CUTTING DOWN EXPENDITURE ; OR, HOW TO ACHIEVE THE IMPOSSIBLE.
" Vous avez pour principe d'achninistration, que l'argent n'eet rien, tandie qu'au contraire, dan,8 lee circonetancee o& nowt FOMMC8, l'argent eat tout."*—(ntrotEort to the Ministry of War, May 29th, 1815.) THE prime duty of the House of Commons is to see that the people of this country are not over-taxed. They must make sure that not one single penny more than is required for the work of the Government is taken from the people. Further, they must make sure that the money is raised in the way which least interferes with the economic) interests of the nation and does not injure or destroy industry. Finally, and arising from this duty, is the dutx of allocating the expenditure of the money raised and of seeing that when raised it is not wasted. But though these are the prime duties of the House of Commons, they are duties which during the last forty or fifty years have been gradually falling into abeyance. The House of Commons, under the stress of a highly organised party • Your principle of administration is, money is nothing ; whereon, on till contrary, in the circumstances in which we are, money is everytWng. system, has almost forgotten its chief functions. At the present moment the ordinary man looks upon the House of Commons as a body whose first business it is to choose the Prime Minister, who in turn chooses the Executive Government, and, if needs be, to dismiss him and his colleagues. After its choice has been made and till the moment for dismissal comes—that is, till the moment that the Prime Minister and his Cabinet have lost the confidence of the country—Parliament accepts, almost as a matter of course, the proposals for levying taxes and the manner in which they shall be raised and expended. Indeed, it is not too much to say that the Prime Minister demands that the confidence which the House of Commons has expressed In him must be shown by passing at his request any financial scheme the Ministry puts forward. " You placed us in power because you thought we should carry out the policy you desire. But policy means the expenditure of money, and we cannot, as your servants, give you your policy unless you vote us the money which we have come to the con- elusion is required for that policy." Thus by a process apparently sound and logical the House of Commons has been deprived, or almost deprived, of its financial functions by the Cabinet. It still, no doubt, retains a certain amount of power in the matter of law making, but even here on great and important matters it registers the decrees of the Cabinet rather than takes a direct part in the business of legislation. Though the House of Commons now only exercises its financial functions through the Ministry which it chooses, and has lost direction and initiative, its powers over finance still remain intact and can be revived. It is our belief that the present grave crisis in national affairs, especially on the fiscal side, requires that the House of Commons should once more assume a direct financial responsibility. To cut a long matter short, we hold that the House of Commons, rather than the Executive, must carry out that financial scheme for rationing the Government and rationing the departments which we hold is the only method of restoring and maintaining the commercial prosperity of the nation, and saving us in effect from ultimate bankruptcy and ruin. We do not want to upset the constitution of the country, we do not want to deprive the Cabinet of the power to shape its policy, to prevent it introducing legis- lation, and administering the affairs of the nation at home and abroad. Again, we fully realise that policy means, and must always mean, the expenditure of money, and that you cannot carry out your policy unless you have the power within limits of spending money. It is in view of these facts, and because we do not want to revolutionize the constitution in order to avoid revolution, that we do not propose an alteration in the scheme of Government, but merely as a temporary measure to erect beside our executive Government machinery for limiting expenditure. To put it in another way, we do not want to constitute the persons of the new machinery a kind of second executive, to found in fact a sort of diarchy, but merely to make these persons, whom we might liken to trustees put in financial charge of a semi-bankrupt business, bring home the actual facts of the financial case to the executive, and to see that they, our rulers, do not forget or put aside these essential facts. As every man who looks into the matter knows, only a certain amount of money can be raised from the tax payers without destroying industry or preventing its development. This sum, this £X,000,000, is clearly the maximum that we have got to spend. But where the peril of a mistake is so great we must be well on the safe side in fixing that maximum.
The trustees will in fact say : " It is for you, as the persons appointed by the House of Commons, to administer the nation, to settle questions of policy, and to govern in detail. We do not propose to encroach upon these matters. All we are commissioned to do is to tell you plainly how much money there is to spend. It is for you, now that you have ascertained the size of the piece of cloth, to cut your coat accordingly." This is the main principle. In practice the trusteea should, we hold, further allocate the money available, and under certain great heads. For instance, they could not allow the executive Government, even if it wanted to do so, to allow the payment of the interest of the National Debt to get into arrears, because they, the Government, wanted to have a more spirited policy abroad or because they wanted to spend more on some alleged public necessity at home. Again, a rationed Government could not be allowed to spend all the money, as it were, in socialistic cakes and ale, and forget the need for national security, that is, national defence. Subject; however, to these considerations, the Government, though they must be given a maximum, should, under the general supervision of Parliament as now, be permitted to save in one direction in order to spend more in another, and to present their estimates accordingly. Further, they should be allowed, as now, to vary, and if possible improve, the methods of taxation.
To translate all this into a concrete form the House of Commons should, in our opinion, first lay down certain general principles in resolutions. As a result of these resolutions a small committee should be appointed—we would not have more than five members—and they should be chosen not because this or that man demanded to be present as a representative of this or that party; but solely for their good sense and financial knowledge. But here again expert financial knowledge must not be preferred to general wisdom. Even in matters of finance it is far better to have a man of sound judgment than an expert at figures. In finance, as in other matters, the final questions are in their terms simple enough. It is the power of choice and of judgment that is required, and not learning. it is only in the lower walks that the technical knowledge is required. This standing committee of Parliament should act as national trustees whose business it should be for a fixed period, say three years, to regulate the financial affairs of the nation, pull them together and get them on to a firm basis. We do not propose that these trustees, whose duty it would be to ration the Government as a whole and to some extent to allocate the money rationed, should have a huge new public department erected for them at the cost of several hundred thousands a year. On the contrary, we would give them the very smallest amount of machinery. They would have the right, of course, of calling for information and assistance from all the departments and of asking questions, and of insisting on getting the correct answers, but their work should largely be done for them on requisition. Almost all the facts they require are already chronicled and assembled. What is needed is not more knowledge so much as the moral force, the will-power, to use that knowledge. In our opinion, if each of these trustees had a private secretary, or, if you like, an official deputy, and a small mechanical staff of shorthand writers and typists, they would not only add very. little to the burden of the taxes, but would be far freer in doing their work. They would have time to think and not be choked with paper and drowned in ink. We want the trustees to think and to act, not merely to write or collect statistics. We want them, indeed, to be proof against St. Just's anti-bureaucratic jibe—" They think too little, and they write too much." One thing it would be essential for the trustees to remem- ber : they must never let themselves be drawn into a discussion with any department of Government as to where or how savings can be made. That way failure lies. If they once were to try and do that they would, of course, become responsible for policy. What they must always have in their minds and on their tongues is something like the following : " We do not know and shall not attempt to say how the money is to be spent in detail or where economies can be made. All we do is to bring to the attention of the executive the stern, hard, unsurmountable fact that there is only 1X,000,001) a year to spend, and further to make them realise in public affairs what they all realise in private—namely, that if you have only a fixed income and you spend a quarter of it on a motor-car, you have only three quarters left for housekeeping and other expenses. That being so, you cannot indulge in the luxury of saying of any item of expenditure, ' We must have this or that, whatever happens.' The only way in which we can help you is to see that you pay the interest on your debt and do not let the essential welfare of the nation suffer by leaving it unguarded. Within these limits it is you, not we, who must decide how expenditure can be reduced in one place in order to allow it to be increased elsewhere. We shall not say you are spending too .much upon education, or bureaucratic machinery, or subsidies to hous- ing, on red coats for the soldiers, or even upon administering Mesopotamia or Palestine, or on levying war upon Turkish Nationalists or Russian Communists, or, finally, on attempts to bribe Irish Sinn Feiners to exchange the delights of shooting policemen in the back or intriguing with Germans or Bolsheviks for the glories of a Dublin Parliament. That is all policy, and we leave it to you. We are merely the financial skeletons at the feast who remind you of the day of audit."
It may perhaps be said that the Government would manage to get round a scheme like ours, and that we should still find a vast waste of money. We do not think so—provided the trustees did their duty, as we believe they would do. We believe that when they looked into the matter, as of course they must do, they would find, as Mr. McKenna tells us, the fact that taxation has already passed the limit of safety, and that, considering our com- mitments and the possibilities of a trade depression arising in the next three or four years, we must at once reduce the sum that can be allocated to expenditure by a hundred or possibly a hundred and twenty millions—Mr. McKenna puts the maximum sum which we can afford to raise by taxation at £1,000,000,000. The cutting off of a sum like a hundred and twenty millions, and the knowledge that they could get no more, would at once force the Govern- ment to carry out financial reforms which now seem im- possible. No person, either in public or private finance, ever cut down expenditure for the pleasure of it. It is only grim necessity that can make people retrench ; though, curiously enough, six months after the tooth is out they find to their astonishment that the things they thought absolutely essential were really non-essentials. We do not, of course, pretend for a moment that our scheme is a final or a perfect scheme. On the contrary, we are quite sure that our proposal could easily be bettered in detail. What we are convinced about is that the Government as a whole must be rationed, and that after that the Government itself must ration its own depart- ments and sub-departments as experience and policy demand. Unless that double rationing is done and earned out with the knowledge and belief that in the policies of great nations finance always says the last word, we shall never get through our troubles. Napoleon was a soldier, and yet he realized this fact, for did not he use the words which we have placed at the head of this article ?
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