in one year went to the benefit of that Department in another. This £500,000 was to be invested in this way: The War Office was investing its savings in a loan made by the Public Works Loans Commissioners, and if things continued as at present the War Office would receive for the next ten or twenty years a sum of £28,000 a year, which would never appear on the Estimates, but which would be at the disposal of the War Office. If, on the other hand, the right hon. Gentle man did as he proposed to do, and abolished the Volunteers, and did away with the Capitation Grant, the War Office would still be in the same position so far as the receipt of that sum was concerned The result of such a transaction would be that the right hon. Gentleman would be able to carry a Bill through the House of which the apparent cost would be £500,000 less than the real cost. He was the last person in the world to be out of sympathy with the War Office, and no one was more in favour of the Vote for the War Office than himself. At the same time it was as well that the House should know what it was doing, and he submitted that the transaction now sought to be sanctioned was absolutely without precedent. *MR. BOWLES (Lambeth, Norwood) said the Secretary of State for War had told the House that this was a proposal with which they ought to agree, because although it was true that the £500,000 would be diverted from the old Sinking Fund and the extinction of Debt, that it would nevertheless be applied to the extinction of debt through some other channel. He thought the right hon. Gentleman was mistaken. The matter was extremely simple. The War Office having saved this money, it should in the ordinary way go to the old Sinking Fund. The right hon. Gentleman now asked them to intercept the money on its way to the old Sinking Fund, and turn it over to the War Office. What was the right hon. Gentleman going to do with the money when he got it? He was going to pay it to the Public Works Loans Commissioners. And what were they going to do with it? In Section 17 of the Public Works Loans Act, 1875, it was laid down in the plainest language that every halfpenny of money which the Public Works Loans Commissioners received, applicable to wards the discharge of any loan which they had granted, was to be turned over not to the National Debt Commissioners, as the right hon. Gentleman appeared to suppose, for the extinction of the National Debt, but was to be paid to the receivers at the Exchequer, to be carried to the Consolidated Fund. He did not know whether the right hon. Gentleman had considered that fact. Not one farthing of the Debt was extinguished at all, in any shape or form. The right hon. Gentleman would no doubt, in the course of the next few weeks, come before the House and take great credit to himself for this half million of money. Its withdrawal from the National Debt would really purchase for the War Office a yearly income of some £28,000 from the Volunteers; and the right hon. Gentleman would no doubt claim that sum every year as an appropriation-in-aid on his Estimates. That was a very different matter from the extinction of the National Debt. He apprehended that what the right hon. Gentleman was asking them to do was to give him half a million of money, and allow him to pay that money through the Public Works Loans Commissioners into the Consolidated Fund, so as to enable him to take credit for £28,000 yearly on the Estimates as an appropriation-in-aid. Not one pennyworth of National Debt was extinguished by this process, which merely transferred another debt in its entirety from the Public Works Loans Commissioners to the War Office. He thought the explanation of the right hon. Gentleman was really misleading, and he hoped he would be able to state in what respect he considered this very remarkable, and he believed unprecedented operation could be in any way said to further the extinction of the National Debt. MR. RUNCIMAN (Dewsbury) said that in cases of this kind, where illegality might exist, the difficulty was got over by the passing of the Appropriation Act, which, as the hon. and learned Gentleman opposite knew, overrode other Acts. Any Act could be overridden by the Appropriation Act, and transactions which were illegal without it, became legalised by the passage of that enactment. The hon. Member for Norwood held the view that no debt had been extinguished. MR. BOWLES: National Debt. MR. RUNCIMAN said if the interpretation of the hon. Gentleman opposite were correct, he was quite sure that the consent of the Treasury would not have been given to the transaction. It had been described from various points of view, and there were points of view from which it could be made to appear very different. His right hon. friend had not put a large sum of money in his pocket; he had not added to the resources of the War Office to the extent of £458,000. What had happened was that the right hon. Gentleman had taken over the debt due to Public Works Loans Commis sioners, who could make use of the transfer to extinguish some of the local loan stock or to make an issue under that fund, and pro tanto they did reduce the public debt of the country. Did the hon. Gentleman mean to say that they were not guarantors for the Public Works Loans Fund? To that extent they had reduced the amount from which the national credit was used. What had happened with regard to the War Office? The hon. and learned Gentleman misun derstood the transaction. He appeared to think that the £28,000 was to disappear. It would not disappear; it would appear every year on the Votes as an appropriation-in-aid. Next year they would have on the Vote £28,000, which otherwise would have had to come out of their pockets. If his right hon. friend's scheme went through, it was his intention to cancel the debt, so far as the Volunteers ware concerned. The effect of the transaction was that instead of providing the £458,000 next year he had provided it this year. [OPPOSITION cries of "Hear, hear."] Yes, that was so; his right hon. friend did not incur indebtedness, and then have the indebtedness hanging over his shoulders for some time; he dealt with it when he had the opportunity, and he did it in a way which left the national indebtedness in the same position. As a matter of fact his right hon. friend would not have been able to carry through this transaction if he had not had savings out of which to do it. Savings on the Army Vote, he knew, were rather unknown, and not very largely within the experience of the hon. Gentlemen opposite. He would like to know what was their object in opposing this transaction. Was it because they objected to the amount going to the Volunteers? ["No."] Ah, what new found virtue! Let this transaction be compared with some transactions in times past. In 1895-6 the surplus revenue of £4,200,000 was set apart by right hon. Gentlemen opposite for what? For the extinction of the National Debt? Oh, no-for Naval works. In 1897-8, the surplus revenue, amounting to £2,473,000 was set apart to be applied by the Treasury to Military works. In 1899, out of £3,678,000, the sum of £2,550,000 was applied to purposes of the Public Buildings Expenses Act, 1898. So that this newfound virtue came rather late in the day. When right hon. Gentlemen opposite were responsible for the finances of the country they used such money for current expenses; and now when they had a chance of making a small Party point they made this objection in order to throw an obstacle in the way of a scheme which they dare not openly oppose. [OPPOSITION cries of "Oh."] The attacks which had been made upon the transaction were utterly unfounded, because it left the national credit in just as strong a position as before, and at the same time facilitated the Army scheme which his right hon. friend had laid before the House. MR. VICTOR CAVENDISH (Derbyshire, W.) said the hon. Member had entirely failed to appreciate the point, which was whether this procedure was legitimate in regard to a scheme which had only been before Parliament for a few days, and had not even been read a second time; and which, it was admitted, that even if passed, could not be perfected for several sessions. was at the Treasury every effort was made both from a Parliamentary point of view and certainly from a financial point of view to do everything possible to diminish, if not to destroy, Supplementary Estimates. The right hon. Gentleman had already taken means to finance this proposal out of sums of money voted by Parliament for other purposes. It had been always of recent years laid down that if there was to be a Supplementary Estimate at all, it ought to rest on some plea of urgency. Proof of that was to be found in the Supplementary Vote for the recent explosion at Woolwich, which was a perfectly justifiable Vote. What was the urgency in this matter? There ought to have been a new item appearing under the Volunteer Vote for the year 1907-8. That would have put the matter perfectly in order, and the House would have been capable of dealing with it on its merits, apart from the complication of a Supplementary Estimate. He still thought the House was entitled to have some better reason for the necessity and the urgency of the right hon. Gentleman's financing himself in the manner now proposed. There might be reasons for the hurry, but the House had not been told what they were. The Secretary for War said that the money was available, and that this was a good way of using it. He did not think there was one departmental Minister who would not be delighted to welcome the precedent, but he hoped the House would not allow such a precedent to be established. *MR. LEIF JONES (Westmoreland, Appleby) thought the criticisms made by hon. Gentlemen opposite were in a great measure justified. If hon. Members would read the Report of the Public Accounts Committee last year they would see that these surpluses were very jealously watched, and they had always tried to secure them for paying off Debt. He did not think sufficient reason had been given for not paying off some of the National Debt with this surplus. Instead of paying off Debt the War Office made an investment. Either they were going to get £28,000 a year for the investment, in which case they would have an appropriation - in - aid which would diminish the Estimates, or they would not get the amount stated, and in that case there would be no appropriation-in-aid, but also there would be no expenditure under this head in Army Estimates. What was the objection to putting the sum on the year's Estimates? He was not saying a word against the scheme itself. The better the scheme, the less justification there was for what was now proposed. The House did not grudge money for good schemes. The danger was of spending money too freely. The criticism which had been offered in regard to the Government action was sound, and the Government would do well to lay it to heart. This method of using surpluses for fresh expenditure which had not been sanctioned by Parliament MR. WALTER LONG: The Financial Secretary to the Treasury made a speech which, I venture to say, will be read with some consternation by the members of the Treasury. I have had many years experience as the head of more than one Department, and I can say that not only have the Treasury carried out with severity their rule in regard to the use of surpluses, but they have gone a great deal further; they have impressed upon the various Departments that money which stood over at the end of the year must not only not be used by a Department for their own advantage, but that it should not even be held to the credit of the Department. When I have dwelt upon the fact that we have effected economies which ought to be held to our credit, the Treasury have come down as purists in economy and pointed out that we could found no claim on that fact. The Financial Secretary to the Treasury in this case quoted what happened when we were in office in regard to the use of surpluses for certain purposes. The hon. Gentleman knows perfectly well that in regard to the redemption of the National Debt by automatic process there are two opinions held not only by Members on this side of the House, but by hon. Gentlemen opposite as well. Each of these opinions has its supporters and opponents on both sides of the House irrespective of Party, and when the hon. Gentleman tried to suggest that this was a new-found virtue on our part, he entirely forgot that, on each of the occasions to which he referred, when money was used both for naval and for military purposes, the most determined critic of that action of ours was the late Sir William Harcourt. I venture to say that there is not a man now sitting on the other side of the House who, if a Member then, did not cheer him and agree with his criticism. Now, right hon. Gentlemen are compelled by force of circumstances to defend a policy which The when sitting in opposition they vigorously versity are well founded. This is condemned. All I can say is that so far entirely without precedent, and the not only has there been no defence on the Government will find that in future the part of the Government, but they have heads of Departments will rely upon not attempted to address themselves to this as a very useful precedent to enable the charge which we make. The them to lay their hands on money which Financial Secretary to the Treasury says otherwise would go to the reduction of that we are attempting in this way to the National Debt. When we are asked attack the measure in regard to Army to look upon this as a natural proceeding, re-organisation which we are afraid to because, as the Financial Secretary to the attack openly. He had no right to make Treasury said, if you do not reduce the that observation, for the simple reason National Debt, you will reduce the that the policy to which he refers has national indebtedness by the process he only been disclosed to us in the speech of describes, I can only say that the Secretary for War. Does the that is begging the question. Financial Secretary to the Treasury Act of Parliament provides for the expect that we should attack the whole reduction of the National Debt; it does policy on hearing the first explanatory not make provision for the reduction of statement of the Secretary for War? local debt in the way here proposed. We have not reached the Second Read- [Cries of " Divide."] I do not wonder that ing stage of the Bill, and I would hon. Gentlemen opposite wish to divide. respectfully suggest to the hon. Gentle- It is not the first time in the last fortyman, who has not had so much experience eight hours that the Government have in these matters as some of us, that he endeavoured to show that what they said had better not count his chickens before was black before is white to-day. They they are hatched, and before the Govern- feel that their withers are wrung, and they ment has given us an opportunity of wish to escape from the situation. They attacking their proposals. We are not will find that they do not meet difficulties attacking the application of the money of this kind by saying "Divide." I or the scheme which the money is believe that the course taken by the intended to assist. What we are attack- Government will form a very grave ing is the way in which the Goverment precedent, and that it will lead to are making this departure from well- difficulties both for themselves and their established practice. What we are attack- successors. ing is the attempt on the part of the Government to do what, if we had done it, they would themselves in opposition have denounced as unconstitutional and improper. I believe that the remarks of the hon. Member for Cambridge Uni- Noes, 51. (Division List No. 42.) Question put. The House divided:-Ayes 208; Ainsworth, John Stirling Allen, A. Acland (Christchurch) Armitage, R. Astbury, John Meir Baker, Sir John (Portsmouth) Baker, Joseph A. (Finsbury, E. Balfour, Robert (Lanark) Barker, John Barran, Rowland Hirst Barry, E. (Cork, S.) Bellairs, Carlyon Benn, SirJ Williams(Devonp'rt) Birrell, Rt. Hon. Augustine Mr. Walter Long. Cory, Clifford John Brunner, J.F.L. (Lancs, Leigh) Cotton, Sir H. J. S. Buchanan, Thomas Ryburn Burns, Rt. Hon. John Burnyeat, W. J. D. Buxton, Rt. Hn. Sydney Chas. Causton, Rt. Hn. Richard K. Coats, Sir T. Glen (Renfrew, W. Cowan, W. H. MacNeill, John Gordon Swift M'Laren, H. D. (Stafford, W.) Manfield, Harry (Northants) Meehan, Patrick A. Micklem, Nathaniel Montagu, E. S. Mooney, J. J. Morrell, Philip Morton, Alpheus Cleophas Nicholson, Chas. N. (Doncaster Norton, Captain Cecil William Nuttall, Harry O'Brien, K. (Tipperary, Mid.) O'Donnell, T. (Kerry, W.) O'Kelly, Jas. (Roscommon, N.) Power, Patrick Joseph Price, C.E. (Edinb'gh, Central) Redmond, John E. (Waterford) Richards, Thomas (W. Monm'th Roberts, Chas. H. (Lincoln) Robertson, SirGScott(Bradf'rd Robson, Sir William Snowdon Runciman, Walter Samuel, Herb. L. (Cleveland) Simon, John Allsebrook Smeaton, Donald Mackenzie Smyth, Thos. F. (Leitrim, S.) Straus, B. S. (Mile End) Taylor, Austin (East Toxteth) Ward, John (StokeuponTrent) Wason, Eugene (Clackmannan) White, Patrick (Meath, North) Whitehead, Rowland Whitley, John Henry (Halifax) Whittaker, Sir Thomas Palmer Williams, J. (Glamorgan) Williams, Osmond (Merioneth) Williamson, A. Wilson, Henry J. (York, W.R.) Wilson, J. W. (Worcestershire, N. Wilson, P. W. (St. Pancras, S.) Winfrey, R. TELLERS FOR THE AYES-Mr. Whiteley and Mr. J. A. Pease. Anson, Sir William Reynell Balcarres, Lord Banner, John S. Harmood Barnes, G. N. NOES. Gibbs, G. A. (Bristol, West) Gill, A. H. Glover, Thomas Goddard, Daniel Ford Richards, T. F. (Wolverh'm't'n Roberts, G. H. (Norwich) Rothschild, Hon. Lionel Walter Shackleton, David James Thomson, W. Mitchell-(Lanark) Thornton, Percy M. Walker, Col. W. H. (Lancashire Walrond, Hon. Lionel Walsh, Stephen Wilson, W. T. (Westhoughton) Younger, George TELLERS FOR THE NOES-Sir Frederick Banbury and Mr. Rawlinson. |