THE GROWTH OF NATIONAL EXPENDITURE.
IIIHE _Economist has recently issued a very useful I little pamphlet dealing with the national expendi- ture of the United Kingdom. Such a pamphlet is all the more valuable as proceeding from the office of a newspaper which has latterly devoted itself very markedly to the support of the present Liberal Party. Even on the matter of expenditure the authors of the pamphlet do not speak out quite as plainly as might be wished in denunciation of the manner in which the Liberal Party has completely forgotten its former pledges in favour of economy. These pledges, it is important to note, are many of them of quite recent date. Even as late as the year 1905 practically the whole Liberal Party was engaged in denouncing the extravagant growth of public expenditure. Mr. L. Harcourt, now a member of the Liberal Cabinet, writing in a little volume on national finance, published by the Eighty Club on the eve of the General Election of 1906, said in an article on "Taxation and Expenditure" :—" No effective alteration can be attained until the House of Commons and the constituencies are prepared to undertake and to maintain drastic retrenchment of expenditure. In the next Parliament this will be one of the greatest and most beneficent tasks of the Liberal Party, and no higher honour could they attain than the achievement of that sanity in expenditure which is the basis and security of national solvency." Instead of reducing expenditure, as Mr. Harcourt, with the full approval of all the leaders of the Liberal Party, so explicitly promised, the Liberal Government in five years have added—when allowance is made for capital expenditure—X16,000,000 a year to the expenditure of the State.
Facts like these are ignored by the Economist, which contents itself with merely calling attention to the enormous growth of expenditure during the past few years. Stress is laid primarily upon military and naval expenditure, but it is frankly admitted that this is only part of the evil. The Economist pamphlet gives the following figures for the total civil expenditure for the United Kingdom :- 1897-98 £47,158,000 1910-11 77,283,000 It comments in the following words :—" In view of this result it is no exaggeration to say that the growth of civil expenditure is at least as serious as the growth of military and naval expenditure. In a period of twelve years our civil expenditure has increased by nearly 66 per cent., and the actual addition made is the huge sum of £30,000,000 a year. What that means to the taxpayer can best be made clear by pointing out that if this additional expendi- ture had not been incurred, the Chancellor of the Exchequer would to-day be in a position entirely to abolish the Sugar- lax and the Tea-tax, and to reduce everybody's Income- tax by approximately 8d. in the pound."
We welcome this very emphatic declaration in favour of economy in civil expenditure ; but unfortunately it is difficult to find any support in any section of the Liberal Party (unless Mr. Gibson Bowles be called a Liberal) for the doctrine here propounded. Mr. Gibson Bowles has indeed devoted himself consistently and persistently to advocating economy in public expenditure; but the Liberal Party has not displayed any great enthusiasm for his support in spite of his work for Free-trade, and did very little to help him to retain his seat. If it be asked how it happens that within the short period of five years the Liberal Party should have so completely abandoned its pledges in favour of economy, the answer is to be found in the fact that the political tune in this country is no longer called by the taxpayer, but by the tax-eater. That part of the electorate to which Liberals specially appeal consists mainly of persons who pay no direct taxation, and many of whom are under the impression that they pay no taxes at all. That, of course, is the Constitutional vice of indirect taxation. The tax becomes merged with the price of the article, and the taxpayer does not know that he is being taxed. Moreover, the Liberal Party, quite consistently, we admit, with its principles in this case, is anxious to relieve the poorer classes of the burden of indirect taxation. It has already reduced the Sugar-duty and the Tea-duty, and doubtless Mr. Lloyd George, if he secures another surplus, will try to abolish the Sugar-duty altogether. In that event it will be roughly true that the majority of the electors of the kingdom will be subject to no compulsory tax at all. Yet it is on their votes that will finally depend the determination of the expenditure of public money. Few people appear yet to have recognised the full gravity of this situation. The property of the well-to- do classes is now at the mercy of a Parliamentary majority dependent upon the votes of persons who pay no direct taxes, and many of -whom are inspired with a Socialistic theory that it is justifiable to use the power of taxation to transfer property from the rich to the poor. Even where this theory is not crudely held, there is a complete indifference to the taxpayers' point of view, accompanied by a belief in the universal efficacy of State enterprise, with a consequent increase of State employment.
It is this political problem which has to be dealt with before we can even hope to secure economy in public expenditure, whether in gross or in detail. For at present there is practically no force in the House of Commons in favour of economy. An occasional enthusiast like Mr. Gibson Bowles will raise his voice in the desert, pleading for better account-keeping, so as to show to the nation the full total of the millions that are being spent, and occasionally a few Members will get together, as they did in the Parliament of 1906, and secure the appointment of a Committee to inquire into par- ticular branches of public expenditure. This was done in the case of the expenditure on Government printing and stationery, with the result of a saving, according to the Economist, of nearly 10 per cent. The Publications Com- mittee then established still continues its work, and still secures economy in details, and these are by no means to be despised. Unless there is economy in detail there certainly will not be economy in gross, but the economy in detail is by itself obviously insufficient. It is useless for a Parliamentary Committee by steady drudgery to save a few thousands a year when the Chancellor of the Exchequer in response to some popular cry may add as many millions to the national expenditure.
While, therefore, we welcome such a volume as that published by the Economist, and hope that many people will study it so as to obtain practical illustrations of the manner in which the nation's money is being wasted, we confess to a feeling of hopelessness as long as there is no movement in either political party for a serious curtail- ment of expenditure. At present the two parties are, in effect, bidding against one another, not only in the matter of legislation, but in the matter of finance. Both are offering bribes with the taxpayers' money. We doubt whether the majority of the taxpayers wish to be corrupted in this manner. There is a vigorous strain of honesty in English people of all classes, and few Englishmen wish to put their hands in other people's pockets either furtively or by Act of Parliament. But as long as our political system is so arranged that men must vote with one or other of two great competing organisations, and as long as these two organisations are each considering mainly their own party interest, it is difficult to see from what quarter relief can come.
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