Expenditure Arising Out of the War.

Part of Supplementary Vote of Credit, 1941. – in the House of Commons on 16th December 1941.

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Photo of Sir Adam Maitland Sir Adam Maitland , Faversham

The hon. Member referred to Germany, and as I happen to have had an opportunity of seeing something of this matter in Germany before the war, I will confine my observations to Germany. The hon. Member's remarks also reminded me that in pre-war days the Germans accepted another thing which certainly would not have been considered. as a matter of practical politics in this country. The policy of fixed wages for all workers in all industries was instituted in Germany long before the war. It was done by the central authority. The fixing of wages was a very important matter because it meant getting right down to the first basis of costs. Having fixed wages, the leaders of Germany found that, as time went on, prices of goods tended to increase, and it was impossible, with the wages that had been fixed, for the wage earners to buy the things they desired to buy. A second step was then taken, and quite consistently and sensibly, selling prices were fixed. It seems to me that in this country we have done things in the inverse order. We talk about the control of prices and have indeed introduced a certain degree of control, but there has certainly not been so far any very serious attempt to control wages. May I say in this connection that some of the most important steps, and some which have been most harmful, have unfortunately been instituted by Government Departments of one kind and another? I commend that to the notice of my right hon. Friend the Chancellor of the Exchequer.

No Member would for one moment think of opposing this Vote of Credit which the Committee are asked to pass, but perhaps this is not an inopportune moment to emphasise once more how important it is, in giving extensions of credit for such huge sums, for the Chancellor of the Exchequer to see that money is wisely expended. In spite of the enormous demands which are being made upon all sections of the community, and in spite of the colossal financial burdens falling upon this country, there is one thing which is outstanding; I would ask those who at times are tempted to condemn our present economic and financial structure to dwell upon this point. Other countries which have experienced financial and industrial crises, and difficulties arising internally and externally, have had a run on the banks, and chaotic confusion has resulted. On the other hand, we have had our ups and downs, and our problems during the last 10 years, but no Member has had suggested to him the slightest shadow of doubt in regard to the stability of our banking institutions. That is a tribute to our financial and economic structure, however much we may criticise it. I do not, of course, suggest for one moment that no improvements could be made to our existing system of finance and industry.

I think that the Chancellor of the Exchequer—and perhaps this is the only bouquet I shall give him—is to be congratulated upon the way in which the money has been raised to meet the cost of the war. It is a great tribute to the stability and solidarity of our British institutions, and to the common sense of our people, that in such a tremendous war, involving such astronomical figures, my right hon. Friend is able to come to the Committee and report that it is possible for him to continue to borrow money act such cheap rates. My hon. Friend the Member for East Birkenhead referred to wasteful expenditure. I believe that the greatest impetus which could be given to the War Savings Movement would be the conviction that the House of Commons is determined to stamp out and eradicate anything in the nature of wasteful expenditure. In this connection I wish to make a suggestion to my right hon. Friend. I do hot believe that Ministers, either during war or in peace, have sufficient time to devote to the question of expenditure—they are so busy with high policy and with other matters that it is impossible for them to get down to questions affecting the administration of expenditure. I suggest that in every Government Department someone should be specifically charged With the duty to examine details of administration and to see that expenditure incurred by the Department concerned is wisely and efficiently made. In the case of a small local authority, a county authority, and a national authority there is a definite and practicable limit to the amount of money which in any given period can be wisely spent. That is specially true during a war. Then there is an expansion of organisation, and people are brought in who have not the knowledge and experience—I am not criticising their willingness or their desire to help—to see that a Department's duties are performed in the most economical, efficient and effective way.

At a time when rationing is regarded with favour, and when we have had two and a half years' experience of war, I suggest that a review should be made of the amount of money which a Department Can spend with real efficiency and with due regard to the needs of the nation. I know this is difficult, especially in Service Departments, when some new strategy may be in the offing which would upset calculations; but there are many other Departments which are not affected by strategy and the variations of war where such a scheme could be adopted. If this suggestion cannot be adopted in the case of the Fighting Services, I suggest that it might be applicable in the case of the other Departments which are also spending considerable sums of money. To see that expenditure is wisely administered, some departmental body, charged with the specific responsibility of administering the expenditure of the funds of that Department, should be set up. Hon. Members may suggest that we already have the Select Committee on National Expenditure, but that Committee is limited in its scope and is limited in the kind of work it can do. It is not an executive body, but in reporting to the House completes one of its main functions. The sort of body I am suggesting would be charged with the specific duty and would be capable of exercising some authority in regard to departmental expenditure. I hope that my right hon. Friend will be good enough to consider that suggestion.

None of us would wish to say anything to destroy confidence in our national financial arrangements, but I must point out that I cannot for one moment accept the suggestion that borrowing and taxation can be put in the same category. Borrowing is something the State undertakes to repay to the lender, be it soon or late. Taxation is imposed by the State with no hope of repayment to the taxpayer. There is some suggestion with regard to discount for taxes paid in advance. This is perhaps the first official recognition of the anxiety that is felt in regard to the practicability of collecting taxation at the very high existing rates. It is a warning to the right hon. Gentleman that he is getting to the limit in the practicality of raising and collecting taxation at the present high rates. It is further evidence that the never-ceasing need of greater vigilance in regard to the expenditure of the money is of vital importance