance of the Department, but he can be dismissed at any moment by the head of the Department. The accounting officer can give advice to the head, but he can be dismissed by the head of the Department.


Apparently the hon. Member did not catch one of the decisions which I summarised to the House a short time ago. It was to the effect that the finance officer could only be appointed or removed with the concurrence of the Prime Minister.

Photo of Mr Godfrey Locker-Lampson Mr Godfrey Locker-Lampson , Wood Green

That does not alter what I was saying.


The hon. Member said that the finance officer could be dismissed at the sole will of the head of his Department.

Photo of Mr Godfrey Locker-Lampson Mr Godfrey Locker-Lampson , Wood Green

Then I understand he can only be dismissed with the concurrence of the Prime Minister, but this officer is not responsible to the Treasury or to the head of the Treasury, and he really belongs to the staff of the Department and is under the head of his Department.


That is essential.

Photo of Mr Godfrey Locker-Lampson Mr Godfrey Locker-Lampson , Wood Green

In that way you will never get proper economy within the Department itself. I want to refer to what has been happening during the last two or three years, and it makes me despair of any good coming out of the Committee which is going to be set up. During the last years we have had fifteen Reports from Select Committees composed of twenty-six Members of this House chosen presumably by the Whips and the Government on account of their knowledge of finance, their interest in this subject, and the amount of time they have been Members of this House. We have had no less than fifteen Reports on this very question we are discussing during the last two years. These committees examined dozens of witnesses, and they sat for many weeks and months. They took up a great deal of their own time in discussing this question, and they made recommendations, May I remind hon. Members of some of the recommendations made by these committees? In the first place they recommended that the Board of Trade, for instance, should have an officer acting with the assistant secretary to examine and criticise, on financial grounds, proposals made for public expenditure. It was suggested that in the Board of Trade there should be some- body who could criticise policy as well as expenditure, but that recommendation has not been carried out.

They also proposed that there should be two Standing Committees on Estimates, and that when these two Committees bad reported to the House in favour of certain reductions in the Estimates, the House should be allowed to vote freely, and the Government Whips should be taken off. They also proposed that the whole form of Estimates should be remodelled, and in one of these Reports they gave the particular form of Estimates which, in their opinion, it would be much easier for the House to understand, would give hon. Members far more information, and enable them to come to some definite opinion one way or the other. In 1918, in evidence before one of these Committees, the accounting officer of the Ministry of Munitions said: I do not think the Estimates as furnished in past Parliaments are worth the paper they are written on from the point of view of Parliamentary control. They also recommend that statements about Money Resolutions sent to one of the Committees for report should be considered, that the Committee should report to the House, and that the same opportunity should be given to the House to vote freely without the Whips being put on. They also recommended that the Treasury should cease to be a spending Department, because they believed that a Department established to look after economy ought not to be a spending Department. They recommended that the accounting officer should not only be appointed and dismissed by the Treasury, but also that be should be a Treasury official solely responsible to the Treasury. Lastly, they recommended that no realisations of assets by capital expenditure ought to be applied to the current working expenses of the year. Have these recommendations been carried out? Not one single one has been carried out.

They produced no less than fifteen Reports. They sat for two years, and not one single one of their recommendations has been carried out by the Government. I say it is a perfect waste of time to appoint these Committees, and that they should sit week after week and month after month without any of their recommendations being adopted. It is not fair to the House, and it is certainly not fair to the members of the Committee, that they should be wasting their time when none of their recommendations are carried out. They are not allowed to look into questions of policy, which, to my mind, is a very great mistake. You cannot divide administration and policy. Take unemployment insurance or the Ministry of Labour. The other day an enormous Vote was produced for the building of Employment Exchanges when it is perfectly clear that the whole of the administration of Unemployment Insurance can be done by existing machinery under the National Health Insurance Act.

What has happened upstairs? We have had a Committee on Unemployment Insurance. We voted the money for the Employment Exchange buildings, but upstairs we passed an Amendment saying that a great deal of this administration is to be handed over to the National Health Insurance Department. We first vote an enormous sum for Employment Exchange buildings, and then we pass a Bill saying a large part of it will not be required, because the machinery to be used is totally different and is already provided for. It seems to me, if these Committees could have looked into the question of policy as well as bare expenditure, they would have long ago come to the conclusion that a great deal of this Unemployment Insurance administration could be done by the National Health Insurance machinery, and that would have saved that money. To do any good, you must allow whatever Committee you set up to look into questions of policy so far as they affect administration. It is also clear to me that recommendations in this form do no good whatsoever. You are setting up a new Committee. I have not the honour of being invited to join that Committee, but, if I had the honour of being invited to be a member of it, before consenting, I should do my best to exact a pledge, without which I would not join, that the recommendations would have an opportunity of being properly discussed by hon. Members in this House. If a Committee be set up, and if it makes recommendations, those recommendations ought to be embodied in a Bill and full opportunity for discussion on the floor of the House ought to be given.

There is one more point that I should like to make. As everybody knows, it is the custom, on allotted days of Supply, for the Debate to be opened with a sort of glorification by the Minister of his own Department. He speaks for about an hour, describing how everything has gone very well, and then various hon. Members get up and make various suggestions, nearly all of which mean an increase of expenditure. It would be infinitely better if, on allotted days of Supply, you could start with a proposal to reduce the Vote. These Committees would have reported to the House what expenditure they thought could be saved, and they would have suggested what reductions should take place here and there. I should very much like to see the Debate on allotted days of Supply commence with a proposal for a reduction from a Committee that had been studying the question You could then start with a Debate on the question whether you could save money. You could divide on the Motion for the reduction, and you could then go on with the more general questions contained in the Vote. I am very glad that to-night we did not hear the usual attack by the Chancellor of the Exchequer upon the Press and upon this House. I am very glad that, in connection with this question, he did not throw the whole onus on a Press agitation, or try to make out that the House leads him into extravagant expenditure. I believe that this question of expenditure is the most urgent one before the country to-day, and I hope that the Government will give us a real lead in the matter and that at no very distant date they will lay down the lines on which they are going to deal once and for all with the question of economy.

Photo of Mr Arthur Samuel Mr Arthur Samuel , Farnham

The right hon. Gentleman the Member for Peebles (Sir D. Maclean), who opened this portion of the Debate, mentioned that it was the question of the control of expenditure which was agitating the public mind. I should rather have said that it was the excessive expenditure and the excessive taxation which were agitating the public mind, and that the public have at least realised that excessive taxation is no remedy for excessive expenditure. The phrase "extravagance in Government expenditure" was also used, and I have been asking myself where this extravagance comes in. I identify myself with this Resolution in no hostile spirit, but rather, as the hon. Member for Ripon (Mr. E. Wood) and my hon. Friend below me (Mr. Locker-Lampson) have said, with a desire to elicit from the Government and from Members in different parts of the House their views upon the financial or expenditure position of the Government. I notice that in the Resolution the words run as follows: No improvement can be made in the machinery for the control. What is the machinery for the control of expenditure? I take it, as a man who has been in trade all his life and has had something to do with factory output costs, that the "machinery" is the accounting. I heard the right hon. Gentleman the Minister of Transport (Sir E Geddes) make use to-day of words which I think I will apply to the Debate in which we are now engaged. He spoke of "a lack of ton-mile statistics. "He deplored the absence of such statistical information in the Railway Accounts. I would like to see these, in figures which we are given, expressing what I would roughly call pound-man statistics." I hold in my hand the White Paper circulated with the Estimates for the Civil Service, which this year amount to a total of £557,000,000. I ask myself how I can find out whether there is departmental or administrative extravagance in this expenditure. Many of these items are dealt with in such a manner that we cannot possibly understand them or control them. We are asking by the Resolution for machinery by which we can control expenditure, but I say that we are given something here which no man can understand. On page 7 you have the Revenue Department one, two and three; Customs and Excise, Inland Revenue, and Post Office. We are asked to control expenditure, and we are given in this Paper three Departments (which eventually bring in money) totalling an expenditure of nearly £50,000,000, and that money is added on to the Spending Department. If this House were a firm, these three items could never possibly appear in this Paper added to the non-production expenditure. I daresay that this is an old point raised long before I was born, or at any rate long before I had anything to do with politics. There it is given in the White Paper year after year, and the additional sum which it adds to the Estimates misleads the public if it does not confuse us here. I found on Page 5, "Ministry of Munitions, £27,000,000," and a note at the bottom says: The substantive Vote for these Services is occasioned by the decision to pay direct to the Exchequer in 1920–21 certain classes of receipts appropriated in aid in 1919–20. How are we to know whether the money expended for the Ministry of Munitions is justified? It is quite possible that it is justified. The amount received by this great Department may justify us spending £27,000,000. On the other hand, we cannot test the point, if it does not justify the expenditure, it should allow us to know enough to say that it would have been better to have burned certain stores than to have spent any money at all We cannot dissect the figures, and we do not know what this Department ultimately brings in. We may be throwing good money after bad money for all we know. Again, we know that the expenditure on the Civil Service for the whole year amounts to £550,000,000, or £497,000,000, taking out the three Revenue Departments. If I went back into a factory and were selling goods which I had produced, I should know to a decimal point when those goods came to my London warehouse, how much they cost me to sell, and, comparing that cost with the cost five years ago, I should add a proportion for the increased cost of living since 1914, and, cœteris paribus, I should know what each item cost for distribution. We ought to have a pound-man type of statistics given us so that we may know what it costs, compared with five or six years ago, for Departmental administration of each £1 of expenditure voted to the Spending Departments. As a matter of fact, I do not myself think that you will find any wastage in the Departments. I share the view of the Chancellor of the Exchequer that when you have been through the whole thing you will find that it is a mere bagatelle whether you have spent a little too much for typists, messengers, hotels, and everything else that is thrown in the teeth of the Government. I think it will not come, relatively, to much, but we have not had the opportunity yet of finding out whether there is anything or nothing in this outcry about extravagance in Government Departments. If we could in some way get these statistics inaugurated, we should know whether there was anything to justify the outcry and be able to lay the ghost and get on to the next point, and find out where is the extravagance. Let us first settle whether there is Departmental waste or not, and how much, if any.

What is the most you can possibly save by cutting down departmental expenditure without impairing efficiency? I do not suppose for a moment it would be possible, even in one's wildest dreams, to save ten millions on the £557,000,000, and that would be nothing to justify anything which has been said. Ten millions is of course a large sum, but we are dealing with half a thousand millions. Therefore we have to come to the conclusion that if the administration of the spending Departments is not grossly extravagant the waste must be in something else, and we are thrown back on policy. The hon. Member for the Ripon Division, who proposed the Amendment talked about the Estimates Committee giving advice to the Government as to whether it could afford to undertake a policy or not. Perhaps he did not go quite so far as that, but at any rate be inferred that it would be able to advise as to whether the Government should embark on a branch of policy. I think no Committee will be able to give advice of that character, and for this reason. We do not yet actually know what is the capital or income of the country, and you can never deal with or discuss or consider the policy of the country without also considering the limit of ability to bear taxation and various other details. From time to time reference is made to Sir Robert Giffen's figures, and suggestions have been put forward that the total capital value of this country amounts to anything from £14,000,000,000 to £20,000,000,000. We do not know even what the income of the country is. We get certain Income Tax figures given us which include a man's own income, to which is added his clerk's income, if he pays Income Tax, and that is also added to his clerk's subordinate's income, if he pays Income Tax, and so know nothing about the real accurate income of the country. We do not know what the value of the capital of the country is, or what its income is, so when considering or advising upon any policy that should depend of necessity on the power of the country to bear the relative burden of taxation that indispensable knowledge is not even yet at the disposal of any Estimates Committee.

Therefore I fear the point made by my hon. Friend will not be of very much use, because the required data, just as are the data for what I have called the "pound man statistics," in the cost of administering the outlay of the country, are wanting. We have not these details of what are the fundamental facts as regards national administration, and until they are forthcoming I do not think the Committee could advise the Government. My own impression is that when we have examined these figures in the terms of the Resolution, we shall find that very little money can be saved on administration, and we shall come to the conclusion that the taxable capacity of the country has been exceeded. That is the cause of the whole of this outcry with regard to extravagance. The country's conscience has been aroused through the excessive expenditure which is being met by excessive taxation, the position is causing disquietude, and making people turn round and grope blindly. They think it is Government extravagance; it is not. It is policy, and I, with my hon. Friend, feel it is very important, if we appoint this Committee, it should have something to say with regard to advice and control of policy, otherwise the country will never be able to make any use of its work. It should have one effect on the country; it will allay irritation; it will allay fear; it will divert attention from petty matters, such as savings in departmental administrations in comparison with the huge Civil Service outlay of over £500,000,000, which depend on national policy, to the main cause of trouble—policy. If we make the investigation I think we shall find there is little or nothing in the cry of extravagance on the part of Government Departments. At the most the extravagance can only amount to some £10,000,000, and therefore the country will have to realise that taxation, even for social reform, is not a benefit—I am not trying to be humorous—taxation is the greatest curse to the economic condition of a country. The proper place for money is in the hands of the working people and the industries of the country to enable them to turn it into profit and make it fructify. When money gets into the hands of the Treasury, into the cold hand of the State, it ceases to do that. People think you can tax and tax without doing injury to the country and to everyone in it, rich and poor, and therefore you have constant electoral pressure put on the Government and on the Cabinet to grant more and more benefits to the people as a whole. In order to pay for these there is further taxation, and we, having passed the limit of our taxable capacity, are being crushed under the burden. I believe we shall discover, even from the Debate to-night, that the Committee will show there is nothing in the cry of extravagance on the part of Government Departments. Suppose you take one case—the case of the Transport Ministry, which is costing £181,000. What is that compared with £500,000,000? There is relatively nothing in the point of Government extravagance; the whole mischief of extravagance is in policy. Believing that policy is causing all the trouble in the country, I decline to accept any responsibility for further expenditure unless I have taken part, by my vote and voice, in initiating the demand for the outlay, and I shall in future place the blame for outlays on the Cabinet and on the Chancellor of the Exchequer and his advisers, who may fail to stand up against the Cabinet and explain that further expenditure is impossible because the taxable capacity of this country has already been reached, if not exceeded.

Photo of Mr Thomas Davies Mr Thomas Davies , Cirencester and Tewkesbury

When I was a new Member of this House, representing a poor agricultural district, I ventured to say I was absolutely at a loss, when asked by my constituents to explain why taxation was so high and prices so high, and there seemed no chance of things getting any better. I was, however, a little consoled by hearing the. Chancellor of the Exchequer state, in reply on the Debate that evening, that he would use every possible effort to cut down expenditure and that whatever savings could be effected should be effected. Now we have heard from the hon. Member for Wood Green (Mr. Locker-Lampson) that every recommendation made by Committees of this House within the last two years to lessen expenditure, to cut down Estimates and to go in for certain methods of checking the Treasury, has been neglected; Not one has been accepted, and that being so I really do think the House is not being treated with the consideration it deserves. When men have given of their best for a long period of two years, in order to see how things can be improved, and have made certain recommendations, those recommendations ought to have more consideration than appeared to have been given them. I do not myself acquit the House altogether of blame for the bloated expenditure, because I have noticed—and I was a sinner among the rest—that when the Chancellor of the Exchequer asked us not to press for any further expenditure during the current year, because if we did he could not be responsible for keeping to his Estimates, the House insisted—and I was one of the chief sinners—that we should spend an additional £8,000,000 or £10,000,000 in increasing the amount of the Old Age Pensions. For that no one can blame the Government. The House itself must take the responsibility, and in that case, I think, the House did take the responsibility. I noticed the other evening, when we were speaking about Labour Exchanges, that the Leader of the House told us that, if we could not trust the Government, the Government had better resign. That is a threat which I think ought not to be offered to us. If you carry it to its logical conclusion, it simply means that the House must trust the Government both in great things and in small, and therefore the House need not take any control at all. I am not coming up from Gloucestershire every week to take part in such an unreal discussion as that.

It seems to me that, unless we put our foot down firmly, this kind of thing will go on. It has been said this evening, over and over again, that the Government have done all they could to keep expenditure down, but I venture to say that, if we had had as Chancellor of the Exchequer, during these last few years, a Mr. Gladstone, or a Sir William Harcourt, or my distinguished neighbour, Sir Michael Hicks Beach, they would have stuck hard and fast against these things, and put their foot down and not lifted it up; and they would have so influenced the House that expenditure would have been cut down long ago. I, in common, I daresay, with nearly every hon. Member of this House, am frequently receiving letters from people with small fixed incomes. One, especially, I have had during the last week from a highly-respected lady in my division, who said: "The breaking-point has come at last, and, I cannot go on paying the increased taxa- tion and the increased local rates. I shall have to surrender my house, but, owing to the unfortunate fact that there are no other houses to spare, I suppose I must try and get into lodgings." Persons of that class deserve every sympathy that we in this House can give them. The only way, apparently, in which they can be helped, if the taxation cannot be taken from their shoulders, is by using every effort we can to cheapen everything they consume.

There are, in particular, two classes of people who are suffering very much to-day. There are those gentlemen and ladies who are landowners, and whose whole income is derived from land. They have been hit as hard as anyone in the kingdom to-day. They have not been allowed to put up their rents, and at the same time their taxation has increased by leaps and bounds. They have tried their best to keep their cottages and other buildings in good condition, and it costs them three times what it did before. That being so, I think they deserve every consideration at our hands. The other class is that to which I have just referred, who have small fixed incomes, and who were fairly comfortable on anything from £150 to £300 a year. To-day their incomes, as we know, are so shrunk that they do not amount to half of what they did before the War. I, myself, have been a member of a County Council for some twenty years, and am chairman of its biggest standing committee. I confess that, if I were to go to the County Council, and tell them that they were to swallow my Budget exactly as I brought it forward, they would very soon reject it. Year by year we put down the Estimates for the ensuing year, and, in a parallel column, we put down the expenditure for the year which has just expired, so that every member of our County Council, no matter whether he is a skilled accountant or not, can look down those parallel columns and see for himself, in regard to every item, whether it has gone up or whether it has gone down, or whether it stands as it did before. If it has gone up, he gets up in the County Council and wants to know the reason why. If it has gone down he is well satisfied, and if it is the same as it was before he has nothing more to say, but is also satisfied. I venture to say that, if our Estimates here, instead of being such a maze as they are, were put down in that way, the attention of everyone in the House would be drawn to the fact that certain items had gone up, that certain others had gone down, and that others had been put in that never appeared before. From natural curiosity, if for no other reason, we should inquire why that was so, and we should be able to have a discussion on those things that matter, rather than upon little things that do not matter.

We have been asked over and over again if we can put our finger upon any expenditure that can be cut down. I at once say that we could very well cut down several millions in capital and current expenditure if we did away with Labour Exchanges. When we consider the perfection to which trade unions have come, in bringing within their limits practically everyone engaged in certain trades, from agriculture upwards, and when we recollect that there is a great federation of employers all over the country as well, I am certain we could very well do away with the luxury of Labour Exchanges. I understand that none of the trade unions care about them, while employers are always complaining that they have the wrong class of men sent to them for the particular job they have in hand; and the work they do in other directions could very well be done by friendly societies and trade unions, which have become accustomed now to work the National Insurance Act. I myself am secretary of a very large friendly society, with some 16,000 members. We are working the National Insurance Act, and a private side as well. We feel perfectly competent to carry out the work which it is proposed shall be done by the Labour Exchanges, and we feel that we can do it without any additional expense. I commend to the Chancellor of the Exchequer the suggestion whether he cannot see his way to do away with these Exchanges. They may possibly be a little help now and again, but it is very little, and I think that by doing away with them we should do away with the scandal of going in for those expensive buildings that we were asked to vote for some fortnight ago, and against which, I am glad to say, the House did set its face. At the same time, we could save many hundreds of thousands of pounds per year in the carrying out of the work which can be done equally well without any expenditure of that kind. I hope the House, in future, will insist upon its rights, and that, as was mentioned by the hon. Member for Wood Green (Mr. G. Locker-Lampson), when it has made recommendations, it will insist that those recommendations shall be thoroughly discussed and, if need be, embodied in a Bill, and that the Government shall be put upon their defence as to why they do not accept the recommendation of competent Members of this House. If that is done, I venture to think the Government will not embark on any new expenditure without thinking once, twice and thrice what the cost will be.

Photo of Lieut-Colonel Sir Assheton Pownall Lieut-Colonel Sir Assheton Pownall , Lewisham East

While I associate myself with what has fallen from those who joined with me in tabling this Amendment, I wish to express, my regret that the Chancellor of the Exchequer does not see his way to agree to an Estimates Committee. The Select Committee, in 1918, issued a questionnaire to a number of those best qualified to speak with regard to our financial methods. With hardly an exception—it is fair to say that the present Chancellor of the Exchequer was an exception—those who answered stated that our present methods were inadequate. The great majority agreed, also in general terms, that an Estimates Committee would serve a useful purpose. If the present Chancellor of the Exchequer does not agree with an Estimates Committee, in view of the fact that all those best qualified to know, with himself as almost the only exception, a couple of years ago thought that such a Committee would serve a useful purpose, it does seem that it is for him to suggest some alternative, with a view to getting more financial control than can at present be exercised by the House of Commons. That is especially the case when our national expenditure is at its present rate. I would remind the House that the Estimates Committee was first set up in 1912, and it then dealt with the Civil Service. It reported in 1913 on the Navy Estimates, and in 1914 it was to have reported on the Army Estimates, but was prevented from doing so by the War. I understand that in the two years in which the Committee reported it did not do quite as much good as was expected in regard to curtailing expenditure. The reasons for that are probably twofold. The great majority of those serving on the Committee were new to that parti- cular class of Commitee work, and I also understand they bad not got the advantage of a trained Treasury expert who could rather guide their deliberations and suggest to them on what points they could best focus. There is already an official, the Comptroller and Auditor-General, who is responsible, I understand, to the Public Accounts Commitee with regard to money which has been expended. It therefore would rather seem as if it was decided that we should have an Estimates Committee and that we should have some further Treasury officials sitting in the various Departments responsible, not to the departmental chief, but only to their immediate chief at the Treasury, and whose duty it would be, when Estimates were put forward, which they thought might, with advantage, be criticised, to bring such matters to the knowledge of the Estimates Committee. I quite agree that a duplicating control of that sort, having your control beforehand as well as your control afterwards, has obvious disadvantages in addition, of course, to the very heavy cost involved, but with our national Budget running into £800,000,000 or something of that sort I cannot help feeling that an expenditure of even £100,000 or something of that sort which might be tried for two or three years, making these officials report to an Estimates Committee, might be of distinct service, not only for what the Estimates Committee would find out, but also because—there is no getting away from it—the departmental chiefs, who feel that their actions are liable to be criticised in this way by a Parliamentary Committee, will be much more careful than they would otherwise be. Departmental chiefs, I imagine, have not got the same sense of financial responsibility that we have in the House of Commons in view of our responsibilities to our electors.

If the Chancellor of the Exchequer will not agree to this Committee on Estimates, I was going to ask him to give us more facts than the House—I am speaking for the new Members—or the country as a whole know with regard to Treasury control as a whole. Very few of those who send us indignant postcards with regard to what they are pleased to call Government extravagance realise the measure of control which is already exercised by the Treasury, and it would be an excellent thing for the Chancellor of the Exchequer to give us an idea of how far this Treasury control goes, not only as regards the Comptroller and Auditor-General, as regards seeing that money which is voted is properly spent, but also as regards the framing of Estimates and to what extent the Treasury, and afterwards the Government, are able to check Estimates framed by the various Government Departments to see that we are cutting our coat according to our cloth. I should also like to have had a reply from the Front Bench whether the Treasury will, in view of its greatly increased responsibilities, in view of the fact that we are now spending some five or six times the £200,000,000 which we used to spend before the War, is really able to cope with this greatly increased responsibility, and, if so, how that responsibility is being grappled with—whether it is by means of gentlemen who joined the Treasury during the War, who have made good there and been kept on permanently—but it seems to me quite impossible for the Treasury Staff of 1914 adequately to tackle the Estimates of 1920.

In view of the treatment accorded to the Select Committee of 1918, I only hope that the appointing of this fresh Committee on National Expenditure is not merely a sign of what we used to call in our soldiering days "eye-wash." When a higher authority was coming round to inspect you, you naturally put rather a special gloss upon all your proceedings. It may be that the Front Bench, feeling that there is a great weight of criticism in regard to national expenditure at present, think it necessary to appoint a Select Committee on the question of expenditure, but they have at the back of their minds the intention, when this Committee reports, to treat it in the same way that they have already treated the Resolutions of the Committee of 1918. I hope that is not the case, and I can promise that although we are supporters of the Government we are determined to do all we possibly can to increase the Parliamentary control upon the financial matters which come before the House and, if necessary, we are prepared to vote against the Government if we think they have not got sufficient control of finance.

Photo of Lord Hugh Cecil Lord Hugh Cecil , Oxford University

This Debate has been conducted under rather difficult, circumstances during the dinner hour, which, under the procedure of the House, is the least dignified and least efficient part of the House's working day, since there is no interval allowed in which persons can get anything to eat. Accordingly, not all those interested in the subject can ever be present in the House together, and it necessarily happens that the Minister himself has to be absent for a considerable period. In spite of that, I am glad we have pressed the matter on the notice of the Government, not, of course, because it would be of any advantage to divide the House on the Second Reading of the Consolidated Fund Bill, but because the essence of the problem of economy is, after all, in control. You will not really effect any economy at all unless you can strengthen the economic forces either in the Treasury or in this House, or whatever it may be, so as to make them stronger than the forces which are always pressing for new expenditure. I was disappointed with my right hon. Friend's speech. I thought he at moments sank to the level of mere bureaucracy. All that part about the intolerable burden it was to officials to answer questions and all the rest of it is bureaucracy all over. I am not at all sorry that these Committees cause every Department a great deal of trouble. I hope they will go on causing them a great deal of trouble. I want to make expenditure as troublesome and vexatious for every official in the Government employ as it can be made, and if I were on such a Committee I would try to give officials who are responsible for the expenditure as disagreeable an experience as I could in order to make them dread coming before the Committee and having to justify the new expenditure. It is not by sparing them time or trouble that we shall effect any economy. It is by being hard upon them, by insisting that they really should be zealous for economy, and by making it very disagreeable for them if they are not.

Then I ask myself, does the Chancellor of the Exchequer realise the extraordinary situation in which we find ourselves, that we are spending more money on everything when we have much less to spend? We have been through a war involving enormous expenditure, and we have accumulated a vast debt, all of which has to be defrayed out of public funds. Yet in spite of that we are going on, apparently, enlarging our normal expenditure, not merely the expenditure necessary for winding up the War or the expenditure arising directly out of the War, but expenditure which is of a normal character and which is to go on for ever. We are enlarging that at the very moment when we are reeling under the burden of debt. It is quite unsound to attempt to shelve the burden of responsibility from the Government to the House and back again from the House to the Government, Nothing is more true than that the House is on the whole an influence in favour of extravagance, and I am afraid that the public opinion which the House represents, which does not necessarily mean the public opinion of the electorate, but the active part of public opinion which puts pressure on Members, is on the whole on the side of expenditure. Though that is true, it does not mean that you are to do nothing; that we are to sit down as the Chancellor of the Exchequer almost seemed to do in a fatalist spirit and to say that nothing can be done; that Treasury control is a very good thing for saving waste, but that no effective economy can be made merely by saving waste; that you must deal with the question of policy, but on the question of policy there is really nothing to be done, because the Cabinet want to spend money, the House wants to spend money, and those who influence the House want to spend money. That is all true It is the diagnosis of the disease; but it is no use merely meditating serenely on an intolerable condition of affairs. We have to alter that, we have to get a Government that will not want to spend money. We must get a more enlightened House of Commons which will not want to go on spending money in this way. We want to instruct the electorate that high expenditure means high prices. It is a delusion to suppose that the poor people can escape suffering under high expenditure, because the expenditure in the first instance is defrayed by taxes on the rich, in Income Tax, Death Duties, and so on You cannot enable the great body of the working classes to escape the whole burden of national expenditure merely by putting taxation first of all upon the rich. In the end, that which is taken from one purse is taken out of the total wealth of the country, and sooner or later everybody suffers, because in the effort to adjust things the pressure is handed from one person to another until everybody feels a degree of the burden. Now, when prices are high, and when we are suffering from inflation, nothing is more certainly true than that high expenditure means higher prices, and that that indirectly hits the great body of the working people. If that is so, we cannot sit down with the fatalist spirit of the Chancellor of the Exchequer and merely complain of the extravagance of the Cabinet, the extravagance of the House of Commons, and the extravagance of the electorate. We must amend these things, and it was in order to get an interchange of view between the Government and the House as to the best machinery for improving it, to try to get the House to realise the dangers of extravagance, to try to strengthen the economical influence within the Government and to instruct the electorate outside that this Motion was put down.

Of course, one can always see difficulties in the way of any proposed reform. I am sure that Committee of Supply is no use at all for the purpose of economy. Committee of Supply is a quite good place for discussing grievances and points of administration and points of policy in the general interests of the country. It is a very useful and convenient means for that purpose, but it is no use for the purpose of economising public money. I think my hon. and right hon. Friends on the Government bench will agree with me in what I am about to say, that within my memory, during the time I have been a Member of this House and, I believe, within their memory, there has not been a single instance in which a discussion in Committee of Supply has brought about any economy in national finance. Therefore, Committee of Supply is no use for the purpose of economy. But are we to take it, therefore, that the Chancellor of the Exchequer and the Government fall back upon this position that the House of Commons has not any machinery for effecting economy, and that we are to do nothing on behalf of economy. That seems to me to be a most grotesque position. Committee of Supply and all the elaborate procedure which the right hon. Member for Peebles (Sir D. Maclean) referred to, and all the elaborate procedure laid down in the Standing Orders, was established in days when finance was very simple in order to enable the House of Commons to check expenditure and control finance. Now, matters are much more complicated, and you cannot really discuss and effectively bring about economy in Committee of Supply. Therefore, you want something in its place. We have had this Committee on National Expenditure for the last few years, and it has made a number of recommendations, none of which I gather the Government has accepted. That is a deplorable thing. It is treating a Committee of this House with a good deal of want of respect, and it is also deplorable because it discourages those Members of Parliament who are trying to have the finances of the country more economically conducted. It is very hard that the Government should turn upon the House of Commons and tell us that we are extravagant, that we put pressure upon the Government on the side of extravagance, and at the same time entirely ignore suggestions in the interests of economy.

We are told, and I believe perfectly truly told, by the Chancellor of the Exchequer and several of my hon. Friends, that though you may save a few pounds here and there by criticism of administrative extravagance, you cannot effect any thing like the economy which you desire unless you deal with the question of policy. Well, why should not a Committee of this House deal with the question of policy? There is nothing wrong in discussing policy. They might make a mistake, and their suggestion might be a bad one; but, at any rate, it is an advantage to the Government to have criticisms on questions of policy. The Chancellor of the Exchequer asks us "on what items would you make a reduction? Do you want to cut down pensions, national health insurance, or education?" That is the sort of question which contains a fallacy. Take education for example. Nobody wants to abolish expenditure upon education altogether. Nobody even wants to set back educational progress, but it does not follow that you must necessarily make, in these years when the finances of the country are so heavily burdened, immense expansion in educational expenditure. That is a matter for consideration and investigation. It is a case of weighing one advantage against another advantage, and until you look into the matter it is quite impossible to say whether all the money spent upon education is or is not wisely spent. I am not speaking of waste, but I am speaking of the question of policy, whether it is really wise to carry forward educational expenditure as far as it is being carried until you look into it. A Committee of Supply is no use for that purpose. A large Committee of the whole House is no use. You want a small Committee that can go into the whole matter and that can say, "Excellent though this expenditure may be on secondary education, at the present time it is not appropriate, and the House would be wiser to wait for three or four years for a suitable opportunity for carrying out this policy." In that way you might effect economy. You need to see the economical side of things. The Chancellor of the Exchequer complained that we are extravagant. So we are. It is because we only see one side of the problem; because we do not know how to economise. We have no body which will inform us of all the detailed arguments in favour of economy. Nothing that will supply us with every side of the case for economy.

10.0 P.M.

That is why we want to have a number of small Committees, Committees of three or four or five—large Committees waste such a lot of time—each working on a small subject, one class of Estimates, and trying whether they can suggest some economy, and setting out with the view of cutting down something. I daresay that they would not be always right, and that they would be often wrong. But, at any rate, we should have the case for economy stated to us by a new authority. The members of the Government, according to tradition, are always supposed to stick to one another. Therefore, once an Estimate is passed, the Chancellor of the Exchequer, who may have fought against it tooth and nail behind the scene, is expected to say that it must be supported.

A Committee of the House would be in a different position. They might reopen the whole controversy. They might have a Treasury official who would further present the case which had first been put unsuccessfully, perhaps with a better chance of success. This would strengthen the hands of the Treasury in controlling expenditure on another occasion. They would be able to say, "You will have your money, but it must be in a manner which can be defended. Can you justify it?" If that be not a good proposal, put forward something else. Do not let us despair of economy. Do not let the House of Commons abandon one of its great functions, and say that nothing shall be done because people are extravagant. Then, in regard to these Votes, which the House does sometimes make unwisely in favour of increased expenditure, what I think unfair to the House is that they have no proper opportunity of arranging the financial side of the question or of having it put properly or permanently before them. It is quite easy to contrive machinery by which that could be done. For instance, it might be arranged that whenever the adoption of a Resolution would involve increased public expenditure, it should be moved in Committee of the whole House, Mr. Speaker leaving the Chair without Question put, on the Order being read. A Resolution in Committee does not become the Act of the House until reported to and agreed to by the House. Suppose an extravagant Resolution is passed in Committee of the House under that procedure, then it would be open to the Government to press the case for economy before the Resolution came up for Report. Under our procedure the Resolution could not come up on Report unless the Government find time. If they did find time, they would, no doubt, take up the case for economy, or you might have a Resolution automatically committed to a small Committee instructed to state the case from the point of view of economy.

It is very easy to contrive opportunities for the House to hear the case of economy stated. There is no difficulty in inventing machinery. You can invent machinery if you want it. What is really wrong with the Government, and I am afraid with a large part of the House, is that although we talk a great deal about economy, people do not really care. This discussion has lasted some time. If it had concerned something which really passionately interested the House and the country, we should have had a larger attendance on these benches to-night. The total apathy of feeling is a testimony to a real want of zeal in the cause of economy. I do not think that there is any cure for that except by information. Let the House have the best opportunity for knowing the facts, the facts about expenditure, the operation of taxation, how it presses upon the life of the country and cases of hardship. A very remarkable case was mentioned by my hon. Friend who spoke from behind the Government benches. Cases of that kind show the real urgency of the need for economy. Let us face the fact that at this moment you cannot possibly do more good to poor people or to the community as a whale than by economising in national expenditure. What we want is something that will press towards economy with something of the force with which the War pressed towards expenditure. I can remember the time when taxation now imposed was regarded as quite out of the question. Even so small a tax as the 2d. on cheques was thought to be impossible. I remember Sir Michael Hicks-Beach suggesting a 1½d. stamp during the South African War, but it was regarded as quite out of the question on the ground that it was likely to cause too much inconvenience. Under pressure of the War, these inconveniences have been faced and endured. What we want is pressure towards economy imperative in the same way as the War exercised pressure towards expenditure.

How do we find ourselves placed? We can do no more than supplicate; we cannot divide and reject this Bill. We do not know the details, and we cannot know the details of national administration in such a way that we can really criticise the policy from point to point and show where it can be made more economical. We cannot oblige the Government to set up new Committees, we cannot oblige them to reform the procedure of this House. We can only supplicate. But I think the Government must realise that unless they achieve much greater economy than they have achieved so far, unless they cut down expenditure for more drastically than they have done hitherto, the country, who are their masters and ours, will blame them, will throw aside all such excuses and such language as the Chancellor of the Exchequer has used to-night about the difficulties of machinery, and will insist that by some way or another we must realise that rigid entrenchment is necessary in a scale of expenditure which is becoming dangerously grave.

Photo of Mr Gerald France Mr Gerald France , Batley and Morley

I am sure the House will be grateful to the Noble Lord for his speech and for having put a little life into the Debate. I wish to associate myself entirely with the view that economies can be effected, if everyone makes up his mind that they shall be effected, and also with the view that policy should be considered as well as expenditure; but I do not agree altogether with the statement that no very considerable savings could be effected. I was surprised at the hon. Member for Farnham (Mr. A. M. Samuel), who has just been appointed to this Select Committee, committing himself to that statement. I think he might have reserved his judgment until he had sat on the Committee and taken evidence. I hope to meet him on that Committee as a colleague, and I shall hope to share with him the task of investigating the matters put before us.

Photo of Mr Arthur Samuel Mr Arthur Samuel , Farnham

What I said, if I remember correctly, was that if we did find any extravagance there, the amount we could really save or recommend to be saved would be so small in relation to the hugh sum of £557,000,000, that the total would not amount to much or be worth much in the interests of economy.

Photo of Mr Gerald France Mr Gerald France , Batley and Morley

I accept that explanation. I am not attacking the hon. Member at all, but I wish to take a different view with regard to the probable result of our investigations in that Committee. I agree entirely with those who have spoken in the sense that if this Committee is to be effective and if Members are to devote themselves to the work, it is absolutely essential, if the House is to retain anything like its position in this matter, that the Government must pay some attention to the Report of such a Committee, which is set up by them for a special purpose. During the whole of the Debates on this question of economy I have been struck very much with the similarity of the speeches made from the Front Bench. In every one of them, in the speech of the Chancellor of the Exchequer as in the very brilliant speech of the President of the Board of Trade, they unite in impressing upon the House that there is really nothing wrong, and that there is really no extravagance, and that nobody had succeeded in pointing out where the extravagance was. I really think that is hardly fair. In the first place, they should not say that if they have neglected to take the advice which the Select Committee on National Expenditure has given, and in the second place, they should not forget that only a week or two ago two Members of the Government had to adopt a very chastened attitude on a certain afternoon when the House, rising for a moment to its privileges, asserted itself and refused to allow what it regarded as very extravagant expenditure with regard to building. On that afternoon, although the Government are asking the House to help them to economise, the House was met by the Leader of the House with a challenge that if they persisted in that course it would be regarded as a vote of confidence, and that the question of spending something like £150,000 upon buildings for the Revenue Department and a larger sum upon Employment Exchange buildings, if refused, would bring this great Government down and that they would regard it as a vote of censure. I really think that is not treating the House of Commons fairly or encouraging the House of Commons to exercise the duty, which I hope it will always exercise, of carrying out and bringing to bear due criticism upon the Government with regard to the question of expenditure. It may be true that the amount of money which can be saved by these investigations will not be large, but I think the effect on the country and upon those who are of opinion that the Government is extravagant will be very much larger than the amount of money actually saved. Whether it is the employment of more clerks or any wasteful administration, matters of that kind have a bad effect and impression upon the general feeling of the country with regard to extravagance and expenditure. It has been said it is very difficult for the Government to exercise control, and that no instances have been pointed out where control could be used in order to produce effect. May I give two examples where expenditure could be controlled? The first is as to Government guardianship of certain stores. Those particular stores were sold to a private firm, which tried to obtain possession of them, but could not do so. They sent a competent man to find out what was happening. He found warehouses, which were formerly timber sheds, filled with the goods, and with locked doors, but instead of trusting to lock and key and a caretaker, with insurance, as any business firm would do, there was something like a platoon of men with noncommissioned officers and officers in charge of the goods. What they were doing nobody could find out, except that they are responsible for the care of the goods. The same firm went to the North of England to take possession of a further parcel of goods, and found the military in possession there and a large number of officers and non-commissioned officers and men engaged in guarding those goods. I should like to ask where the control and where the investigation of expense of that sort comes in? There is another case. I heard the other day of a case which I know is authentic, under the Ministry of Shipping, of a steamer which was in the employment of the Admiralty being sent from one southern port to a northern port empty, sent back another 300 miles empty, and then was about to be sent from London to Newcastle again empty, but after two days' persuasion it was permitted for the owners of the steamer, who were being paid £800 a month for the use of it, to load her to take a cargo from London to Newcastle, as a great favour. When the steamer arrived in Newcastle she took on board one boiler weighing 35 tons—she was capable of carrying some 800 or 900 tons of cargo; she went to Middlesbrough and picked up another boiler weighing 35 tons; - and delivered them to a private purchaser in Hull, who paid £50 extra for having delivery made, and the cost of delivery from Newcastle to Hull was £400, by which means the Government lost £350 on the transaction. That is the kind of thing that people are hearing about every day and coming in contact with in business life, and it is idle for the Government to say there is nothing wrong and that we do not point out individual cases of extravagance and waste. I sometimes wonder whether the Prime Minister, like Abraham Lincoln, in the leisure moments of the Cabinet, reads them classical fiction, and whether, if so, he has ever read them a passage from a well-known book, which I went to borrow after hearing one or two of the speeches from the Front Bench. There is a passage which is very applicable to the present situation in an old book, in which a reference is made to a certain Government office: Sometimes angry spirits attacked [that] Office. Sometimes Parliamentary questions were asked about it, and even Parliamentary, Motions made or threatened about it, by demagogues so low and ignorant as to hold that the real recipe of government was 'How to do it.' Then would the Noble Lord, or right hon. Gentleman, in whose Department it was to defend [that] Office, put an orange in his pocket, and make a regular field-day of the occasion. Then would he come down to that House with a slap upon the Table and meet the right hon. Gentleman foot-to-foot. Then would he be there to tell that hon. Gentleman that [that] Office not only was blameless in this matter, but was commendable in this matter, was extollable to the skies in this matter. Then would he be there to tell that hon. Gentleman that, although [that] Office was invariably right, and wholly right, it was never so right as in this matter. Then would he be there to tell that hon. Gentleman that it would have been more to his honour, more to his credit, more to his good taste, more to his good sense, more to half the dictionary of commonplaces, if he had left [that] Office alone and never approached this matter. We hear something very much like that nowadays continually with regard to the Treasury and other Government Departments, and we really cannot believe it, because when we go about the country and meet in business with the various transactions of life, we know that in Government Departments there is waste going on, and all is not well with the work of economy which might be carried out. I have the highest respect, if I may say so, for the many qualities of the Chancellor of the Exchequer. I always listen to his speeches with great delight, but I wish he were rather more ruthless and would change places with the Minister of War. We want a peaceable person at the War Office and a warlike person at the Treasury. We need a Chancellor of the Exchequer always wanting to fight somebody, and I think the Minister of War would fill that office very well. We want somebody with a robust vocabulary, and as we sometimes find the principal artistes changing rôles, at any rate for a short time, I would ask the Chancellor of the Exchequer whether he would not consider going to the War Office for a short time and asking the Minister of War to occupy his position, and do a little rough work round his Department for a few months.

I would like to endorse what the Noble Lord has said. It is no use saying that these things cannot be done; they have to be done. Economy and retrenchment must take place, and I am sure the Chancellor of the Exchequer will agree that, on the lines of economy and retrenchment, we are likely far sooner to arrive at a sound financial position than by any far-fetched, subtle means of reducing debt, which might have a very adverse effect upon the general financial condition of the country. While the Noble Lord was speaking I was reminded of a story which, perhaps, will serve to press the point home. An American traveller was once telling a friend of an experience he had in a desert, where he saw a goat hotly pursued by a lion. Coming to a palm tree the goat, looking at it in despair, ran up the palm tree and sat on the very top. The lion remained at the bottom in the sand and growled. The American's friend said, "But a goat cannot climb a tree." The American replied, "A goat cannot climb a tree? It simply had to." If we are really to recover our financial position and the strength which we hope to see again in the industrial, economic and financial world, the Government will have to economise, and we shall have to see that they do.

Amendment negatived.

Original Question put, and agreed to.

Bill accordingly read a Second time, and committed to a Committee of the whole House, for To-morrow.