Savings Already Effected.

National Expenditure. – in the House of Commons on 1st March 1922.

Alert me about debates like this

Now I should like the House to know what we actually have in anticipation in the way of savings between the Estimates of the present financial year and the Estimates of the next financial year. I am dealing at this moment only with the ordinary Supply services. That is all with which the Geddes Report deals. The Estimates for the present year for ordinary Supply services, including in these Estimates the Supplementary Estimates, amount to £665,000,000. As a result of the reductions, of which I have been speaking, obtained through the counsel of the Geddes Committee, and through the activities of the Departments, I think that the Estimates for the next financial year may be reckoned at a sum of £484,000,000; that is to say, a figure of £181,000,000 less than the Estimates for the present year. I venture to put to the House that that is a great achievement. It is not achieved yet, as my right hon. Friend says, but I am assuming that we are able to carry out the proposals which I have been putting before you.

A great deal of talk with regard to economy by the critics of the Government has been on the footing that we have done nothing up to now, and that only as a despairing effort, when we were drifting on the rocks, did we appoint the Geddes Committee. I hope hon. Members will not repeat that kind of fallacy in their constituencies again. I mean to enlighten them as to what the actual facts are. These are the facts:

In 1918–19, which contained eight months of war and four months of peace, our Gross Supply services took £2,965,000,000.

In 1919–20, we had reduced that sum to £1,690,000,000—a reduction of £1,275,000,000.

In the year 1920–21, we had reduced the figure for these services to £1,015,000,000, making a reduction for that year of £675,000,000, and,

In the current year, my estimate is that these services will cost us £825,000,000, or a reduction of £190,000,000.

I have already disclosed to the House that I anticipate from the ordinary Supply services next year I shall get a further reduction of £181,000,000 compared with the present year.

That is a record incomparable in the world at the present time. There is no other country which has made efforts in the least like it, or which has achieved nearly so much. There are many criticisms that we are still keeping War Departments going, where limpets cling, where they do nothing but go to sleep, and it seemed to be assumed that it was possible for us to get rid of all the War Departments as soon as the Armistice came. I wonder if the House realises what has been taking place in connection with these so-called War Departments. They were created to carry on business which there was no Department to conduct. We took control of enormous amounts of material in this country. We were preparing for a continuance of the War, and we had in hand, at the time the War ceased, enormous stocks. The Disposal Board since the Armistice has sold £600,000,000 worth of material. Was that to be done without a staff? Let anybody who has ever been connected with an ordinary liquidation of even a comparatively small company consider the time which elapses before you can put it into liquidation, and the number of people you have to employ if you are to save the assets of the company. Were we to leave all that property derelict? If so, the country would have been a loser to the extent of £600,000,000. The Food Ministry has sold since the Armistice £550,000,000 worth. The Wheat Commission has sold £370,000,000 worth. The Sugar Commission has sold £160,000,000 worth of sugar, and the Shipping Ministry £91,000,000 worth of shipping.

I am sure that the House will agree with me that that was an enormous undertaking. I know no business in the world which has ever compared, or could compare, with it, and be it noted that throughout the Geddes Report, whatever criticisms you may find, you will discover no comment which suggests that these Departments have been extravagantly managed for the results which they have achieved. But the House will readily realise it is the last saving which is the hardest to attain. The first saving is comparatively easy. It is when you get near the bone that your difficulties really arise, and now we have to realise in this country that there are many services which, in normal times, we would choose to carry on which, under present conditions, we must realise will have to be curtailed in their activities, or perhaps disappear altogether.

But we have no reason to despair. Our burdens at the present time are no doubt very heavy, and our anxieties which arise through trade depression are very great; but while we have been confronted with great difficulties during recent times, we may recognise with gratification that our financial system is to-day, amidst all the vicissitudes of the world, proving its soundness and stability, with the result that of all the countries in Europe, we are in the best position to take advantage of any revival of trade which may occur. Our currency has been steadily rising in value, with the result that we have more power to-day to purchase all the food and raw material which we require for our own need. Our Government securities— although this matter, to some extent, is connected with the fact that there is a lack of enterprise at the present time—have risen, with the favourable result that we shall not need to find next year so much money for sinking fund charges and for cognate charges. [An HON. MEMBER: "What will be the saving?"] I would rather not say, but altogether the situation at the present time is more hopeful, and more favourable than we could have anticipated a few months ago, and, in spite of all the burdens and anxieties which still remain with us, as a result of the War and its consequences, I am confident that these anxieties are no longer so menacing as they were, and that we shall emerge from them with success.

6.0 P.M.

Photo of Mr Herbert Asquith Mr Herbert Asquith , Paisley

I congratulate the right hon. Gentleman most heartily on the dexterity with which he has managed, more or less at any rate, to keep his balance in a highly embarrassing position. The situation is one of embarrassment to the Government, and one of impotence for the House of Commons. We have here a formal and colourless Motion on which we can talk, but on which we can give no effective decision. The proceedings to-day are very much in the nature of the proceedings of a debating society. The right hon. Gentleman has traversed the ground with great, but not at all excessive, copiousness, and with—if he will allow me to say so—much lucidity. But the salient fact which emerges from the long and labyrinthine array of very necessary figures, is that it has been found possible, first by an appeal to the spontaneous initiative of the Departments, and next from the stimulating suggestiveness of the Geddes Committee—an extra Parliamentary, extra-Departmental instrument—and by the operation of public and electorate opinion—as, I say, the combined result of these forces it has been found possible for the right hon. Gentleman to tell us he can make a reduction, or a proposed reduction—the two are not quite the same—which, as I gather from his concluding statement, will amount to £180,000,000 for the supply services. I should like, before I make any further comment, to be quite clear that we understand the statement of my right hon. Friend—he will correct me if I am wrong.

The inference I draw from what I heard is this: that whereas the Geddes Report recommends reductions of £86,000,000, of which £15,000,000 are unspecified, and, therefore, apparently, according to the right hon. Gentleman to be left out of account, I take the figure of the right hon. Gentleman and deduct the unspecified £15,000,000, leaving £71,000,000. This does not include the savings that may result from the Washington Conference. He says we have accepted £64,000,000, including the £11,000,000 which are due to the Washington Conference, making a net result of £53,000,000 against £71,000,000. It is very important we should get these figures right. Take the accepted figure of £64,000,000. I assume you have to add to that the £75,000,000 referred to in the Geddes Report which the Departments spontaneously save, making a total of £139,000,000; or if you take the lower figure of £53,000,000 you get a total of £128,000,000. Then to my mind a puzzle remains. You have a total of £139,000,000, the combined savings of the Departments spontaneously offered, and under the Geddes Report, so far as accepted, and the right hon. Gentleman makes a total saving of £181,000,000.

Photo of Sir Robert Horne Sir Robert Horne , Glasgow Hillhead

The right hon. Gentleman is really not comparing the same things. The deductions which have been dealt with by the Departments and by the Geddes Committee were originally Estimates which these Departments were making for next year. The £181,000,000, on the other hand, is a comparison with all the Estimates of this year, plus the Supplementary Estimates, with the Estimates for next year. My right hon. Friend will follow that the original Estimates had added to them, necessarily, Supplementary Estimates, in order to show what, was the full estimated expenditure of this year. So that figure compared with the anticipated Estimate for last year yields the difference or £181,000,000, but, as he will realise, what the Geddes Committee dealt with was the total difference altogether of the Provisional Estimates for the Departments for next year.

Photo of Mr Herbert Asquith Mr Herbert Asquith , Paisley

I understand. This £165,000,000 includes the Supplementary Estimates.

Photo of Sir Robert Horne Sir Robert Horne , Glasgow Hillhead

Yes, it includes the Supplementary Estimates.

Photo of Mr Herbert Asquith Mr Herbert Asquith , Paisley

I have a glimmering; there is now more light than before. I still, however, find the gaps unbridged and unexplained between the total savings that the right hon. Gentleman explained from the joint operation expected from the Geddes Report and the Departments. I am only asking the right hon. Gentleman these questions for information, but he alleges that by spontaneous departmental action, quickened and supplemented by an outside committee, you bring down in the course of 12 months national expenditure by no less than £181,000,000. [An HON. MEMBER: "After the War."] A long time after the War; nearly four years after. If you can do that, why was it not done before?

I do not regard the Report of the Geddes Committee as inspired. I am far from committing myself to all its conclusions, but, as the right hon. Gentleman has very truly said, I think it is one of the most valuable contributions of our time to the question of our national expenditure under these abnormal conditions. Without in any way accepting the verbal inspiration of the Geddes Report, taking that Report and the action of the Departments of the Government, the two present a formidable indictment, one of the most formidable indictments ever made against a Government of waste and extravagance. Let me make a distinction, not merely a verbal distinction, but a very important one. I think the House on the discussion of financial matters should always bear in mind the distinction between waste and extravagance. You may have waste, even in private concerns, and perhaps still more in national finance. You may have waste, though you are rich or prosperous, and though your revenue is well in excess of your expenditure, in spending on overgrown and overstaffed establishments, either for military or civil services, you may have waste as a concomitant incident to a thoroughly prosperous revenue-producing country. Extravagance comes in when a country is spending beyond what you actually and prospectively can pay for. When you have reached, as we have reached, or very nearly, the limit, the ultimate limit, of possible taxation, then you must cut down as extravagance—not as waste, but as extravagance—forms of spending which an overflowing revenue, or an adequate revenue, could very easily bear. The Geddes Report teems with examples of both. Just let me read—and these are figures not disputed, and which cannot be disputed, by the right hon. Gentleman: The staffing and use of the man power in the Army to-day"— Man power, not money, for money values change— is on a far less economical basis than it was before the War. Then it is extravagant. Again, I am reading from another passage in the Report— We are convinced from our survey of the War Office Estimates that there is great room for economy in men and money."— More significant is a passage which precedes in the same volume of the book— We must record a very marked impression derived from long conference of the Departmental representatives of the three fighting services. The Estimates provide that in the year 1923, the fifth year after the Armistice was signed, with a broken and exhausted Europe, with no German menace, we are to have far greater fighting power, with a larger personnel, and greater preparations for war than ever before in our history. That is the considered judgment of the Geddes Committee, after examining the representatives of the Departments. That is the real indictment. It appears to me that the Government have no answer to the Geddes Report, after all qualifications, modifications, and adjustments have been considered. The Chancellor of the Exchequer wraps himself from time to time, I will not say in a complacent, but in a self-compassionating pessimism. It is worse than pessimism; it is fatalism. He told us the other day that The situation has been too much for us all. Who created the situation? I quite agree that the War created and bequeathed a heritage of a most embarrassing kind. The position has been very much accentuated by deliberate and perverse short-sightedness. The right hon. Gentleman says, "You forget, you critics, that we have a dead weight of £500,000,000 to meet every year in discharge of the new obligations which the War has placed upon us." We do not forget anything of the kind. That was the case in 1918, and it has been the case ever since, and if ever there was a reason which called upon those who were responsible for the conduct of our affairs for the most rigorous, vigilant and even meticulous economy, it is the fact that they had to provide every year in the shape of that £500,000,000 of war debt and war pensions a sum which is two-and-a-half times the total revenue of the country in the year before the War broke out. With this enormous load hanging around the taxpayer's neck, or, at any rate, burdening his shoulders, the Government has added gratuitously to its weight by their adventures in Russia, Iraq and the Middle East. In this way they have deliberately added to its weight, and we are suffering, now to the extent of £681,000,000. That, I think, is the moral which this Debate will bring home to the taxpayers of the country.

I should now like to say two or three words on some of the figures which the right hon. Gentleman has given. It is impossible without any papers before us of any sort or kind, except the Geddes Report, to carry these figures in one's head. I should, however, like to make two or three observations on some of the figures which the right hon. Gentleman has given under particular headings. With regard to Education, I acknowledge that I am much reassured. I stated my own views and so did some of my hon. Friends on that part of the Geddes Report in the Debate on the Amendment to the Address. I think the proposal to raise the age of school attendance to six years was a suicidal one, and I am heartily glad that the Government has given it the go-bye. I cannot imagine anything which would have been more enfeebling and demoralising to our population.

I am a little anxious at the attitude which the right hon. Gentleman took in regard to the increase in the size of classes. I am stating a mere truism when I say that everybody concerned with the practice and administration of education knows that one of the largest strides in advance which we have taken with a view of making education not a mere form but a reality is in the reduction of the size of classes bringing individual pupils into actual personal and direct contact with the teachers. I remember myself when I was a small boy going to a school in which the lower classes consisted of 50 or 60 boys. We had very good masters, but no master in the world, however skilled or however experienced, could deal with a body of boys like that in such a way as to make their daily training really effective. Of course boys vary infinitely in capacity. Some of them get the benefit and others are left behind.

One of the greatest improvements that has been made in our system of national education is reducing the size of the classes, and, as the right hon. Gentleman acknowledged, the new schools and the better schools are structurally not adapted and cannot be adapted to increasing the size of the classes. I also agree as to the importance of maintaining the bargain made with the teachers, although it is not strictly a bargain for which the Government are responsible, but the local authorities. The Government have decided not to step in or undermine those authorities, and with the manner in which the Government have dealt with that part of the Geddes Report I heartily concur.

With regard to the fighting services, perhaps the right hon. Gentleman will be good enough to tell me whether I am right or wrong in my figures. I am now taking into account the reductions which he has accepted or substituted for those suggested in the Geddes Report. I make out, on a hasty survey, that the Navy, on the reduced basis, will cost about £60,000,000, the Army £58,000,000 and the Air Service £10,000,000, making the total of £128,000,000.

Photo of Mr Herbert Asquith Mr Herbert Asquith , Paisley

In round figures I might say the amount is about £130,000,000. I want to know, does that include the cost of Iraq, Palestine, Constantinople, Egypt and the Middle East?

Photo of Mr Herbert Asquith Mr Herbert Asquith , Paisley

So that £10,000,000 has been added for those purposes. I understand that Egypt is included.

Photo of Mr Herbert Asquith Mr Herbert Asquith , Paisley

These are very startling and formidable figures. Here we find that, four years after the War, our fighting services are costing us £130,000,000, and the right hon. Gentleman is not in a position to give us any assurance of a speedy reduction to a lower figure. As I pointed out the other day, it seems to me and to most of us to be a monstrous thing in all the years that have passed since the War when all the great armies of Europe have either practically disappeared with two or three exceptions—[HON. MEMBERS: "France!"]—yes, I say with two or three exceptions which I gave the other day, when the armies of our late enemies have been reduced to comparatively shadowy and almost incalculable proportions, we are still maintaining a force which is a great deal more than anything we ever dreamt of before the War. I see the Lord President of the Council here, and I am sure he will agree with me when I say that one of the great drawbacks to the success of the Conference at Washington to which the right hon. Gentleman contributed so largely, as we are all ready gratefully to acknowledge, by his tact, his diplomatic skill and his real enthusiasm for the cause of peace—one of the great drawbacks was that nothing was done, and nothing could be done, for the reduction of land armaments on the Continent of Europe. I think this Debate will have served a useful purpose if some spokesman of the Government is able to give us an assurance that whether it be at the forthcoming Conference at Genoa, or by any other machinery, this problem is going to be settled seriously and in the same spirit, and I hope with the same effect, as the naval problem was handled by those at Washington. Only in that way can we really relieve Europe and the world from this paralysing and sterilising military expenditure.

I want to say two or three words in regard to other parts of the Report with which the right hon. Gentleman has dealt. I think, myself, and I speak after a good deal of administrative experience, that the proper way to deal with these subordinate Departments is to absorb them. I feel quite sure that if we took as our model the old Board of Trade, the old Home Office or the old Local Government Board, we might easily engraft, as sub-departments, some of these new forms of activity which have been developed since the War. I am very much in favour of consolidation for two reasons. In the first place, I think it will be found to be economical in the long run; and, in the second place, it brings the various feeders of the Departmental organism into closer relation with one another, greater daily contact, and this makes the work of government much smoother and more efficient. In this direction the changes which the right hon. Gentleman has suggested, as far as they go, seem to me to be changes in the right direction. It will be a great thing if we can reduce our Supply services by £180,000,000. Just consider the position we are in to-day. £500,000,000 is required for Pensions, Debt, and other matters. The expenditure for the year will be £1,000,000,000. Indeed, the right hon. Gentleman will be very fortunate if he brings it down to that. It is more than this country can bear. It means keeping up a state of taxation, both direct and indirect, at a figure which makes saving and accumulation practically impossible, and which will tend as time goes on to lower the standard of the comforts of life. There is no more vital consideration, not even the re-opening of international markets, urgent and important as that is, than the task of bringing down taxation to a point at which it will no longer check the springs of industry. That can only be done by a large additional reduction beyond anything now proposed. It ought to start at once—a large additional reduction of the non-productive causes of expenditure, which are a menace to civilisation.

Mr. THOMAS:

We have had this afternoon a remarkable illustration of the manner in which the present Government can adapt themselves to circumstances. My right hon. Friend the Chancellor of the Exchequer opened his speech by saying that no one welcomed the Geddes Report more heartily than the Government did. Notwithstanding that fact, tremendous pressure had for weeks to be put on the Government to publish the Report. Curiously enough, they welcome the Report, notwithstanding the fact that it scraps nearly every proposal for which the Government themselves are responsible. I wonder what the Prime Minister will say to the statement of the Chancellor of the Exchequer announcing the willingness of the Government to sell the houses which have been built under their housing schemes. My right hon. Friend says, "We welcome the Geddes Report, which enables us to sell the houses that were made for heroes to live in. We welcome the opportunity of getting rid of those houses for heroes." I can hear the Prime Minister saying he is prepared to sell them to the heroes. But in this case the buyers will not be those who fought and who now are hungry, and unable to buy; you may rely upon it that the people who will get these houses are not the heroes my right hon. Friend was speaking of at the time he secured approval of this particular policy.

Again, the Chancellor of the Exchequer adapts himself to circumstances by saying, "We welcome the Report and the opportunity of abolishing the Ministry of Transport which was the genius and creation of my right hon. Friend. We welcome the opportunity of scrapping all these things which secured us votes at the General Election." Another very curious thing is that the Chancellor of the Exchequer said he could not understand the opposition in this House and in the country condemning the Government for the creation of this particular Committee. I think I had better state again the objection raised from the Labour Benches at least to the creation of the Geddes Committee. That objection was not to the personnel of the Committee. It was not to any particular individual. We protested then as we protest now against the Committee doing work which ought to have been done by the Government themselves. If there is a justification for this Report; if the Government are justified this afternoon in coming forward and saying, "We welcome this Report and we welcome those responsible for it, and are prepared in the main to adopt their recommendations," then our answer is that a Government with an unprecedented majority, refused nothing by this House of Commons and having unlimited chances to do the business for which it was elected, ought to have done this work. We say our condemnation is not against the Geddes Committee or its Report, but rather against a Government such as I have described shelving its responsibilities on to another body not representative of this House of Commons, and then coming along and blessing its Report.

I want very briefly to clear up two misapprehensions which have arisen on this matter. In general statements in this House and outside it is assumed that we of the Labour party believe in Government control and the creation of Government Departments merely for the purpose of finding labour. The taunt we are compelled to meet from time to time is that it does not matter what the circumstances may be, if we can only give people jobs we are in favour of doing so. I want to say quite frankly and emphatically that that is foreign to our conception of Government responsibility. We recognise indeed that no one pays more heavily for waste than do the working classes, by increased taxation, direct and indirect. For waste in any Department, whether private or public, we know only too well that the working classes in the main have to pay a very heavy price. Where we join issue is in differentiating as to what is waste. We have no hesitation in saying that the most terrible of waste at this moment is to be found in the 2,000,000 people unemployed. There is no waste equal to that. As far as the Geddes Committee Report is concerned, we want to differentiate between economy in our so-called fighting forces and economy in the health and well-being of the people.

I hope the Government will go beyond their present proposals with regard to education. We whole-heartedly support them in opposing any attempt to cut teachers' salaries, which we believe were all too low prior to the War, and are not too high to-day, and we also support them in the proposal not to drive on to the streets thousands of little children who, if they were not in school, and were not being cared for in their homes, would be mutilated in the streets. In the end we should have to pay more dearly in consequence of that change of policy. We support the Government in not attempting to save at the expense of these innocent children. We also beg of them to realise even on this question of larger classes that all experience is against larger classes. The best answer is that you do not get large classes in public schools. [HON. MEMBERS: "Oh, oh!"] Not being a public schoolboy, I am only giving utterance of opinion of those who know better than I do, but I venture to suggest there is no analogy in the matter of the contemplated large classes in the elementary schools and the supervision of the teacher and direct contact between teacher and pupil between the elementary schools and the great public schools to-day. We believe that any attempt to further increase the size of the classes will be disastrous. In that connection I want again to remind the House and the Chancellor of the Exchequer that this Report, which the Government welcomes, throws entirely overboard the policy adopted by the Minister of Education less than two years ago. Of course, that is only another illustration of the adaptability of the Government to circumstances.

I hope my right hon. Friend will not proceed with the proposal to amalgamate health and unemployment insurance. If I were to join issue on any part of the Report it would be on this- point, for those who make that recommendation can know absolutely nothing about the administration of these services. There is not an approved society in the country, there is not a friendly, insurance, or trade union organisation that would not admit right away that any attempt to amalgamate health and unemployment insurance would be not only difficult to administer, but would prove far most costly than the present system. Anyone who knows anything about this subject will confirm what I am saying, and anyone who supports the proposal to amalgamate both services and run them under one head can know nothing about their administration. Such an amalgamation could not really be carried out, and in the end it would prove very costly indeed.

The real point I want to make in connection with this Debate is this: We may talk about economy, we can talk of saving money, we can cut down here and there, but we cannot separate expenditure from policy. We may talk about the money that has been squandered in Iraq and other places, we may talk about the money we are saving to-day, but until we recognise that money has been wasted, and is still being wasted, in pursuit of a wrong policy, and until we reverse that policy, we shall never get effective economy in this country. It is for these reasons that I say, on behalf of the Labour party at least, that we shall jealously protect, and fight against any attempt further to curtail, the educational facilities of the children of this country, or any attempt to interfere with the health of the men, women, and children of this country, upon which already not enough is spent; but equally we will support wholeheartedly any attempt to eliminate real waste, defining waste as that which does not contribute to the well-being of the community as a whole.

Photo of Mr Francis Mildmay Mr Francis Mildmay , Totnes

I should like, first of all, to congratulate the Chancellor of the Exchequer on his admirably practical and lucid speech. There was no attempt to conceal anything. He gave the House all the information at his disposal, and I am sure that all will agree that his speech was most convincing. I have been reading lately the proceedings at various bye-elections, and I find it very difficult to have patience with the use which has been made of the Geddes Report by those who are obviously manœuvring for position in connection with a General Election. First they found fault with the fact that there was no immediate publication of the Report. That plea failed them, and afterwards they would have it that there was an intention to refuse certain reductions. I think that those gentlemen who have been so violent on the subject must feel very foolish now. Is there a man amongst those who have been so loudly screaming about a General Election, who does not know that these reductions cannot be effected by a stroke of the pen? There must be detailed consideration in connection with the adjustment of these reductions to policy.

I agree with the right hon. Gentleman the Member for Derby (Mr. Thomas) that the question of reductions depends very largely upon policy. I am especially interested in the reductions on the Army Vote, as foreshadowed by the Secretary of State in his speech last year. I quite agree with the Chancellor of the Exchequer that this is not the moment to discuss those reductions in detail, but it is the moment to ask ourselves whether they are going to be effected on the right principle. It seems to me that there is one great essential, and that is to keep the various cadres in being, and to preserve the possibility of expansion. We must not scrap that possibility in preference to dealing with what we believe to be the largely superfluous personnel of the War Office and in commands throughout the country. We must not injure the great work which has been done by Lord Haldane in the past in connection with the Army. During the War, on the Western Front, I was thrown into contact with a good many Generals in high command—army commanders and others—and to a man they were agreed that the British Army was more indebted to Lord Haldane than to any politician for the last 50 years. I have always thought, as, indeed, they thought, that nothing was more disgraceful than the treatment which was ultimately meted out to him by the leaders of his own political party.

I should like, in the absence of the Chancellor of the Exchequer, to ask the Secretary of State for War one question. I think the Chancellor of the Exchequer said, speaking of the possibilities in connection with the Agriculture Vote, that he had turned down the suggestion that the small sums voted for the encouragement of horse breeding should be withdrawn. Have I rightly gathered that he is not going to withdraw the grants already made in connection with the King's premiums? I think that, if he has so decided, he has decided rightly, and that that will be agreed to by anyone who has been at the Horse Show to-day and has seen the magnificent array of stallions there. His Majesty himself was present, and presented the prizes in connection with his premiums. It seems to me, in connection with those premiums, that the great advantage is that there is no bureaucracy required to carry out the arrangements. No officials are concerned, and all the arrangements are made by people who work without remuneration. It is, however, perfectly certain that in the future those stallions will no longer be provided unless this grant is forthcoming. I fully agree that all these details will be discussed more appropriately under the various Votes when they come before the House. I see that the Chancellor of the Exchequer is now here, and perhaps he would be kind enough to answer the question I was putting. I understood him to say, in connection with agriculture, that he had turned down the suggestion that the small sums voted for the encouragement of horse breeding should be withdrawn, and I gathered that the King's premiums were not to be withdrawn.

Photo of Sir Robert Horne Sir Robert Horne , Glasgow Hillhead

I have pleasure in stating that those will remain.

Photo of Mr Francis Mildmay Mr Francis Mildmay , Totnes

I am very glad indeed to hear that. I will not say more, in view of the fact that we shall discuss these details in connection with the various Estimates, but will conclude by again congratulating the right hon. Gentleman on the admirable way in which he has completely countered all the misrepresentations connected with the Geddes Report which have been so effective in recent elections.

Photo of Mr Charles Ammon Mr Charles Ammon , Camberwell North

In rising to address the House for the first time, I feel sure that I shall have its sympathy and forbearance. I think it is, perhaps, well that someone fresh from the constituencies, where this question has played some part, should express some views, however imperfect, on the Report which is now before us. I should like first to say a word in praise of both the form and the manner in which the Report has been presented, making it easy to read and to get at the information which it is desired to bring before the public. That, at any rate, is something that one may be thankful for, and I suppose it accounts for this Blue Book being amongst the best sellers of the day. Moreover, if I may say so with respect, the manner of its presentation is equalled only by the lucidity with which the right hon. Gentleman the Chancellor of the Exchequer put his case before the House. Having said that, I should like to put one or two points before the House. In the first place, I feel that I owe a debt of gratitude to the Chancellor of the Exchequer because he has already enabled me to redeem two of my election pledges. I ventured to promise the electorate of North Camberwell that, if I were returned at the head of the poll, I would, when the Geddes Report came under discussion, endeavour to get withdrawn any ban that might be placed on the lower age limit for children, or any proposal to reduce the teachers' salaries. Those two election pledges have soon been realised, and I may claim, for once, to have been among the prophets.

I have looked through the Report with much interest, and it has revealed to me some things that I did not know before. I was always under the impression that the cost of education from public funds was concerned only with working people, but, on looking through this Report, I find that the sons of the wealthy actually cost the public funds more than do those of the poorer classes. With regard to the cadets at Dartmouth in particular, I find that they cost £462 a year each, and that the average amount paid by the parents or guardians towards their education amounts to only £65 a year. That is a remarkable commentary, and it will, I know, be received with a good deal of interest by the masses of the people when they begin to appreciate all that this means. Even more remarkable, in view of the proposals which the right hon. Gentleman says he has accepted under the education recommendations, is the fact that for 445 cadets at Dartmouth, there is a total staff of 529, that is to say, there is more than one person on the staff to every student in this college for naval cadets. I should like respectfully to draw the remarkable contrast between that and what is going to happen in our elementary schools in London, where the average of 50 means that sometimes as many as 70 children of the working classes are crowded into one class. I was very much interested to hear the right hon. Gentleman say that they were not going to press forward the case for raising the lower age limit, but when one looks at that there is not quite so much in it as there may seem to be at first sight, because already the fiat has gone forth to stop the education authorities spending any money on buildings for the purpose of extending their work. I speak as a member of the Education Committee of the London County Council, and we have already issued instructions to restrict the flow of these little children into the schools, because there is not sufficient accommodation for them. I think that that to a very large extent discounts the concession which the right hon. Gentleman has made to us here.

I was also interested to observe that no breach of faith with the teachers was desired. That is interesting in view of some of the things that I heard, before I became a Member of this House, with regard to the Sankey Report, the Agricultural Wages Board, and other matters, in regard to which the same course was not pursued. It is also remarkable that there has been a surrender to the Admiralty and the War Office, while a considerable attack is being made on the working people. In fact, as I view it in my inexperience, this Report, and the proposals accepted by the Government, is, after all, in the main, an onslaught on the conditions and the life of the working people, and I venture to say that that cannot be gainsaid. Although it has been said that there has been no attack on pensions, I do want to point out, nevertheless, that that is already taking place, both in the new questions that are being asked, the further combing down, and the reduction of pensions on certain scales to those who have fought. That, however, is a digression. I want to come back to what it means to us here in London and the large urban districts with regard to the overcrowding of classes in schools. This is a very serious matter. It is no exaggeration to say that it is going to mean a great increase an sickness and ill health among the children in the poorer districts, and to prevent them from having any benefit whatever from education. Some of us who live in such localities know what the incidence of sickness, such as measles, hooping cough, scarlet fever, and so on, means. It is going to be increased tremendously by the proposals that are being made here. I note that the Chief Medical Officer of the Board of Education, in his report for the year 1914, said: One thing is certain: we cannot afford to lose, by premature death, lives of children which can be saved, nor can we afford to neglect to remedy or to prevent, in those who survive, disabling effects or disease which can be removed. Very respectfully I venture to say that the proposal to accept the suggestion of larger classes is going to have the very effect of doing what the Chief Medical Officer deplores. It is bound to increase infantile mortality.

7.0 P.M.

There is yet another point upon which nothing was said by the Chancellor of the Exchequer, namely, the reduction in the number of scholarships which go to the children of the working classes. The majority of working people are looking forward, and have been striving, to give their children a better start in life than they have been able to have themselves, and, in view of what has been already said as to the large expenditure out of public funds on the training of naval and military cadets, surely we have every right to claim that the children of the people should go out with the best possible equipment for waging their battle of life. I take the ordinary, conventional point of view that most of us take with regard to ourselves as Englishmen. I believe that we are, and want to be, the best race possible, but this Report, and the acceptance of parts of it by the Chancellor of the Exchequer, is doing the very thing which will lower us in the scale of nations. While other nations are spending more on their education at the present time, we are doing all that we can to handicap future generations and make things more difficult for them in the days to come. Teachers are to be congratulated, certainly, that they have done something to frighten the Government from the attack on their salaries, but even then it has to be remembered that pensions were also part of an agreement entered into, and it was proposed to put teachers on to precisely the same footing as civil servants. Therefore, to depart from this without in some way coming to an agreement with them is undoubtedly a breach of contract. It ought to be known that after all our education, so far as the masses of the people are concerned, is weighted with a good many other things that cannot strictly be called education, and which really belong to the Ministry of Health. I refer to such things as feeding, medical inspection, and so forth. It is absolutely unfair to weight our educational charges with these things as is done at the present time, and that should be taken into consideration.

I want to turn to one other point that has not been touched upon. I prefer to talk on subjects about which I know something. I have dealt with education, and I want to turn now to the proposals affecting the Post Office, with which I have spent half my life, and am still connected. It is worth noting that after all the attacks, inspired and otherwise, which have been made on the Post Office, the Geddes Committee having exercised all their ingenuity can only suggest a saving of half-a-million, and that is all at the expense of the staff. That is to say, we are carrying into this Department of State exactly the same thing as is being waged in industry outside, namely, that instead of sitting down and devising ways and means whereby we should reorganise our commerce and industry, the attempt is to reduce the status of the workers and to bring them down to something like the wretched standard at present obtaining on the Continent. The proposed reductions are, £150,000 on indoor staff, £200,000 on outdoor staff, £30,000 on telegraphs, £10,000 on telephones, and £80,000 on uniform. I venture to say there can hardly be a meaner suggestion than the last, in particular. On the uniforms already there has been a considerable saving of something like £90,000. That has been done by giving a less number of garments, by inferior quality material, and so forth. Everyone in this House is conversant with the postman, who is probably one of our most popular public servants. He has to be out in all weathers and in all conditions. Now it is proposed to reduce the standard of the uniform with which he is provided in order to guard him against the inclemency of the weather. That is not a real economy, because you are bound thereby to have increased sickness, inefficiency, and other things that will outweigh all these considerations.

The Report suggests that there is too much staff for the work, and that economy could be effected by cutting down the staff. I might mention that as recently as the 8th June, 1921, the Postmaster-General told a deputation that the number of the employés for the whole country had decreased since 1913–14, while the volume of work done was infinitely greater than in pre-War days. He said the general result was that the cash transactions of the Post Office, which amounted to £500,000,000 in 1913–14, now stood at £1,500,000,000, although the increased work involved was carried out by a diminished staff. That ought to be borne in mind. This Committee seem to have seen in the more ordinary lines, such as postcards, that there has been a decline, but they have given no thought apparently to an increase in business on another side of the Post Office. I would like to point out that Health Insurance has risen from £16,000,000 in 1913–14 to £22,000,000 in 1921–22; unemployment has risen from £1,000,000 to £25,000,000 in the present year; and other new business has amounted to £176,000,000, all transacted through the Post Office and involving work that has been directly thrown on the staff. The proposal to cut down the staff simply means that we are going to speed up and place increasing burdens on those already there, with the result that when you have a revival of trade and commerce you will have inefficient service and will make it very difficult to carry on. I wonder if that is why the Postmaster-General has again and again thrown obstacles in the way of an investigation into industrial fatigue in the Post Office. That has been done. He has also only agreed to a very limited inquiry with regard to telegraphists' cramp. These are bound to increase if these recommendations are carried out. Post Office workers have already suffered considerable reductions. The abolition of Sunday work saved £1,000,000. That is not to say that we are in favour of it, but it was part of our meagre emoluments, and it had an effect on our pension rates. These have been cut down very considerably quite recently. The average worker has been reduced from 30s. to 39s. in the last 12 months, and the President of the Board of Trade, in the House of Commons on the 18th December, 1920, said that the pre-War wages of postal workers were in a very large proportion of cases very low. At the present cost of living, many Post Office workers are getting less than in pre-War days. I do respectfully point out that if this had been approached, as the Chancellor of the Exchequer said, in a real business manner, they could have devised ways and means by which increased revenue could have been discovered. I was able—and it had considerable effect on the constituents in the recent election—to point out to them large quantities of literature posted abroad by largo firms in this country in order to escape the increased postal charges. It shows a real lack of business acumen, for people, who are largely in the position of shopkeepers, to stand in their shop doors with a loaded revolver waiting to blow out the brains of their customers as they come to deal with them. Some firms can save as much as £2 a thousand circulars in this way, but we do the work because this material is simply transferred back in bulk and we deal with it. I apologise to the House for the time I have taken, and am very grateful to it for its patience.

Photo of Sir Henry Craik Sir Henry Craik , Combined Scottish Universities

Before I go further I hope the hon. Member for Camberwell (Mr. Ammon) will allow me to congratulate him on the fact that having come with some triumph from a well-fought battlefield, he has shown us that he can bring to the debates of this Assembly not only administrative experi- ence, but powers of clear exposition, and fair, lucid, and well-argued statements.

Since the speech of the Chancellor of the Exchequer we have had the benefit of listening to two Front Opposition Bench speakers. They gave us some very edifying copy-book maxims on economy, They pointed out particular personal arguments that might tell against the present Government. They reiterated the fact, which many of us have in a humble way stated, and which I think is echoed from every corner of the land, that there has been extravagance, and that that extravagance must stop. We are to-night considering this Geddes Report and the verdict of the Government upon it. That Geddes Report, it is perfectly clear, can come to nothing if we are all to do as the right hon. Member for Derby (Mr. Thomas) and the right hon. Gentleman the Member for Paisley (Mr. Asquith) did, select a sort of eclectic choice as to which economies they will allow and set their faces steadily against the others. We must combine, if we are to accomplish anything, in making some common contribution, and whatever may be our peculiar interest and favour in economy, we must feel it is our duty to contribute to the whole and to give some satisfaction to what is the imperious need of the nation at this moment more than anything else, some reduction in taxation.

Some hon. Members speak for the Army and the Navy. I speak as one who has been most of his life in educational work and who for some time held an administrative post. I know many mistakes were made and how difficult one found one's task. I did, however, find one thing, and that has been impressed upon me. However much it is the first moral and religious duty of the Government to give a good education, it is not easy to say what is a good education. The mere word "education" is sometimes used too easily and with too much readiness as a sort of sacred word that justifies any kind of extravagance. That is not really doing our work well. What education really means is the training of those who are to come after us in the best way we can to take our places, not only to do the menial work of the world, but to rise to high aims and high ideals and to make the most of their lives. I am not very sure that I like the constant references which I hear urging us to give education because it would be so commercially successful, because commerce depends on it, and because if we do not train properly we cannot compete with foreign countries. We used to hear in the old narrow and selfish times the better classes say that we must not educate the lower classes because there would be no one left to do menial work. This idea that you should educate for commercial competition is exactly the same thing, and it is radically wrong. We should educate our children, not for gain, but that they may rise to higher things.

I welcome the fact that we are not going to break contract with the teachers, because if your schools are to be properly conducted you must have men of high character. It is far more important than all your buildings and size of schools. Put a good man at the head of a school, and he will make that school a success. I myself was Chairman of the first Commission that sat upon the salaries of teachers in my own country in 1917. We made a unanimous Report; I got the joint consent of my colleagues to every point. Our main abject was to attract good men, and we tried to do this by offering some high prizes and raising the general scale. With reference to fixing a minimum, it was agreed that you should pay your teachers well, but you should not go and establish a sort of trade union scheme to be uniform all over the country, without regard to individual circumstances. That is an extravagant system, and it has resulted in many second and third rate teachers being paid too much. I can say quite confidently that it tends to lower the level and the spirit of a very great profession. I do not believe that the teaching profession will thank you for introducing this sort of trade union system of unified salaries all over the country, which sometimes means giving to a young girl in a small country school a salary of £350 or £400.

Photo of Sir Henry Craik Sir Henry Craik , Combined Scottish Universities

I am not speaking without knowledge. There is another thing which I would impress upon the Education Board. You are not going to get teachers of the best class in your schools solely through monetary considerations. What is driving some of the men away is the ever multiplying of your regulations, and your restrictions; you do not leave them a free hand. They have not the old independent free hand. I say we never had a better teacher than the old parochial teacher of Scotland He was paid very little, but he had an independent position. He was master within the walls of his own school. He was the friend, the adviser, and the guide of his pupils, and he managed, poorly as he was paid, but independent as was his position, to make the youth of the country strong, and to lead Scotland to the position of the most virile nation in the world. That is due more to the old parochial teachers of Scotland than to anything else. It is not merely by money that you get these results. You may sometimes overpay your teachers. Give them freedom and individuality, and see that you do not go back to the old sordid payments which were considered good enough in the last generation.

There is another way of saving. Do not have too many fads in education. Let your education be simple. Simplicity is the greatest ornament of all human things. Do not think that these rules about when a child should come to school will really touch the life of the school. The hon. Member for North Camberwell (Mr. Ammon) spoke about the size of the classes. Sometimes a big class is very bad and very dangerous, but I know that a small class may be so too. Remember that there are circumstances to be considered. It is sometimes a very good thing to have a big class. It stimulates and arouses emulation and rivalry, and gives the variety that stimulates education. I remember 60 years ago, when I was at the University of Glasgow, at the age of 14 years, I was in a class of between 150 and 180, and it was the big class that made us. It stimulated ambition; we were always on the alert to try and distinguish ourselves. I always thought a good deal of the success of the old Scottish University was due to big classes. Now and then a small class will dwindle to only a few, and that is most dreary and plodding work, sometimes making the children actually hate the sight of themselves; they want a little more variety. Why is it considered, especially by hon. Members opposite, that it is a great injustice not to thrust a prolonged school education of a scholastic and scientific kind upon all children? Do they really think that all children should have their education prolonged?

Photo of Mr James Wilson Mr James Wilson , Dudley

It was good enough for you.

Photo of Sir Henry Craik Sir Henry Craik , Combined Scottish Universities

Perhaps I was not good enough for anything else. Would the whole world be better if all were trained to be classical scholars or skilled mathematicians? Are there not faculties in human nature just as good, just as useful, just as great as the faculties I have mentioned? I have myself spent days on the stormy seas on the West Coast of my country with a fisherman. I saw how that man's faculties were trained. I saw how he could tell his course by the stars, how he could by extraordinary perception foretell the weather, how he understood the ways of Nature and of the ocean. I saw the delicate poise by which he could, in a storm, discern the due balance between recklessness and undue caution; how by the turn of the sheet or of the rudder he could manipulate the craft, and I saw all that was given him by talking with Nature. He could give points to many men whom I have known as classical scholars. We spend a lot of money by giving this elaborate education, which my hon. Friend insists must be given, and is the only proper thing to be given to all. But wasting your money is not the worst thing; you are spending valuable years of their lives during which they might gain familiarity with Nature, gaining niceness of touch and dexterity, and a keenness which, if they had been detained in school, they would never have gained at all.

I want the Minister of Education, and I advise the Chancellor of the Exchequer, to look to the costliness of administration. That is a matter which has hardly yet been fully understood. When I first entered the Education Department, now many years ago, the local management of schools was in the hands of voluntary managers, Nonconformists or Churchmen. The whole of the local management did not cost the nation a single penny, and I can say honestly that the correspondence showed intelligence, keenness and zeal in management. Now you have established huge county authorities, and an enormous staff beyond all justification. They have a host, an army, of what they call directors of education and assistant directors of education. I believe the director of education is a man who forms theories; he is above teaching; he thinks of school management, not merely matters of education. He is big, with pedantic theories, and talks of matters concerning instruction, at a very high salary. In the old days the Education Department dealt with every separate school. It paid grants to every school. It sent down inspectors to every school, and it corresponded directly with an enormous number of school authorities. You have now huge county authorities, who pay large sums in administration, and the whole responsibility rests with them. They have very large expensive administrative bodies. Why is it that the central administrative costs have at the same time doubled and trebled? Why does the Department, when they have handed over the greater part of their work to these local authorities, continue to swell the number of secretaries and assistant secretaries and have a Vote on salaries twice as large as in 1913? I cannot understand it.

Another thing I urge is this. Do not discourage voluntary effort. There has been far too much of that, Remember that by this non-contributory system of pensions you turned your teachers into civil servants. I protested against that at the time, but the House was occupied with the War and would not listen. It was a fatal system. Many voluntary schools are threatened with the necessity of closing their doors, and you would then have to supply their place. It would be a very serious thing if you killed out all the voluntary schools. At the present cost of education it is going very far towards doing that. Above all, do not trust too much to compulsion. We have had a little too much of compulsion. During my 50 years' experience of administration my faith in it grew weaker and weaker. I remember in my first experience of educational administration coming into contact with Mr. Forster when he was producing his 1870 Bill. I know then that the feeling amongst those who promoted compulsion was that it would kill itself and would render itself useless. That has not been the case. Instead of becoming useless it has killed the old enthusiasm and zeal which existed in my own country. There was very little compulsion necessary in the country districts of Scotland, but we Scotch are a stubborn race. When we are told to do things that we would very willingly do if we were not told we begin to kick against them, and I think there is less enthusiasm for education in Scotland now than there was. We must carry out the supreme duty of checking these burdens on the country. Enthusiastic as I am for education, having spent the greater part of a long life mainly in that work, still I urge on the Chancellor of the Exchequer that even in that economy may be practised, not only without loss of efficiency, but, I believe, with a good deal of addition to efficiency. I advise those who are the true friends of education not to kick against some restriction in expenditure in this direction, but to join hands with those who, in regard to armaments and in regard to all other things, are ready to say, "We will take our share in adding to this work of clearing away the load of debt that is crushing the nation."

Photo of Lieut-General Sir Aylmer Hunter-Weston Lieut-General Sir Aylmer Hunter-Weston , Bute and Northern

It is a just criticism of Members of Parliament and of the country generally that everyone is keen on economy generally when practised by other people, but not at all keen for economy at the expense of himself or of anything in which he is particularly interested. Those Members belonging to and interested in the Army are sensible of the justice of this criticism, and the majority of them agree that in the critical state of our national finances it is necessary that some reduction in the cost of the Army should take place. It is a choice of risks. On the one hand, in view of our very greatly extended difficulties and dangers in the world generally, it is a great risk to reduce the Army. On the other hand, to continue expenditure at the present rate is an even greater risk. It is regrettable, but true, that to secure a great reduction in cost it is necessary to reduce strength. By proper co-ordination of our triplicate defence services, by administrative reforms, by cutting down offices and staffs, we can get considerable saving, but such savings can only be counted by thousands of pounds. In order to get savings which can be counted in millions of pounds it is unfortunately necessary to reduce strength. It is a grievous misfortune that the Members of the Committee on National Expenditure, in their rapid review of all the different Departments of State, have necessarily not had enough time to go thoroughly into every subject, and so in many cases, their premises being inaccurate, some of their conclusions are unsound. This is especially the case with reference to the statement that is made with regard to a broken and exhausted Germany which appears at the beginning of the first Interim Report. Its implication is that our present Army and our pre-War regular Army existed to guard us against the German menace. This is entirely at variance with the facts, and that, I believe, lies at the foundation of some of the recommendations of the Committee and is the basis of many articles in the Press and of speeches both inside and outside this House. The Army that beat Germany in the past, the Army that would be required to safeguard us against a European menace in the future, was and would have to be a national Army. It is owing to Europe being broken and exhausted and there being at present no German menace that our national Army, the Army not of six but of 80 divisions, has been disbanded.

Our pre-War Army and our present Army exist not as a national Army but as a police or gendarmerie Army to safeguard our far-flung frontiers in every quarter of the world and to maintain internal security. Its strength neither was nor is determined by our liability for service on the Continent of Europe. The strength of the Contemptible Little Army of six divisions that did such good service when it first went across the sea in 1914 was not determined by our Continental responsibilities. If it had been it would have been far larger. It was merely fortuitous that the home units, the feeding units, of our gendarmerie Army, when properly organised, amounted to six divisions. The units at home, which were largely composed of soldiers too young to go abroad, existed for two purposes only. First to train officers and men with which to feed the units across the seas, and secondly, when made up with reservists, to make a striking force to take action on any of our many frontiers where their presence might be required. That the strength of the old pre-War Army was not excessive in 1914 was proved by the fact that they had great difficulty in dealing with many of the larger of our "Small wars," so-called, in South Africa, in India and in Egypt. Are the dangers against which our regular Army has to guard us now less? Are the dangers less on our frontiers, which are far longer, or is the internal condition of our dependencies all over the world, and especially in India, more tranquil? Omitting altogether for the present the grave potentialities in Ireland, we cannot but recognise that the internal condition at present, both in Egypt and in India, and indeed nearer home, is more dangerous than it was in 1914. What about the dangers externally on our many frontiers and at the many places where troops are now stationed? What about Constantinople? It is perhaps difficult to remove our small detachments there when the French and Italians have troops there, but the difficulties and dangers which might have to be faced in case certain eventualities occurred must be recognised. This is a post-War commitment.

Then about Mesopotamia. Whether the British troops there belong to the Army or the Air Force, the vulnerability of small detachments spread over a huge country, with no communications to speak of, is just the same, and it can be mentioned in this connection, though it sounds paradoxical, that the Air Force is in some respects less mobile than infantry. For each serviceable aeroplane in France—and of course each serviceable aeroplane could only be up the air for a short time every day and not all the aeroplanes could be up at the same time—there were 40 Air Force men, there were two to three motor vehicles, and there were many tons of material. Therefore, instead, as in popular faney, of an aeroplane squadron being able to take wing and fly away, it is tied to the ground by a mass of material which has got to be moved in motor lorries—not a very easy thing to do in a country where there are no roads! In Mesopotamia you have frontiers, and you have to guard them against both Turks and against frontier tribesmen, and against the Arabs in the interior. Our commitments, therefore, in Mesopotamia are large, and they certainly are commitments which have come to us after the War. What about India? No one can be so blind as to see that certain grave happenings may at any moment necessitate the despatch of all our available forces to that country. The lives of our fellow-countrymen there, with their women and children, are directly dependent on the strength of the British Army and the knowledge of the Indian peoples that that Army is both strong and invincible. What of the north-west frontier of India? The Afghans and the frontier tribesmen have in recent years become much more formidable. They have learned the value of discipline and they have been able to get large supplies of the latest modern quick-firing, accurate long-range guns. There the improvements in modern weapons have been to the advantage of our possible enemies because they have all the quick-firing, long-range weapons which can be used in their mountains, whereas our modern engines of war are ruled out because of the difficulties of transport. The physical difficulty and vulnerability of our lines of communication remain just the same as before, and thus it is that it is an accepted military fact that to operate at Cabul now would necessitate a force larger than was the case in Lord Roberts' time. And so with all our other commitments. There can be no doubt that the dangers for which our Regular Army is required are not diminished but are greatly increased since the War, and that being so, to reduce our pre-War Army is to run great risks.

Certain risks in this matter must be taken, not only because of the state of our finances, but also because of the situation that obtains in regard to barrack accommodation, which introduces the necessity of the reduction of units. Before the War there was the greater part of two divisions quartered in comfortable barracks in Southern Ireland, in places where living was cheap. These units are now being removed, and to find permanent accommodation for them in the United Kingdom without prohibitive expenditure in building new barracks would be impossible. We, therefore, fully recognise that some limitation of military strength is imperatively necessary, but it is a corollary of that that if you make these reductions everything must be carefully thought out, in order that there shall be the possibility of rapid expansion at some future time if occasion demands it.

Our civil administration and our historical traditions are all based on our counties and our municipalities, and our Regular Army and our Territorial Army are, therefore, rightly based on those ancient divisions of our land. It is the same with every other army in the world. We must, therefore, be very careful that in our reductions we do not destroy any of our county regiments, and we must be careful not to destroy any territorial connection whatever or any historical tradition. Both bulk very largely in our power of expansion and in the efficiency of the units when in being. It would be fatal if any of our county regiments were to be wiped out, and I trust that this House and the country will make their opinion very strongly known that, whatever our present difficulties may be, they will not permit of our future being hypothecated and its security endangered by any such course. I know that the Government are alive to this danger, and that their proposals, as far as we know them, have kept this principle in view, but they are making huge cuts and proposing reductions that go very far.

Let us in this House say to the Government: In the present grave financial situation it is, we are all agreed, necessary to take military risks, but those military risks must not endanger the security of our country, nor render in the not distant future expenditure both in men and in money which would be far and away out of proportion to our present gain. We must not scrap our historic cavalry and infantry regiments, with their glorious traditions, which mean so much and which have so real an effect on efficiency. We must not destroy our county regiments, on which we rely for our power of expansion. The county regiments, small though they are in peace, expanded in war to 15, 30 and even 40 battalions each. They were the mother-liquor into which the man-power of this country was poured, and this mother-liquor, this yeast, leavened the whole mass and made possible the brewing of that great, mighty, strong flood that, being transported in stout vessels of our fleets to the other side, overwhelmed with its power and spirit the forces that were intended for our destruction.

The spirit and tradition of our historic associations, of our historic infantry and cavalry regiments and of our various corps cannot be improvised. Whatever you do, therefore, preserve that precious yeast. Those who have seen and studied the psychology of men in the mass know the wonderful power that the tradition of their unit, and the spirit of those who have gone before, have on men who, owing to physical and mental exhaustion, are dependent entirely on instinct which is derived from discipline and tradition, the wonderful power which the tradition of their units and the spirit of those who have gone before have on the men in tight places. We must reduce our military strength, it is true, but while we reduce that strength, think what you will do with the officers and men who by these reductions are thrown out of employment and who will be apt to be in great misery. Think now what can be done to minimise that hardship. Reduce, with judgment and with reverent care, so that you lose not the perhaps incomprehensible but still very real power that lies in the historic association and spirit of our cavalry and of our historic territorial regiments.

Photo of Mr Carlyon Bellairs Mr Carlyon Bellairs , Maidstone

The hon. Member for the Scottish Universities (Sir H. Craik), in a very interesting and instructive speech, gave very high praise to Scottish education, and it is a proof that the Chancellor of the Exchequer agrees with him as to the merits of Scottish education that he should have appointed a Geddes Committee consisting of four Scotsmen and one Englishman. I supported the appointment of that Committee, and I think the right hon. Gentleman has his reward in its merited success in focussing opinion throughout the country and throughout the Departments in favour of economy. Before that Committee was appointed we got no sort of success in the movement towards economy out of the Public Accounts Committee or out of the Estimates Committee, and new measures were required if we were to effect economies. The point of view from which to approach this question, both in regard to my own service and to the other services, is that we cannot economise on vital expenditure, but we must sacrifice everything else to the financial needs of the country.

I regret that in regard to the particular item on which the hon. member for North Camberwell (Mr. Ammon) congratulated himself, in that it enabled him to redeem one of his election pledges—namely, the raising of the school age from five to six, the Government have not seen their way to carry out the recommendation of the Geddes Committee. They say that they have not carried it out because of the health of the children and the beneficial effect of their going to school at the age of five. Schools were organised to give education, not health, and if you consult any dentist—after all dentistry means more to health than anything else—he will tell you that the important age for looking after the children is before the age of five. Therefore, that argument, if carried to its logical conclusion would mean that you would have to send children to school at a very much earlier age than five years. I do not think that that argument can hold water for one moment. It is not vital to education in any sense of the word that children should go to school as early as five years of age.

Photo of Mr James Wilson Mr James Wilson , Dudley

According to your showing it is.

Photo of Mr Carlyon Bellairs Mr Carlyon Bellairs , Maidstone

In such matters, at the present time, the Chancellor of the Exchequer cannot afford to be generous. It was said of a former Prince of Wales, about 150 years ago, that he was very generous, but his generosity ruined a great many people, and it may be said of the Chancellor of the Exchequer that he can be very generous but he can ruin the country if he is too generous. Seeing the cuts that are to be made in the other services, education ought to contribute its quota in any matter which is not vital. I agree that the promises which have been made to the teachers must be redeemed. I would never economise on teachers' salaries to the extent of making teachers in any way discontented with their position, because of the vast influence which they exercise on public opinion in this country and on the future generation.

Now I come to those parts of the Chancellor of the Exchequer's speech where he dealt with the fighting services. After allowing £11,000,000 for the savings which can be effected as the result of the Washington Conference and of the use of oil in the Navy, the cuts and savings by the three fighting services are £5,500,000 less than the reductions specified by the Geddes Committee. If you add in the unspecified savings, the figure is £19,500,000 less than the reductions recommended by the Geddes Committee, or something like 35 per cent, less than the Geddes Committee expected. That is a point upon which we shall have to focus attention. To that you have to add the savings which will be effected in respect of Ireland—if and when we are able to get them, and certainly we are getting them, because we are evacuating our troops from Ireland—and also the savings which result from the cost of living having gone down. The Geddes Committee were told to estimate on a standard of 100 per cent, over the cost of living in 1913, whereas the cost of living has gone down to over 88 per cent. That reduction in the cost of living ought to affect pay and the cost of materials. In the third volume of the Report of the Geddes Committee, on page 169, the Committee attach great importance to that reduction in the cost of living. The Chancellor of the Exchequer did not deal with that reduction in the cost of living except in a rather evasive answer he gave to a question which I put to him. The Geddes Report, dealing with the question of the cost of living, says: There is also one very important point in reserve. The Treasury in May last laid down that Departments should estimate upon a cost of living figure for the year 1922–23 of 100 per cent, above the pre-War level. As the cost of living has already fallen to 88 per cent, above the pre-War level, there appears to be more than a possibility that the Treasury forecast made in July last can be improved upon, and as the cost of materials was also taken at the same hypothetical level it will be seen that the Estimates as a whole have in all probability a margin of further saving in sight. The Geddes Committee met in an atmosphere of the Treasury. All their inquiries were conducted at the Treasury. Therefore, they advocated a very large strengthening of the Treasury checks. I think that is a wrong way to approach the problem. We live in cycles in these matters. In the days when Lord Salisbury was Prime Minister, he said that the influence of the Treasury in controlling other Departments was not in the interests of the public service. The Geddes Committee proposes a great strengthening of these Treasury checks. What has been the history of the last 50 years in regard to these checks? As they have been strengthened the different services have regarded economy as no part of their duty. That was my experience in the Navy.

Had the Government gone to the public Departments and said to the First Lord of the Admiralty, to the Secretary of State for War, and to the Secretary for Air: "Get hold of your war staffs; get them to teach economy; get them to preach economy; tell them to preach that economy and efficiency go together," you would have had a very different spirit in the services. Whenever a war breaks out the Treasury checking system comes to nothing, and if you have not trained your officers in the promotion of economy they will have no interest in getting economy. It is no good anyone saying to me that that is a counsel of perfection that is impossible. There are competitions in the American navy and in our own Navy in regard to the expenditure of coal, with a view to cutting down the expenditure, to the lowest possible amount. That is the sort of thing that ought to be done all along the line. It was done in Nelson's time. He urged all the captains of his fleet to exercise the most rigid economy, and they prided themselves on economy of spars and sails and not having to go into the dockyard's hands. I think that spirit should be carried out all along the line.

8.0 P.M.

The next point is this: The Government control policy and the Admiralty carry out the policy. I am inclined to criticise the Admiralty a good deal, but on one point I am entirely on their side, and that is in regard to the political pressure that is exercised upon them. I believe the Admiralty would like to economise on the dockyards, but what is the whole effect of political pressure in this House? I acknowledge that the dockyard constituencies are very safe Coalition seats, and the pressure on the Coalition in consequence is to please the dockyards. I think that is wrong, I think it is wicked. The Admiralty would, no doubt, like to economise on the training system at Dartmouth College. Again, political pressure lays it down that the Dartmouth College must continue. We get as good officers from the public schools, who are entered after three months' training, and it was the experience of the Grand Fleet that they show more initiative than boys trained under the naval system. Then the Admiralty, probably would like to economise on the coastguards. Again, pressure comes from outside to maintain the coastguards, and the Admiralty have not been heard in the matter. The most important point of all is in regard to the policy which dictates the armaments of this country. There is a paragraph in the Admiralty Memorandum, in reference to the Geddes Report—and I think they had a perfect right to issue this Memorandum, though I do not like its tone and temper—in which they say they are responsible for seeing that effect is given to the Naval policy of the Govern- ment announced and accepted by Parliament while the Committee remain free from any such responsibility. What is the policy laid down by the Government? It is given on page 10 of the First Report: The one-Power standard upon which the Admiralty are working involves 'that the Navy should be maintained in sufficient strength to ensure the safety of the British Empire and its sea communications as against any one other naval Power.' It is not obscurely indicated on pages 35 and 36 of the First Report that the one other Power is the United States of America. On page 166 of Volume 3 all the comparisons are with the United States of America. The Chancellor of the Exchequer himself made comparisons with the United States. He gave the personnel of the American Navy as 129,000 and the personnel to which the Admiralty are going to work as 98,000. I submitted on the Estimates of the year 1920 that this is a profound mistake. I believe that I took a stronger line, in the Parliaments from 1906 onwards, than any other Member on the subject of naval armaments in regard to Germany. I always mentioned Germany as the country with which we should make comparisons, and I was always urging the increase of armaments, but I cannot accept this policy in any shape or form in regard to the United States. I said on the 1920 Estimate that it was unthinkable that this country would ever be at war with the United States of America, unthinkable even that the Navy would obey orders if any Minister were so mad as to involve this country, as George III did, in war with America. The whole thing is unthinkable, and we ought to rule out of consideration altogether the American Navy except as allies. If you did that, you could afford to economise on naval armaments very considerably. When the Lord President of the Council went to America he did not take behind him any army or navy, but he was able to return to this country practically with Cæsar's maxim emblazoned on his record, "I came, I saw, I conquered." He accepted the American proposals at once. His method was, "I came, I saw, I concurred," and it was completely successful. If you rule out these comparisons with America, and realise that you cannot think of America as an enemy, you will do more to achieve the alliance of the English-speaking peoples than by any other method. The Government ought to relieve the Admiralty of the responsibility of preparing against an American navy, and say that they should rule out America altogether in these questions. In that way we shall get very substantial naval economies beyond those which are at present promised, or even what the Geddes Committee hoped for.

Photo of Mr William Graham Mr William Graham , Edinburgh Central

Our first duty in this Debate is to try to place the total recommendations of the Geddes Committee in their proper proportions. The three Reports recommended an aggregate saving of some £87,000,000. Let us relate that as closely as we can to what we believe will be the Budget of the coming financial year. The last Budget passed through this House provided for £1,216,000,000 in all, and making all allowance for the economies already introduced, but keeping also in mind a probable serious falling off in revenue, it seems to me incredible that, when the Chancellor of the Exchequer presents his statement in a few weeks, he can budget for very much less than £900,000,000 or £1,000,000,000 in all. That is necessarily a rough-and-ready guess, because we have not, at the moment, the means of ascertaining what is likely to happen or what will happen in the last quarter of the financial year, but take the figure at £1,000,000,000 and put alongside it the aggregate recommendations of the Geddes Committee of £87,000,000. Under the modifications which have already been announced by the Chancellor of the Exchequer, it is clear that at this stage we cannot hope for reductions of more than £55,000,000, and on that point we must keep in mind that the Chancellor of the Exchequer has included certain savings flowing from the Washington Conference which were excluded when this matter was last discussed.

However that may be, I think it a fair argument to say that we cannot expect a saving of more than £50,000,000 or £55,000,000, or about one-twentieth of the tremendous sum that this country would be called upon to find, with its industry largely paralysed, in the coming financial year. So there must be among people who are earnest in the reduction of expenditure a feeling of disappointment, and our duty is plain to-night to ask whether there are not more drastic re- ductions that can be effected in certain spheres, and whether there is anything which should be safeguarded in any other spheres which we believe to be essential to the economic recovery of our country. On the other side of the House it is very often argued that we concentrate apparently on the mere reduction of armaments, and that we forget the unsettled state of the world at the present day and the provision which in those unsettled conditions this country must make. But let our critics remember the actual facts. Last year we set aside £207,000,000 for Naval, Military and Air Force purposes, more than the whole of the pre-War revenue of this country, and the Provisional Estimates, which were included in the Geddes Report, provided for a sum of £175,000,000 in the coming financial year. The Chancellor of the Exchequer to-day has made what appeared to one side of the House to be only niggardly concessions in Naval, Military and Air Force Estimates, but what are in our judgment excessive concessions, because we are bound to keep in mind that, having regard to what the Chancellor of the Exchequer has done, we may spend in round figures £150,000,000 on these Departments in the coming year. It is plain that that is one of the great elements in public expenditure which must be drastically reduced as a foundation of the economy which we hope to achieve.

I recognise in common with hon. Members in other parts of the House that this expenditure is very largely regulated by policy. Much depends on our international or foreign policy. Much depends, following from that policy, on the position of military and other problems, but it is not unfair to suggest that we should be much more determined and vigorous than we are under at least two heads, and if, under those two heads, we had more vigorous action we could probably look for greater reductions on armaments than we are likely to achieve in the near future. In the first place, we in Great Britain must do more than we have already done to support the success of the League of Nations, and in the second place, we must be much more vigorous and enthusiastic about the extension of self-government, and, above all, about the establishment of local responsibility for defence than we are perhaps at the present day. The Geddes Report has made plain that we are responsible in different parts of the world for a great deal of enterprise for the preservation of security which should really, if it be necessary at all, be undertaken by others, so that the taxpayers of this country to that extent should be relieved. These are two elements of change which it is our duty to press. There are many other changes which are urgently required, because if one thing is clearer than another, it is that this country, faced with all the calamities and all the depression of the past 18 months, and with the great burden of taxation at six times our pre-war budget and from six to seven times our former taxation per head of the population, cannot afford to expend £150,000,000 on armaments in these conditions, and until that expenditure is drastically reduced there is very little hope for the remission of taxation and the definite encouragement of economic recovery which that would bring.

There is one important controversy which arises in this Debate. The Third Report of the Geddes Committee and other Reports refer to the Ministry of Transport, the Ministry of Mines and the Ministry of Labour. The broad purpose of these recommendations is to abolish these Departments at the present time, and to transfer their activity to other Departments under what we could rightly call a scheme of Departmental concentration. Take such Departments very briefly one by one and try to show the effect of this change as it is proposed on industrial and commercial problems to-day. It is no part of my business in this Debate to defend the Ministry of Labour as such. It is the opinion of many of my colleagues, and it is certainly mine, that in industrial matters within recent times this Ministry has pursued a very weak and often evasive policy. It has not achieved that industrial regulation which was a large part of its purpose when it was established. We have no interest in defending the thousands of people who are employed in it. It is no concern of ours to maintain it as an expensive Department of State, but when we have made all these concessions, we are still compelled to ask whether, in view of the industrial policy of this country within recent years, some Department of the kind is not required, and whether some form of industrial regulation is not necessary? A great deal of attention has rightly been devoted to the question of industrial peace. The Ministry of Labour is closely concerned with the Works Committees, with the Trades Boards, with the Joint Industrial Councils, and with a great many of the other regulating bodies of the present time, and it is necessary that there should be some Department representing the community as a whole, which will do its best to hold the balance evenly between capital and labour as long as the existing industrial system lasts. Many people argue that this should be left to other machinery and the Ministry of Labour abolished. I want to plead for the importance of some form of intervention in the public interest. It is the duty of the Government, if it comes ultimately to make this proposal, to show that in this particular sphere the public interest will be safeguarded and maintained.

In the second place, take the Mines Department. Probably it will be quite easy to put that under some other Department of the State, but I am not sure that is going to achieve any economy, and I have no hesitation in pressing this consideration—that as the mines of this country are a great national asset, and as we have been reminded of the dangers of a stoppage or dislocation, you have here precisely that sphere, in which it is all-important that there should be a liberal interpretation and administration of Acts of Parliament. It is, above all, the sphere in which the community should be given the benefit of that publicity in mining matters to which it is undoubtedly entitled for its protection. Thirdly, there is the Ministry of Transport, which has been exposed to a great deal of hostile criticism in recent months, just as it was during the discussions last year on the Railways Act. It was then urged that in the interpretation of the Railway Agreements, and innumerable other matters, the Ministry of Transport had hardly justified its existence, and that is the belief of many of us, but that is no reply to the problem we are now discussing.

In considering these suggested economies, we are bound to keep in mind the great change which has taken place in our industrial structure, and more particularly in the railways of Great Britain. The Railways Act of last year swept away—or in 1923 it will sweep away—a very large number of separate railway concerns. These will be replaced by four great amalgamations on a geographical basis, which it is not unjust to call powerful trusts. It is perfectly plain that if, Clause by Clause, the Railways Act, 1921, is to be interpreted in the public interest—and after all that is what is at stake—there must be some Department responsible for the task. I should be the very last to suggest that we should retain the Ministry of Transport, if it can be proved that we can do this satisfactorily under the Board of Trade or other Department, but I am bound to say our pre-War experience of the railways department of the Board of Trade was not encouraging. It can be argued that this country was let in for an expenditure of many millions due to the weakness of that Department, when the initial agreements were negotiated between the railway companies and the Government in the early days of the War. These things we cannot afford to forget or neglect, and my argument is that in their consideration of a scheme of departmental concentration, which must come, the Government should keep clearly in view that change in the railways, in the industrial structure and in general industrial regulation, which has taken place within recent years. Subject to this consideration, there is a great deal in the Geddes Report that we can confidently and sincerely support.

In the Third Report, there is another department of expenditure to which, necessarily, for reasons of time, the Chancellor of the Exchequer could not refer to-day. I invite hon. Members who are interested in economy to look at those portions of the Report referring to the large sums which we have sunk in protectorates and in different districts and areas up and down the world. There are references to Nyasaland, to Rhodesia, to Uganda and other territories, and one must be impressed by the very shadowy character of many of the securities for large sums which this country has either voted in the past or is voting at present, in these different territories. Broadly speaking, the recommendations of the Committee suggest that we should, as soon as possible, try to put these territories, in so far as we have any connection with them at all, on a self-supporting basis, that their budgets should balance, that they should pay appropriate interest on the amounts which we have advanced, and that, as soon as possible, we should, in the aggregate, get rid of the large commitments to which we are bound at the present time. On that point, however, is it wrong to make this suggestion? The Geddes Report itself indicates that there is more than a possibility that the very large sums which British taxpayers are being called upon to find for investment and for development and general enterprise in those areas is really enuring to the advantage of large business interests which are carrying on operations in one territory or another, and I am by no means satisfied that we are getting from those business interests anything like commensurate return for the sacrifices which the taxpayers of Great Britain are in reality at the moment making on their behalf.

In conclusion, I hope that when the House comes to the closer study of the innumerable proposals and difficulties raised by this Report, not only shall we have far fuller information regarding these outlays than we now possess, but that we shall have a much stronger policy in those protected and other States in reducing what is on the whole a considerable proportion of the annual expenditure of this country year by year, and which, on a paralysed industry, and above all on a recovering industry, as we hope it shall soon be, we really cannot afford to bear.

Photo of Mr Ernest Gray Mr Ernest Gray , Accrington

The task which the Chancellor of the Exchequer undertook this afternoon was one of much more than usual difficulty, and I hope that he will not consider me presumptuous if I, as a very old Member of this House, express my appreciation of the wonderful skill and patience with which he discharged that duty. If, therefore, I ask him for some further explanations of the figures which he used with regard to one of these public services, I trust he will recognise that it is entirely due to my failure to grasp his statement, and not to any want of lucidity on his part; but before I put that question to him I do want, as a back bencher, to enter my protest most emphatically against the comments made by the right hon. Member for Paisley (Mr. Asquith) in regard to the statement of this afternoon and its bearing on the question of national expenditure. He stated that the extent of the economies exhibited the measure of previous waste and extravagance—not perhaps in words so terse, but he declared that it furnished overwhelming evidence of past waste and of a lack of economy on the part of the Government. That is the kind of comment which will readily catch the thoughtless throughout the country, but I do not think it will appeal to anyone who reviews honestly and without prejudice the current of affairs during the last five years.

It seems to me that the right hon. Gentleman never did learn the lessons of the War, and he has never learned what has been the position of England since the War. In 1918 the whole nation was straining every nerve and every muscle to achieve victory on the battlefield; the whole of our national energies were directed towards that aim, and everything else had to go, and then suddenly came the change. The whole current of national life had to be changed. From seeking victory on the battlefield, we had to strive for victory in the field of peace, and the whole of our national life underwent, almost at a day's notice, a great change. Was it possible for the huge expenditure which we had necessarily built up during the closing year of the War to be suddenly brought to a complete standstill and the nation placed on a peace footing in the course of a year or two? Like an ordinary business house which changes its attitude, it has taken time to reduce our heavy expenditure, and gradually approach normality, and I noticed with great interest the figures which were given by the Chancellor of the Exchequer with regard to the steady decrease in expenditure during these intervening years. As far as my humble judgment goes, I think the Government may be well congratulated on the policy which they have adopted during the last four years in gradually reducing national expenditure without endangering national efficiency, and I note, in the decisions they have taken upon the Geddes Report to-day, they are, so far as I can judge, carrying out the policy which was expressed in the Speech from the Throne at the opening of this Session. They are effecting economies as far as they are consonant with the preservation of the efficiency of national services, and no Government is entitled to go further than that. Whatever may be the demand for economy—and we know it is greats—they have no right to destroy the efficiency of any one of the national services, nor have they the right to inflict an injury now which can never be made good in future years.

My interest, as is generally known in the House, is mainly in connection with popular education, and I do not want to comment upon the decisions of the Government with regard to the Army or the Navy or other branches of national service, but I do want to offer one or two comments upon the decisions of the Government in regard to national education. I am afraid the lot of the Government is not going to be a happy one with regard to this Geddes Report. I suppose they fully recognise that, for the Report encouraged hopes in many quarters which are doomed to be disappointed, and the Government will have full credit for that, and it aroused fears in other quarters which it will take some time to allay, and the Government will get full credit for that also. There are always interested persons who are prepared to put the blame for either hopes deferred or fears aroused upon the shoulders of the Government.

I listened with great patience to the speeches made from the Front Opposition Bench, and there is one phenomenon in this House which always interests and puzzles me, and that is the policy of the Labour party as preached in the House and as practised outside. That is a thing I never have been able to understand. I noticed that the right hon. Member for Derby (Mr. Thomas) joined in the general chorus this evening in favour of economy, and that the Labour party, in common with other parties, was anxious to have economy in the public services, but I hardly ever hear a proposal brought before this House but that the Labour party declares that the State is spending insufficient money upon it, that it is not that the public services are being overpaid but that they are being underpaid, that it is not to restrict expenditure, but to incur more. There is, however, some semblance of a reasonable policy in the House, but when I contrast the policy expressed here and the policy professed and practised outside, then I really cannot understand what is the policy of the Labour party, whether it is the economies preached to-day in the House or the extravagances practised in Poplar and elsewhere. Nay, more, is it the policy of economy as enunciated by the right hon. Member for Derby this evening, or the policy which is being advocated from one end of London to the other at the present moment, whereby the State shall take over the municipalisation of nearly every trade at the expense of the taxpayer and the ratepayer? There is no reconciliation of those two practices and principles—none whatever—and I can only believe that the one is preached here before an audience which will understand, and the other is preached and practised outside before audiences which are not so well-informed. Perhaps some of my hon. Friends opposite, the so-called leaders of the Labour party, will some day undertake the solution of what has always been to me an extraordinary puzzle, and that is the relationship of the policy here to that expressed outside.

Therefore, I have very little regard for the protestations of economy of the right hon. Member for Derby, nor do I attach any importance to the suggestion of the right hon. Member for Paisley to the effect that the extent of our saving represents the extent of our waste. I have heard with much relief this evening the decision of the Government with regard to some proposals in the Geddes Report regarding education, and let me say that one which struck me as most important and of far-reaching effect was the decision of the Government to reject the recommendation with regard to children under the age of six. I wish these Benches were as full now as when that statement was made, because I would have a word to say to some of my hon. Friends who usually sit here. I noticed, when the Government announced that decision through the mouth of the Chancellor of the Exchequer, there were general cheers on the other side, and practically dead silence on this side—a silence which did not bespeak consent, but, I thought, rather represented disappointment.

Photo of Mr Ernest Gray Mr Ernest Gray , Accrington

I hope my hon. Friend is an exception, but I never know how to take him, because his views are so erratic I can never forecast what he is going to do. I put him on one side. He has a pawky Scotch humour which enables him to disagree with everybody. But I noticed the silence, which seemed to bespeak disappointment here. May I just tell some of my Conservative friends that they would change their attitude on that if they would face the electorate for a while. [An HON. MEMBER: "Have an election!"] I am going through it at this moment, and I have had to face large audiences practically every night for the last week or ten days, and I do know that, whatever their politics, Liberal, Tory, or Labour, they realise that this admission of young children to the schools is not merely an educational question, but a great social question, and they are firmly determined that they shall not be excluded. The Government have acted wisely and discreetly. It is a pity they did not say so a little bit earlier, and allay some of the anxiety that has been aroused, as they have admirable, excellent and unanswerable reasons for rejecting the Geddes Committee's Report on this question. It is not merely that the life of the home in tens of thousands of cases is such that the young mother can-hot give proper attention to the child, but it is a fact that the education in our schools has taken on a new form in recent years. The child of five is medically examined, and many physical defects are removed under our present practice during that year from five to six, and, if not removed then, become the more deeply seated in the child's constitution, and the more difficult to remove in the years that follow. It is an utter fallacy to suggest that these children should now be excluded from school, when the public at once realise the great advantage that has accrued, not merely to the child, but to the future citizen of the country, through having physical as well as mental training devoted to it in the earliest years of life. I wonder the Geddes Committee ever recommended it. I can only imagine that it was a collection of business men with no knowledge of the-internal economy of the school, and, for some reason or other, neither the educationists nor the medical men were able to put the full picture before the members of that Committee, or it would have been about the last recommendation they would have made.

I will not say more than a word or two with regard to the suggestion that there might have been a reduction in the salaries of teachers, but I think that the statement made by the Chancellor of the Exchequer was, in one or two respects, defective. It is perfectly true that, before the War, and during a great part of the War, the salaries paid to teachers were miserably small, altogether inadequate to sustain them in the difficult duties they were discharging, and so inadequate that recruits for the profession were not forthcoming. You had, there- fore, to increase salaries, and improve the superannuation scheme, or you would have had no teachers whatever for your schools—certainly no men, and I am one of those who believe very strongly that this country should never drift into the American system, and have almost entirely a staff of women for the teaching of big boys. I think we must keep within our boys' school a fair proportion of men for their training. I know what the women can do, perhaps as well as the women, themselves, and I have the greatest admiration for their work, but they will be the first to admit that the finest portion of the teaching service at the present time in all our boys' schools consists of the men who came back from the War, who are now being looked upon by the youngsters as young heroes—as they were—and their influence on the training of these children is perfectly wonderful. We must not at any time, in the desire to effect economy, take such action as will prevent the profession being recruited from the- best of the young lads from our schools. The salaries of the teachers were altogether inadequate either for their sustenance or for recruitment.

There was something more. We in this House for many years past have declared that salaries and wages should be the result of bargaining between employer and employed. This is what has taken place since the War. Under the chairmanship of Lord Burnham a Committee has been sitting, consisting of representatives of employers, the local education authorities, and teachers, and they have between them agreed upon certain scales of salaries. To tell the local authorities that they must break them would be to issue an order which the local authorities, in many cases, would not obey; therefore, you could not get the economy, and it would destroy confidence in the Government. There is something more which the Chancellor of the Exchequer did not say, and that is that the Board of Education, representing, the Government, have been a consenting party to these agreements. They have recognised them, adopted the schedule which was issued, and agreed to make a contribution to the local authorities who adopted the scales which were elaborated by the Committee of employed and employers. Therefore, it would have been a very distinct breach of agreement on the part of the Government, and I am very glad to see they have brushed that on one side. I will not say anything with regard to the proposal to place the superannuation scheme upon a contributory footing, because that must be the subject of legislation, and full opportunity, no doubt, will then be given to discuss the matter. I merely remark that the first speech I made from this seat some 27 years ago was in favour of the superannuation of teachers, when they had not a single penny of State funds or of local rates coming to them in the way of superannuation, and when the man and the woman who left the service left without any refuge than the workhouse after, it might be, 45 years' laborious service. I am glad to find that that position has been entirely changed during the intervening quarter of a century. I believe the action which this House took in 1918 was thoroughly justified when the teachers were placed for superannuation purposes on the same footing as civil servants. I, for one, shall not willingly consent to any alteration of that plan.

It might, then, be imagined that I am opposed to all economies in education. That is not so. I hope I am not quite so unreasonable. But before I refer to some economies that might be made may I just add this, that I hope the Government have not yet finally made up their minds in regard to the size of classes in the schools. I cannot make out how the Geddes Committee got at these figures, unless they took all the teachers in the country and all the children in the elementary schools and divided the one by the other. If they did that it was a very foolish proceeding. I am not very greatly alarmed, and I do not mind stating it to the Government, at the proposal to do this, because I know that they cannot do it—at least, not much! For example, under pressure from the Government we in London—I speak as a member of the London Education Committee—have remodelled nearly all our schools, or a very large number of them, under arrangement with the Government. We have built schools with class-rooms in them to accommodate 40 scholars—48 in the infant departments. You cannot cram another 10 into those rooms. They are fixed for 40 for all time. I do not think it would be considered an economical plan to send round the archi- tect and the builder to pull down the walls which have just been put up at great expense. You cannot enlarge those classes, practically. Then I have in mind, too, the village schools of the country. I know a very great many English and Welsh schools where the total number of children present does not exceed the size of the ordinary class. What are you going to do there? Go to any Welsh village, say one in the county of Carmarthen, many miles from a railway station, where you will find 27 children in a school with one teacher. The Geddes Committee says: "Oh, but that is a dreadfully small number for a teacher to teach." Nobody in this House could do it! There are scores and scores of these little village schools in the country where the number of children per teacher is small, but where, I can assure the House, it is a far more difficult task to teach than it is to take a class of a 100.

A charming little essay was given to us by the hon. Gentleman the Member for the Scottish Universities (Sir H. Craik). It was delightfully expressed, and appeared to me as though the speaker were an artist who had come out of one of the bye-gone centuries and was painting a canvas after the style of one of the old masters. He appears to be totally unacquainted with the changes which have taken place in modern education. When he was telling us that these things should be done I could have imagined thousands of teachers and local authorities crowding around him and saying: "That is what we are trying to do." We have no longer made our background nothing but gold. We have tried to put into it a little natural scenery, and so forth. If you enlarge your classes dangerously—it is impossible in some cases—the inevitable result is waste of money and waste of labour. The ordinary teacher in all his class work is always teaching an imaginary child. There are two extremes in a class. The teacher knows that his best teaching, which will suit the brightest, will leave the dullest hopelessly behind, while if he goes for the dullest, the bright ones will be marking time. For the most part then he plays up to the average child. He works at that average child with such attention as he can give from time to time to individuals, but the wider apart are the extremes to which I have referred, the greater is the waste at both ends. Everybody who knows school work at all knows that. Let me, too, say this. I know no reason whatever why the child in the secondary school should have one teacher for every twenty, when, according to the Geddes Committee, the ordinary elementary school class should have one teacher for every fifty. It is not fair treatment of the child who works under the most disadvantageous conditions, and without much parental assistance.

There are some directions in which economies can be effected. I believe there is an immense amount of overlapping. The work in the offices of the local authorities might be substantially simplified and much money saved. The Board of Education, too, maintain a great staff of inspectors. The local authorities are not satisfied unless they, too, have a staff, and they are always getting in each other's way. It is perfectly impossible in ordinary school life to serve two masters. You cannot do it any better now than you could in Biblical days. You offend one or the other. Generally, the teacher succeeds in offending both. You could well do with one only. The teachers' lives are often made miserable by the multitude of forms that have to be filled up. I should like to know the amount of printing and stationery bills for the Education Board and the local authorities. I am perfectly certain that in the work of administration a considerable amount of economy could be effected. I am not merely saying this in the abstract. We have in London recently cut down our estimates for the next year by £800,000, equivalent to a 2d. rate, and a demand for £400,000 less upon the National Exchequer. This has been done without inflicting any serious damage upon the main structure of education. The axe was not the proper weapon to apply to education. The surgeon's knife may be—the pruning knife, possibly—but the axe is altogether far too clumsy a weapon with which to attack a delicate organisation like the education of the children of this country.

I have been postponing my question because I thought the President of the Board of Education might come in, but I will put my question and trust it will be conveyed to him. I do not quite see how the Government have reached the amount of £6,500,000 which they are to save. I think the Geddes Report recommended £18,000,000, and of that something like £3,500,000 was associated with the admission of children between five and six. Strangely enough, there was a sum of about £6,000,000 due to the enlargement of classes. If the Government have dropped the proposal to enlarge classes, and I take the £6,000,000 and the £3,000,000 and, deduct them from the Geddes recommendation of £18,000,000, then I do get near the figure which the Government say they are prepared to adopt. Otherwise I do not see how they have reached that saving of £6,500,000, and I do not see why it is not more unless they have also rejected some other recommendation. Perhaps at some later stage of the Debate this point may be made clear.

I for one am intensely glad that the great anxiety which has been felt, not merely in educational circles, but, I believe, amongst the great majority of the parents of this country, is to be removed by to-night's Debate and the announcement to which we have listened. There were many who felt that the adoption of the Geddes Report would inflict, not merely a serious injury upon the progress of education, but would intensify adverse conditions in many a poor home. I believe that many a mother will be glad to-morrow morning to know that her child next year and this year may go for warmth, training, safety, and medical treatment into the school where she has been in the habit of sending that child, instead of being a burden on her slender resources and her time. That anxiety is practically removed, and I trust we shall never more hear any suggestion of inflicting stringent economy upon the educational services of the country, for I am certain that no axe ought ever to be laid on the root of the fairest tree that blossoms on British soil.

Photo of Captain William Benn Captain William Benn , Leith

I wish to refer to another matter which forms one of the subjects dealt with in the Geddies Report—I mean the continued existence of a separate Air Service. If the Under-Secretary of State for War is able to say in reply to my question that it is the Government's intention to maintain the integrity and independence of the Air Service, I shall not trouble the House with any further remarks.

Photo of Captain William Benn Captain William Benn , Leith

If that is the case, then I have nothing further to say.

Photo of Mr Robert Sanders Mr Robert Sanders , Bridgwater

I do not want to give a definite assurance of that kind in answer to a question without careful consideration, but I understand it is so, and that the Air Service will continue as an independent service.

Photo of Captain William Benn Captain William Benn , Leith

If that be so, I should not dream of troubling the House with any further remarks. That is an extremely satisfactory statement in view of the doubts that have been thrown upon the future existence of the Air Service. If the hon. Gentleman states that there is no intention of interfering in the matter, that assurance is extremely satisfactory.

Photo of Mr Robert Sanders Mr Robert Sanders , Bridgwater

That is my belief at the present moment.

9.0 P.M.

Photo of Mr George Barnes Mr George Barnes , Glasgow Gorbals

I suppose that there are few Members of the House who have read and thoroughly digested the Geddes Report. I have read all three Reports, and while I do not claim to have thoroughly absorbed them I think the House will agree that those Reports are very important and reflect great credit upon those who drew them up. I thoroughly endorse the sentiment expressed in appreciation of the work of the Committee and also in what I hope will be its effect upon the mentality of the nation in bringing the people to a realisation of the parlous position in which we stand. Both here and elsewhere in the last few months I have commented upon the lamentable fact that three years after the greatest war in history we seem to have forgotten, if we ever learned, the lesson of that War. The only real remedy to save us from a repetition of that horror and its expense is an effective League of Nations. I should be out of order in proceeding to comment further upon that matter. Suffice it for me to say that so impressed am I with the parlous condition of the country in regard to finance and with the burdens that the country is carrying and the effect upon industry and upon employment that for my part, although I regret the Report of the Committee recommends the abolition of certain things to which I attach importance and proposes to curtail cer- tain things to which I also attach importance, still, if I had the opportunity of voting only for or against the recommendations as a whole, I should be inclined to vote for the adoption of the whole lot. We are not called upon to do that.

Perhaps I may say a word or two upon one or two other recommendations. First of all in regard to education. I cannot speak on this subject with the intimate knowledge of the last speaker. Although I sympathise with many of his views. In my opinion 50 years of elementary and compulsory education has not been altogther a success. I do not know what is the matter. I am not an inside member of any local authority dealing with education, but as an outsider I judge by results. Unfortunately, I was born a little bit too early to get the benefits of the Free Education Act, and I never went to any school under a public authority. When I was a youngster and an apprentice engineer I remember many interesting conversations and debates which we used to have round the "devil," which consists of a bucket with holes in it and a coke fire. We used to have interesting discussions on national and other topics, but we do not get anything of that kind now.

Photo of Mr Neil Maclean Mr Neil Maclean , Glasgow Govan

You get it in the discussions in the OFFICIAL REPORT.

Photo of Mr George Barnes Mr George Barnes , Glasgow Gorbals

I try to keep in touch with my fellow workmen, and I think I can speak with as much knowledge of the psychology of my fellow workmen as hon. Members opposite. I think that to-day we have a far larger proportion than ever in the workshop who are more concerned about tips on horseracing, reading "Tit Bits," and those other attractions presented by the newspapers in order to get their pennies, and there is far more of that kind of thing than there used to be. I think with my right hon. Friend the Member for the Scottish Universities (Sir H. Craik) that the results are not altogether so satisfactory as they might have been. I agree with him that in many circumstances and places the children would be far better outside than in school, and that more importance perhaps is attached to book-learning than ought to be. I agree with him that children would be far better in contact with nature and that they would get more learning by observation than they get in school. But I am afraid that my right hon. Friend lives too much in the memories of his native glens. He forgets that many children attending elementary schools never saw those glens or any other glens, and therefore what we have in our mind is the provision not only for the child who has the good fortune to live in a Scottish glen, but also for the child who lives in a Glasgow slum. Those children, I am glad to think, will still have the fostering care of the educationalist. I want to maintain the ladder of learning right from the bottom to the top. I want to maintain it for those who want to mount it. There ought to be a little more elasticity in these matters, and if it were given I believe better results would be obtained than we now have.

I want to say a word or two in regard to the speech of my hon. Friend the Member for North Camberwell (Mr. Ammon). I would congratulate him, if I may, on the splendid speech he made earlier this afternoon. He complained that there was a great deal of money spent on the education of the poor and on the education of rich people's children, and, as I gather, he objected to the latter. He gave as an illustration the cost of education at Dartmouth in connection with the training scheme for officers for the Navy. He said that there were 567 teachers for 460 pupils. [An HON. MEMBER: "'Staff.' not 'teachers'!"] He complained that there was a great deal of money spent by the Government from the taxpayer's pocket on this education at Dartmouth. No doubt there is a great deal of waste. It is the tendency of all Government Departments to blow themselves up into balloons and to sub-divide themselves into more balloons with more secretaries and more staff. It is more than likely that at Dartmouth there is a great deal of waste which ought to be cut down. But there is another principle involved besides economy in training for the Navy and Army. I have repeatedly said in this House that, for my part, I would throw more of the cost of training officers for the Navy and Army on the public Exchequer rather than less, because at present, by reason of the prohibitive fees paid for the education of these boys, you have to confine yourself for selections for all the positions of responsibility and power in the Army and Navy to the very small number of people who can afford to pay the fees. I believe the fee at present at Dartmouth is £66. It used to be a good deal more, but, as a result of agitation in this House and elsewhere, it has been reduced. £66, however, does not cover the total cost to the parents of a boy at Dartmouth. There are other expenses connected with his maintenance, and, I dare say, £100 or more has now to be paid by the parents.

Photo of Mr George Barnes Mr George Barnes , Glasgow Gorbals

How many parents in this country can afford to pay £100 a year? I suppose for each who can do it you have two or three hundred who cannot, and this means that as a result of the fees which are required to be paid at Dartmouth and other places—I believe that at Sandhurst they are even higher—all the positions of power and responsibility in the Navy and the Army are filled by those who can afford to pay the heavy amount, and who constitute probably not more than from 2 per cent, to 3 per cent, of the whole community. I want, therefore, the burden to be not less on the public Exchequer, but more, so that we can avail ourselves of the best brains there are in the community. The best brains do not necessarily come from the top of the community. I think it was the Tichborne claimant who claimed that the community was divided in two classes—those with money and no brains, and those with brains and no money. I am not subscribing to that doctrine. I believe the best brains are equally divided between the upper and the lower classes of the community, and, therefore, the wider your field of selection the more chance you have of getting the best men for the Army and Navy. As this item is only a small one, I for my part should not grumble if the Government agreed to pay more rather than less.

Then there is another matter to which the hon. Gentleman referred in his interesting and eloquent speech, namely, pensions. He complained that the teachers were going to be called upon to contribute towards their pensions. I marvel at some of my hon. Friends being so tender about teachers and people generally who are in public employ. After all, where do pensions come from? There is only one source for them, and that is industry. If everyone were getting pensions, I would not mind voting for the pensions being given, but I can- not get out of my mind that workmen in this country go through life with all the vicissitudes of industry—spells of unemployment, and so on—and some, at all events, have lived on very low wages; but no one ever thinks of pensioning them off. They may go on, some of them, for 30, 40 or 50 years, and for them there is nothing at the end except the 5s. or 10s. pension at the age of 70. When I hear this tender solicitude for civil servants—who at all events, if they do not get work, get pay all their lives—I cannot help thinking of the others who supply the pensions. Therefore I am not at all sorry that the teachers, who are now fairly well paid—I am not saying that they are too well paid—are going to be called upon to pay just a little towards their pensions.

There are one or two recommendations that I hope will not be adopted. One of them relates to afforestation. We neglected afforestation in this country in times gone by to such an extent that we had to pay through the nose during the War for timber imported into this country. I remember seeing a Departmental report during the War—a long time before the War was finished—and it showed that the cost of wood had, even then, exceeded by £37,000,000 what would have been a fair price for it before the War. That was because of the condition of the market which enabled people who sold wood to charge exorbitant prices. We do not want to be left in that hole again. Moreover, afforestation is a sort of counter industry to those of the towns. I believe that people are being heaped up into the towns far too much, and I want to encourage anything that will take them out of the towns into more healthy surroundings, and enable them to contribute to the country's welfare as well as their own. Therefore, I think we ought to attach a good deal more importance to this small Afforestation Department. I think it only involves a sum of something like £10,000,000 spread over a number of years, and I hope the Government will not adopt that particular recommendation.

With regard to housing, I admit the evils connected with the system which we adopted some years ago. I heard a good deal of the Debate the other day on the Ministry of Health Vote. I heard the denunciation of profiteers, and I quite sympathise with it. I think it was a scandalous thing that those who sold piping, or lead, or wood, or bricks, or any material for the production of houses, should have taken advantage of the nation's need to feather their own nests. That lesson, however, ought to be learned all round, and, if we are going to have anything like a successful application of the collective principle, we must have imbued in the people—not only the sellers of wood and iron and bricks, but of labour as well—a larger degree of social consciousness, and until we get that I do not look for any great success from nationalisation or any application of it. Before leaving that, I would suggest that, if these houses are to be sold, they should at all events not be sold to some capitalist combination who will make profit out of them. It is suggested that they should be sold at half the price at which they stand on the books now, and it seems to me that someone may—I do not say they will—reap a large profit out of it. I would suggest that, if the houses are to be sold, their sale should not be made a further source of profit to people who have made lots of profit already. If they are to be sold, let them be sold to the tenants who are now in them, and who might, by some application of the principle of credit, be enabled to acquire possession of the houses in which they live.

Having said what I have said with regard to the application of the collective principle, let me say that I am extremely sorry to find the reference which is made in the Geddes Report to the cost of making, things in the deckyards as compared with making them elsewhere. I want to eliminate the element of private profit altogether in the manufacture of guns, and ships, and all the devilry of warfare, because I believe that in times gone by we slipped into war very largely as the result of the weight of metal that had been forced upon us by armament rings. I am sorry to say that, but one never gains any thing by refusing to face facts, and those who have taken an interest in public affairs for the last few years know that certain things came out a few years ago in connection with armament-building that did not look at all healthy, to say the least of it. I believe there were some people in the armament-building industry who were not above taking advantage of their country's need and fomenting international trouble to bring profit to themselves. I want to avoid that. My wish is that as soon as possible all these things shall be manufactured in national workshops, but I cannot disguise from myself the fact that it costs £3 in a national workshop to use up £1 worth of material, instead of the £1 10s. that it costs elsewhere, and that does not tend towards moving things in the direction of national workshops. Therefore, I say that people ought to have regard to that aspect of the matter, arid ought to work at least as well for a public authority, when they have the chance, as they do for a private employer.

I should like to say one word about the Labour Department. I was not here when the Chancellor of the Exchequer was dealing with that, if he did deal with it, but I have read the Report. A great deal of comment has been made, in the Report and elsewhere, about the Labour Department, some even going, as I believe the Committee do, so far as to suggest its abolition.

Photo of Mr George Barnes Mr George Barnes , Glasgow Gorbals

I am sorry to hear my right hon. Friend endorsing that revolutionary sentiment, because I do not believe for a moment that you can abolish that Department. It was my good fortune to be the Chairman of a Commission which was set up to examine, not the abolition of the Labour Department, but the abolition, as we thought proper, of the Exchanges. We cannot abolish the Employment Exchanges under present conditions. The Employment Exchanges may be good or they may be bad, but while you have an insurance system, and many thousands of men out of work, it is begging the question to talk about the abolition of the Labour Department. You must have some authority to deal with them. I believe there is a good deal that might be abolished in the Labour Department as there is in other Departments. I am one of those who believe that so far as the mass of employers and workmen are concerned they ought to be left to adjust their own differences. They know more about them than anybody else, and there is a danger that if we do too much or hold out the hope to either side of doing too much in regard to industrial disputes we may tend to foment them rather than adjust them. If you have a number of men fussing around looking for trouble they are sure to get it. The industrial world is such, with the workmen and em- ployers always more or less looking about to find how to get the best of one another and in a position of sensitiveness, that if a man goes around saying, "If there is trouble I am ready to adjust it," it is just possible trouble will be made for him. Man is a difficult sort of being. If a man cannot get trouble he will look for it, and if he cannot find it he will make it. I am not suggesting that these gentlemen are making it, but I am suggesting that some of these officials, at all events, might be eliminated and set to earn their living in a more useful capacity. I do not want it lo be thought that I am suggesting for a moment that employers and workmen should be left to adjust their disputes apart from the interests of the community. The community is a partner, and I believe that inasmuch as the community is ever getting more sensitive, and organisations of employers and workmen are always getting larger, the community will have to protect itself ultimately against the results of large stoppages of work. I know the argument is that it is necessary to look round to see how things are going on in order to prevent disputes. My point is that in looking round for disputes, disputes are made. It would therefore be better to dispense with many of these people who are doing no good to themselves nor anybody else.

As to the Navy and Army, I am glad we are going to have at least a very considerable reduction. I believe that reduction is overdue, and that now we are going to have £181,000,000, I think it is, within the period up to the 1st April next year. I am glad to hear that, and also that there is to be a reduction in the Army.

Reference is made in the Report to the policing of Palestine, Iraq, and places in the Near East, and a good many millions are saved, I believe, by taking these police away. There is, however, one area from which you cannot take them away while it is so disturbed as it is to-day. That area is Palestine. I am sorry that the Balfour Declaration of 1917, as it is called, has cost this country already a good deal of money, and is likely to cost them a good deal more. That was never contemplated, and I am afraid it has come about through a wrong interpretation of the Declaration. The Declaration simply was that the Jews should go back to Palestine and might regard Palestine as their national home, but that in going back nothing should be done to prejudice the interests or affect the rights and privileges of the existing population. Those may not be the exact words, but it was something in that sense. Now I am afraid a great deal is being done to affect the rights and privileges of the existing population, and I fear that is due very largely to the ill-considered zeal of Zionists throughout the world. It so happens that a few years ago I was in Palestine when speeches were made by Dr. Wise of New York, a prominent member of the Zionist organisation, and whether he meant it or not, the speeches at all events led to the conclusion out there that Jews were not only to be allowed to go to Palestine, but that they were to be encouraged to do so. The Zionist organisation then, and I suppose now, in Jerusalem has been in touch with Jewish organisations all over the world and is picking up Jews from America and elsewhere, some of them not altogether desirable people, with the result that we have fomented trouble in Palestine as the result of the interpretation of the Balfour Declaration. It is not a right interpretation, and if I could say anything to advise Jews, and especially those belonging to the Zionist organisation, I should advise them to "ca' canny," and not to force Jews into Palestine against the will of the people and against the interest of Jews who are already in Palestine. It is said that they have a sentimental attachment to Palestine. That applies to the people already there, and I should say, therefore, that although I agreed with that declaration in 1917 when it was issued, it has been wrongly interpreted, and has landed us in a great deal of expenditure which I hope will be lessened in the near future. In order to lessen it I would suggest to the Chancellor of the Exchequer that he should get the Jews, so far as he comes in contact with them, to give a more liberal—and by "more liberal" I mean the phrase in the sense of being more fair to the present population of Palestine—interpretation to the declaration than has been given. I am glad to have had an opportunity to say a few words about this Report, which I think, as the Chancellor of the Exchequer does, is one of the most important documents that has been issued for a long time. I hope the Government will adopt as many as possible of the proposals, because I believe that the way back to prosperity and fuller employment is to case the burdens now falling on the shoulders of industry.

Photo of Sir Alfred Warren Sir Alfred Warren , Edmonton

I propose to take a very few moments of the time of the House, because, generally speaking, I am in perfect agreement with the Reports which have been issued, and I would like respectfully to congratulate the "men of goodwill," who have given so much time and attention to the compilation of the Reports before us. They have entered into every Department, every commitment, and practically every responsibility of the Government, and we have their findings before us in the three Reports. The remarks I have to make are not in any sense intended to criticise or belittle their labours, or to suggest to the Government that they should in any drastic way depart from the recommendations that have been made. I rise to call attention—and I am bound to do so in the interests of the persons I am presumed to represent—to matters which will bear very heavily upon a very large number of the working population of this country. In their examination of the expenditure of the Government the Committee have of necessity come to the Ministry of Health, and in surveying that Ministry they were bound to have regard to that which in recent days has been transferred to the Ministry, namely, the administration of National Health Insurance. Members of this House have some lively knowledge of National Health Insurance after what happened in the year 1911 and what has happened since in the various amending Acts and the different responsibilities that have been assumed by the Exchequer in relation to additional grants to assist that particular fund.

They have called attention quite rightly to certain important and vital matters, but with a view to assisting the Government they have made a recommendation, based upon the report of the Government Actuary, that there should be a small increase in the contribution to meet the additional cost of medical and other benefits. Speaking on behalf of the many approved societies who are administering this Act for the insured person, I must say that the contemplation of any additional contribution is regarded with the very highest disfavour, and the proposal that the contribution should be increased from 9s. 6d. to 12s. per member is one that will be resented very keenly and very acutely. I do not know whether I am rightly informed—I have had no authority for the statement, and I am one of those old men who pay little attention to what appears in the Press—but I believe there has been some suggestion in the Press that this proposed recommendation will be departed from; in other words, that the suggested increase of contribution of employer and insured person by the amount of 1d. per week will not be persisted in. I hope that is so, but in the absence of any direct authority I call the attention of the House, and of the Government, to the matter, in the sincere hope that whatever steps are taken they will not be in the direction of imposing a further contribution, because although national insurance has come, and has come to stay, I want the House to appreciate that there is a considerable feeling still existing in the country in relation to it, and any addition in the matter of contribution will be regarded with very great disfavour indeed.

The Committee, in their incursions into the work of the Ministry of Health, make recommendations as to the setting up of an inter-Departmental Committee, with a view to amalgamating Unemployment Insurance with National Health Insurance I want to utter a word of caution. I hope that whatever happens in that direction the greatest possible care will be taken. I want the House to appreciate the fact that approved societies of the country have, generally speaking, made a very great success of their administration of National Health Insurance. They have done it in the face of very great, almost insurmountable difficulties, and to throw their administrative work in respect of cards and stamps into the melting pot, and bring it into association with insurance, which is of entirely a different nature, will probably cause a very great deal of conflict and confusion in the work of the approved societies Therefore I hope great care and attention will be given to this subject.

There is one other matter. I am glad the Chancellor of the Exchequer is in his place, because I want to draw attention to a recommendation that is made in relation to a Department which I believe particularly comes under the purview of the Treasury. The Committee in making their investigations have left in my judgment nothing undone in so far that they have inquired into the most minute and almost insignificant Departments in the public service, and in that respect they have come up against the Friendly Societies' Registry. For many years, the friendly societies of this country were without any Act governing, or regulating, or protecting them. For a long period in their history they had to fight their own battles and do the best they could to protect themselves, but ultimately the Friendly Societies Act was passed. In recent years the Department has grown from a moderately small size into a very large and very ambitious Department, and it is imposing a good deal of restriction—and we sometimes think a great many unnecessary requirements—upon the old benefit friendly societies.

The Geddes Committee in dealing with this Department give it their general approval. They say: The only suggestion we have to make is that where appropriations in aid were estimated at £4,500 for the years 1922–23 should be increased. There is no reduction proposed in the Department, but a recommendation is made in respect of that which is imposed by the Department upon the friendly societies throughout the country. They call attention in their second Report, upon page 101, to the fact that there are approximately 40,000 returns which have to be made to the Registrar of Friendly Societies in respect of annual returns, tri-annual returns, and quinquennial returns, all of which are required by legislation, and are imposed upon the friendly societies. There is a total of 40,000, and they recommend, to help the Department, that there shall be imposed upon friendly societies a fee of 10s. in respect of any one of those returns. In other words, they compel them to make a return, and then they suggest that they should have the privilege of paying for making it.

Like some other matters, the Geddes Committee could not have looked very carefully into this question, because there are societies and societies, and those hon. Members who are acquainted with the work of friendly societies will remember that there are centralised societies and de-centralised societies. A huge centralised society is cast in the sum of 10s. per annum for its returns, whilst a society like the one I have in mind, with approximately 4,000 branches, but no larger Ti umber of members, is cast in a sum of £2,000 for making similar returns. In five years the one society would pay to the friendly society's registrar £3, whilst in the case of the de-centralised society, no less a sum of £12,000 would be imposed. That is not fair treatment to a body of men who have done very excellent service in the thrift movement, which has been so belittled, so whittled away in these recent years, of which you hear so little to-day, though there are still an ardent body of men desirous of promulgating and furthering its doctrines. I therefore hope that in going carefully into the question the Chancellor of the Exchequer will have regard to this, and see that, at any rate, if the suggested registration fee is not removed, it is based upon some process of equity where no one society, because of its particular form of organisation, is mulct in a larger sum than a corresponding society of even the same number of members, and I appeal to him on behalf of that body of men that some consideration shall be given in that direction.

Photo of Mr George Lambert Mr George Lambert , South Molton

We have had a very excellent exhibition of how popular economy is in the abstract and how distinctly unpopular it is in detail. Nearly every hon. Member has said, "Save money on the other fellow's fad, but please spare mine." If we are to have economy there must be economy all round. Everyone has got to make a sacrifice. I know the Chancellor and the Committee have worked hard, but the right hon. Gentleman's speech will be intensely disappointing to the country at large. In the first place, the cuts recommended by the Geddes Committee were assumed to be the minimum. The right hon. Gentleman has whittled them away from £86,000,000 to £53,000,000. Secondly, I did not gather anything in his speech which would lay the foundations of future economy, for it is idle to imagine that we can go on spending money at the rate even suggested by the right hon. Gentleman for next year. He said he hoped to bring the Supply services to £484,000,000. I have been to the Library and taken out the figures for 1913–14 introduced by the present Prime Minister as Chancellor of the Exchequer. They were £150,000,000. And we are going to spend three times more money next year, after the Geddes cuts, on the Supply services than we did before the War. I say we cannot afford it. Let me take the right hon, Gentleman's figures. What is he going to put his debt redemption at? My right hon. Friend the Member for Paisley (Mr. Asquith) suggested £500,000,000. If that be so, you get a total of £984,000,000 of expenditure next year. The country cannot carry that. Let us take the estimated revenue this year. Again, I have examined the speech of the Leader of the House, who introduced the Budget in the right hon. Gentleman's absence. He estimated a revenue of £1,058,000,000. But you are not going to get it. He anticipated £120,000,000 from Excess Profits Duty, but you are only going to get about £30,000,000. That is £90,000,000 off, and that is one item alone. That brings your revenue to something like £968,000,000, and you are budgeting apparently for £984,000,000. The country wants a reduction of taxation. Are they going to get it with these figures? Does anyone believe your Income Tax can maintain the figure you have estimated for the present year? In 1913–14 Income Tax and Super-tax came to £47,000,000. This year you have estimated for £410,000,000. Customs and Excise, beer, wine, and the rest of it, £75,000,000 in 1913–14; this year £323,000,000. Corporation Tax you estimated at £30,000,000 this year. Already, according to the revenue returns just issued, you have only got £15,000,000. I say definitely that the taxable capacity of this country has been strained unduly, and we cannot tolerate this amount of taxation.

Let me give you an illustration. I asked the right hon. Gentleman about Excess Profits Duty. He said that instead of getting £120,000,000 he had only got £29,000,000. Answering another question about the Corporation Tax, the Financial Secretary said: The Corporation Profit Tax assessed for the year 1921–22 approximates closely to £30,000,000, which is the Budget Estimate. Owing to the exceptional industrial and financial conditions now prevailing, it is probable that the receipts during the year will fall very substantially short of the assessment. Therefore I say we have reached the limit of our taxable capacity. Next year do you expect anything like the revenue you have this year? Are you going to get it from the Income Tax? The right hon. Gentleman said no other country had done as much. But no other country has such a debt as ours. The Treasury issued these figures of our taxes per head of the population. The taxes of this country are £20 8s. 10d. per head of the population. The taxes for France, taking the franc at 50, would be £5 15s., and for America, taking the dollar at five to the £, £6 10s. last year and £5 10s. this year. We have £20 8s. 10d., and the country cannot stand that amount of taxation.

Photo of Mr George Lambert Mr George Lambert , South Molton

But he is not reducing it, I take Germany. I do not quite know how to work the German taxation out. According to this it is 1,610 marks per head. Of course, if you reckon 1,000 to the £ that is about £l 12s. 0d. With this enormous amount of taxation our manufacturers cannot compete in the markets of the world. We are not richer than we were before the War, but poorer, and we have three times the amount of taxation or more. This is a workman's question more than any other. There is a poisonous doctrine that the more public money you spend the more the workman is benefited. It is absolutely the reverse. The taxes to-day are creating unemployment. There is no doubt whatever that taxation is absorbing that reserve of profit which ought to be put back into industry, and which would go to pay wages and produce some useful article, because if some useful article is not produced by private enterprise the producer will go into the bankruptcy court. The prospects of trade revival must be crushed by this enormous taxation. I do not say that the Chancellor of the Exchequer can reduce it all at once, but we have to make up our minds that we must vote for an all-round reduction of public expenditure. Without that reduction of public expenditure we cannot get that reduction of taxation which is so absolutely essential for our industries. I hope the Chancellor of the Exchequer will insist more strongly upon Treasury control over expenditure. The Treasury to-day have lost control. We want to get the Treasury back into the old system that existed under Mr Gladstone. Sir Michael Hicks-Beach and Sir William Harcourt. When my right hon. Friend the Member for Peebles (Sir D. Maclean) brought up the case of civil servants who had been given permanent pensions based upon the ephemeral cost of living, it was amazing that the Treasury should have passed such a thing. We have always looked upon the Treasury as being the one Department we could trust, and I hope we shall be able to look upon it in future as the watchdog of the taxpayer. The Chancellor of the Exchequer said that the Departments had given us £75,000,000 reduction of expenditure. The Geddes Committee say: The reductions proposed by the Departments are automatic"—

Photo of Mr George Lambert Mr George Lambert , South Molton

The Report says: The reductions proposed by the Departments are automatic, due to the fall of wages and prices, or to windfalls, or to the cessation of special expenditure on services arising out of the War. The reductions in Estimates shown in response to your circular "— that is the Treasury Circular of May last year, in which they asked for these reductions— are, therefore, by no means fully the result of curtailments of activity or of economical administration, and this point cannot be too clearly brought out. That proves my point.

Photo of Sir Robert Horne Sir Robert Horne , Glasgow Hillhead

It is obviously stated there that there has been considerable reduction due to the cessation of what they regard as the activities of War Departments. That is one of the things that I thought the House had from time to time clamoured for.

Photo of Mr George Lambert Mr George Lambert , South Molton

My point is that I want to get the Treasury control over Departments more strict, and I want to show my right hon. Friend that the Committee reported that the reduction of £75,000,000, with which my right hon. Friend made a good deal of play this afternoon, is by no means the result of curtailment of activities or of economical administration. I want to curtail Government activities all round. There are about 891,000 State-paid servants to-day. The country cannot afford that. When we have this enormous expenditure, unless the country insists that Members of the House of Commons shall drop their individual fads and their individual prejudices and really work so as to bring down public expenditure, we shall have unemployment aggravated, scarcity perpetuated, and unemployment and scarcity are the very worst things for the working classes.

10.0 P.M.

Photo of Mr Frederick Banbury Mr Frederick Banbury , City of London

I agree with a great deal of what has been said by my right hon. Friend who has just spoken. There can be no doubt that the taxation of this country, which is a very vital matter, is far higher than the taxation of any other country, and it is absolutely necessary if we are to maintain our financial prestige and if we are to create and develop industries and employment that we should reduce taxation. I agree with my right hon. Friend that, so far as we can tell as to what the actual receipts from taxation in this year will be, that on the present reduction of expenditure there probably can be no reduction of taxation. In 1913–14 the expenditure on the Supply services was £160,000,000; in 1905–6 it was £150,000,000. In 1913–14 the expenditure on education was £17,200,000 out of Imperial taxation. In 1921–22 it was £60,500,000. Therefore, from 1913–14 to 1921–22 the expenditure from Imperial taxation on education has increased from £17,000,000 to £60,000,000. Are we much better off in regard to education than we were in 1913–14? I very much doubt it. I agree with the right hon. Member for the Gorbals Division of Glasgow (Mr. G. Barnes), and I do not think we are any better, and I am not at all sure that we are not much worse. What reduction does the Government propose in this enormous increase of £43,000,000 on education expenditure? Only £6,500,000.

Photo of Sir Robert Horne Sir Robert Horne , Glasgow Hillhead

The Estimate next year for education will be £44,000,000, according to my recollection.

Photo of Mr Frederick Banbury Mr Frederick Banbury , City of London

I understood my hon. Friend to say that, so far as the recommendations of the Geddes Committee were concerned with regard to education, it was only proposed to effect a reduction of £6,500,000.

Photo of Sir Robert Horne Sir Robert Horne , Glasgow Hillhead

That is a reduction from the Provisional Estimate, which was much less than the present year's. The Provisional Estimate was £50,000,000, and it is to be reduced by £6,500,000, leaving, roughly, £44,000,000.

Photo of Mr Frederick Banbury Mr Frederick Banbury , City of London

I am glad of that; it is better than I thought. As I understand the position now, the total expenditure on education in the coming year will be £44,000,000, as against £17,000,000 in 1913–14. There is plenty of room for further reduction. Why should it not go back to the £17,000,000?

Photo of Mr Neil Maclean Mr Neil Maclean , Glasgow Govan

Why have any education at all?

Photo of Mr Frederick Banbury Mr Frederick Banbury , City of London

My right hon. Friend says that there is a contract with the teachers which expires in 1923.

Photo of Sir Robert Horne Sir Robert Horne , Glasgow Hillhead

1923 in London and 1925 in the country.

Photo of Mr Frederick Banbury Mr Frederick Banbury , City of London

Having entered into a contract, we have got to keep it. That is the attitude which I have always taken up, but is there not a contract also about superannuation?

Photo of Mr Frederick Banbury Mr Frederick Banbury , City of London

I always understood that the teacher pays nothing to superannuation, and now he is going to be asked to pay. That seems to me to be a distinction without a difference. Then what about new entrants? Is it necessary to give new teachers coming in, who have not got a contract, the same salaries as those who have? My hon. Friend talks of starvation wages. I do not know what the exact wages of the teachers are, or how they managed to live before the War. There is an increase in the cost of living, but a number of us have to meet that out of our own resources. If we have not got the money, what are we to do? We have not got the money to go on doing all these sort of things. Health in 1913–14 cost £5,000,000. In 1921–22 it cost £29,000,000. Labour in 1913–14 cost £900,000; in 1921–22 it cost £21,000,000. What on earth are we getting for that £21,000,000? [HON. MEMBERS: "Nothing!"] I am not sure that we are not getting less than nothing; we are getting our fellow subjects into the habit of looking to the State for assistance for which they ought to be looking to themselves. Those seem to be items from which very large reductions might be made.

For the last five years I have been trying in my humble way to impress upon the Government the necessity of restraining their expenditure. It was not a question of whether the expenditure was good or bad. We had not the money, and therefore we could not afford to go in for all these new schemes, whether they were good or bad. I incurred a great deal of unpopularity, and if derision was not expressed openly at my remarks, it was implied by the votes in the Division Lobby, but every word which I said has come true, and if hon. Members had followed my advice four or five years ago, especially during the last three years, we should not be in the position in which we are to-day. The Chancellor of the Exchequer plumed himself on making these reductions, but he ought never to have made the expenditure. If he had not made the expenditure it would not be necessary to make the reductions.

Having said that, may I add that I have heard of the reductions on the Army and Navy with horror and amazement? I consider those reductions to be the greatest possible form of extravagance. Suppose there is a professional man with a large family who has nothing but his earnings. He insures his life to provide for the family. He is of a rather extravagant nature, goes abroad, has a motor car, goes to the theatre and enjoys himself, with the result that his expenditure exceeds his income. What is he to do? Ought he give up his motor car, his trips abroad, and his visits to the theatre, or his contribution of premiums on his life insurance for his children? Surely he ought to cut down his enjoyments and continue paying the premiums on his insurance for his children. That is just what the Government has not done. The Army and Navy are our premium for insurance against invasion and for the maintenance of this great Empire. And this moment, when the positions in Egypt, India and Ireland are, to say the least of it, dangerous, is the time which the Government take to reduce the expenditure on the Army and Navy.

In August, 1914, we were able to send out four divisions to France, and later two other divisions which did not go until the end of August or the beginning of September. There has been discussion in various places as to who won the War. I say that those six divisions won the War. If it had not been for those six divisions the Germans would have been in Paris, and there would have been no opportunity for anybody afterwards, either rightly or wrongly, to conduct military operations. Now the Chancellor of the Exchequer tell us, with all the troubles which we have at home, that if there should by any accident be any foreign complications we cannot send six divisions, and that we can send only two, and I am informed by military authorities that we can only send one division of 20,000 men. That is playing with the future of this country, and it is extravagant for this reason, that it is sure to encourage our enemies to take advantage of our difficulties. I was told this evening that we could create an Army. We did so in 1914, but at what expense, and if we had not had those six divisions to arrest the march of the Germans we should not have had time to create that Army. We cannot be certain in the future that we shall not have another war in conditions in which we may not have the time to create an Army as we did in 1914. I hope the House will carefully consider this position, because, to my mind, it is one of the most dangerous positions we have been in during the last five or six years. I do not think it will be denied that if we had been able, instead of sending six divisions in 1914, to send 15, which, after all, would not have cost a great deal more, the War would have been over certainly within a year, if not sooner, and we should have saved many thousands of millions. Are we justified in running this risk again?

Photo of Mr Carlyon Bellairs Mr Carlyon Bellairs , Maidstone

What is the German strength?

Photo of Mr Frederick Banbury Mr Frederick Banbury , City of London

According to the papers to-day it is 1,500,000 men. I do not state that on my own authority and I do not know any more than my hon. and gallant Friend what is the actual state of Germany. I would recall to him, however, what happened to Germany, many years ago, when she was conquered by Napoleon—or, I think it was, when she was conquered earlier than that—and her army reduced to 20,000 men. That was the beginning of national service in Prussia. When she was compelled to reduce her army to 20,000 men she made an army of the nation. Whatever the League of Nations or any other absurdity of that sort may say, we never can prevent Germany or any other great nation from having a strong army. We must not count on that. Is Germany our only enemy? I do not think it would be wise to go into details, but everybody in the House knows what I mean, and we have to deal with that. Take the Navy. I am informed that before the War the personnel of the Navy consisted of 150,000 men, which it is proposed to reduce to 98,000 men or less than America. I am informed that at the present moment America has 129,000 men in the Navy. What then becomes of the two-Power standard? What becomes of all the professions which those who have been some time in the House have so often heard, that, whatever foolishness you commit with the Army, you will have a strong Navy and command the seas? I see my hon. and gallant Friend who occupied a distinguished position in the Navy now thinks it more convenient to discuss the weather with his neighbour than listen to my observations on the Navy.

I wish to emphasise the very dangerous character of the procedure to which the Government are now committing us. Children are to be sent to school at the age of 3, when they cannot possibly learn anything, instead of being sent there at the age of 5 or 6, which is, I believe, the age in every other country. Why is this done? Because it is good electioneering. Good electioneering cost this country a great deal before the War. We should have acted on Lord Roberts' recommendations, had it not been good electioneering to do otherwise, and I hope we have had enough of good electioneering and that we shall in future put before everything the safety of the country.

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

In these economy Debates I usually have the pleasure of finding myself in complete agreement with my right hon. Friend the Member for the City of London (Sir F. Banbury), but in regard to the last portion of his speech, where he deprecated the proposed reduction in the fighting forces and then expressed his fear that very shortly we might be at issue with an enemy or enemies, I feel constrained to ask: What enemies, what possible enemies? Is it France? Is it the United States? Is it Japan? Is it Italy? Certainly it is not Germany, at the moment, anyhow. Her army organisation is completely shattered: of that there is no doubt at all. I really hope that on calmer reflection my right hon. Friend will see that his fears, although perhaps natural from his political position and his record in the past—he always has been an upholder of an Army on the Continental scale and a Navy of tremendous dimensions—are unfounded. I hopes he will be able to see and to realise with us, and in the words of the Report, that, in view of the situation abroad, with a broken and exhausted Europe, and with no German menace, we are to have far greater fighting power, with a larger personnel, and greater preparations for war than ever before in our history.

Photo of Mr Frederick Banbury Mr Frederick Banbury , City of London

I will not rise and say what I fear to my right hon. Friend, but if he will allow me to see him in the Lobby, I will do so, but I would like to say this. Let him carry his mind back to the summer of 1914, when the present Prime Minister informed us in this House that that was the most opportune moment to reduce expenditure on the Army and Navy, and that in the following year, that is, in 1915, he proposed to make a great reduction in the expenditure on those two forces.

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

There was then an enemy, which everybody knew.

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

This time there is no answer to the question as to what enemy my right hon. Friend has in mind. Passing from that topic to the one which is more immediately before us, the Chancellor of the Exchequer, in his opening remarks, made a most extraordinary statement, and it was this, that the Government was not driven to the request to the Treasury early last year nor to the appointment of the Geddes Committee by any fear of the weight of criticism from these Benches or from other parts of the House, or from pressure outside, but largely owing to the new situation which had developed owing to our straitened financial circumstances. If that was the position, nothing could be more clear in its condemnation of their lack of foresight as to what the situation must have developed into, and he quoted with pride these very remarkable figures. He said that in the year 1918–19, taking the eight months of War and four months of what we call peace, the expenditure then was £2,965,000,000; it came down to £1,690,000,000, and then to £1,015,000,000, and then it dropped to £825,000,000. While he was talking, I added those figures up, and, including the eight months of War, this country on those services—not the Consolidated Fund Services, but the Supply services—

Photo of Sir Robert Horne Sir Robert Horne , Glasgow Hillhead

And Appropriation Grants.

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

Yes, but the gross expenditure amounted to no less than £6,495,000,000—an amazing record of money spent. If you exclude the year which was partly War and partly peace, you get over £3,000,000,000 on these services, and my right hon. Friend has the assurance to tell us that at last they are realising the seriousness of the situation. There never has been, during the past 40 or 50 years, a more complete vindication of criticism than the Geddes Report and the action of the Treasury Department during the past year under the direction of the Government. Year in and year out there has been an insistent cry, not confined to these benches, but from all parts of the House, urging the Government to make preparations for the evil days which must come, and now we know the evil days have fallen upon us. Whoever is entitled to credit for what has happened, it is not His Majesty's Government. They have empanelled a jury which has found them guilty on all indictments. Let me ask the Chancellor of the Exchequer one or two questions on his statement. He claims, as I understand it, that in the Estimates which will be submitted for next year there is a saving of about £181,000,000. Let me compare like with like. In the Financial Statement for 1921–22 I find the total Supply Services were £602,750,000. That is to be reduced, as I understand it, in round figures, to £484,000,000. That means that there is a saving of £118,000,000. I would ask my right hon. Friend whether he makes the comparison of like with like by adding Supplementary Estimates which have come in on the top of that?

Photo of Sir Robert Horne Sir Robert Horne , Glasgow Hillhead

Supplementary Estimates on ordinary services—not special services.

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

I know exactly what is meant. We have only too painful knowledge of what Supplementary Estimates are. We know to what the right hon. Gentleman is referring. What I want to know from him is this: In that £484,000,000, which he anticipates as expenditure in the coming year, what allowance has he made for Supplementary Estimates? Has he made any? In the figure of £602,000,000 there was added the Supplementary Estimates, and £484,000,000 from that gives him his £181,000,000 of savings. I ask him whether in the £484,000,000 he has included an estimate for Supplementary Estimates? Has he, or has he not?

Photo of Sir Robert Horne Sir Robert Horne , Glasgow Hillhead

There is no estimate for Supplementary Estimates in that.

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

Then that is, of course, a wholly fallacious estimate. We have had these Estimates from time to time submitted year after year, and always there is an Estimate from £15,000,000 to £25,000,000 put in for Supplementary Estimates. He ought at any rate to have done the normal thing, and that is added to that £484,000,000 at least £20,000,000. We know what has happened in regard to Supplementary Estimates since this Government took office. There has been no less than about from £420,000,000 to £450,000,000 of Supplementary Estimates. My right hon. Friend is astonished at that statement, but it is the bald truth of the situation. That having been the experience of the House of Commons and the country of the conduct of the financial proceedings by His Majesty's Government during these years, what chance is there on the coming year of there being no Supplementary Estimates? I will make my right hon. Friend a present of a suggestion. There will be at least £60,000,000 of Supplementary Estimates. That may be right or wrong, but at any rate he ought to have had some idea, judging from past experience, that his Estimate was a very risky Estimate to make. So far as the saving is concerned, I think we can look on that part of the Estimate with a sort of friendly suspicion. The Government's financial record fully entitles us to that.

The next point to which I wish to draw the attention of the House is that, notwithstanding the display of financial rectitude and severe economy which now decorates the efforts of the Government, the cold fact remains that the country in the coming year will have to raise little, if anything, short of £900,000,000. Take the £484,000,000 to which reference has been made. The War charges, no doubt, on the very low estimate I have put, stand at about £50,000,000. If you add the Consolidated Fund Services at about £370,000,000—they were £371,000,000 this year—and the right hon. Gentleman depends for a reduction on the better condition of the money market, which we all hope he will have the good fortune to have—I will allow him £5,000,000 or £6,000,000 on that—that brings the total, so far as I can make it up, to £920,000,000 or £925,000,000; in round figures the country, under the most favourable conditions, will have to raise £900,000,000. Can it do it? What is the position? The Treasury in their Circular say: So far as can be seen at the present the ordinary revenue of the State in 1922–23, even if no taxation is remitted in that year, is not likely to exceed £950,000,000. That was in May of last year. Even the most pessimistic of us in May had no idea of the terrible disasters which would fall upon the country by November. When the new assessment of Income Tax falls to be made there will have to be brought in one of the most disastrous years for British trade in the last 30 years. What that will mean, not only in the lesser claims made, but in the lesser capacity of the taxpayer to pay them, I do not know. I feel certain that the revenue next year, unless His Majesty's Government go far beyond the proposals of this Report, must fall short of the expenditure, and instead of congratulating my right hon. Friend and his colleagues on what they have done, I say that this ought to have been done two years ago.

The Chancellor of the Exchequer knows that with the common-sense method of the ordinary business man, whether it be a small grocer, a man who runs a great financial undertaking, or a large manufacturing concern, it is not a question of what his expenditure is, but what his revenue is that governs his methods. Until His Majesty's Government sees that common ordinary fact as the basis of their financial operations disaster must dog their footsteps and those of the country as well. They ought to have taken this not as a standard to work up to, but as a finger-post of progress to other larger and more sweeping reforms.

I will conclude with a suggestion which I hope will meet with the approval of the whole House. On going through the three volumes of the Geddes Report I find that they deal with round about 100 chapters. They deal with several Votes. Sometimes a chapter includes more than one Vote, and that means that these three volumes, and very valuable volumes they are, cover a wealth of criticism of Votes and points for examination well over 100 in number. What opportunity has the House to deal with that? Here is a situation which the whole country demands shall be dealt with instantly.

Photo of Sir Robert Horne Sir Robert Horne , Glasgow Hillhead

You will have the Estimates very soon.

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

As hon. Members know, we shall have about 20 days to deal with them, and hundreds of millions will pass under the guillotine without any discussion at all. I make this prediction that, while that might have been stood with equanimity in the past, I do not think the country will stand it this year from any Government, and the country demands that these Estimates shall be examined on the Floor of this House in detail. What the Government ought to do, and what any Government which may succeed it in the next two or three months ought to do, is this. If the House of Commons chooses to assert itself, to get back on its fundamental basis of controlling the finances of the country, and if the Government do not act up to what the nation demands, then the House of Commons should take the matter into its own hands—it can do so, if Members of all parties will bring pressure to bear on the Executive—what the Government ought to do is to demand the suspension of Standing Orders for the purpose of examining the Estimates on at least 40 days instead of 20.

Photo of Sir Robert Horne Sir Robert Horne , Glasgow Hillhead

That was the number of days spent in the Wilderness.

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

And those days were succeeded by reaching the Promised Land. If the Government will do this the country will begin to think they are in earnest. The Estimates will have to be gone into and carefully examined day after day and night after night. That is the only way to prove to the public that the Government are in earnest in this matter. It is the only way in which effective work can be done. I have a further suggestion to make. The right hon. Gentleman has made his statement on a very complicated matter of great lucidity and clearness, but that statement could be made of still greater use to the House if he would produce in a White Paper the proposals of the Committee and the proposals of the Government in regard to them. I think that is a suggestion which might very well be carried out with benefit to us all.

Photo of Mr Worthington Evans Mr Worthington Evans , Colchester

The right hon. Gentleman the Member for Peebles (Sir D. Maclean) quoted some figures which I am going to ask the House to let me repeat; because although the Chancellor of the Exchequer first gave the figures to the House the right hon. Gentleman the Member for Peebles quoted them for one purpose, and I am going to quote them for another purpose. He pointed out that the actual expenditure on the Supply services for the years 1918 and 1919 was £2,965,000,000, but that it dropped in the next three years respectively to £1,069,000,000, £1,015,000,000, and £825,000,000. The right hon. Gentleman quoted those figures as evidence of extravagance on the part of the- Government, but surely anyone realising those figures will say that they are evidence of the exact contrary. They are evidence of a definite attempt by the Government to reduce expenditure year by year in the figures over which they have any control. The right hon. Gentleman said that the Government, far from dealing with this as a business man would deal with it, dealt with it extravagantly—that the business man would limit his expenditure by his revenue. Does the right hon. Gentleman suggest that the Government, during those years, ought to have limited their expenditure by the revenue? Is that the real test that he would wish the Government to have applied to their expenditure during those years? During those years there was no difficulty about revenue. The Government could have spent more, if tested by the right hon. Gentleman's test. It was not revenue, it was the necessities of the case that forced that expenditure.

Just see what the right hon. Gentleman overlooked altogether. He seems to have forgotten already the last year of the War and the condition in which the nation found itself. What was the real fact? Every man and every woman in the country who could do any work was working on behalf of the nation in order to win the War. Whether it was in the Army or in munitions, every man and every woman was engaged—at relatively high payments, it is true—in endeavouring to win the War; and the Government, in those years to which the right hon. Gentleman calls attention, was endeavouring to demobilise the men in the Army and the men and women in munitions who were engaged at these high rates which the Government had in one way or another to spend. Does the right hon. Gentleman suggest that you could have turned all the men in the Army out into the street straight away? Does he suggest that, the munition workers having done their best to help to win the War, the Government should have said to them. "Well, we have no further use for your services, you can go into the street and beg for your living"? No. What happened was this. The Government had to spend, during those years, no less than £275,000,000 in getting back from war work into peace industry the people who were engaged in the War—both for the purpose of re-settling the soldiers and for insurance for those who were transferring from war work to civil work. There was an expenditure of something like £275,000,000. Was that to be tested by the revenue, or was it to be tested by the necessities of the case? The test of the right hon. Gentleman is a test which might be applied to a grocer's shop, as he suggested, but it could not be applied to His Majesty's Government, who were trying to carry on the business of the nation, and the business of the nation was not to be ungrateful to those of its subjects who had done so much towards winning the War.

Photo of Mr John Cairns Mr John Cairns , Morpeth

You are ungrateful: you have the men on the streets now.

Photo of Mr Worthington Evans Mr Worthington Evans , Colchester

That, of course, is not an argument for greater economy at this moment. I can quite understand the hon. Gentleman (Mr. Cairns) saying that we are spending too little, but I cannot understand that interruption as supporting the right hon. Gentleman's contention that we are spending too much.

Photo of Mr John Cairns Mr John Cairns , Morpeth

I was not supporting the right hon. Gentleman (Sir D. Maclean).

Photo of Mr Worthington Evans Mr Worthington Evans , Colchester

These figures, if properly understood, are evidence that the Government, at the earliest possible moment, set about putting their house in order. At the earliest possible moment they reduced their expenditure, and I know very well that some hon. Members, like the hon. Member for Morpeth who interrupted just now, think that that expenditure was reduced too quickly, and that, if it had not been reduced so quickly, if deflation had not taken place as quickly as it did, perhaps the state of unemployment would not be so bad to-day; and there is a great deal to be said in favour of that argument—but it does not support the right hon. Gentleman. Not at all. These figures do show, if they show anything at all, that the Government has done its best to reduce expenditure as rapidly as possible. I take the view that the Government, having done that, and having seen that further reductions had to take place if expenditure was to be kept within probable revenue, took quite the right course in setting up the Geddes Committee. I will tell the right hon. Gentleman again, notwithstanding his derision, that that was not forced upon the Government. Not at all. It was part of a deliberate policy of reduction as part of these four sets of figures. What was intended was that still further reductions should take place, and the Chancellor of the Exchequer set up that Committee to advise him. I have heard it suggested that the Chancellor of the Exchequer ought himself to have been Chairman of that Committee. In the normal course the Chancellor of the Exchequer would have been Chairman of a Committee if he desired a Committee to help to advise him. But are these times normal? Is it possible for any Chancellor to take the chair at a Committee that is going to spend six months of time in doing nothing, but examine expenditure of Departments. The right hon. Gentleman, if he ever occupies the position of Chancellor of the Exchequer, will find that the Chancellor of the Exchequer has a great many other duties to perform than merely the duty—though that is a very important one and I am not belittling it for a moment—of checking the expenditure of the various Departments. To-day he has a duty which he has never had before. He has a bigger financial business than any banker in the United Kingdom. He has his own business with his short loans, just under £1,000,000,000 at this moment of Treasury bills, and another £500,000,000 or £600,000,000 of short loans, with all his foreign business both on the creditor and debtor side of his account, to say nothing of reparations. He has much more business than any other Chancellor has ever had, and although it would have been normal that he should have been Chairman of such a Committee and should preside over its deliberations, yet in the abnormal conditions in which we live he was right in farming out that work to some one else to advise him so that he might maintain his check over the other business he has to do.

The right hon. Gentleman has made various suggestions. He said the House of Commons ought to take this matter into its own hands. He is hardly fair to his fellow Members of the House of Commons. I do not think the House of Commons has failed to take this matter into their own hands. For months and months past, although we have always invited constructive suggestions, we have not been favoured with very many suggestions. We have been favoured with a wealth of criticism, but not with any constructive suggestions. The particular one to which the right hon. Gentleman pledged himself to-night was that the Supplementary Estimates next year would be at least sixty millions. That is to be noted, and he will have an opportunity no doubt either that to say that he was right, or that he was wrong when the time comes. He has no right, however, because he makes a wild guess of that sort, to say that our definite estimates of savings next year are not going to be realised. The right hon. Gentleman is entitled to say he does not think they will be realised, but he ought to give some ground for that. No ground has been given. To say that there were Supplementary Estimates in the past is no argument that there will be Supplementary Estimates in the future. Let me show why. During the whole of the last three years we have been having War remnants of all sorts. Even this year I am going to have to present a Supplementary Estimate which by no possibility of careful estimating last year could have been foreseen. I will not go into the details to-day. It will come before the House in a week or two. But the House will see it is absolutely impossible to have foreseen the cost of re-conditioning ships which have been used as troopers during the year.

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

That is exactly what I meant.

Photo of Mr Worthington Evans Mr Worthington Evans , Colchester

But that is a War charge. The difference between the three last years is this Constantly we have been face to face with War charges—charges arising out of War conditions, and this next, year we are going to get into a period of peace so far as we know, and unless the Estimates are upset by War contingencies, which no man can prophesy, the Chancellor of the Exchequer is satisfied that there will be the saving of £181,000,000 to which he referred. Then the right hon. Gentleman suggested that a White Paper should be published showing the recommendations of the Geddes Report and the action proposed to be taken by the Government. I do not know whether the Chancellor of the Exchequer could usefully put such a Paper before the House on all the services, but, speaking for my own Department, if the House would desire to have a summary of the recommendations with regard to the Army Votes before the Estimates are discussed in this House, I should be quite willing to put in a White Paper showing the proposals of the Geddes Committee and the way in which I was proposing to deal with them. I do not think it could be done as a White Paper with regard to all the Departments, but it can be done, perhaps, by the separate Departments dealing with their own Estimates, and if that be of advantage to the House, so far as I am concerned, I shall be very glad to do that.

I want the House to realise that the Government are serious in this matter. It may well be that, thinking of those outside the House, the right hon. Gentleman is obliged to suggest that the Government are not serious, but here he cannot challenge us unless he can show us in what way we can be more serious and more definite in our desire for economy than we are at the moment. He is bound to show that we are not taking the course we ought to take, if he makes that charge against us. I could not find anything substantial in his speech, cither that the Government were taking a course they I ought not to take, or were taking the course they ought to take. Unless he can be more specific, I think we are entitled to ask the House to believe we are quite serious in our endeavour to cut down expenditure on non-essential services to the greatest possible extent, so that, not merely expenditure may be reduced, but ultimately taxation may also be reduced.

Photo of Mr George Lambert Mr George Lambert , South Molton

Will you kindly tell us when we shall have your Estimate?

Photo of Mr Worthington Evans Mr Worthington Evans , Colchester

I suppose it will not be possible to publish the volume in time for the Vote on Account. I expect to take the Vote on Account about the middle of March.

It being Eleven of the Clock, the Motion for the Adjournment of the House lapsed, without Question put.

The Orders of the Day were read, and postponed.