SUPPLEMENTARY ESTIMATES

§ Captain Crookshank (Gainsborough)

I beg TO move, to leave out from "That" to the end of the Question, and to add instead thereof: this House, while bound by commitments entered into and payments already made, in anticipation of Parliamentary sanction, during the lifetime of its predecessor, deplores the failure of the Chancellor of the Exchequer to enforce his own instructions to Departments not to overspend so extensively their Estimates for the current year. My first words must be to express regret that my right hon. Friend the Member for Bristol, West (Mr. Stanley) is not well enough, though present, to take part in this Debate, and also that this Debate is unlikely to be graced with the presence of the right hon. Member for Colne Valley (Mr. Glenvil Hall), whose disappearance from our financial Debates we, on this side of the House, very much regret. Some day, perhaps, we will know the explanation. We recognise that in him we always had a most courteous opponent who went out of his way to try to solve some of the difficulties with which he was faced, and had a pleasant smile when he did not know the answer. When he did, he put up a very strong case on behalf of his leader.

Having said that, I should like to remind the House that on 24th October, the Prime Minister came down and announced the economies which he and his colleagues considered necessary to deal with the devaluation crisis, which was, of course, by no means the first financial crisis that we had had since the advent of the Labour Government. Of all the prophecies the Chancellor of the Exchequer has ever made, the one which has undoubtedly come out most accurate was that in which, 917 years ago, he told us that he could not imagine the Labour Party coming into power without a first-rate financial crisis. Well, we have had a series of them and the devaluation one was the most recent. The Prime Minister came down and told us that the Government had put together a string of economies to deal with it and said: These reductions are related to the anticipated expenditure during the next financial year— That is, after April. But they will be introduced as speedily as possible— This is the point I wish to stress— and will to some extent affect expenditure this year."—[OFFICIAL REPORT. 24th October. 1949; Vol. 468, c. 1020.] The total was to be £90 million. The economies were to some extent to affect expenditure this year. Two days later we debated that statement of the Prime Minister and the Chancellor of the Exchequer again said the same thing: Some can be put into effect at once. And later on: We cannot, of course, expect this programme of economies to come into full effect in the current financial year, but it will be fully effective in the next financial year."—[OFFICIAL REPORT, 26th October, 1949; Vol. 468, cc. 1344 and 1345.] It would not come into full effect in the current year but obviously something was to happen.

Then the Chancellor concluded his speech with the famous peroration, which no doubt has been echoed time and time again during the recent election, in which he pointed out that no devaluation or economies or any other Government action would be of any use unless we all collectively and severally played our part. He said: We are not out to fight one another to see who can get most; we are all fighting together… There was not much sign of that last month. I thought we were fighting against each other. We were all to fight together as a team for the survival of a way of life, and these economies—that is, the £90 million of which some were to come into effect this year— like devaluation, are a prelude and no more to a new surge forward to conquer the hard currency markets without which our standards, our standards of living, indeed, our civilisation 918 itself, must fade and wither away."—[OFFICIAL REPORT, 26th October, 1949; Vol. 468, c. 1353,] All this was to be the result of the first step taken in economies in public expenditure. And just to make quite sure that it only was the first step, the Lord President of the Council the next day came down from the heights of the peroration and told us: We have made the present instalment of cuts to serve notice on everyone, inside and outside this country, that the Government mean business about economy, but it would be quite wrong to assume that economy begins and ends with the cuts announced by my right hon. Friend. … Anyone who imagines that the present list represents the end of the Government's efforts to achieve economies is going to be undeceived before long."—[OFFICIAL REPORT, 27th October, 1949; Vol. 468, cc. 1554 and 1555.] So that by the time the Debates of October were finished, we had built up this great picture of the vital necessity for public economy, of cuts already made—admitted, according to the Prime Minister, that they would only take effect to some extent this year, admitted by the Chancellor that they could not take full effect during this present year, but also admitted by the Lord President of the Council that they were merely a prelude to something more. That was at the end of October. Then silence. Nothing about it during the election but, on 6th March, the Estimate of £148,402,365 first presented to this honourable House for payment.

That is a staggering bill in itself, quite apart from the fact that it followed all the talk in October about the needs and the intentions of the Government to set about dealing with public expenditure. A staggering bill. Added, of course, to an earlier list of Supplementary Estimates in the region of £22 million. After all, this represents something like a shilling in the £ of the standard rate of Income Tax and it is this and allied problems that we wish to discuss today by putting down this Amendment. If the Lord President had not been quite so definite last week that there could be no general financial Debate before Easter, this Amendment might not have been put down, but he was unwilling to give us an opportunity and, therefore, we have sought it within the rules of procedure now open to us.

The Government knew long ago that a great big bill was bound to be presented 919 this spring. This money has not all been spent since the beginning of the Christmas Recess. By the end of the year it must have been quite obvious that a big bill was coming along. Last year the Supplementary Estimates were presented on 3rd February. Of course, it could not have been done as early this year since there was no Parliament, and they were presented at the earliest moment. However, I must say that it is coming a little near suppressio veri on the part of the Government to have a general election campaign and not to give any warning that these great bills were in the drawer awaiting the declaration of the poll. I have no doubt that some of my friends, as I did myself, warned audiences that this would happen but, of course, warnings from the official Opposition are very different from statements of facts, as they might have been, from the Government themselves.

However, here we are on 14th March, the first day on which matters of this kind could be raised, the Address in reply to the Gracious Speech having been passed. Owing to the lateness of the season—which arises from the date of the General Election—there is the fact that these commitments have been entered into and, indeed, largely paid, a great proportion out of the Civil Contingencies Fund. Obviously, at this stage this House can do nothing but feel itself bound to pass them.

Forty different votes—40—asking for supplementary grants. What is remarkable is that out of those no fewer than 12, and some of them for large sums, have already drawn much, if not all of what is required from the Civil Contingencies Fund. It is obvious that today—or, indeed, on any day between now and the end of the financial year—we cannot discuss all 40 of those Votes because there is not the time, though naturally we would reserve any rights we have in this matter. That is why I have moved this Amendment, because we want to, point out to the House, and through the House to the country, the failure of the Government to do anything like what they should have done in pruning public expenditure, which they promised to do as recently as October.

Before I come to my main theme, I want to make this remark. During the last Parliament we reformed to some ex- 920 tent our handling of Supply days and of Estimates. In the old days Supplementary Estimates were not part of Supply Days; special time had to be found by the Government for them, and each Vote had to be put separately from the Chair. As we all know, it led at times to discursive and detailed debate. The Select Committee on Procedure decided to abolish that, to increase the number of Supply days, and to make the Supplementary Estimates come within their ambit. I am not so sure, on reflection and in view of the experience both of this year and of last year, that the House was entirely right in doing that. I will say why.

The knowledge that the details of administration—not of policy, because policy is not open to Debate on Supplementary Estimate discussions—if a Supplementary Estimate were produced, would have to be explained and argued before the House was certainly a great deterrent to Ministers and their Departments in producing Supplementary Estimates at all. In those days, not so long ago, it was considered, I will not say a disgrace, but a very bad mark on any Department to have to produce a Supplementary Estimate; a bad mark from the Chancellor because they wanted more money, a bad mark from the Chief Patronage Secretary because they wanted more time. Under this new system, rolling up Supplementary Estimates into Supply days, the House has lost something of its control.

The second mistake that I think that we did in the last Parliament was when in 1946 we enormously increased the amount of the Civil Contingencies Fund. My right hon. Friend the Member for Bristol, West, at that time pointed out the risk that was inherent, because, he said, if Departments come along and have spent the money out of the Fund instead of coming here ahead of time for a Supplementary Estimate, to that extent our powers of criticism are somewhat reduced.

It may be that this new Parliament will have, or will desire, to look into this matter again. Be that as it may, the effect is that under the new system we can, on the Motion that Mr. Speaker should leave the Chair, raise rather wider issues than we could on any particular Estimate; and in the Vote which comes 921 before us today—obviously, I do not intend and I am perfectly certain nobody else intends, even if it was, which I doubt, completely in order, to go into every single detail—we must obviously take note that in this figure of £148,402,365 there are two or three enormous Supplementary Estimates.

Very nearly £100 million is required by the Ministry of Health and the Department of Health for Scotland. One's only comment about that, I think, is how extraordinarily out these Estimates are and how extraordinarily out they were last year. Of course, last year we all recognised—it was admitted on every side of the House—the difficulties with the new Health Service of making what, I presume, was much more than a guess. One had hoped, however, even then that an intelligent guess would have been within 40 per cent. of the right answer. It was not. That was the margin of mistake last year. This year we find that the mistake is 37 per cent. up. That seems to be a great deal in the second year and I hope that possibly the Minister will be able to give us some explanation.

The Ministry of Health is not, of course, the only big excess. There are the Ministry of Food, the Ministry of Supply, and so on. These big excesses have all occurred in spite of the policy of the Government, because in the Budget speech on 6th April last year the Chancellor made no provision at all for the possibility of any Supplementary Estimates. Before the war there was a time when it was quite normal for Chancellors of the Exchequer to take a small sum, because, whatever happens, something is bound to crop up. It may be a new small item of unimportant policy, or perhaps a new Vote is required, and Chancellors safeguarded themselves, so that the out-turn of their Budget would not be spoiled. by taking something in hand.

The present Chancellor of the Exchequer, much more rigid and austere, does not hold, apparently, with that sort of policy—in fact, very much the reverse, for in his Budget speech he was telling us: Looking at Government expenditure as a whole, I have thought it advisable to issue today a Treasury Circular asking all Departments to review again the expenditure which is likely to flow from the development of existing policies, so that it can be kept within the bounds of what is considered feasible. In par- 922 ticular, I have emphasised that only in special cases, such as, for example, major changes of policy, can any Supplementary Estimates in future be permitted."—[OFFICIAL REPORT, 6th April, 1949; Vol. 463, c. 2084.] Note the words, "be permitted." I think the circular itself uses the words, "will not be allowed." That was the direction given by the Chancellor, presumably with Cabinet authority and that of the Prime Minister, to his colleagues—"No more Supplementary Estimates. No more excesses this year excepting in changes of policy."

§ The Chancellor of the Exchequer (Sir Stafford Cripps)

Special cases.

§ Captain Crookshank

These are the words then used: In particular, I have emphasised that only in special cases, such as, for example, major changes of policy.… Are there other special major cases?

§ Sir S. Cripps

The right hon. and gallant Gentleman cannot have any difficulty in understanding English. One example of a special case is a major change of policy.

§ Captain Crookshank

I want to know what other examples there are besides major changes in policy. If the right hon. and learned Gentleman runs out on a quibble like that, the country and the taxpayers will know where lies the blame. Of course, at that time and ever since everybody assumed that what was meant was that if there was a major change of policy Supplementary Estimates would have to be introduced, but that in the normal run they would not be introduced.

I have looked through these Supplementary Estimates bearing that in mind. I have every desire, naturally, in controversy to be fair to the Chancellor; and I think I am being fair to him. The only cases I can find, however, in this great collection of the 40 Votes, where the change of policy argument or excuse, whatever it is, can be introduced, are these. First, of course, there was all the extra expense which results because of devaluation.

§ Captain Crookshank

The right hon. and learned Gentleman agrees there. That, of course, was not a change of policy; it was nothing about policy at 923 all. It was forced on the Government. It having happened, however, it obviously flowed from that result that Embassies abroad, Foreign Missions, travel and the like and, very likely, some of the goods purchased under the trading services of the supply Departments, would require more money because of the changed value of the pound. For what it is worth, therefore, we will give the Chancellor that one although it was not any great policy move.

Secondly—I am glad that the right hon. and learned Gentleman, apparently, is obliged to me—there is mention of a loan to Burma of £500,000. That is a new item of policy; perhaps it will be explained. There is another £600,000, which appears to be some form of a gift or uncovenanted obligation, to Brazil. That is, presumably, some new policy point. There is money for the Council of Europe. That, certainly, was a new piece of policy, but not adopted particularly by the Government. It was only at very long last that they agreed to the views expressed about that by my right hon. Friends on this side of the House. That was, anyhow, a new policy and the money spent for it comes within the definition of the Budget speech. The last item in that class which I can see is the increase in pay of the police, which the House accepted as the result of the inquiry into all that matter. There may be scattered about here and there some other items of new policy, but I have not been able to find them.

All the rest of this expenditure I call merely "over-spending," out-running the moneys which had been voted by this House at the time when the main Estimates were before it. The big moneys, as I have said, are partly in the Ministry of Health, partly in the Ministry of Supply, and partly in the Ministry of Food. Those are the three very big items and it will be interesting to hear from the Minister of Health whether, in his view, it has all been a matter of circumstance which he could not forecast at all—there are people who are victims of circumstance, and the Minister may one day again find himself so placed—or whether, in fact, there never has been any effective control on expenditure. I should like to know which it is, for we have had examples of both. In the last 924 Parliament we had instances where Ministers were victims of events, and we have also had experience of when there really never was any effective control. In this connection I need go no further than mention the word "groundnut."

It does appear that the Minister has been able either to estimate so carefully or to have sufficient control to make his figures come out right over the doctors and over the local authorities, but all the rest seems to have no relation to the figures he originally put before us, so that the final outcome is an increase in the order of 37 per cent. on his original Estimate. I want to know from the Minister more particularly about this because this is a very big hole in the picture.

This is a very big hole through which the money has been pouring, whether rightly or wrongly, or controlled or uncontrolled. That is exactly what I want to know. In November the Minister was saying that he shuddered to think of the ceaseless cascade of medicine pouring down British throats. He may have shuddered to think about it, but has he done anything about it? Has he any control over it? Otherwise we shall be shuddering over the ceaseless cascade of public money going into these services—against what was apparently thought necessary at the beginning of the year. Some explanation of this is very much required from the right hon. Gentleman this afternoon.

The second big difference is in the expenditure required for the Ministry of Supply, particularly for the trading services of the Ministry of Supply. Perhaps we could have some explanation about that. The really big figure is in what has happened in trading in non-ferrous metals, where we find a credit of £2,250,000 turned into a loss of £13,500,000. Again, these are staggering figures. They are no surprise to us on this side of the House, because we entirely disapprove of and disagree with this theory of the Government going in for this sort of trading, particularly as we know that by the way they do it they have no opportunity of doing, such as ordinary merchants do, hedging, and if the market goes wrong they find themselves in the very difficulties in which they are today.

925 The same occurs in the extra demand for the Ministry of Food; £15 million and more for that. We and the whole country are in difficulties when making any remarks at all on the figures which occur in the Estimates for the trading services because they are only just an in-and-out cash account and take no kind of cognizance of whether there has been any change in the stock position. Therefore no one can tell and, unfortunately, the Government do not help because they give no information on these topics, although they might very well do so.

The fact remains that these vast sums are now being asked from this House in excess of what was expected at the beginning of the year, and it is that which requires an explanation and why the Chancellor's instructions on the day of his Budget Speech have been flouted. After all, the Chancellor of the Exchequer is the Minister in charge of finance and of economic affairs. There was a time when there was diarchy, but he brought them all into himself after he became Chancellor. We do not know exactly what the Minister of State is to do to relieve him of some of the work, but the responsibility is his.

Here we have a Government, and no one more than the Chancellor of the Exchequer, telling us how vitally important it is to plan. That is the secret of success, according to them. Surely financial planning is the one essential of the whole lot. Of course it has always existed. We remember the character of Molière who discovered he had been talking prose all his life without knowing it. I imagine that every Chancellor in the past has been doing some planning, even in the days of Gladstone, though whether or not he was prepared to accept it in the meaning which the present Socialist Government does, I am not sure. This Government are always talking of planning and here we have in finance the keystone of the whole arch of Government. It is a catastrophe.

This is not the first case. If this were the first and only time since we had a Labour Government that there were vast Supplementary Estimates possibly some excuse might have been found, but it is not the only time. I am talking only of Civil Estimates on Revenue Account which have nothing to do with the Ser- 926 vices. In 1946 the Supplementary Estimates were £33 million, in 1947, £145 million, in 1948, £222 million. This year there has been a drop, but they are still £169 million. This from the arch planners, and they can look back as much as they like to 1919, 1921 and 1922, which I have here with me, but they will find nothing comparable in the way of Supplementary Estimates. In the fourth year after the last war—

§ An Hon. Member

They went to sleep.

§ Mr. Fernyhough (Jarrow)

What about the "axe"?

§ Captain Crookshank

Hon. Members who make those remarks forget what I said at the beginning, that in October the Prime Minister, the Chancellor of the Exchequer and the Lord President of the Council told us how necessary it was to make economies on what was then announced as only the first steps—

§ Mr. Sydney Silverman (Nelson and Colne)

rose—

§ Captain Crookshank

No, I cannot give way. These Supplementary Estimates are a condemnation of the administration of the Chancellor. He just has not had his way. The right hon. and learned Gentleman smiles, but does he think he has had his way. Does he consider that £169 million of Supplementary Estimates do come within the wording of his pledge and his instruction, because, if he thinks so, I am perfectly certain that no one else does.

For our part we merely say that we are quite certain, as were right hon. Gentlemen opposite as recently as October, that economies and cuts have to be made. Let there be no mistake about it. Anyone who was not in the House then should read the Debate of 26th October. Let them read the Chancellor's speech, particularly columns 1335 and 1336 in the OFFICIAL REPORT, in which he pointed out that owing to devaluation and in order to get back even to the Budget position, a great many harsh things must he done. We are perfectly certain that they have to be done and that taxes must come down.

We regard high taxation as a grave evil, and we have said so repeatedly during the past few weeks in the country. We are certain that expenditure must be reduced 927 in order that taxes can be reduced. By cutting expenditure we can increase at least our chance of keeping inflation at bay—and that is of paramount importance—we can increase our chance of capturing foreign markes. During the election the Chancellor said it could not be done, but in October, before the date had been decided, he was not only saying it could be done, but that it must be done and nothing has changed since then.

One cannot escape the conclusion that this terrific taxation under which the country is groaning today does damage our economy at home and does affect the cost of living and harm the credit of sterling abroad and does reduce every kind of incentive. For that reason we must make our protest today and it is right that we should and that we should be joined by hon. Members on all sides of the House, because it was the Chancellor himself who told us, hon. Members will recall, that their traditional role is to be the defenders of the taxpayer against the rapacity of the Executive.

Do not let us forget that all this was in the Budget speech less than a year ago. Do not let us forget that the responsibility of the House of Commons for finance still remains and cannot be abrogated. We were encouraged by those words in April. We thought that they meant something on the part of the right hon. and learned Gentleman. We thought that the instructions he was giving to his colleagues would bear fruit. Instead we find a mammoth Supplementary Estimate today of £148,402,365. The Chancellor knows perfectly well what should be done. He tried in April to do it by a circular, and that failed. He knew in October what should be done by that strong speech. He failed. He stands condemned, and in the words of our Amendment we deplore his failure.

§ The Chancellor of the Exchequer (Sir Stafford Cripps)

I intend this afternoon to keep quite strictly to the terms of the Motion and the Amendment, and I am quite sure that no one in the House will expect me to go into such attractive channels as that sketched by the right hon. and gallant Gentleman the Member for Gainsborough (Captain Crookshank) on taxation which he has just mentioned. That is for a later period. I am really 928 delighted that the Opposition have raised this matter in the way in which they have done. It is wise and right that the House should have an opportunity of an explanation as regards the general volume of Supplementary Estimates which have been submitted to it.

The right hon. and gallant Gentleman mentioned, a moment ago, what I said in my last Budget speech regarding the position of the House as the guardian of the finances of the country, and I am very glad that in this new Parliament the Opposition are to do something at least to exercise that right of guardianship which they so signally failed to do in the last one. [HON. MEMBERS: "Oh.") I hope they will realise that the concessions and extensions for which they are constantly pressing, and which they have so generously offered during the election, have to be met out of the revenue which is raised under the authority of this House, and perhaps the fact of the supplementary Votes will call to their minds the many occasions on which resistance has had to be put up by the Government to pressure by them for further expenditure.

During the war, as the House knows, the whole structure of our financial control through Parliament was put aside for obvious reasons, and in the first years after the war it was difficult to re-create, either in the country or in this House or indeed in Government Departments, that care for accurate estimating and control of expenditure which had been the practice before the war. It was indeed in order to encourage a greater degree of care and accuracy in this matter that I made, at the time of my last Budget, the statement which the right hon. and gallant Gentleman has quoted, the words of which I should like to emphasise once again.

I said: In particular I have emphasised that only in special cases, such as, for example, major changes of policy, can any Supplementary Estimates in future be permitted."—[OFFICIAL REPORT, 6th April, 1949; Vol. 463, c. 2084.] There are obviously a number of types of special cases other than major changes of policy with which everyone in the House would agree, and examples of which I shall give shortly when I deal with the Supplementary Estimates. There are others which require considerably more 929 justification because they would appear to be on the face of them, and some of them indeed may be, actual overspending. I suppose it is an absolute commonplace that no Chancellor of the Exchequer can ever regard any Supplementary Estimates with any degree of equanimity, and during the past year I have set my face very strongly against them except in special cases.

The right hon. and gallant Gentleman suggested that this was some carefully concealed position which was not brought before the country or Parliament before the election. He must have failed completely to follow the statements of the Chancellor of the Exchequer at least upon these matters. I made specific reference to them when I spoke at the Guildhall on 4th October. After having, as usual, made the review of the Budgetary position which the Chancellor always makes at that particular dinner at the Guildhall. I then said: On the expenditure side the, outlook is not so good. Below the line expenditure is not far off the proportionate estimate but above the line it is likely to be exceeded. As a result of obligations under the Atlantic Pact and Western Union the expenditure on Defence is almost certain to exceed the original estimates by quite an appreciable amount. Owing to the economies subsequently imposed on the Defence Ministries, there has, as the House knows, been no Supplementary Estimate in connection with those new services. I went on: There will also be increased cash requirements by the trading Departments for renewal of stocks which have in some cases been run down and may require replacement, and in respect of the higher sterling prices in others, but I hope that most of them will be recouped, though probably not till the next financial year. The maintenance of the Health Scheme and the improved conditions for those employed in it, such as the nurses and hospital staffs, may also entail some additional expenditure. So that if the balance of the Budget is vitiated it is more likely to come from increases in expenditure rather than from a shortfall in revenue. That was perfectly fair notice to the country at that time of what I was anticipating in four major categories—defence, the trading services of the Ministry of Food and the Ministry of Supply and in the case of the Ministry of Health. Although in one case that has not materialised in the others it has. I will explain how and when as I come to them.

930 Of course, every Chancellor and everyone who studies the accounts of the country knows perfectly well that the expenditure over the year will not fall out exactly as it is estimated. More will be spent here, there will be underspending there, so that some Votes will be exceeded while others will not be reached. The aim is of course that overall there should be no excess of expenditure above the aggregate of all the Estimates; that is to say, as the right hon. and gallant Gentleman said just now, the balance of the Budget should not be interfered with by Supplementary Estimates.

Although that is the hope and expectation it would not be very wise to put the matter in that way to one's colleagues because if one did so their natural optimism would lead each one individually to imagine that he could overspend while all his other colleagues would do the underspending. Therefore, the principle must be that each Department must not exceed for each of the services for which it is responsible its own Estimate for that service, plus anything that it can properly, with Treasury consent, transfer from its savings on other services. In other words, there must be a qualified ban on Supplementaries.

In considering the success or failure of the ban we must, of course, consider the savings which are available to offset the Supplementaries. Unfortunately, as the House knows, it is not possible to state with certainty how much those savings are until we have passed the end of the financial year, and I hope to have more to say about them when it comes to a Budget speech. But this I can say, on the basis of 11 months' expenditure, that the net excess over the Estimates as a whole will certainly be not nearly as large as the total of the Supplementaries.

That comforting fact does not in any way diminish the desirability for accurate estimating or for control of expenditure within the estimated figure. As the right hon. and gallant Gentleman has stated, for the current year the Supplementaries are 50 in number amounting to £170 million; 10 in the Summer batch, amounting to £21 million and 40 in the batch just published amounting to £149 million. A great many of those are quite trivial and of a purely technical character. There are, for instance, 15 token Supplementaries in the most recent batch none 931 of which indicated any degree of overspending. A further number consist of cases where an unavoidable obligation has been anticipated in time and so is being discharged this financial year instead of next financial year.

To give an example of that, among the miscellaneous expenses is an item of £2½ million for money spent on buying silver recovered from the coinage, buying it from the Mint and stockpiling it to meet the obligation, of which the House is aware, to return silver bullion shipped to us during the war under Lend-Lease arrangements. It proved possible to effect this recovery of silver from the coinage during the current year faster than we had expected. There has in fact been de-hoarding. The House will remember there was a good deal of trouble from hoarding in the preceding period. In the same way, to take another example, under Development and Welfare in the Colonies there is an extra item of £5,950,000. It proved possible—to our great gratification let me say—to spend more of the resources already allocated by the relevant Acts of Parliament owing to the increased availability of materials and equipment. That was merely an anticipation of future expenditure to which we were pledged, made possible because there was greater availability in the world of materials and equipment for the carrying out of capital works.

The third group of small excesses arises where payments at a pre-determined rate had to be made to individuals or funds and the outcome in numbers differs from the actuarial expectation. There are a number of these which could not be withheld without a breach of some legal obligation. One example of them is the £1,600,000 for the Ministry of National Insurance. A further set arise from the increase in rates of pay resulting from awards of one kind or another which could not be pre-judged in the Estimates o but equally could not be disregarded once the awards had been given. For instance, the larger part of the Post Office £2 million was due to this, and the right hon. and gallant Gentleman has mentioned the Police in accordance with the decisions of the Oaksey Report.

A further small number of Estimates are concerned with expenditure abroad other than the trading services, with 932 which I will deal in a moment, and they have been affected by the devaluation of the £. It has been necessary in some cases to give greater allowances to officers of ours who are abroad, the expenses of foreign stations have been greater in the case of travelling and so forth.

So far, I have dealt with a number of categories of Supplementaries which were for one reason or another unavoidable, and which may well have their counterpart in under-spending of a similar nature elsewhere. Of the remaining Votes there are a number for overseas services arising out of new policy decisions, in the carrying out of which our prestige and interests abroad are very much concerned. Let me give as an example of that the Colonial and Middle Eastern Services Vote, in which there is an item of £6 million for the maintenance of the internal security of Malaya. Then there was the completely new Vote for £10 million for Burma war damage payments, a matter that had not been settled when the original Estimates were laid. In practice, none of these new items of expenditure could have been avoided, nor, indeed, would the House have wished us to avoid them. They all arise out of special circumstances, and they are almost entirely non-repetitive in nature. In all they amount to some £20 million.

That brines me to the three largest Supplementaries which are, I presume, the real basis of the present Amendment. I will take them in rising order of magnitude; the Ministry of Food, the Ministry of Supply and the National Health Service. First of all, the Ministry of Food. That is for £13,880,000, and it consists almost entirely of a requirement for £15 million extra cash for trading services, against which there are certain small savings set off.

There are a number of items in the subheads, but broadly speaking, it can be said that stocks have increased by £23.9 million over the estimated level. This is reduced to a cash requirement of £15.3 million by the net result of changes in procurement costs and selling prices of various food stuffs. That is, of course, not an overspending, as we have more than an equivalent in extra stocks in hand representing that extra expenditure.

933 Next, the Ministry of Supply, which is £16 million. This is rather more complicated to trace out because it arises from a variety of excesses and savings and a large deficiency in the Appropriations in Aid. This latter deficiency is in reality a reflection of the reduced expenditure under the production subheads, as too is the increase in "Research and development." The House will appreciate that if less is produced, say on behalf of the Army, less will be paid for in Appropriations in Aid by the Army. Therefore, we get a corresponding reduction on both sides. That leaves the "Trading services" and "Assistance to industry" to account for almost the whole of the £16 million. This, again, is difficult to trace owing to changes that have been made in accountancy under the different subheads. But, as in the case of the Ministry of Food, it is in reality a cash deficiency only and it is accounted for by an increase in the level of the stocks of tin, copper and lead in particular.

Consumption by industry has been lower than was anticipated, and the very special position of tin and the action we had to take as regards it after devaluation has been a major contributing factor to the accumulation of those large stocks. So here too it is not an overspending but an increase of stocks which are being held equivalent to the extra cash which is being issued.

I have disposed of all the Supplementary Estimates except that on the Health Service, which is larger than all the others put together and is certainly one which could only be justified upon some very special considerations. The question which I am asked, if I may put it rhetorically, is, "How did I, as Chancellor of the Exchequer, come to pass such an Estimate and how can I justify the extra £98 million that will have to be spent by the end of the year?" Or, to put it more shortly, "Why is this a special case such as I mentioned in my Budget speech?" It is not desirable, as the right hon. and gallant Gentleman has said, that I should take the House into the details of this Estimate. That is a field somewhat unfamiliar to me but it is one with which my right hon. Friend the Minister of Health, who will be speaking later, is fully acquainted.

934 What I desire to do is first to point out to the House why this is a very special case. Let me take, first of all, the largest item—hospitals and specialists. The estimates which formed the main Health Estimates for 1949–50—that is for the last Budget—had their origin in the Hospital Management Committees in August, 1948. The time-table laid down for that estimating was as follows: submission by the Management Committee to the Regional Hospital Board not later than 1st September, 1948; examination by the Regional Board and submission to the Ministry of Health by 15th October, 1948, together with the Board's own estimate; submission to the Treasury by the Department, together with the estimates submitted by the Boards of Governors of the teaching hospitals direct to the Minister, during the month of December, 1948.

After discussion, those were settled in January, 1949, and submitted to the House on 3rd February, 1949, so that when these particular estimates came into being the management committees themselves had only very recently been appointed and, indeed, in some of them, had only skeleton staffs available at that time. There had not been time for an adequate review of the hospitals which had been grouped under their care—grouped for the first time—and in many cases no satisfactory accounts existed upon which estimates could be firmly based.

It will be borne in mind that 1948–49 actual expenditure was only for the first nine months of the Service and, of course, was anyway not available as a guide. The question arose when we examined these accounts in January as to whether in such circumstances steps should be taken to ensure that the greatest economy should be practised by reducing aribitrarily the total asked for and by spreading back the diminished total over the various Boards and Management Committees. It was impossible to judge how accurately the estimates had been made as no earlier comparable records existed other than the estimates which had been made—which were known to be wrong—for the preceding nine months.

Therefore, it was decided to reduce the estimates by some £12 million with a view to bringing about economies, or at least avoiding extravagances, and it was the 935 sum so reduced that formed the basis of the main Estimates. Unfortunately, it subsequently turned out that the Management Committees and Regional Boards had in fact under-estimated their expenditure and not over-estimated as had been suspected. This reduced overall sum—reduced by the £12 million I have mentioned—was made the basis of a request to the Management Committees and Boards in February, 1949, to submit revised estimates on the reduced basis. That is to say, the £12 million was spread over the country and they were asked to go through their estimates again so that they did not amount to more than the new total that was given. But it became clear after a good deal of discussion and correspondence that to bring the Estimate within the lower sum could not be done without closing hospital beds, and that the Government were not prepared to do.

In June, 1949, the Regional Boards and Boards of Governors were told that in making these revised estimates for which they had been asked it was not desired that economies should be made which would result in closing beds or in the reduction of other services essential to the care and welfare of the patients. It was the revised Estimate produced on this basis which eventually gave rise to the increase of £50 million in the items "hospital and specialist services."

There are several special items in the £50 million besides the £12 million cut which I have already mentioned. These were items which did not come into being or were not ascertained until after the original Estimate had been put in. The first was the implementation of the Spens Report on specialists, including arrears back to July, 1948. Some allowance had been made for this in the original Estimate but the sum which has to be paid in the current year is actually £10 million more than the original provision. The Whitley awards to nursing and other staff cost a further £7 million in the current year and they, of course, were not included at all because they had not been awarded at the time; neither were the increased numbers of the staff which have since been procured in those hospitals which were admittedly understaffed before. The balance in amount, which the House will see is somewhere round about £20 million, is underestimating due 936 to lack of material upon which to make estimates, and due to some extent to prices which have increased. So much for the hospital and specialist services.

So far as the general medical services are concerned, the small difference there is due to a speeding up in payments. The amount of the central pool is fixed at 18s. per head for 95 per cent. of the population. The other three items of importance, pharmaceutical services and dental and supplementary ophthalmic services, show between them an excess of about £45 million. Though there is an element in this of price changes, by far the greatest factor is the element of consumer demand. It was here that there existed a large pent-up demand, and there was no possible way of estimating how big it was or how long it would last. In fact, it continued much longer than was estimated at a much higher level, and only now is the curve of demand beginning to flatten out.

These, then, are the very exceptional circumstances of the launching of this vast new Service and the difficulties which arose as to the making of accurate forecasts of public demand and of the backlog of expenditure that had to be met. When these new factors were first encountered in the early summer of last year, there were only two ways of dealing with the matter—either to shut down beds and discontinue other services so as to keep within the estimates, or else to instruct the committees to maintain their services but with the greatest possible economy. We unhesitatingly took the second alternative, which was, we are convinced, absolutely right, and I am quite sure that right hon. Gentlemen opposite would have done the same thing.

It would have been quite unthinkable for any responsible Government suddenly to discontinue this essential Health Service on the grounds that a Supplementary was undesirable. This does not by any means indicate that we are content with the situation as it now exists, and I am quite sure that all those concerned with its administration, from my right hon. Friend downwards, are keenly anxious to see that there is no inefficiency or extravagance in this great new Service.

There is, too, of course, as every one recognises, a limit to the speed of development of this Service, as there is in education or indeed in any other social service provided by the community for its use. 937 The method of control and organisation in this particular case in the hospital section of the Service was praised by many people in the belief that it would be less bureaucratic and more in conformity with particular local considerations. It was, of course, an experimental form of organisation, calling into being a vast volume of that voluntary service in which in this country we have always excelled. I am certain that we should all wish to express our gratitude to the great army of volunteers on the Management Committees and Regional Hospital Boards for the devoted work which they have given.

My right hon. Friend, when he speaks, will give the House some account of the many ways in which he is proposing to assist these bodies to arrive at a more co-ordinated control of their finances and of the finances of the Service, but there are two matters which are perhaps more relevant to my duties as Chancellor of the Exchequer and which I should therefore like to mention now. First, I believe it is necessary to call a halt to further development of these services. We must, therefore, regard the Estimates for the forthcoming year as a ceiling beyond which we must not be carried by new developments or extensions of existing services which cannot be provided out of ascertained economies in other directions. I think that, on that matter, we can be greatly assisted by the fact that the Management Committees, in these estimates which they have made for the forthcoming year, have had a year's experience behind them, unlike the former occasion when they had no experience behind them.

Second, we must, now that so large an annual sum of money is at stake in the hospital services—some two-thirds of the total Vote—find some means to associate my right hon. Friend's Department more directly with the Management Committees and the Regional Boards, so that both he and I may be assured that there is no possibility of the budgets being exceeded once they are passed, or of the savings under one sub-head being dissipated unnecessarily on another. This will, I believe, be of the greatest assistance to the Management Committees and Regional Boards in what is a most difficult and not always very pleasant task—the task of controlling and limiting expenditure. How best that association can be achieved will be settled after my right 938 hon. Friend has consulted the Regional Hospital Boards and the Management Committees upon it.

The objective, therefore, as the House will see, is to place a ceiling in the way which I have described upon total expenditure, and, at the same time, to reinforce the present Budgetary system of control which is in operation. There is, as we all realise there must be in such a great new Service as this, ample room for perfecting the machinery and organisation and for checking the comparative expenditure of different units as soon as a uniform basis for estimating and costing in each unit has been worked out. All this work is proceeding busily under the guidance of my right hon. Friend and is already yielding considerable results, and the two extra factors of control that I have indicated will, I believe, reinforce the work already in band.

We certainly shall not be satisfied until we can feel that the new Service has been thoroughly examined in all its incidence and so knitted together in its organisation as to enable us to feel certain that there is no waste and no extravagance. We want to provide the best Health Service that we can for what the nation can afford to pay, and a first-class Health Service is worth a great price to the nation. It is not, therefore, something that we can either expect or hope to get on the cheap, but it must, of course, be weighed in its cost against all the other desirable and necessary items of expenditure by the community, and we must bring expenditure on health into its proper proportion with food subsidies, education and all the other matters that vitally concern the safety and happiness of the people.

It is for that reason that we are determined to see that the best possible National Health Service is built up within the limits of expenditure that can be afforded. For the present, as I have said, we must place a ceiling upon the total which we can so afford and see that within that total the best use is made of our resources. I have attempted to explain to the House why it is that in these various Supplementary Estimates there is either a technical reason or a reason which is not overspending, except in the case of this very special circumstance of the Health Service.

939 I believe that it would have been disastrous if we had done what is suggested in this Amendment, that is, refused in the middle of the year to provide any more money for the Health Service. No one would so have done. We have taken the steps which we believe are necessary in order to see that money is not being wasted or ill-spent and that development will not proceed faster than the country can afford. In the circumstances, I hope that the House will reject the Amendment.

§ Mr. Walter Fletcher (Bury and Radcliffe)

At the beginning of his remarks the Chancellor of the Exchequer took it upon himself to twit us that within the last Parliament we did not exercise that right of guardianship which it is the duty of the Opposition to provide. That, I think, came very ill from him. We remember only too well an occasion last. year on the Budget when he wished to avoid a discussion which we desired to bring about on the Purchase Tax. By a very shabby trick he avoided that discussion. Does he really think that he has the right to stand up and twit us with not exercising that right of guardianship? Let me assure him that that right will be fully exercised in this Parliament, as it undoubtedly was in the last.

It was very noticeable that towards the end of his speech the right hon. and learned Gentleman indulged in a veiled vote of censure on his right hon. Friend the Minister of Health and then ended on a note which was really an apologia. I have no doubt that we shall hear from the Minister of Health—who is quite capable of defending himself. As for the beautiful phrases that we have heard from the Chancellor, I think we could readily paraphrase them, as regards the Health Service, by saying, "We rushed ahead without a sufficient survey of the whole field which we could have made and from which we could have ascertained many of the facts, and we did not really count the cost."

I do not believe that any parish council having to spend public money, or any private business planning ahead, would have fallen into such a margin of error as is shown in these Supplementary Estimates. I believe that the House, which will undoubtedly have to pass them, will, 940 nevertheless, be perfectly right in saying that this is the worst example of lack of real planning that has ever been seen. Indeed, I have no doubt that this document will be known as the "Obituary of Planning." It was very significant that when the Chancellor was talking about the Health Service it reminded a great many of us, I have no doubt, of the same muddle and the same desire of the Minister to get personal kudos, and to be able to say that he alone had secured a great victory, as we saw in the case of the recent Minister of Food in connection with some of his schemes in East Africa. Indeed, the right hon. and learned Gentleman has brought the "peanut" method of finance back on to the home front.

In this Parliament, which will be known, I think, as the Parliament of "St. Even Stephens"—as we are a much greater parity—we shall be vigilant. Let the right hon. and learned Gentleman be certain that he will not be let off one single bit of his Estimates. Since the Labour Government came into office in 1945, there has been in every walk of life, whether in business, in local councils or in the case of people, a very strict control. The individual is controlled through the financial policy of the Government, through the Bank of England, through the Exchange Control. No business, whether in import or export, or manufacture, can escape the heavy hand of the Chancellor of the Exchequer working through various agencies, but, very largely, through the Exchange Control of the Bank of England. The Chancellor knows quite well that a permit has to obtained for practically everything. He has been most vigilant in that form of control to see that people who want to go away for holidays are limited to £50 here or £75 there.

Control over expenditure, trade, and industry has been exercised to the absolute maximum. It is quite clear from these Supplementary Estimates that there has not been the same measure of control over Government Departments. Surely, the first duty of the Chancellor of the Exchequer must be to control Government Departments and not to hamper, as he has very frequently by his financial control, the freedom of the individual and the progress of trade and industry. He has not put first things first; very much the opposite. He has been flouted by the spending Departments.

941 Of course, the Chancellor's position in 'this matter has been very much weakened, and we listen to him with a great deal less respect than we did a little while ago. At the time, just before devaluation, when his authority was great and when he went all over the world speaking with real authority, he was a man to whom when he talked to us or lectured us we listened not only with patience—that was necessary—but with some degree of respect. But, alas, he has inherited from his predecessor various "songs in his heart." "No, No, a Thouand Times No" was his theme song until we got devaluation, but the next day it was "The Man that Broke the Bank at Monte Carlo," and he cannot expect entirely to escape the consequences of that great fall from grace and authority which has been the result of his bad planning and bad estimating.

That is a grievous thing for this country, because when he now goes abroad, as he is going very shortly on O.E.E.C. and other business with America, he cannot talk with the same authority that he had before. These Supplementary Estimates are a condemnation of his lack of vigilance and of his lack of knowledge of how to handle these matters. He cannot expect that the new authority which he was trying to build up in recent months can be anything but greatly diminished by it.

Let us turn to one of these Estimates, that of the Ministry of Supply on page 70. The Chancellor attempted to explain—I thought not very clearly or convincingly—the very great difference on nonferrous metals. I am very glad to see that the Minister of Supply is present. In days gone by—a good many years ago—when we were both working in the City, he dealt very largely in non-ferrous metals. He is a great expert on them. Possibly, the explanation of this is not that given by the Chancellor. The profit motive was undoubtedly present in his mind in those days, and very much to his advantage. Is it possible that now, it a fit of repentance, in a hope of gathering treasure in Heaven, and in salving his Socialist conscience, he may think it a good thing to make a cracking loss on behalf of the taxpayer where before he made very satisfactory profits in other ways?

942 I would call on him, if he will when he comes to reply, to give a better explanation. It is believed in circles well-informed on these matters that this is not as the Chancellor explained, only the taking in of extra stocks, but that it is bad trading by the Government in nonferrous metals, and that, in the case of lead in particular, many of the results of bulk purchase and state trading have resulted in sharp losses and have nothing to do with devaluation and nothing to do with increases or decreases, and that there is no balancing factor on the other side to offset them.

Nothing is easier for the Government, with an inside line of defence in these matters, than to conceal trading losses. Perhaps this is one of the years mentioned in the phrase—which we have heard referred to so frequently in many Bills—"taking one year with another." Is this a year which we are going to take or are going to leave? I hope it is the year when they are going to take once and for all, and that we are not going to have to take it on the chin year after year until we take the count. The House is entitled to some explanation of the State trading of the Ministry of Supply in non-ferrous metals.

The real importance of these Supplementary Estimates have hardly been touched upon by the Chancellor. It was very well indicated by my right hon. Friend who opened this Debate, and that is their effect on us and on our position overseas, and particularly their effect within the sterling bloc. We are the bankers of the sterling bloc. If we are to produce the impression—and nobody can deny that Supplementary Estimates of this sort cannot fail to increase that impression—of bad and improvident finance, of not really knowing our business, of not thinking ahead, of not doing what we did traditionally as bankers of the sterling bloc and as the depository of good finance and wisdom, then these cracks already appearing in the sterling bloc will widen into great fissures and will break it up.

It is an extremely serious matter. It is no smiling matter. I notice that the Chancellor is smiling to his right hon. Friend the Minister of Health. They may be smiling to instil Dutch courage, which they will need, into themselves. 943 As the Chancellor knows from what happened at Colombo, there is in the sterling bloc at present a very great sense of disequilibrium. We shall find ourselves in a parlous condition if the dollar-earning capacities of these parts of the sterling bloc outside the United Kingdom go too far, and when their dollar need gets greater, they are no longer willing to make the contribution they make at present.

That is why it is vital that we should not have to show to the rest of the world such thoroughly bad estimating as is revealed in the Estimates before us. We know quite well that one Department has already had to be censured for bad accounts, which were presented in a way not acceptable even to the auditors. That has not happened here, but a figure of £170 million of largely avoidable Supplementary Estimates does create a very great doubt whether we are a good debt not only among most people in this country, who have to pay for this in the end, but also among most of the people who are lending, and are willing to lend us, money to carry on.

These Supplementary Estimates must, in the end, show themselves in the cost of production of the goods we have to sell. We have been exhorted by every Member on the Front Bench opposite to increase production and to lower costs. But Supplementary Estimates amounting to £170 million translate themselves in the long run into increased costs. How are we going to have this glibly promised full employment which the Government talks about as if it were a solid to be taken out of the refrigerator and sliced up and given out to people? The Minister of Health, who talks with that evangelical glow of enthusiasm which he can turn on like turning on a refrigerator with a knob at any moment, should count the cost of that when it is translated into dearer goods in competition with other countries.

Let us hope that the Government are not going to try to repeat the £170 million they have tried to gloss over this year as unavoidable. I think the old Scottish verdict of "Not guilty, but don't do it again" will have to be brought in by the country. This was bad estimating that could have been, and should have 944 been avoided. To come forward now with an apology, which is not a full explanation, will certainly call for greater vigilance if possible from the Opposition than we have exercised before. And it will call for greater power to make that vigilance effective.

§ Mr. Messer (Tottenham)

I have been rather caught out. It was certainly my intention to speak, but rather later, after I had heard a little more of what the Opposition really intended by their Amendment. There are three lines of criticism that can be levelled at these Supplementary Estimates. The first is the quite mechanical question whether or not the Minister should have been able to foresee exactly how much would have been required. The method which has been adopted with regard to hospital finance is a very important part of the supplementary estimating.

I sometimes wonder whether the country realises just what happened in the fusion of the voluntary hospitals with the municipal hospital service. Anybody who has had experience of either the municipal service or of the voluntary service will know that there were certain checks in existence. For instance, the voluntary hospitals could only spend up to the amount they were able to collect, plus what capitation fees they were able to obtain from patients. There was nothing to control them, except their knowledge of what they would be able to raise by appeal, by indiscriminate charges and by contributions from hospitals savings associations and suchlike bodies.

The municipal service was different in that management committees of hospitals were able to assess, to some extent, what would be required. It was always more than their main committee would permit. Then it had to run the criticism of the finance committee of the borough or county council. After that it had to go through the county council itself. When we had this new experiment of a management committee we had something which was completely untried. These management committees were completely unable to foresee, with any degree of exactitude, what would be required. It was very largely a shot in the dark.

Only this week I was present at a meeting of a regional hospital board and we had to consider the case of a manage- 945 ment committee which had underestimated to the extent of £40,000. Could the Minister have foreseen that a management committee was going to under-estimate to the extent of £40,000? It was clearly outside the realm of possibility. Neither he nor anybody else could have done it. The House may ask why anybody was responsible for such a bad estimate. It resulted from the fact that there was nothing on which to base it. The voluntary hospitals, which form a group under that management committee, were unable to obtain data from which a realistic estimate could be made. So it was imposible for the Minister to do anything but accept this estimate, although it finally proved to be wrong.

There is a second line of criticism. Having allowed the estimate, should the Minister have said, "You are not going to get any more money, you must work within your estimate, no matter what the consequences may be." Indeed, if the Amendment is accepted its implication seems to be that what he should have done was to restrict the service. Those who are facing great tragedy because of disease cannot listen with equanimity even to what the Chancellor of the Exchequer has said. There is need for expansion. There is need for a great deal more to be done than has been or is being done. Let us take certain services. Although if we look at the national curve of mortality figures for tuberculosis it looks encouraging, in fact it is increasing. The truth is that T.B. morbidity is increasing. There are at present no fewer than 10,000 tubercular people waiting to get into sanatoria. In one of the 14 regions there are no fewer 2,000 waiting to get into a tuberculosis bed in a hospital or a sanatorium. Among those people are some who have waited since January, 1949, and some females among them who have waited since October, 1948.

The implications of the Amendment are that not only have those people to wait still longer, but that we are to reduce the facilities which already exist for dealing with tuberculosis. That is unthinkable. I want to persuade the House, if I can, to spend even more money on this service, because more money is required. I repeat what I have said before in this House: no better investment can be made than safeguarding the health of the people. 946 Spending money first in preventing disease is the better way of using it. It is far better to spend money in preventing a person going to hospital than to spend money in keeping a patient after he has gone into hospital. Even so, if we fail to prevent a person becoming a patient there is no reason why we should be afraid of spending money in maintaining him when he is in hospital.

I want to deal specifically with three grave matters which are facing hospitals at present, and tuberculosis is one of them. The second is the care of old people. I am not one of those who, blinded by political prejudice, believe that a change which has been made by my own party is necessarily perfect and that everything that happened before was necessarily bad. What we have found since the introduction of the new service is a greater difficulty in getting accommodation for old people in hospitals than we found before. While I do not want to go back to the days of the relieving officer, I do remember that the statutory officer was sometimes in a position to get a bed for a patient, and we find that very difficult at present. The reason is that we are now upgrading our hospitals. Those places which were infirmaries are now being turned into hospitals, and the cost of this service results from the fact that whereas at one time they were staffed by medium-standard people, they are now being staffed by specialists. We are upgrading these hospitals but the tendency is to use them for acute cases, thus rendering less opportunity for the accommodation of these chronic cases.

I have with me a file and if I were merely talking sentimental tosh, I could affect hon. Members by reciting some of the cases in this file. There are people suffering from cancer, with nobody in the house to help them, and there are some people who are doubly unfortunate in that they are unable to do anything for themselves, and accommodation cannot be found for them. Then there is the type of old person who falls between two stools. The hospital authority says, "This case is not a hospital case because the person is not suffering from any sickness that can be certified." The person has arrived at that stage of physical deterioration which requires some measure of care and attention, and the hospital authorities say, "This is a job for the welfare authority 947 of the county or the county borough." The county or the county borough says, "No, this person requires medical care and attention; he is the responsibility of the hospital board." Such a case falls between those two stools.

Then there is the case which fluctuates. An old person may be ill for a short period and well for a short period, arriving at that stage when he is in a decline as a result of those rapid fluctuations. Such a person also falls between the two stools, and is accommodated neither in a hospital nor in a welfare home. These are matters which require urgent attention, and I am mentioning them because I want to refer to the expense of this service. Such people must be looked after. We have got to find the money to enable such people to be cared for. It is no good saying that we must cut our garment according to our cloth, if that means that some people get the benefit of the shelter of that cloth and others are denied it. We have got to see that the cloth is so distributed that that section of the community which is most in need of it gets what is required.

Then there is the third class of case—a class of case which is pathetic not only in itself but also from the point of view of the relatives of those who are affected. Here, again, one does not know how to meet it. Everybody who is engaged in muncipal work knows how difficult it is. A child is submitted to an education committee as being ineducable. The education committee, advised by its officers, certify that the child is ineducable. As soon as that happens the child is no longer the responsibility of the education authority; it is dealt with by the health authority. It is mentally deficient, and at present there are in the homes of this country large numbers of such children who cannot be accommodated. I mention these things only as illustrations to show that if the logic of the Amendment is followed, money cannot be spent on such children.

It is no good hon. Members opposite saying, "We are not opposed to the National Health Service." It is no good their reiterating their election speeches in which they said "The Health Service belongs to us; this is our Health Service." It does not. I happen to have been the vice-chairman of the County Councils' 948 Association when we had the first discussion which preceded the White Paper issued by Mr. Ernest Brown. That was nothing like this Health Service. It was not a comprehensive health service. It was not a free health service. It was not a health service which gave to everybody an equal opportunity. Even so, Mr. Ernest Brown was not allowed to continue. Then Mr. Henry Willink came in. Further discussions took place, and even Mr. Willink's plan was not like the present service. It is not a bit of good any hon. Member opposite saying "We believe in the Health Service," and putting down an Amendment which has as its object the curtailment of that service. It is true that there is room for criticism in the service; that is due to the nature of things. If my right hon. Friend had introduced a scheme which was perfect at the beginning, I should not have had to point out its imperfections.

I am quite ready to admit that in this magnificent scheme, this splendid scheme, there are things, beyond the control of my right hon. Friend, which require consideration. In the first place, the hospitals are unfitted to be dealt with under the Treasury system of finance. This will give some explanation of why there has been such moderate estimating. In the old days a local authority would estimate its requirements. All the chief officers would be called in to say what would be required by them for the forthcoming financial year and, when the budget was passed, that money was available to be spent; but if, at the end of the financial year, that money had not been spent, they were able to carry forward their balance on to the next year. This meant that any economy which could be effected within the financial year was at their disposal for the following year.

Treasury finance is not like that. Treasury finance falls at the end of the financial year and if, after an estimate has been made, the estimate has not been expended, then they cannot carry forward the unexpended balance. That possibility no longer exists as an inducement for them to make effective economies to enable them to do work which might be required later. The effect is likely to be this: I hope it will be understood that while, nominally, the regional boards are responsible for passing the estimates of 949 the management committee, in actual fact they are not in a position to check very closely because members on the other side of the House have always insisted on the necessity for complete independence on the part of management committees. Because they have insisted on that complete independence, the regional boards, for instance, are not in a position to do anything in regard to establishments. They can advise, they can guide, they can direct, but they have no authority and we would not want them to have authority. What we require is machinery to deal with the situation which still makes for flexibility and adaptability at that point in the process in contact with the patient.

The methods of Treasury finance can be an inducement to wasteful spending, for the management committee, having estimated and not having been able to use the whole of the money in its estimate, would be tempted to spend that money where otherwise it might have been saved. I realise that in this scheme we have to go a long way yet before we can satisfy ourselves that all the holes have been stopped up. But, as has been indicated by the Chancellor of the Exchequer, steps are being taken towards that end. The King Edward Fund and the Nuffield Trust are at present engaged in research for the purpose of ascertaining whether it is possible to have a unit costing system, so that there could be some datum line when estimates are being made. That work is going on, but I suggest that it would be possible for us to effect economies if we were able, first of all, to establish the realistic nature of the estimate first submitted and then able to apply some such test as unit costing. The regional board itself might then be in a position to indicate in what way economies in administration might be effected.

I realise that I am speaking as if nobody else has had any experience in hospital administration, but I know enough about the hospital world to say this: that the teaching hospitals—and I am a member of the board of governors of teaching hospitals—and the voluntary hospitals—and I have a large number of voluntary hospitals attached to the region of which I happen to be chairman—realise that at this juncture the necessary changes which had to take place have left both the Minister and the Chancellor 950 quite incapable of correctly estimating what it would cost.

Let us take the question of nurses' salaries. If the Amendment is carried, notwithstanding the fact that we have set up machinery for the determination of wages and salaries, notwithstanding the fact that there has been the Spens Report and that we have to pay that which we could not possibly estimate, does it mean that it is to be argued that we should not continue with the development of the work—work which cannot stand still and which is probably the most important social work we have in this country? I am sorry to see the Opposition take this early opportunity to put such an Amendment on the Order Paper for, although they have made it comprehensive so that it covers other services, the fact is that it is aiming at the Health Service and the country had better take note of that.

§ Dr. Hill (Luton)

May I crave the indulgence of this House, which is customarily and so generously given to new Members in addressing the House for the first time? I will, if I may, and within the realm of the Amendment before the House, refer to some aspects of financial control, in particular in the hospital field. Before doing so, may I say that it gives me particular pleasure on what is to me, a unique occasion to follow the hon. Member for Tottenham (Mr. Messer) who has done such magnificent work in the building up of this service both at the regional board level and in the position in which he is highly honoured—that of chairman of the Central Health Services Council?

Despite his admonition, I would desire to say just this: that whatever controversies may have raged in the past as to the form the Health Service should take, whatever battles may have been won and lost, it can now he fairly stated that both inside and outside this House the people of this country are anxious that the National Health Service, with such changes as may from time to time be necessary, shall be a resounding success.

Beginning, if I may, with hospital and specialist services, the Supplementary Estimates bring the total under this heading—the heading dealing with advances to regional boards and boards 951 of management—to the level of £215 million, some £45 million higher than the corresponding figure for the first year, bringing the nine months period up to date to 12 months. A significant point is that of that total expenditure—and it is of particular significance in view of what we have heard this afternoon—some 95 per cent. is for day-to-day expenditure and only some 5 per cent. is for capital expenditure. In pre-Act days the expenditure of local authority hospitals was conditioned by the prospect held before the members of local authorities of periodic re-appearance before the electorate. The voluntary hospital field expenditure was conditioned by the money available for the prospects, bright or dim, of obtaining that money.

Now I turn to this administrative set-up—I should say, in parenthesis, that I believe the set-up to be a right one and my only misgivings are whether Scotland has not achieved something better than ourselves. In this administrative set-up the difficulty, it seems to me, is this, that the expenditure of the hospital management committees, lacking such checks, is contingent upon the prospect of a successful argument with the regional hospital boards, and the check upon the regional hospital boards is the prospect of a successful argument with the Ministry of Health. In consequence, there is a weak element of accountability. As has been said, the budgets, the estimates, of hospital management committees are gathered together by the regional hospital boards, where they may be summarised and criticised, but the Minister's role and the Minister's problem is to exercise central control after the budgets have been assembled and received, after they have been through the regional mill; and his difficulty, it seems to me, is to impose, often too late, cuts—for it is as cuts that they are regarded—on the regional boards and hospital management committees.

Now the right hon. Gentleman has—I think, rightly—proclaimed his intention to permit the highest possible measure of local responsibility and local autonomy, and the difficulty which has to be resolved is, how to reconcile that local responsibility, that local budget preparing, with central financial control. Already the Minister has sought to impose a cut only 952 to find it impossible. I am glad—for I understand it to be the case—that the Minister has decided in future to make allocations of money, not earmarked for particular hospital management committees, but to regional hospital boards for their allocation. I believe that to be a step in the right direction.

Even so, and even if all possible central economies are effected, it is impossible not to expect a substantial increase in hospital expenditure. The proportion of expenditure for capital development is in the region of 5 per cent., and under the present system there are few hospitals which cannot effectively sustain arguments for rebuilding a new wing, or buying a new piece of apparatus—arguments which the Minister, under this set up, will find it impossible to resist. If we may look at the problem in isolation for a moment I would say that I see the prospect of increased expenditure on hospitals—justifiable in relation to hospital considerations—of £100 million or even £200 million in the next few years.

This brings me to this point, that if it be assumed—and I assume it—that there is a limit to what can properly be raised by taxation without killing, or at least injuring, the goose that lays the golden egg; if that be true, and if it be true that such increased expenditure is a reasonable possibility, then we are led up against the crucial issue of the priority of social services in relation to limited resources. We are approaching—the Chancellor of the Exchequer made me wonder today whether we had reached it now, in his view—we are approaching a decision as between hospitals and houses, as between clinics and schools; and sooner or later there must be a proper allocation of resources as between one form of social service and another.

I do not presume to say whether the limit has been reached, or what the priority should be, but I do believe that the one way of strengthening the hand of the Minister of Health in this matter—the one way—is the pre-determination of a sum of money, at whatever level it may be, which is available to be expended on the Health Service. Now, this would mean in the case of the hospital services an annual allocation of money to regional hospital boards, and in turn the allocation to hospital management committees. Clearly, that allocation must be sufficient 953 to meet maintenance costs, with a reasonable allowance for capital development.

In this way the local hospital management committees would receive a control comparable in some ways to the accountability of old. It might have this further advantage. The public, recognising the element of State provision, to which the Chancellor of the Exchequer referred today, would return once more—recognising the character as well as the limit of the provision—to that old and friendly and supporting attitude towards the hospitals of this country. I do not mean a return to flag days and the like, but there are still people and organisations who are anxious to help their fellow men, and who find in service for the hospitals opportunities which, in their experience, cannot be equalled in other fields. Apart from anything else, I believe that the existence of such opportunities does good to the people who take advantage of those opportunities.

I hope I shall not weary the House if I refer very briefly to two other aspects of the Supplementary Estimates. It is, perhaps, inappropriate here to refer to the comparison between the cost of general practitioner services, relating as they do to the general medical care of the whole body, and cost of dental and supplementary ophthalmic services, which, though important, relate to circumscribed parts of the body. Nor is it the occasion to refer to general practioners' remuneration, which, in some ways, needs improvement; nor to the margin between the general practitioners' and the specialists' remuneration, which needs to be narrowed. The point I want to stress is this, that the sort of allocation to which I have been referring in relation to the hospital field, exists within limits, and subject to periodic review, in the general practitioner field; which is one of the reasons for the more modest Supplementary Estimate that has been found necessary in that field.

But the dental and pharmaceutical services, the greatly increased cost of the dental service, and, even more important, the tragedy of the decay of the school dental service—these things are attributable, in my view, to three main causes. There are too few dentists to provide a comprehensive dental service however it is organised. The dental Spens Report is not being applied to the school dental 954 services, with the inevitable result that dentists in considerable numbers are leaving for other more remunerative forms of work. Third, the present system of remuneration being the same for all qualities of work, it provides for a minority an incitement to hasty and so to unsatisfactory work.

The solution is one of immense difficulty. If we apply—I confess I am doubtful on this point—the allocation principle to these services it will be possible to give expression at long last to the Government's policy of priority for the dental care and treatment of mothers, by providing a complete service for those priority groups, provided that steps are taken to attract back to those dental services the practitioners who have left. The list of priorities could from time to time be extended, but it would mean this. Bearing in mind that there cannot be a comprehensive service because of the shortage of dentists is, perhaps, not so tragic to contemplate. It would mean this, that outside the priority groups there would be a fixed sum of money which would be available as grants in aid for those whose needs were less in this dental field. Whatever else is done we must restore the school dental service and the dental service for expectant and nursing mothers, and reverse the conservative tendency, which, because of haste, has already begun—I do not use the word "conservative" in a political sense—to return to the old and more vigorous "pull it out" methods in our schools and clinics.

May I say one word on the pharmaceutical service which at present is the greatest problem of all? The increase in cost is due in part to an increase in the number of items of service. I believe that the increase there is actually some 7 per cent. It is due in considerable part to the increased cost of the newer drugs which, although expensive, contribute to the service elsewhere by shortening periods of illness. It is due to the tendency—not surprising in view of the initial propaganda—on the part of the public to seek to obtain under the National Health Service arrangements those minor medications and dressings which formerly they were willing to pay for themselves. I admit that, among other causes, is the pressure of the middle- 955 class, covered by this scheme, for the standard of medication to which they have been accustomed in the form of the better proprietory medicines, and that is, in part, responsible for the increased cost. The remedy is very difficult apart from a cash barrier.

I hope that the Minister of Health will say something about what I will call the shilling scheme. I know that the effect of the announcement of that scheme reduced the burden on practitioners, but I hope that the tendency to regard a large number of the lesser items which are demanded of the service and of the doctors in particular as frivolous will cease. The whole of this service was to bring people to the doctor for the trivial to prevent it becoming a tragedy, and there is a tendency in all quarters to regard the trivial as being mainly or wholly frivolous. Of the shilling scheme, I would say this: I can see its force and effect in one direction, but, speaking only for myself, I have the most serious doubts as to its practicability, and I have serious doubts whether it will be possible to devise a scheme which is fair to all sections of the community, particularly to the larger families.

Lastly, may I thank the House for the patience with which it has listened to me—recognising that the strain on some Members may have been greater than usual—and thank the whole House and its staff on behalf of the new Members generally for the friendliness and cordiality with which they are received into the Parliamentary community.

§ Dr. Barnett Stross (Stoke-on-Trent, Central)

It falls to me on behalf of the whole House to congratulate the hon. Member for Luton (Dr. Hill) on his first speech in this Chamber, and to say that we have been very happy, certainly on this side, to hear him. We hope that we shall hear him in this vein—I think his true vein—very often because his enormous experience, and, if I may say so, his undoubted sincerity when he speaks on this subject will endear him to the whole House.

To follow the speech made by some one who, as it were, was making it from these benches, and speaking very strongly against the Amendment, is somewhat difficult. I say at once—and surely it is 956 not offensive to say so—that I found myself in agreement with everything that the hon. Gentleman said; in particular when he was speaking of the small percentage of funds available for the capital improvements of the hospital service—a mere 5 per cent. Those of us who have worked as medical men know full well what are the crying needs.

I am reminded that only a few days ago—I hope that on this point the Minister will listen to me carefully—I went round a very large hospital of a thousand beds in North Staffordshire. I saw evidence of a great deal of capital expenditure in the way of new building—but I was told that no new building was permitted but-reconstruction and rebuilding were allowed. Obviously a great deal of money was being spent on patching, when, in fact, we could have got something much better had it been spent according to a proper plan. I hope that the Minister will bear in mind that a service of this type must burst through any bonds that tend to restrain it because it is a moral service and a human service, and the demands of the people have to be met. It is far better not to waste our money by patching and repairing when we can get a better result by saying, "Here is so much money for you; spend it in the best possible way."

I thought that there was a suggestion when the hon. Member for Luton was speaking of a little regret at the terms meted out to the general practitioner. The general practitioner does indeed bear the brunt of the service on his shoulders. He has to face up to all changes that occur in the first place. I sometimes used to wonder when I was in practice why the word "specialist" was not applied to the general practitioner, because he is a specialist in his own line, and a very wise one when he has had sufficient experience. It has been fascinating to know that his average salary is £1,530 a year, but his prescriptions cost £1,700 each year.

The last speaker gave some of the reasons why the drug bill is so high. Sir Henry Cohen and his committee are considering a type of advisory pharmacopoeia which will help the medical practitioner. It is very essential and very desirable. Certainly, in my day, and, to a lesser extent now, treatment was not considered as being of the utmost importance by way of training because there was many 957 other things to learn. The curriculum was overcrowded, and the medical man, when a house physician or house surgeon, and, later on, in practice learnt much by reading and discussion with his colleagues.

This brings me to the point that his education will improve vastly and many of the problems which we are discussing now will not be so apparent when the health centres are ultimately built and available. When he is in practice and if he has not full experience he tends to be affected a little by the high pressure salesmanship of the people who come round and wish to sell new lines of drugs. Some of these, as has been said, are expensive. In no way should anyone think that I am saying anything derogative of the great firms who have turned out so many excellent products.

It is true that there is a certain fashion in prescribing and fashions in prescribing can be particularly expensive because fashions change, and chemists tell me that that they have been left with great stocks on their hands because no one wants any more of a particular product. That is all somewhat unsatisfactory. In the olden days, one got some kind of guidance with a rather rudimentary pharmacopoeia given to the practitioners who worked for the National Health service. He knew that he could go outside it in any direction he liked, but when questioned he would have to defend his choice, and, if the defence was untenable, he was surcharged. I myself see nothing wrong in that as a principle. The whole of the pharmacopoeia should, of course, be open to each and every medical man; the question of surcharge if he does not know his work, or if he shows excessive licence in prescribing, expensive and unnecessary proprietary articles, is a matter upon which we all have our own views, and upon which most of us are agreed.

In the past there has been a good deal of controversy about the cost of the dental service. I think that we have now begun to realise that the dentists as a whole have done a very good job; but it was a job that very badly needed doing. None of us had realised what the needs were. Probably the ordinary general medical practitioner in a great urban area was the person who knew best how sadly deficient people were in care and attention in this respect, and it has not surprised me that 958 there was a great rush on the service. I was delighted to hear the hon. Member for Luton make a plea for the re-establishment, as quickly as possible, of a priority service for children, and expectant mothers.

I have often wondered whether the Minister could not cut the Gordian knot fairly simply by stating as a condition of service for the dentist that he should treat a percentage of children. We all know very roughly how many children there are in an area, and I think it is well worth while asking the dental profession whether they will not work out their own scheme in that particular way. Certainly the public are becoming very restive over the fact that the people who need dental care most are those who tend to be most neglected, because the dentists do not find time to do the work for them.

The ophthalmic services have also been very costly, and it has become significant that because we needed very many more spectacles they became dearer as time went by and as the service went on. I should have thought that spectacles and their provision would have become cheaper if there was such a great demand. I am told that it is normal business practice if there is a very large turnover the goods become cheaper. In this particular case that has not been so; there has been a greater demand for spectacles and they have become more expensive, and I think there is something very unusual about it.

Another point which the Minister should perhaps have considered but did not was the giving of a suitable incentive to the optician, because from a financial point of view the optician found it desirable to prescribe two pairs of spectacles rather than one. I should have thought that it might have been wiser to have paid only a very small fee for the second pair. At any rate, there is a spate of double spectacles provision all over the country, in a way that did not exist before, and ophthalmic surgeons and men who are cognisant of these problems have put it to me that the incentive has been wrongly balanced. I will put it no higher than that.

This Health Service is one we boast of as being universal in type, as comprehensive as any in the world, and one which we wish to be entirely and freely available 959 to the public. I have heard the Minister say that he felt it was quite reasonable within the service that people who had money to spend should be able to buy privacy but not priority. I think everybody agrees with that, but unfortunately priority is being bought throughout the country. I have never read a letter in the House before, but I do crave indulgence to be allowed to read part of a letter I received yesterday from one of my constituents. He states that he has a child aged six who was examined in April of last year by the school medical officer and found to be underweight, and also very deaf due to enlarged and septic tonsils. He says: We were told that there was a big waiting list but we would hear in due course, when my son would then undergo an operation for the removal of his tonsils. Now, 11 months later, we are still waiting and the child cannot even hear a wristlet watch tick when it is held to his ear. His general physical condition has deteriorated to such an extent that the school medical officer has prescribed a course of sun-ray treatment. Of course"— and this is the point— if I were to pay for an operation I could nominate my own date. However, I cannot see the purpose of a National Health Bill if one has to contribute the scheme and yet pay doctors' fees in addition if immediate treatment is thought desirable for a child's welfare. I have great sympathy with the point of view expressed there. The child is becoming progressively deaf and 11 months have passed by. I can vouch for the truth of the assertion that in the area from which this letter was written—as indeed in many areas—if this father were willing to pay a fee, perhaps not even a very high fee from some points of view, he could have immediate attention for his child. I hope the Parliamentary Secretary will tell the Minister that we on this side feel very strongly indeed about this unfortunate hiatus in the Service, or this omission from what we felt was promised to us, or what we promised to the public. If money is the trouble we should not be afraid to spend more money.

My last word on the subject is this, and I am sure I shall carry the whole House with me. No one has yet pointed out that the best way of saving money is not to spend it, and one of the most costly things about sickness and ill-health is that we have to care for those in the community who a