Expenditure Arising Out of the War

Orders of the Day — Supplementary Vote of Credit, 1944 – in the House of Commons at 12:00 am on 16th May 1944.

Alert me about debates like this

Motion made, and Question proposed, That a Supplementary sum, not exceeding £1,000,000,000, be granted to His Majesty, towards defraying the expenses which may be incurred during the year ending on the 3rst day of March, 1945, for general Navy, Army and Air services and supplies in so far as specific provision is not made therefor by Parliament; for securing the public safety, the defence of the realm, the maintenance of public order and the efficient prosecution of the war; for maintaining supplies and services essential to the life of the community; for relief and rehabilitation in areas brought under the control of any of the United Nations; and generally for all expenses, beyond those provided for in the ordinary Grants of Parliament, arising out of the existence of a state of war.

Photo of Sir John Anderson Sir John Anderson , Combined Scottish Universities

I have to ask the Committee for a further Vote of Credit for war expenditure. In view of the recent Budget Debate and of the impending introduction of the Finance Bill, I trust that the Committee will allow me to confine my remarks to a few brief facts about our war expenditure. Although the sum of £1,000,000,000 which was voted by the Committee on 25th January last for the current year is likely to cover our requirements until the early part of next month, it is never possible, and less so than ever in the unpredictable circumstances of the present time, to say with certainty on what precise date money voted for war purposes will be exhausted. I am accordingly asking now for a Vote of a further sum of £1,000,000,000. On the basis of such information as is now available as to the probable rate of expenditure in the immediate future, this sum should suffice to carry us on to a date in August, before which I shall no doubt have to ask the Committee for a further sum.

When I addressed the Committee on 25th January, I said that our war expenditure was then averaging about £13,250,000 a day, of which about £11,000,000 was on the Fighting and Supply Services. I said that those rates might be expected to show some slight increase in the later months of the financial year. In fact, the rates rose in the last few weeks to £14,750,000 and £12,000,000 respectively. These figures, however, represent a seasonal rather than a permanent increase. The average rate of total expenditure over the whole of the financial year just closed was approximately £13,500,000 a day, including £11,250,000 for the Fighting and Supply Services. As regards the present financial year, the period that has elapsed is rather too short to provide an average rate of any real significance, but over the six weeks to last Saturday the total expenditure has been at the rate of about £13,250,000 a day, of which about £10,750,000 was on the Fighting and Supply Services.

Photo of Mr Frederick Pethick-Lawrence Mr Frederick Pethick-Lawrence , Edinburgh East

I think that there is only one sentence that I need say—"He who wills the end wills the means." That is a view of the House of Commons of this matter.

Photo of Mr John Tinker Mr John Tinker , Leigh

May I ask whether the recently improved allowances for soldiers are included in these Estimates, and if so, to what extent they will affect the amounts to be voted?

Photo of Sir John Anderson Sir John Anderson , Combined Scottish Universities

The Committee will appreciate that this is not an Estimate; this is a provision of resources expected to last for the period which I indicated, that is, up to next August. Of course the money will be used to meet all expenditure which has been authorised, and the estimated cost of the additional allowances referred to was given, I think, in the statement which was made on the subject and is of the order of £50,000,000 a year.

Photo of Mr William Craven-Ellis Mr William Craven-Ellis , Southampton

If this Vote of Credit is approved, it simply means that the Treasury is authorised to spend £1,000,000,000 on behalf of the war effort. I wonder whether Parliament gives serious consideration to the consequences of these repeated Votes of Credit. In due course this £1,000,000,000 will have to be met from one source or another. I estimate that approximately 53 per cent. will be provided from taxation and 25 per cent. from borrowing, and that approximately 22 per cent. will be found by the banking system. That means that the coun- try is permanently put in debt to the banking system, and to that I object.

Photo of Sir Percy Harris Sir Percy Harris , Bethnal Green South West

On a point of Order. Are we justified in having a discussion on the way in which we raise the money for this Vote of Credit?

Photo of Mr William Craven-Ellis Mr William Craven-Ellis , Southampton

We are asked to give authority for a Vote of Credit for £000000,000, and I really do not understand the intervention of the right hon. Gentleman, the Member for South-West Bethnal Green (Sir P. Harris), because I feel that, as a Member of Parliament, I am justified in dealing with the significance of this matter. I take exception to Parliament being asked repeatedly to grant these Votes of Credit when a large percentage of the money is raised by putting the country into debt to the banking system. I submit that the authority for making up any gap between borrowing and taxation—

Photo of Mr Douglas Clifton Brown Mr Douglas Clifton Brown , Hexham

I am sorry to interrupt the hon. Member, but he is certainly out of Order in those remarks which apparently relate to the raising of the money.

Photo of Mr Aneurin Bevan Mr Aneurin Bevan , Ebbw Vale

Is it your Ruling, Major Milner, that the hon. Member cannot discuss how the Chancellor of the Exchequer proposes to raise this sum of money?

Photo of Mr Douglas Clifton Brown Mr Douglas Clifton Brown , Hexham

That would certainly be out of Order. The question before us is how the Chancellor will spend this sum.

Photo of Mr Aneurin Bevan Mr Aneurin Bevan , Ebbw Vale

Would it be in Order to discuss the destination of the money or the source of the money? Which would be in Order at the moment?

Photo of Mr Douglas Clifton Brown Mr Douglas Clifton Brown , Hexham

The destination of the money, clearly. We are in Committee of Supply.

Photo of Mr John Tinker Mr John Tinker , Leigh

In my view, the question seems to cover the whole range of how the money shall be raised. It must be a question for us how the money is to be provided.

Photo of Mr Douglas Clifton Brown Mr Douglas Clifton Brown , Hexham

The procedure of the House on this matter is well known. It is the Committee of Ways and Means which decides upon the ways and means by which money is to be raised, whereas the Committee of Supply is concerned with the propriety of its expenditure, and that is the matter which we are in process of dealing with at the moment.

Photo of Mr William Craven-Ellis Mr William Craven-Ellis , Southampton

I am sorry that I am not keeping in line with our procedure. A few weeks ago, I asked a question as to the amount of the deficit on the Budget since the war started, and the answer was to the effect that we had a deficit of £10,900,000,000, up to 31st January last. May I ask the Chancellor of the Exchequer if the gap between taxation and borrowing—

Photo of Mr Douglas Clifton Brown Mr Douglas Clifton Brown , Hexham

I am sorry, but I cannot permit that question to be asked in this Committee.

Photo of Mr Francis Bowles Mr Francis Bowles , Nuneaton

On a point of Order. You said just now, Major Milner, that hon. Members can discuss the destination of the money. Surely one of the most important questions is into whose hands it is going to be paid back at the end.

Photo of Mr Douglas Clifton Brown Mr Douglas Clifton Brown , Hexham

Yes, but an even more important matter at the moment is the immediate destination of the money.

Photo of Mr Clement Davies Mr Clement Davies , Montgomeryshire

Surely any hon. Member can object to the Vote of Credit, and, in doing so, can raise the question of how that money is to be utilised, and say that it is not necessary to raise it in this particular way?

Photo of Mr Douglas Clifton Brown Mr Douglas Clifton Brown , Hexham

This is not an occasion for discussing the raising of the money in the ordinary sense of that term. The Budget is the occasion for raising the money. This is an occasion for providing a Vote of Credit, on account of expenditure.

Photo of Mr William Craven-Ellis Mr William Craven-Ellis , Southampton

While I completely agree that the Vote of Credit is as you have described it, Major Milner, I feel that the Committee should know what is the ultimate responsibility that Parliament will carry by granting this Vote of Credit. Therefore, I would ask the Chancellor of the Exchequer if the £10,900,000,000 which he said was the deficit on the Budget is the gap between—

Photo of Mr Douglas Clifton Brown Mr Douglas Clifton Brown , Hexham

Again I am sorry to interrupt the hon. Member, but we are not discussing the £10,900,000,000. We are discussing a sum not exceeding £1,000,000,000 which the Committee has been asked to vote on account.

Photo of Mr Aneurin Bevan Mr Aneurin Bevan , Ebbw Vale

In view of the fact that a portion of this money will be used to organise loan campaigns, would I not be in Order in resisting the Vote of Credit on the ground that that is an extravagant and useless way of spending public money?

Photo of Mr Douglas Clifton Brown Mr Douglas Clifton Brown , Hexham

That would be in Order if the hon. Member desired to take that Line.

Photo of Mr William Craven-Ellis Mr William Craven-Ellis , Southampton

What we are doing to-day will lay an additional heavy imposition upon the taxpayers of this country and that I do resist.

Photo of Mr Douglas Clifton Brown Mr Douglas Clifton Brown , Hexham

I cannot hear the hon. Member further unless he has some other point to raise.

Photo of Mr William Craven-Ellis Mr William Craven-Ellis , Southampton

Then I will record that I object to this Vote of Credit being granted.

Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

I understand that it is in Order to discuss the waste of public money on the celebrations which take place throughout the country in order to raise funds for the Chancellor's gap. I wish to tell the Committee—I see the Chancellor has gone—that it is about time that the Government endeavoured to tell the truth to the country about where the money comes from. I know that we are not allowed to discuss that sort of thing at this moment, but I ask the Committee to bear in mind that the Chancellor has said that he does not keep any account of new money. He does not think that is important, though any business man would do so as a matter of elementary efficiency. On this question of waste: Up and down the country these celebrations are going on. I have come from a tiny seaport town which had a target of £25,000. The steels were all decorated with flags, the mayor and corporation were called out, and tanks and goodness knows what were put into the procession—and the joke of it all was that they lost the procession and the crowd never saw it. I want to put forward this matter in all seriousness. The target set for one of these ridiculous celebrations was of the order of £3,000,000. At 10.30 on the day the subscription list opened there was a terrific demonstration at the town hall. The mayor and corporation were there in their robes, there was a guard of honour lining the streets up to the steps of the town hall, trumpeters were blowing a clarion call of welcome, and there was a ridiculous little man with a plush cushion and a top hat. And what was on it? The Ark of the Covenant? No. A cheque for £2,000,000 from the Prudential. I submit that that is really carrying the thing too far. It is time the Chancellor of the Exchequer set out upon a campaign of education in this matter instead of a campaign of deceit.

Photo of Mr Tom Driberg Mr Tom Driberg , Maldon

As it is the question of the destination of the money which is before us, should I be in Order in raising the matter of Service pay and allowances and various anomalies arising out of the recent White Paper?

Photo of Mr Douglas Clifton Brown Mr Douglas Clifton Brown , Hexham

Yes, that would be in Order.

Photo of Mr Tom Driberg Mr Tom Driberg , Maldon

I want very briefly—and I do not expect any reply now from the Government—to draw attention to the fact that there has been considerable disappointment among serving personnel in the last week or two after the exhilarating and optimistic stories which they had seen in the newspapers about the increases in allowances. It happened in many units last week that the first pay day under the new scheme came round, and to their surprise and regret many of the men concerned found that they were having 25. or 4s. docked from their money instead of getting what they had vaguely, perhaps wrongly, expected would be an increase.

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

On a point of Order. Are we in Order in discussing money which has not been provided?

Photo of Mr Douglas Clifton Brown Mr Douglas Clifton Brown , Hexham

No, but the hon. Member's remarks were incidental to the money which is being provided.

Photo of Mr Tom Driberg Mr Tom Driberg , Maldon

I shall detain the Committee for only a moment or two to draw attention to another small anomaly, which seems very wrong to me, and which I hope will be looked into by the officials who are now examining these anomalies. I understand that the husbands of childless wives, who do not benefit under the new arrangement, are now being docked 6d. as well, although their wives do not get any increased allowance at all. I should be very glad if this point could be borne in mind.

Photo of Mr Frederick Bellenger Mr Frederick Bellenger , Bassetlaw

I have listened to the remarks of my hon. Friend with a considerable amount of interest because, although I do not know that the Treasury can do anything, there is no doubt that there are a tremendous number of anomalies and inequalities in pay and allowances and war pensions which have not been dealt with in the White Paper. I do not think this is an occasion when the matter can be put right, but I urge upon the Government to keep an open mind on some of the proposals which we shall have to bring before Parliament in one form or another on a future occasion.

Photo of Mr Aneurin Bevan Mr Aneurin Bevan , Ebbw Vale

May I ask the Financial Secretary to the Treasury what proportion of the £1,000,000,000 is to be set aside for the relief and rehabilitation of the areas under the control of any of the United Nations? Has any estimate been formed of that proportion? We are asked to swallow a global sum of £1,000,000,000 and I should like to know whether it would be possible for the Financial Secretary to break it down from that indigestible figure and give the proportion which the Treasury proposes to set aside for the purpose I have already stated.

Photo of Mr Ralph Assheton Mr Ralph Assheton , Rushcliffe

I should like to say first, in answer to the point raised by the hon. Member far Southampton (Mr. Craven-Ellis), as I said in reply to my hon. Friend the Member for East Stirling (Mr. Woodburn) the other day, that that is a point with which the Chancellor of the Exchequer, or I, hope to deal before long. With regard to the points raised by the hon. Member for Ipswich (Mr. Stokes) and the hon. Member for Maldon (Mr. Driberg), those will be borne in mind.

Photo of Mr Ralph Assheton Mr Ralph Assheton , Rushcliffe

In regard to the question raised by the hon. Member for Ipswich, we did have a discussion on that on the Motion for the Adjournment. I am sorry the hon. Member did not take part in it, but there was the opportunity. I do not think the Committee would want to pursue that particular aspect on this occasion. As to the question raised by the hon. Member for Ebbw Vale (Mr. Bevan), the House was informed at the time that the estimate for U.N.R.R.A. was £80,000,000, and, of course, this Vote of Credit for £1,000,000,000 will cover whatever portion of that is necessary, during the time this £1,000,000,000 runs.

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

It seems to me that we should be in Order in discussing whether the Vote of Credit is really necessary for the conduct of the war during the period in question and that this is a subject which might very well be debated. It has never yet been debated whether the expenditure is necessary or not. I venture to say that no one who has had such an intimate acquaintance with these matters as I have, has any doubt but that, of the £1,000,000,000, at least £200,000,000 will be poured down the drain. Where there is no wages policy, no proper contract policy, for the supply of munitions, the waste is certainly not less than 20 per cent., and I do hope that, at some time, the House of Commons will pull itself together and realise what it is here for, which is not to go on voting enormous sums of money and preparing a time of the greatest privation for our people after the war, but to examine how that money is spent and what sort of control there is over the spending of it.

May I put a small case in point to show the way our expenditure is run? One check upon expenditure on munitions by a certain Department is a system of cost accounting. What it amounts to is that an efficient firm takes on a contract for goods at, say, £1,000 apiece. The contract is also let out to other firms who, being inefficient, are charging £1,1000, Cost accountants are sent in by the Department. They discover that the efficient firm, charging £1,000, is making a considerable profit owing to its ing is not making any profit at efficiency, but the inefficient firm, chargall and, therefore, they reduce the price of the efficient firm to £900 and raise the price of the inefficient firm to £1,200. And that, incredible as it may appear to Members of this Committee, is the way this costing system works. This is the so-called check upon unnecessary' public expenditure whereby every inefficient firm in the country is favoured at the expense of the efficient ones.

Another point is the method of payment by which the material and the wages costs are taken and then a per centage on the aggregate wages paid is allowed for standing charges. We find, in one case, that the standing charges come to over 300 per cent. on the inflated wages already being paid. In many munition works, the wages paid are vastly inflated and out of all proportion to the value of the product received for those wages. When you get wages inflated on a job to the extent of, perhaps, 100 per cent. and then 200 to 300 per cent. is allowed on wages costs for the standing charges of the firm, you get a state of affairs which I can only describe as a scandal to this country and a disgrace to that Department which ought, really, to control national expenditure and see that the money is not, as I have said already, poured down the drain.

Photo of Mr Arthur Molson Mr Arthur Molson , High Peak

May I ask the hon. Member a question? If he has all this information available, has he ever appeared before the Select Committee on National Expenditure with it?

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

No. We know from experience that if anybody takes up a scandal with that Committee, somebody in authority stops it.

Photo of Mr Oswald Lewis Mr Oswald Lewis , Colchester

I was rather sorry to hear the Financial Secretary say that he was going to take a note of what was said by the hon. Member for Ipswich (Mr. Stokes). I hope he will pay not attention to it. It is true that there are great popular misconceptions as to the effect of war savings weeks, but they do serve one extremely important purpose. They encourage people to save. They induce people to save who have never saved before and those savings will prove, in the future, one of the chief weapons in our armoury against inflation. Savings are of first-rate importance, and I hope the Treasury and the Government will not be deterred from encouraging these war savings weeks.

Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

As my next door neighbour the hon. Member for Colchester (Mr. Lewis) has challenged me, may I say that I have never discouraged savings, but I have discouraged the humbug "put over" on the people that by saving their money, they produce new tanks. The hon. Member knows that is the case. My complaint is that the Chancellor will not set out on an expedition of truth to the people, explaining the importance of saving and explaining that it does not make the slightest bit of difference whether they subscribe to these ridiculous funds or not, so long as they put their money on deposit in the bank and leave it there.

I want to say a word in support of my hon. Friend the Member for Mossley (Mr. A. Hopkinson) though, probably, he will not like my doing so. It is on the question of the shocking waste of public funds in manufacturing. The Committee will forgive me if I refer particularly to tanks. This is a straightforward statement of fact about which the country is not allowed to know. Those who know anything about the manufacture of these vehicles, know that, not £200,000,000, but at least £500,000,000 is wasted in producing tanks and, then, when we protest in the House, we are forced into a secret Debate so that the country shall not learn the truth. The only reason for the secret Debate was to defend the Government. I did not learn anything then I did not know before. I cannot refer to what happened in the secret Debate, but the whole object was to cover up the appalling fraud perpetrated on the people by the incompetence of the so-called technical experts in the Ministry of Supply. Those people are more fit to be in charge of perambulators than of tanks. The country should know that practically brand-new tanks to-day are being cut up for scrap. At the time they were made, it was known that they would never be used in battle. Recently, I visited a tank unit where a certain tank was still having mounted on it a particular gun mounting, which was never intended to take a gum. The gun mounting was solemnly put on to the tank and the tank was delivered to the unit, and the unit dismounted the gun mounting at once.

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

There is no need to confine that sort of thing to tanks. I know instances of aircraft being manufactured and then smashed up again.

Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

I could keep the Committee entertained about many such things, but tanks are of much more general interest. I submit that the Government ought to agree to a full and proper inquiry into the wastage that has gone on behind closed doors. We ought to be told where the incompetents are and, as the soldiers say, "root out these inefficient devils and destroy them."

Photo of Mr Morgan Price Mr Morgan Price , Forest of Dean

I do not wish to take up the time of the Committee, but I feel that I must say something in connection with the remarks of the hon. Member for Mossley (Mr. A. Hopkinson). If I understood him aright, he made certain statements in regard to waste of public money in connection with contracts. I happen to be a member of the Select Committee on National Expenditure which has issued Reports from time to time and, I think, if the hon. Member had read those Reports, he would have seen that there is no very widespread wastage going on. The Committee has certainly set its face very much against the cost-plus method of accounting, which had been allowed in the early stages of the war and which led to a great wastage of money. Such contracts are now going on only in certain circumstances.

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

What is the essential difference between the cost-plus system and a fixed percentage on the wages?

Photo of Mr Morgan Price Mr Morgan Price , Forest of Dean

Methods have been introduced, whereby provisional contracts are made and, meanwhile, costings are introduced, and if they are found to be lower than the original cost, they are reduced. If the hon. Member had read the Reports, he would have seen that that is going on on a very large scale. I do not think he has any right to make such wild statements.

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

The hon. Member for the Forest of Dean (Mr. Price) is accusing me of making wild statements. I can give him chapter and verse in connection with my own concern, of everything I have said in my speech.

Photo of Mr Morgan Price Mr Morgan Price , Forest of Dean

I object to the very wild statement that great wastage is going on. One other point. The hon. Member for Mossley intimated that war workers are earning excessive wages. That is not the case at all. On that, too, there have been investigations and I, personally, have been over a certain munition works where we specially asked to see the wage, sheets in order to find out whether there were any such cases of boys earning £10 a week which is the sort of thing we hear being said. Where large wages were being earned it was always due to long overtime work and Saturday and Sunday work and, generally, wages are not anything like what is suggested in the speech of the hon. Member. Those are the only points. I wish to make.

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

I did not say that wages were universally high. I said that in many instances wages in munition works are vastly inflated. The hon. Member for the Forest of Dean (Mr. Price) said that he visited one munitions works and looked at the wages sheets. I would ask him what authority he is on the question whether wages are high or not?

Question put, and agreed to.

Resolved: That a Supplementary sum, not exceeding £1,000,000,000, he granted to His Majesty, towards defraying the expenses which may be incurred during the year ending on the 31st day of March, 1945, for general Navy, Army and Air services and supplies in so far as specific provision is not made therefor by Parliament; for securing the public safety, the defence of the realm, the maintenance of public order and the efficient prosecution of the war; for maintaining supplies and services essential to the life of the community; for relief and rehabilitation in areas brought under the control of any of the United Nations; and generally for all expenses, beyond those provided for in the ordinary Grants of Parliament arising out of the existence of a state of war.

Resolution to be reported To-morrow; Committee to sit again To-morrow.