§ LORD MONKSWELL rose to ask His Majesty's Government how much they estimate that the people of this country must save every year so as to ensure that the value of the national estate shall not diminish through the processes of ordinary wear and tear and obsolescence; whether they consider that the requisite sum is being saved, and, if not, what plans they have to meet the situation; and to move for Papers.
§ The noble Lord said: My Lords, you are aware that a great many people who have studied finance have deep and serious misgivings about the so-called economic recovery of this country. The subject could easily be treated at great length, but it will now be sufficient to 936 mention those points which are causing these doubts and misgivings. They are more or less progressive depreciation of the currency, an intense and widespread system of subsidies, and crippling taxation of the investing public. The prosperity and even the existence of every civilised country must obviously depend upon the regular production year by year of all those things which constitute civilisation, and means of production must be continuously available. It is not sufficient to build or manufacture or lay down means by which wealth is produced. Every material object is constantly wearing out and must be regularly repaired or replaced if it is to continue to fulfil the intention with which it was made.
§ The question that is causing doubt and misgiving is whether national savings are great enough to maintain the efficiency of our means of production. I am afraid I must ask your Lordships to allow me to give you a few figures. Most authorities, such as bankers and statisticians, agree in placing the total capital wealth of this country somewhere between £30,000,000,000 and £40,000,000,000. The wealth represented by this sum is based on material objects, all of which are wearing out at different rates. It is probably a fair estimate to assume that the average depreciation due to wear and tear or obsolescence is 2 per cent. per annum. This means that to keep in good working order the whole of the property of the whole nation or, as the case may be, to replace obsolete material, the sum of £600,000,000 must be provided every year over and above the living expenses of the whole nation. This is assuming the national wealth to amount to £30,000,000,000. If it amounts to £40,000,000,000 the sum required will be £800,000,000. In each case the sum of approximately £100,000,000 taken out of capital in the form of Death Duties and devoted to current expenditure must be added. Taking the lower estimate, it therefore appears that 700,000,000 must be saved every year merely to prevent the nation from becoming poorer. If increased prosperity is desired the sum must be greater.
§ It does not matter where the money required for maintenance comes from. It may be a proportion of the taxes or 937 rates, it may be company reserves, or it may be private savings, but wherever it comes from it must be surplus to the whole annual sum spent on the living expenses of every man, woman and child in the country. It must be surplus to everything, including education, health services, amusements and so on. If it is not there is automatic impoverishment. We learn from noble Lords and others who take an interest in national saving that working-class savings amount to a capital sum of about £3,000,000,000, and so far as I can make out are increasing at a rate certainly not greater than £200,000,000 per annum. This is perhaps half of the amount distributed to the working classes every year out of the proceeds of taxation alone without taking increased wages into account. The whole of the rest of the wages and subsidies received by the working classes is apparently spent in raising their standard of living which, whatever advantages may thereby be secured, means that it is spent without doing anything to maintain the material wealth of the country.
§ There appears to be too much reason to fear that the present system works somewhat as follows. Money which was formerly invested is now distributed as largess to the working classes, who are encouraged to spend it in ways that do nothing to increase the productive power of the country but artificially stimulate the output of heavily taxed luxuries like tobacco and spirits. Out of this taxation the National Revenue is in turn heavily subsidised. The while crazy system thus depends on draining away at the source the supplies of new capital which ought to be used to maintain and increase our means of production. Up to about 1910 there is no doubt that savings were on a scale sufficiently large not only to maintain but to increase the national wealth. These savings came from the incomes of the thrifty of all classes, and principally from big incomes. In 1914 came the War with its colossal waste on the one hand, and huge increases in the wages of the working classes on the other. When the War came to an end these increases, or a great part of them, in most cases remained, and they have been constantly supplemented by enormous fresh subsidies of many kinds.
§ All political parties have raised the cry of redistribution of wealth by taxation 938 and have acted accordingly. So great drafts of money have been diverted from the people who were rich enough and thrifty enough to save, and handed over to the working classes not as payment for increased production on their part but as a free gift. The natural consequence has been that this money, which in the hands of the rich and thrifty had mostly been reinvested in new and improved means of production, has been and is mostly spent in raising the standard of living of the working classes. When it is remembered that, as I have already pointed out, something like £400,000,000 a year is diverted in this way by taxation alone, quite apart from increases in wages, and that production where it has increased at all has increased at a very much slower rate, it is obvious that the sources from which new investment used to be fed are largely dried up. Have any other sources appeared, and if so, what are they? If not, this country is manifestly becoming progressively poorer with nothing to look forward to but a pauper's funeral. Are the Government, who must be aware of these facts, doing anything about them? I beg to move.
§ LORD MOTTISTONE
My Lords, I am sure we are all very grateful to the noble Lord, Lord Monkswell, for having brought forward this matter, but I feel bound to say that I shall try to show that his gloomy prophecy of impending disaster is not supported either by facts or by the opinion of any of those best qualified to judge. Is it true or not that we are living on capital, and that if we go on raising the standard of life of the poorer classes and increasing their wages we are doomed, as he says, to a pauper's funeral? I believe that this is far from the truth, although the noble Lord has produced certain facts and figures to support his view. I propose with your Lordships' permission, as Chairman of the National Savings Committee, and therefore cognisant with the arguments on both sides and with the facts of the matter, to give the answer as I see it, and the answer of those who work with me in the great movement for national savings, whether through State-controlled or other agencies.
As I have so often said that we ought to speak without notes in this House I must apologise to your Lordships for 939 having to use notes on this occasion, because some of the figures which I shall have to quote were only supplied to me a few minutes before the noble Lord began his speech. First of all I should like to deal with the question whether capital is being increased in sufficient volume to make up for wastage. I have some figures here showing how capital is being increased from year to year. The figures do not make up the total which the noble Lord, Lord Monkswell, says is essential, but I can only tell him that no serious authority, whether economist or banker, will agree to the vast total that he postulates. The figures which I shall quote are all either official or supplied to me by economists and bankers who are in touch with official sources of information. Let us see, then, what has been happening since the great blizzard of the depression took place. I will take first the three great State-controlled agencies for saving—the Post Office Savings Bank, the Trustee Savings Banks, and National Savings Certificates. In December, 1932, the amounts standing to the credit of depositors amounted to £1,173,000,000; in 1933, £1,206,000,000; in 1934, £1,238,000,000; in 1935, £1,292,000,000, and up to October this year £1,347,000,000. Those figures show an increase, since the slump, in the first year of £33,000,000, in the next year of £32,000,000, followed by £54,000,000 and then £55,000,000, all added to the already vast total of money due to the small investor. I have been dealing with figures relating to the State-controlled agencies for saving.
I will next deal with the total volume of what are called the small investors savings to see whether they are increasing or whether, as the noble Lord fears, they are diminishing, and then I will give brief consideration to the big items accounted for by the large investor. If you include with the savings to which I have referred the money in the building societies, friendly societies, industrial and provident societies, and industrial insurance—which is apart from general insurance such as your Lordships indulge in when you can afford it—it will be found that in 1932 the total was £2,470,000,000; in 1933, £2,573,000,000, an increase of £103,000,000; in 1934, £2,705,000,000, an increase of £132,000,000; and in 1935, £2,794,000,000, an increase of £89,000,000. For this year the latest available figure is £2,862,000,000, showing an increase of 940 £68,000,000, but to that will have to be aided the figure for the remaining three months of the year which will no doubt make up the increase to well over £100,000,000. Those are very remarkable figures. They are going up, and up, and up by an average of over £100,000,000 a year.
Now I will turn from the small investor, as he is termed, to the investor who is supposed to be better off. Take the amount put to reserve by public companies in the last few years. The figures are based on the published report of some 2,000 companies—not a bad basis. The amounts drawn from reserve have been allowed for, and it, is fair to say that these, again, are national savings. They are savings of the nation. Now in 1932 these reserves were £7,600,000; in 1933 they were £12,100,000; in 1934 they were 227,400,000; in 1935 they were £40,300,000; and in 1936, up to date, they were £05,300,000. These are very striking figures, showing the continuous advance of the savings of the people.
§ LORD MOTTISTONE
No, these are actual millions, just little quiet millions. For the last period it was £55,300,000, not hundreds of millions, and if we divided it between us we should be very well off! Then we come to capital issues, excluding the great conversion issues—with one of which I was myself concerned, as your Lordships may remember—which are, I think, rightly regarded by the economists, who differ on all subjects except on this on which I am now addressing your Lordships, as in a sense the savings of the nation, because you cannot invest something unless you have it to invest. Here we come to the hundreds of millions. For the year ending December 31, 1932, the amount of capital issues, excluding the great conversions, was £189,000,000; in 1933 it was £215,000,000; in 1934 it was £169,000,000; in 1935 it was £236,000,000, and from January 1 to December 12 of this year—so that it will be seen that a considerable sum has to be added up to date it has been £240,000,000. Those are hundreds of millions.
There is one little item, but I think it is of importance, which your Lordships might be interested to hear about, 941 and that is life assurance apart from what they call industrial assurance. I am told by men of renown in the economic world that insurance is a very sure index of the wealth, and indeed of the prosperity, of a people in comparison with other peoples. Of course, I hasten to say that I do not think everything is all right; I shall come to that in one moment before I sit down. But as compared with other things, with other peoples, and with ourselves in previous times, this final figure is, I think, interesting. It concerns the people who want to insure their lives, apart from the poorer people. In 1932 the amount paid in premiums was £68,000,000; in 1933 it was £71,000,000; in 1934 It was the same sum; in 1933 it was £77,000,000; and, though I have not the amount for this year, I am told on good authority that the figure still continues to rise.
If, my Lords, you take the whole picture as I have put it before you by these figures, which I have been able to obtain from various Government and other official sources, as checked by the best economists, I think you will be inclined to agree: with the view which I venture to put forward; that, far from the gloomy prophecy of Lord Monkswell that we are living on our capital and that unless we manage to reduce our expenditure, and especially, I think he said, make sure that there is no increase in wages or increase in extravagance by the working classes, we are doomed to a pauper's funeral, e truth is really quite otherwise. If we manage to escape being involved in a great war or some other catastrophe, which will cause these figures to be completely altered and of no avail, I foresee, and others who are much wiser than myself foresee, a period of ever-increasing prosperity for all classes in this country. But in the speeches I have had to make in the country as Chairman of National Savings, I have always ventured to indicate that the danger lies in the possibility that this ever-increasing wealth may not be distributed sufficiently widely to enable the whole volume of prosperity to proceed unimpeded owing to the discontent of large numbers of people who think they are not getting a fair deal. I have sometimes been told that I am a wicked Radical or even a Socialist; yet the fact is that those who really think, and think 942 deeply, about this question, even if they are of the most extreme Conservative school, agree with the view I have put forward.
I do not know if your Lordships saw—it was reported very fully in The Times—a most remarkable speech made by one of the leaders of finance, a director of the Bank of England, Sir Robert Kindersley, in October. I have the record here. He happens to be my predecessor but one as Chairman of National Savings; my immediate predecessor was a noble Lord much respected in this House, Lord Islington, whose death I am sure we all deplore. Sir Robert was his immediate predecessor. In this speech this director of the Bank of England, whose politics I do not know, but I think they would satisfy all reasonable tests in any Tory community, said:Without fair distribution prosperity will be short-lived; but with fair distribution and a sane and just improvement in the standard of living, we can look forward to a period of world prosperity which will surprise the most optimistic.In a previous part of that speech, which was delivered on October 8 at Southport, Sir Robert pointed out what he thought was the danger: do the country understand and realise that only 4 per cent. of the people of this country, which, as he was pointing out, is getting richer and richer every day, have incomes of over £8 a week? A very striking speech and a very striking fact.
Then he went on to say, this director of the Bank of England, this ex-President of National Savings:If I am right in thinking that we are at the commencement of a long period of prosperity, that prosperity must be made to be productive of good and not of evil. Much will depend on how we as individuals conduct ourselves and one of the crucial tests will be that of how we spend our money. The necessity for new capital will be insistent and a large part of that capital will have to be found by small investors.I am sure that that is a true doctrine. I am sure that it is not the least bit true to say that we are living on our capital and are going to have a pauper's funeral. The reverse is the case. But we must see to it first of all that all classes, especially the small investor, are encouraged to plan their income and expenditure so that there will be something saved up, in order that they may be able to look after their children and 943 do things which otherwise the State may have to take on; because they will thus be adding to the general pool of capital, which cannot now be filled up so much by the wealthy classes for the obvious reason that the very high taxation takes so much larger a proportion than it took in days gone by.
It is up to all of us so to plan our lives as to do the thing which I have never yet succeeded in doing: to make our income slightly exceed our expenditure. I will own up to your Lordships that I have tried to do it all my life and I have never succeeded yet; but we know that it is our duty to try to do it, so that we shall all be adding to the pool of capital. My consolation for the fact that, although having eight children, I have not been able myself to do it, is that there are others sitting round me who have done it through generations and centuries and thus have enabled the world to go on and prosperity to increase. Far from it being the case that we ought to try and draw in our horns, and pay less wages, and encourage poor people to spend less money, we ought in my judgment to encourage everybody so to plan his life that he can save a bit for the good of the State, and then spend the rest on a good plan and not fritter it away in small ways.
I am sure that if we continue, as we are doing now, to make ourselves secure from outside attack, if we remain a good humoured, quiet and friendly people, without envy or hatred, and if we are determined to see that no particular body of citizens are harshly dealt with, as in the case of the Special Areas, as I have said more than once to your Lordships, and if we try to remove every grievance which we can remove, and see, so far as possible, that nobody shall be very, very rich whilst others are dreadfully poor—if we continue on those good old English lines, with all the help that modern science gives us, there can be no doubt that, as Sir Robert Kindersley prophesies, we shall go forward to greater and greater prosperity and wealth which, wisely spent, will add to the happiness of the people of this land.
§ LORD TEMPLEMORE
My Lords, my noble friend Lord Monkswell has introduced a very interesting and very important topic to your Lordships' attention. 944 I had it in mind that possibly the noble Lord's Question might induce some of your Lordships' financiers to come down to this House to take part in this debate. I am sure we are the poorer for the absence of their contributions, but as regards the unfortunate individual who addresses you now, I am not sure that I am not rather relieved, because, although I understand that mathematics is an enact science, the opinions of financiers in discussing financial questions, when I have had the pleasure of listening to them, have been very wide and somewhat varied, and I might have found myself faced with a more difficult task than I dc at the moment. My noble friend, as usual—as a rule it is with regard to railways, but this time he has attacked the finances of the people—is a kind of Cassandra. He might reply to me that Cassandra, although nobody took much notice of her at the time, was always right, and I believe that was one of the most disagreeable traits of that individual. I hope to show your Lordships be fore I have done that things are not quite so bad as they seem, and that your Lordships may more or less rest quiet in your beds at night.
There are really two questions, as your Lordships will see, in the noble Lord's Notice. The first is: How much ought the people of this country to save every year to ensure that the value of the national estate shall not diminish through the process of ordinary wear and tear and obsolescence? Secondly: Is the requisite sum being saved? First of all the noble Lord estimated the wealth of the country, the capital wealth of the country, at £30,000,000,000 or £40,000,000,000. As I think my noble friend on the Liberal Benches, Lord Mottistone, said, that really, in the opinion of the Government, is a great deal too high. His Majesty's Government prefer to take the estimate of Sir Josiah Stamp, issued some years ago, which put the capital wealth of the United Kingdom at a great deal less. In fact, excluding the National Debt, he put it at about £18,000,000,000, and this figure would be reduced to £16,250,000,000 if we excluded the property belonging to the Government, to local authorities and to railways. As your Lordships are aware, depreciation is provided in those cases either by special sinking funds, by voted 945 expenditure on new works and replacements, or, in the case of the railway companies, by maintenance allowances. I do not think it can be argued that depreciation is insufficient in these cases, but even after that there are still many deductions to be made from the figure I have quoted.
I need hardly remind your Lordships that the greater part of the national wealth consists of the moveable property of private persons, such property in fact Us household goods, motor cars, jewellery, etc., and I think in the case of these matters hardly anyone—probably not one per cent. of the population—really makes any provision for depreciation and obsolescence other than by buying new articles when the old ones are worn out. I think everyone would agree that purchases of this kind are very heavy at the present time. That may be a good thing or a bad thing, but I think it does answer the noble Lord's question about depreciation and obsolescence. These things are being taken care of in the only way possible, by the purchase of new articles, and the national wealth under these heads is certainly not diminishing. Then there is the question of working capital, which is very large arid is not subject to depreciation or obsolescence in the same manner as fixed capital.
Now, there is a further element of uncertainty arising from the nature of the statistical estimates which even the greatest experts are compelled to make. Such estimates are based necessarily on the market value of shares, and include a large element of capitalised profit and goodwill. The real figure we need is that of the value of physical property which is subject to depreciation. I take it that there are two headings of this: real property, which I will take at £5,500,000,000, and other kinds of property, £6,500,000,00. I have tried to estimate a figure which they cannot well exceed—in fact I am advised that £12,000,000,000 may be much too high. If I applied to such a total the provision of 2 per cent., which the noble Lord, Lord Monkswell, suggested—though again I ought properly to point out that it is too high an allowance for real property—it works out at a maximum conceivable charge of £240,000,000, which is of course much less than half the lowest figure 946 which the noble Lord suggested in his speech. I think I have dealt with the first part of the noble Lord's Question.
I pass to the noble Lord's second Question, as to whether the requisite amount is being saved in order to ensure that the value of the national estate shall not diminish. I have no reliable estimate of the total savings of the country, except such as may be got from the excellent speech made this afternoon by my noble friend who is Chairman of the National Savings Committee; but I think I can satisfy your Lordships that the savings are far more than sufficient to take charge of the processes of depreciation and obsolescence. As regards real property, everybody knows that the amount of new building and new construction going on has been unprecedently high in recent years, and I think we may say that new construction has been and is taking place on a scale which is manifestly far and away higher than existing property can be deteriorating. As regards property other than real property, this is largely in the hands of industrial and business concerns. I should like to refer to a well-known estimate, also I think by Sir Josiah Stamp, that in 1928 public companies representing about two-thirds of the total capital placed about 21 per cent. of their profits to reserve. And I am informed by my advisers that the proportion has now grown to 25 per cent. I would remind your Lordships what this means. Public companies have to provide for depreciation before they reckon their profits. But we find that after providing for depreciation to the satisfaction of their auditors they place a further large and growing sum to reserve. And all this is done by the companies themselves: it is independent of the question what savings people who receive dividends may make out of their incomes. Thus while insufficient provision might be made for depreciation and obsolescence in particular cases, it would seem impossible to credit that over the whole field the provision is insufficient.
At the same time, I would not wish your Lordships to imagine that I am decrying thrift, or that His Majesty's Government consider the amount of the national savings to be excessive. On the contrary, as Lord Mottistone said just now, one of the most encouraging signs of our economic state is the fact that savings have been maintained at such a 947 satisfactory level. This applies with particular force to small savings, the amounts which the wage-earner puts by: they have been wonderfully maintained during the slump, and now, in conditions of recovery, are constantly increasing. So eminent an authority as Professor Clay has put the total of small savings throughout the country at about £3,000,000,000 and he believes that they are increasing, as Lord Mottistone said, at the rate of over £100,000,000 a year.
I have done my best to answer the noble Lord's points, and I think I have covered the whole ground. In conclusion, I may say that His Majesty's Government are fully in agreement with the noble Lord in regarding the maintenance of national savings as a matter of great importance. I am very much obliged to the noble Lord for having drawn the attention of your Lordships to this important subject. While His Majesty's Government must, and will, watch the financial situation of the country with the strictest care, I venture to say that there has been no more careful guardian of the national finances than my right honourable friend the Chancellor of the Exchequer. I hope I have been able to show that the noble Lord need not be too uneasy, that matters are not quite as bad as he made out, and that in the opinion of His Majesty's Government the national savings are really sufficient to meet the processes of obsolescence and ordinary wear and tear.
§ LORD ARNOLD
My Lords, my apology for speaking after the noble Lord, Lord Templemore, is that I desired to hear what he was going to say in order to link on to his observations what I had in mind to put before your Lordships. The debate has been an interesting one, but I think the crucial figure even yet has not been given, and I will try to supply it. Before I come to that let me say a few words about the observations of the noble Lord, Lord Monks-well. As the noble Lord, Lord Temple-more, has said, the suggestion that the national capital amounts to between £30,000,000,000 and £40,000,000,000 can only be described as fantastic. Lord Monkswell says that is the opinion of most business men and authorities. Personally, I have never heard such a figure given by anybody before. Undoubtedly the figure put forward by the noble Lord, 948 Lord Templemore, is much nearer the mark; that was, £18,000,000,000 some years ago, apart from the National Debt. But in arriving at the total national capital you only have to take into account that portion of the National Debt which is in private hands. A great deal of the National Debt is held by limited companies and so forth, and that is already included in the other heads of Sir Josiah Stamp's estimate. Moreover, that estimate was made some years ago, and prices have gone down since then Probably on balance.
Taking everything into consideration and estimating the amount of National Debt in private hands, which was about £3,000,000,000, probably we should not be far wrong if we took the round figure of £20,000,000,000. From that, for the purposes of the noble Lord's Question, as the noble Lord, Lord Templemore, pointed out, various deductions have to le made. But the question is this, and although I listened carefully to the noble Lord, Lord Mottistone, I did not hear him give what are estimated to be the national savings in the sense of the net accretion of capital in the course of twelve months. We did not get that and that is what really matters. It is a matter of a good deal of argument. Before I come to the figure let me say this. My noble friend Lord Monkswell night say: "Yes, but is the accepted estimate of national savings, in the sense in which I have described them, before allowance for obsolescence and depreciation?" It is. I have satisfied myself about that and I have inquired from the best authorities. Before the War the national savings in the sense in which I am speaking were between £350,000,000 and £400,000,000 a year. The country was growing richer. The Colwyn Committee, which reported in 1927, came to the conclusion that probably the national savings, say in 1926, were about £150,000,000 or £500,000,000. There was of course a change in the value of money, and, taking into account the pre-War figure of £350,000,000 that would have become at that time £650,000,000. Therefore, as against the £450,000,000 to £500,000,000 of 1926, and the estimate of £500,000,000 of Mr. Coates, one of our greatest authorities, there was at that time a slight set-back in the amount of national savings in actual value.
949 What are the national savings now? It is impossible to say with certainty. When the economic crisis came, they naturally declined, but it is improbable that they were ever less than £100,000,000 to £200,000,000 a year. I think I should be within the mark if I say that now they are probably about £400,000,000, possibly more, for the national income is increasing rapidly at the moment. I suggest to your Lordships that that is really the figure that matters: after obsolescence and depreciation and after Death Duties have been paid, there is an accretion of the national income of about £400,000,000. I hope that will be some comfort to the noble Lord. As the noble Lord, Lord Templemore, said, Lord Monkswell comes here with these gloomy forebodings, and if I can do anything to cheer hire up I shall feel that my day's work has not been wasted. I hope he will, after this debate, sleep a little more easily at night and not be obsessed with these fears about obsolescence and depreciation.
There can be no doubt that the national income is increasing by something like the figure I have put forward. At the same time I wish to say this, and I think it is an appropriate opportunity. There is no official estimate, and why is there no official estimate? Because we have not got sufficient official statistics in this country. I have put forward this plea in your Lordships' House before. On that occasion I was replied to by the noble Earl, Lord Stanhope, who, if I may say so with respect, was not quite as adequate in his rejoinder as he usually is. He said you did not want to ask people to fill in a lot more forms; we have enough forms to fill in already. I think we all agree about that. But that is not the point. We ought to have better official statistics prepared by the Government. Many other countries have them—Germany and the United States for example. I consider that the minimum requirements are that the Government ought to have official estimates of the national savings, of the national income, arid of the national capital. These three I think should be the minimum. I do not think you would need to have these estimates year after year, but only at frequent intervals. They could then be quoted with authority.
What do we do now? If I want any figure in particular I have to ring up 950 Sir Josiah Stamp or Professor Henry Clay, and although their economic and statistical knowledge is almost as great as their good nature, I do not think it is right that busy politicians should trouble busy men like them to get information that ought to be available from Government sources. I put forward the plea very earnestly that the Government should consider the matter. I am sure that what I am saying will be supported by the statistical societies of the country—the Royal Statistical Society and the Manchester Statistical Society, which, as a matter of fact, is the oldest statistical society in the world with the exception, oddly enough, of one in Mexico. I am sure this request would be supported by them and that it would be of the greatest value to have figures. At the present time the Government give one or two estimates year after year. They give an estimate of the balance of overseas trade, and we have their cost of living figure, but these other matters could be arrived at without any very great labour.
If the Government will not go straight forward and do what I am asking, would they consider taking an intermediate step and set up a Committee to consider this whole question of official statistics? I do not think they can object to the suggestion that they should set up another Committee. They have set up countless Committees, and another one would be little more than another wave on the shore; and it would arrive, I believe, at the conclusion that something ought to be done in this matter so that this country could come into line, I do not say with all the great countries of the world, but with most of them which have official statistics. I think we could undertake that any official statistics compiled in this country would be as reliable as it is possible to make them. I believe they would have advantages in many directions.
I cannot discuss that point this afternoon, because it is not the subject matter of the Motion, but, in conclusion, on this question of the national savings, if anybody is sufficiently interested, he should read Mr. Coates, our greatest authority on this matter, who arrived at a figure of £500,000,000 in 1926. It is all given in the Report of the Committee on National Debt and Taxation that came 951 out in 1927. The reserve by companies he put at £194,000,000 after depreciation and obsolescence, as the noble Lord, Lord Templemore, has intimated. Therefore I think we may take a cheerful view of the future. I even go one step further than Lord Mottistone. I do not want to bind Mr. Keynes to this, because it is some time ago, but I remember that Mr. Keynes, perhaps in a moment of enthusiasm, indulged in this prophecy. He said—this is not very many years ago—that apart from another war or some calamity of that kind, he thought there was good reason to suppose that in another hundred years this country would be eight times as well off as it was then. That, as I have said, was some years ago, and I do not know whether he would say that now.
§ LORD TEMPLEMORE
My Lords, I can only speak again by leave of the House. I should like to reply to the suggestions made by the noble Lord, Lord Arnold. He asked if the Government would consider setting up a Committee on this question of official statistics. I can only say to him that I will see that this matter is put before my right honourable friend the Chancellor of the Exchequer, who, no doubt, will give due weight to any suggestion coming from the noble Lord or from any other member of your Lordships' House.
My Lords, I should like to ask the noble Lord, Lord Templemore, one question. He talked a good deal about depreciation. Was that a net figure after allowing for appreciation as an offset against depreciation? Your Lordships will realise that there are certain forms of property—for instance, land near large towns and certain forms of personal property which do not depreciate but appreciate if the noble Lord had had in his possession a First Folio of Shakespeare thirty years ago it would have been worth £1,000; to-day it is worth about £15,000. There are many forms of property which appreciate, and what I should like to know is whether in the Treasury figures they have struck a balance and given the net result.
952 On the general question I would take the argumentum ad hominem, one's own personal experience and that of other people one knows. I do believe that the insurance system which this country has embarked on during the last twenty-five years has been of immensevalue. There are very few people, even lowly-paid labourers in the country and the less well-paid classes of working men in the towns, who do not now possess some form of insurance, saving certificates, or something of that sort. I believe that has made greatly for thrift. I know that in a different class the position is perhaps not so satisfactory. I remember only too well that sixty years ago my grandfather used to save half his income; thirty years ago my father used to save one-third of his income; to-day I have the greatest difficulty, living in a modest way, to save one-quarter. The only consolation in that is that the money is going to the Exchequer where I hope it is doing more good than it otherwise night do.
§ LORD TEMPLEMORE
My Lords, again, by leave of the House, I will say in answer to the noble Viscount that I understand the figures I gave are net figures. The only other thing I have to say is to congratulate most heartily the noble Viscount on being able to save one-quarter of his income.
My Lords, there are one or two points in the speeches of noble Lords to which I should like to reply. To begin with Lord Mottistone, I did not gather that the figures he gave for working-class savings differed very materially from my own. They came pretty much to the same thing —£3,000,000,000. There is not a very great difference between us. The noble Lord made the remark that I was against an increase in wages. Of course I am against increased wages unless you get value for money, but I am enthusiastically in favour of increased wages if they are increased by increased production. That is the whole matter. The idea of raising wages without an increase in production is impossible. It cannot be done. That is exactly the trouble we are suffering from at the present time. Then he said it was desirable that nobody should be very rich. That seems to me to be a hopeless 953 attitude. The whole of civilisation depends on people who have had the efficiency and self-sacrifice to accumulate money and who are able to give other people productive work, so that I am afraid that in that respect I differ in toto from the noble Lord.
§ LORD MOTTISTONE
I did not say that I did not want anybody to be very rich. What I did say was that if we wanted to be secure, nobody ought to be very poor.
It seems to me that that is likely to follow. The richer rich people become the richer poor people are likely to become. I think the principal disagreement between the noble Lord who answered for the Government and myself is mostly in regard to the estimate of national wealth. All I can say is that the estimate I gave was the one I had heard over and over again, and the last time I read it was in a speech by the chairman of a well known bank to its shareholders. So far as I can remember he put it at somewhere about £36,000,000,000 or £37,000,000,000 but I do not think it is worth while saying any more about that. Obviously estimates must vary greatly, and they must also vary greatly according to the basis on which they are made.
All I need now say is this. The noble Lord, Lord Arnold, said that national capital is increasing. I should feel more happy about that if he could tell us how it is increasing. It seems to me that even if national capital is increasing it is certainly not increasing at anything like the pace at which it used to increase.
One of the questions I asked in my speech was this. It is a well known fact that something in the region of £400,000,000 a year is now taken in taxation and distributed to the working classes over and above what they used to get. The whole of the working-class savings are certainly not more than £200,000,000 a year, so that that leaves a deficit of at least £200,000,000. I asked if any new sources of capital had been found to cover this deficit. There is no answer at all to that. That really seems to me to go to the root of the matter. I am very much obliged to noble Lords who have spoken 954 and shown such an interest in this debate. I beg leave to withdraw my Motion.
§ Motion for Papers, by leave, withdrawn.