THE CHANCELLOR OF THE EXCHEQUER
Sir, I rise to ask for leave to introduce a Bill to amend the Act relating to the Superannuation of the Civil Service. In submitting to the House the Motion of which I have given notice, I will take the liberty of calling its attention to the manner in which the existing system of superannuation in the civil service originated and has worked. In the last Session of Parliament the subject of administrative reform deservedly engaged a considerable portion of the attention of this House. Her Majesty's Government; fully appreciated the importance of that subject, and is desirous, to the extent of its power, of contributing to the reform of the administrative departments. One important element in that reform is the just apportionment of the remuneration of persons employed in the civil service. This remuneration, according to the present mode of payment, is divided into two parts. It consists partly of an annual salary received by a public servant while he is discharging the duties of his office. It also consists of an allowance which he receives at the time when he ceases to be able to perform those duties. During the last Session of Parliament I was asked whether it was my intention to submit to the consideration of the House a Bill which I found in existence at the time of my accession to office. I replied, that the business of the Session would not admit of any probability of its being considered at that period, but that as soon as an opportunity should present itself I would call the attention of the House to the subject. In fulfilment of that promise I have now to ask the House to permit me to introduce, this evening, a Bill which is sub- 871 stantially identical with that which I found in existence on my coming into office.
Before I explain the provisions of the Bill, I will trouble the House with some remarks upon the nature of the present system of superannuation. I will do so for various reasons. In the first place, the existing system of superannuations has given rise to extensive complaints and dissatisfaction on the part of the members of the civil service. Those complaints and that dissatisfaction have found numerous modes of expression. They have been circulated in printed statements, they have teen expressed in newspapers, they have found organs in this House; and I think it due to so important, so respectable, and so public-spirited a body of men as the civil service, that their complaints should be fairly considered and investigated. I am sure that every Member of this House, casting aside those old prejudices which used to be entertained against placemen merely as such, will admit the great importance to the due conduct of the Government of the country of the permanent civil service. We know how much importance was attributed to the permanent civil service connected with the army during the painful discussions that took place last Session. The civil service connected with the administrative departments at home is equally important to the due conduct of our public affairs; and those Gentlemen who give an unpaid attention to the business of the State as Members of this House will, I am sure, be not slow to recognise the valuable assistance which the stipendiaries in the civil service render to them in the discharge of their public duties. There is another reason why I am desirous of calling the attention of the House to the state of the existing system of superannuations. That system has grown up within a comparatively recent period; but during the short time it has existed there has been much inconsistency shown in the conduct of this House in dealing with the subject. Important changes have been made without due deliberation, and, now that we are called upon to reconsider the question, it seems to me of the utmost importance that we should proceed to that consideration with a full knowledge of all the antecedent circumstances, in order that any measure we may adopt in the present Session may be of such a nature as will prevent future vacillation and uncertainty on the subject. During the last century there was no system established by Act of The Chancellor of 872 Parliament for the superannuation of the civil service. The Treasury had a general power, in certain cases where it thought fit to interfere, of granting retiring pensions, but that power was not very frequently exercised, because there were then numerous sinecures in existence which were called in aid for the purpose of providing for persons whose time of service had been so long as to give them a fair claim for retirement. The system was altogether irregular; it did not, indeed, deserve the name of a system, and about the end of the century remarks were made by several Committees of this House as to the expediency of introducing a more regular and better adjusted mode of superannuation for the civil service. And here I must be permitted to say, in connection with the plan which then existed, that in my opinion nothing can he more shortsighted than to abstain from providing superannuations for civil servants who are unable, from ago or infirmity, to discharge their duties efficiently. When a person of liberal education has given the best part of his life to the service of the public, and the time comes when it would be for the public advantage that he should retire, it will be found that no Government, from whatever side of the House it may be taken, will consign such a gentleman to poverty and destitution, if such would be the effect of compelling him to retire. The certain result, if no system of superannuations be provided, inevitably will be that a largo number of persons, incapable of performing their duties on account of old age or ill health, will be kept quartered upon the public offices, incumbering the departments to which they belong, and excluding from the upper branches more efficient persons, who would be entitled to an increase of salary, they themselves performing scarcely any duty, but receiving high salaries, and the chief business of the departments falling upon their juniors, who, with inferior and inadequate salaries, would be called upon to discharge their duties. Such an unwholesome and inefficient state of the public service would, I venture to predict with great confidence, be the inevitable result of attempting to carry on the civil service of the State without superannuation allowances.
Well, Sir, about the beginning of the present century the foundation of a system was laid. A Treasury Minute, of the 10th of August, 1803, is the first authority by which a system of superannuations 873 was introduced. The operation of that Minute was confined to officers of customs. An officer who had served with diligence and fidelity, and was reported to be absolutely incapable, from infirmity of mind or body, of executing the duties of his office, might retire upon one-third of his salary. Service from ten to twenty years was rewarded with one-half of the salary; and above twenty years, with two-thirds. This was, I consider, a very liberal provision. We next come to the first Act of Parliament on the subject. The 49th of George III. c. 96, entitled "An Act to provide for a durable Allowance of Superannuation to the Officers of Excise" was passed in the year 1809. An officer who had served less than ten years was entitled by that Act to three-fourths of his salary, if incapable of duty; and an allowance was also provided for officers who had served between seven and ten years, and who were incapacitated by injuries received in the execution of their duty. There is one peculiarity in this Act which I would venture to point out to the House. The Act recognises the principle of making deductions from the salaries of Excise officers for the purpose of creating a fund from which superannuation allowances were to be paid, and directed that the sums so collected should be invested in Government securities. The next Act of the Legislature on the subject was in 1810. That Act approved of the Treasury Minute of 1803, and fixed certain limits, but less restrictive than those of the Minute. It set forth a scale of superannuation and determined the conditions upon which allowances were to be made. This was the first general Act for superannuation of the civil service, the previous Act having been confined to the department of Excise.
I come now, Sir, to the fate of the Customs' Superannuation Fund, which it seems had not a very long existence. It was originated in 1803. In 1811, when in consequence of the war the finance Minister of the day was obliged to resort to various expedients for raising the revenue, a Bill was passed for abolishing the superannuation fund in the department of the Customs, for transferring it to the Consolidated Customs; that is to say, for carrying it to the account of revenue—and for authorising the payment of all retiring allowances in that department out of the Consolidated Fund. Now the meaning of that phraseology was 874 simply this, that the Government took possession of the fund, paid it into the Exchequer, and made the superannuation allowances a charge on the general revenue. The sum thus paid over was £165,071. Such was the fate of the I Customs' Superannuation Fund. That I brings us to the year 1821, when, in consequence of an Address of the House of Commons, originating in a Motion by the late Member for Montrose, Mr. Hume, for an inquiry into the several civil departments, the Treasury, among other things, took the superannuation allowances into consideration. The House will recollect that at that time there was no fund in existence, the Government having appropriated the only one that had been created. A Treasury Minute was issued on the 10th of August, 1821, recommending that those who enjoyed the benefit of the superannuation allowance should be called upon to contribute to a superannuation fund, and also proposing an amended scale of allowances, somewhat less liberal than that of the Act of 1810. At this time the amount of the superannuation allowances began to attract much of the national attention, and a movement took place for the purpose of diminishing the expenditure under this head. The Treasury Minute to which I have referred led to the Superannuation Act of 1822, by which the superannuation fund was authorised to be raised by a percentage on salaries and emoluments. All the salaries of persons to whom superannuation allowances might be granted were charged as follows, and this is the first introduction of the system of deductions, which is one of the many grounds of complaint urged by the civil service. Salaries under £100 were exempt; those between £100 and £200 paid a deduction of 2½ per cent, and those above £200, 5 per cent. I ought to mention that at this time all the departments of the civil service had undergone a general revision by the Treasury, in consequence of the movement originated by Mr. Hume, and on the ground of the regulation then made it was required that all salaries increased beyond a certain regulated rate should pay 10 per cent—that is to say, that if a civil servant received an increase of salary beyond the regulated rate, he had to pay upon it an annual deduction of 10 per cent. It was further enacted that the contributions should be paid into the Bank of England to an account to be raised in the names of the Commis- 875 sioners for the Reduction of the National Debt, being entitled the General Superannuation Fund; also, that in every case where an officer retired from the office held by him, under any circumstances that would not allow of the grant of a superannuation allowance, he should be entitled to the return of all the money deducted from his salary, but without interest; and that if an officer died while in office, the sum contributed by him should be paid to his executors, also without interest. The repayment of contributions was likewise authorised where an officer might die after his resignation or removal from any office without having received a superannuation allowance. The Act also introduced a new scale somewhat more liberal than that of 1810. The Act was made applicable to the case of existing officers, and this caused so much objection that in the following year a Motion was made in Parliament on the subject which was supported by a majority of the House, though opposed by the Government of the day. The result of this Motion was, that in 1824 a Bill was passed by which so much of the Act of 1822 as related to the superannuation fund was repealed, and the sums paid during the two preceding years returned to the contributors. The whole amount of these contributions I have not been able to ascertain; but in 1823 they amounted to £88,000, so that probably the entire sum was something short of £180,000.
We now arrive at this result—Parliament, having created a superannuation fund in 1822, changed its mind two years afterwards, and the contributions to the fund were repaid to the contributors. That was the state of the second superannuation fund which Parliament created, the first having been made a charge on the general revenue of the country. The second fund, after two years, was, as I have just stated, dissolved by the return of all the contributions. I wish to draw attention to these circumstances, because one of the plans now proposed by members of the civil service involves the creation of a superannuation fund. I have now shown the attempts which have; been made to create a superannuation fund, and the breaking down of the system in two years. Nevertheless, the opinion of Parliament was that a superanimation allowance ought to exist, and that it might be effected; and the subject, came before a Committee of the House which sat to consider the state of public 876 salaries and expenditure in public offices in 1828, and which was presided over by Sir Henry Parnell. The object in view was the diminution of the charge for superannuation allowances on the public revenue, and the restoration of the system of deductions from salaries, which was established by the Treasury Minute in 1821, enacted by Parliament in 1822, and repealed by Parliament in 1824. The attainment of that object was recommended by the Committee. I hope the House will give me its attention while I read a short extract from the Report of that Committee, because it excited much attention at the time, and will explain clearly the idea which was then entertained as to the best mode of settling the question. The Report first speaks of the persons holding office at the time, and then proceeds—With respect to persons who may hereafter come into office, there is no difficulty in making a more economical arrangement. The Committee, therefore, recommend that the means of granting allowances to such persons in case of age or infirmity should be wholly provided by deductions front their salaries; the scale and conditions of the allowances to be made; to them should be so regulated, that the charge may be fully provided by the fund which their contributions would I create, so that the public may not eventually have to bear any part of the expense of these allowances. The Committee have fully considered whether it might not be more expedient either to leave the salaries wholly in the hands of the parties themselves, wherewith to provide by insurance or by other arrangements of their own for the contingency of a forced retirement from office, or to diminish the salaries in the proportion of the deductions proposed to be made, and to provide the charge of the retired allowances out of the public moneys; but neither of those modes has appeared to the Committee so advisable as that which they now suggest.The plan of the Committee, therefore, was, that a fund should be created by annual deductions from the salaries of persons in office, and that the superannuation allowances granted should be exclusively derived from the fund so created. The Chancellor of the Exchequer at that time, Mr. Goulburn, whose recent loss we all so much deplore, introduced at the end of the Session of 1828 a Bill to give effect to the recommendations of the Committee. This Bill was to be made applicable to the entire civil service, and every officer's salary was to be subject to the deduction by which the fund was to be created. The measure underwent a close examination in this House, and strong objection was taken to the introduction of a system of deductions applicable to existing officers who had entered the service on 877 other conditions. The consequence was, that after the discussion on the second reading the Bill was withdrawn. The recommendations of Sir Henry Parnell's Committee, therefore, were followed by no action on the part of Parliament. But the Government of the day thinking themselves bound to take some course in consequence of the recommendation of the Committee of 1828, issued in 1829 that Treasury Minute which is the foundation of the system now in operation. This Minute imposed a deduction on all persons entering the civil service from that date of 2½ per cent for salaries not exceeding £100 per annum, and of 5 per cent on all above that sum. These deductions were carried into effect; but Parliament did not legislate on the subject, and there was no rule laid down with regard to the appropriation of the deductions, which remained invested in Exchequer Bills till Parliament should decide upon the question. In 1831 a Treasury Minute was adopted which made some reduction, taking off one-fifth from the scale authorised by 3 Geo. IV., imposing some checks with regard to superannuation, and providing that no superannuation allowance should be granted without an examination of the application by two Lords of the Treasury. No change took place until 1834, when the Bill was passed under which superannuations are at present granted. That enactment adopts the rule of the Treasury Minute of 1829 with respect to deductions, and declares that all persons entering the civil service after the year 1829 shall be subject to deductions of 2½ per cent from salaries under £100, and to deductions at the rate of 5 per cent, from salaries of higher amount, but it contains no specific provision with reference to the appropriation of these deductions. The Act docs not direct that the deductions shall he constituted into a fund, but it clearly contemplates that they shall be carried to the account of the revenue, in diminution of the expense of superannuations. So far, then, as the deductions are concerned, the Act of 1854 introduced no new principle. It merely gave the authority of Parliamentary legislation to a rule which had been laid down five years before ill a Treasury Minute. It made, however, this important change—it altered the scale of superannuation allowances which was laid down by the existing Statute, and it made that scale less favourable to the civil service. One principle was introduced into the Bill while it was passing through this 878 House, which had considerable effect upon its operation. When the measure was introduced, it was intended that all increases of salary which might take place after its adoption, should be subject to deduction, but by an alteration introduced during its progress through the House, the rights of all persons employed in the civil service at that time were recognised, and it was declared that every person who was engaged in the civil service in 1829, whatever office he might hold, and whatever his salary might be, should be exempt from deduction. The sytem of deduction was, therefore, limited strictly to those persons who entered the civil service after 1829.
During the earlier years of the operation of the Act, the number of persons whom it affected was small; the persons in the public offices consisted mainly of those who had entered the civil service before 1829; and complaints with regard to the deductions were not much heard. I find, however, from the best information I can obtain, that about one-third of the persons at present employed in the civil service entered that service before 1829, and about two-thirds have entered it since. The consequence is, that about two-thirds of the persons now engaged in the service are liable to the annual deductions, and inasmuch as they feel greatly the diminution of their salaries caused by these deductions, their united complaints have reached the cars of Parliament. The complaints of the civil service are distributed under several heads, and I think it due to them to put the House in possession, as briefly as I can, of those points in the existing system, to which I understand the objections of the civil service chiefly to apply. In a printed paper which has lately been circulated, I presume widely, among the public offices, and which bears the signature of Mr. Bromley, a very able gentleman, employed in the department of the Admiralty as Accountant General of the Navy, who has acted as Chairman of the Committee of the Civil Service, who have considered the subject, I find very strong assertions with respect to what he considers a distinct breach of faith on the part of the Government—namely, that there has been an illegal application of the funds derived from the deductions, and an attempt—I will not say to defraud the civil service of their just dues—but at any rate, an attempt, deliberately carried on by a succession of Governments, to withhold from the civil service, by the non-creation of a 879 fund, those deductions from their salaries, which ought in justice and in law to have accrued to them. I have stated distinctly the charge that is made, in order that I may meet it with an equally distinct denial. I have looked through the whole series of Treasury Minutes and the Acts of Parliament which bear upon this subject, with as much care as I have been able to bestow upon them, and I have shown the House how variable the policy of Parliament and of different Governments has been. At one time, undoubtedly, they created in the most distinct terms a superannuation fund, and it was the policy of Parliament that a superannuation fund should exist, from which the pensions should be paid. It appears to me equally clear that that policy was abandoned in 1829, and that under the Act of 1834, which we have now alone to consider, there is not the slightest trace of any direction to create a fund; and the absence of any direction to create a fund, coupled with the precise enactments in former Statutes, directing the creation of a fund, prescribing the title under which it is to be raised—as it is technically termed—in the books of the Bank of England, and making provision with reference to the Commissioners in whose name the account is to stand, shows in the most conclusive manner that it was not intended by the Act of 1834 to create a superannuation fund. I will read to the House the recital of the clause in the Act of 1834 which imposes the deduction—And whereas the Commissioners of the Treasury did, by a minute dated the 4th day of August, 1829, record their intention to adopt certain regulations with a view to reduce prospcctively the charge incurred in providing for superannuation allowances, of which notice was given in the several public departments, for the information of those who should thereafter enter the public service; and whereas, in pursuance of the said minute, an annual abatement hath been made from the salaries and emoluments of the several persons who have entered the public service subsequent to the date thereof; and whereas it is expedient to continue such abatement in those cases, and to extend it to others, as hereinafter provided.That is the entire recital, and the section goes on merely to define the amount of the deduction, but the Act contains no provision whatever relative to the appropriation, or application, or management of abatements.
Now, if the House should desire it, I will state to them the precise practice which is followed with regard to the disposition of the money which accrues from these deductions. Inasmuch as such charges as 880 those to which I have referred have been made, it is important the House should be informed of that practice, that they may be satisfied there has been no departure from the terms of the Act which has guided the conduct of all the Governments which have dealt with this subject since 1834. In the Revenue Departments—the Customs, Inland Revenue, and Post Office, the deductions from salaries are made when the salaries are paid, and the amounts are carried to the account of pensions for superannuations. Those amounts are never paid into the Exchequer. With respect to the other departments, the practice up to 1848 was similar to that of the Revenue Departments. The deductions were stopped, and were carried to the account of the departmental charge for superannuations, and reduced pro tanto the Vote of the following year; but since 1848 the deductions have been paid into the Exchequer, in order that Parliament may vote the full charge for superannuations. If any further inquiry should be made on this subject, I believe the House will find, on looking into all the documents bearing upon the question, that there is no ground whatever for the charge of a breach of faith on the part of the Government, since the year 1834, with reference to the administration of these deductions. The terms upon which these deductions were to be made were, as I have stated, communicated to the several, departments in the year 1829; they were afterwards embodied in an Act of Parliament; all persons who accepted office since 1829 had full notice that such deductions would be made; and it is impossible to say that they have any right to complain on the ground of breach of faith or non-observance of engagements on the part of the Government with regard to these deductions. It is, however, important that the House should bear in mind the nature and operation of the deductions. When you vote the salaries for the Revenue Department you vote the full salaries, but every salary above £100 is subject to a deduction of 5 per cent. I will, for example, take the instance of Sir Thomas Fremantle, the First Commissioner of the Board of Customs. His salary is set down in the Estimates at £2,000. The present First Commissioner is, however, liable to a deduction of 5 per cent, and never can receive by any possible combination of events more than £1,900 a year. If he had entered the service before 1829 ho would receive the full salary, but having 881 entered since, he is liable to a deduction of 5 per cent, and that remark applies to every salary which is voted by this House. Those who plead the cause of the civil service for remission of deductions and increase of pensions have drawn a very highly-coloured picture of the enormous profits which they state the Government has made by the present system. They say that if the deductions which have been made since the year 1829 were funded, and if they accumulated at compound interest, in a certain number of years a sum which certainly would move the envy of any Chancellor of the Exchequer would rise before his eyes, and they make it appear that the Government have achieved a most profitable bargain, and that the civil service has been defrauded of a very large sum. Now, Sir, these speculations about compound interest are similar to those of Dr. Price, who, in reference to a sinking fund, estimated that a halfpenny at compound interest would, after a certain number of centuries, produce a sum sufficient to pay off the National Debt; but, if instead of such calculations we refer to facts, we shall find this result—that the total amount of compensations and superanannuation allowances payable on the 31st of December, 1854, was £767,559. A further sum of £75,000 is paid for pensions to artificers, labourers, and others in the Naval and Ordnance Departments. Those two sums make £842,659, which is now the annual charge of the compensations and superannuation allowances. The deductions in 1854 were £61,214, so that at present the deductions bear a very small ratio to the total amount of superannuations, and, I must say, taking the most sanguine views which any calculators can form of the probable amount of those deductions, even if they could he funded, I can hardly conceive the time will ever arrive when the fund will cover the probable expense of the annual superannuations.
Another objection to the present system is, that it is partial and capricious—that it spares the high and the low, and that it strikes only those whose salaries are of the middle class. The complaint of the civil service reminds me of two quaint old monkish lines, in which the same idea is expressed, probably in reference to some former system of taxation—Deuce ace non possunt et seize cinq solvere nolunt,Omnibus est notum quater tray solvere totum.882 Those lines express in a few words the complaint by the civil service—that the chief officers of the State escape deductions, and that a large class of artificers employed in the Naval and Ordnance Departments are likewise exempt. I believe at this moment there are only four political pensions in existence. Therefore that class scarcely affords any ground of legitimate complaint. Then it is said Ambassadors and Ministers and the whole diplomatic establishment ought to be subject to deductions. The system under which they are placed is peculiar, a charge of £180,000 is made on the Consolidated Fund, out of which both these salaries and these pensions are defrayed. They are not entitled by right to superannuation allowance. Their pension depends on the discretion of the Government; it is impossible, therefore, without an entire change, to bring them under the system of deductions. The next head of complaint is, that the India Board is also exempt from the superannuation system. That department has always stood by itself, and has not been brought under the general rules as to salaries and superannuations. Then, also, it is said the judicial establishments are not subject to the Superannuation Act. They also must be considered as standing upon different ground. The Court of Chancery is paid from the suitors' fund, and many officers are paid from fees of court. They are not voted in the same manner as other departments, and have always been considered as standing apart from this system. Many of the officers in the Judicial Department do not come under the description of high officials. Nevertheless, they are exempt from this charge. So far this is an anomaly in the system, but an anomaly for the reason which I have stated. Then there are a number of inferior officers in the Naval and Ordnance Departments also exempt from deduction. In the Ordnance, in the year 1855–6, there were 9,472 workmen entitled to pensions without being liable to the superannuation fund abatements, whose aggregate pay was £504,000 a year. In the Admiralty the number was 12,508, with the aggregate annual pay of£821,085. There is also a considerable number of persons in the Post Office who are in the same position. The annual pay of persons in that department, who are entitled to pensions but do not pay deductions, is £174,000; the number of officers is 2,398. That shows that there is a considerable number of persons in branches of 883 some of the large departments whom it is found advantageous to the public service to bring under the benefits of the system of superannuation, but who, receiving, in many cases, weekly pay, in all cases small salaries, are not placed under the system of deduction. Another very serious complaint, made by many members of the civil service, is, that out of the number subject to deduction a very small proportion receive superannuation allowance. Dr. Farr, a member of the Registrar General's Office, who has given much attention to the subject, and whose authority on statistics is very high, estimates the number of persons who will be superannuated under the new scale, provided the system is fully brought into effect, at not more than 6 or 7 per cent—that is to say, that out of every 100 persons entering the civil service since 1829, ninety-three or ninety-four will pay deductions without receiving any benefit from them. That, however, refers to a future period.
I will now shortly state to the House some facts as to the operation of that system during the last five years. In the Inland Revenue Department, during the last five years, the number of persons who have retired altogether from the department is 1,348. Out of that number 667 have retired on pensions, or rather less than one-half; 242 have died in the service; 243 were discharged; and 196 left for other pursuits. The House, therefore, will see that out of 1,348 persons who left the department during those five years rather more than half paid deductions without deriving any benefit. With regard to the Customs, the total number who in the same time left that department was 1,280. Out of that number 509 retired with pensions; 22 were discharged on gratuities; 329 dicd in the service; 238 were discharged for bad conduct; and 182 left voluntarily for other pursuits. One objection made by the civil service is the double operation of the deductions and the income-tax. Sir, I am bound to say that in my opinion this combined operation produces cases of considerable hardship. I will state to the House one case which will show in a strong light how this combined operation is felt. A clerk who is promoted from £105 to £110 a year in consequence of his new liability to income tax becomes a loser by his promotion. His salary of £110, less superannuation abatements (£5 10s.), is reduced to £104 10s. It is still further reduced by £5 0s. 1d., being the amount 884 of income tax at 11½ in the pound, which leaves him £99 9s. 11d. His previous in-come, after deductions, was £99 15s., and he is thus a loser of 5s. 1d. by his promotion. Now, that is a case of considerable hardship, and, without confining ourselves to the low rates of salary I have just mentioned, this combined operation of the income tax, and the deductions, makes a largo inroad in the small incomes of the chief part of the civil service.
I have now stated, I hope fairly, the objections which are urged by the civil service to the combined systems of deductions and pensions. Well, the House will perhaps expect me now to propose to them to accede to the prayer of the memorialists—namely, to abolish the deductions and to substitute the old for the new scale of pensions—the more liberal for the less liberal scale. In answer to that memorial of the civil service, I must, in the first place, remark that the notice given to all persons entering the civil service after the Act of 1834 is as distinct and explicit as it can be. Every one who accepted office after that time must know that his salary would be subject to these deductions. Although the salaries voted by this House are not diminished by the deductions, every person entering the civil service must have known, or might have known, that his salary was liable to that rate of deduction. We may, in fact, consider the Act of 1834 in the light of a contract entered into between the nation and the civil service. I cannot, therefore, admit as valid, the argument that any breach of faith has been committed on the part of the Government and the nation. I think that great objections exist to inconstancy and vacillation on questions of this sort. We cannot look to the conduct of Parliament in former years as holding out any very useful example of steadiness of principle. But it behoves us the more to beware that we take no rash step; and that we do not, without strong and valid reasons, rescind that which has been decided upon by a former Legislature, and acted upon, without intermission, for nearly a quarter of a century. Therefore, Sir, in the measure which I ask for leave to introduce I do not propose to make an alteration in the system of deductions. The amendments that I ask the leave of the House to make are limited to alterations in the scale of superannuation allowance. I purpose to make it more liberal than the existing scale, and to make it resemble more nearly the old scale than that which 885 is now in existence. These amendments will be accompanied with several changes, rendering the allowances more liberal to the civil service; but beyond this I do not purpose to go. I will not trouble the House with any detailed statement of the Bill which I seek to introduce. If the House should permit me to carry the Bill to a second reading, I propose to refer it, not to a Committee of the whole House, but to a Select Committee, giving that Committee the power of examining witnesses. The Committee will then be able to examine thoroughly a subject full of difficulty, and embarrassed by numerous details. The Committee will also compare the provisions of the Acts of Parliament in force, and will be able to say whether there is any foundation for the complaint that there has been any illegality on the part of different Governments. I shall wish to submit to that Committee the whole series of Treasury Minutes and other documents of the departments on this subject; and the Committee will, moreover, have the opportunity of learning from different members of the civil service what are the complaints they make, by what arguments they are substantiated, and what remedies they have to propose. After considerable reflection, this appears to me to be the most satisfactory course for the House to adopt, and the fairest to the civil service. Before I sit down there is one other remark with which I must trouble the House. One of the measures proposed by different members of the civil service is simply the abolition of the deductions, combined with the increased scale of pensions. The other proposition is that the present system of superannuation allowances taken out of the Consolidated Fund shall be continued, but that the abatements shall be allowed to exist, and be made into a fund distinct from the pensions, which should go to the survivors in the nature of an assurance to the wives and families of members of the civil service. I express no opinion upon these two plans. I submit them to the judgment of the House, and I hope that if the subject is thoroughly sifted and investigated by the appointment of a Select Committee, the House will be able, with a full knowledge of the facts, eventually to arrive at a judgment which will be satisfactory to the civil service, and will be found conducive to the efficiency of the administration of public affairs.
§ MR. RICH
said, he must beg to express his approbation of the attention which the 886 right hon. Gentleman had devoted to the subject, and his satisfaction that it was not intended hastily to alter the settlement that had been effected in 1834. When a claim was raised on the part of the civil service to a superannuation fund, it should be borne in mind that there neither was nor ever had been such a fund except during the short period from 1822 to 1824. All the other branches of the public service had suffered great deductions, whereas, since 1821, the salaries of civil servants had been untouched. In 1821 some reductions were sanctioned, but which were not such as to prevent the imposition of 5 per cent deduction for the superannuation fund then recommended. That had been abolished soon after, but in 1828 Sir Henry Parnell's Committee recommended a recurrence to it. Under Lord Grey's Administration there had been large deductions in the political, judicial, and diplomatic departments, but the civil service had been untouched, except by the reimposition of the deduction of 5 per cent for superannuation, to which it formerly had been subject. But even this regarded only those who should hereafter enter that service. There was no ground, therefore, for complaint of breach of faith with the civil service. The civil service were better paid than the Army, the Navy, or the Church, and had greater certainty of promotion. On the other hand, was the service so very hard? The service was so attractive that there was a constant pressure on the Government for admission into it. The proposition of the right hon. Gentleman to refer his measure to a Select Committee was a prudent concession to a pressure from without on the part of the civil service. He hoped the Committee would not be swayed by clamour or complaints, but would consider the subject carefully and justly. It was not conducive to the good working of the service that it should be filled with relatives of noblemen and Cabinet Ministers. The observations he made were not to cast any reflections upon the service, which, from what he knew of it, he believed to be efficient.
§ MR. DISRAELI
Sir, after the suggestion of the right hon. Gentleman the Chancellor of the Exchequer to refer the Bill to a Select Committee, I think it would be extremely inexpedient to enter into any detailed discussion as to the principle we ought to adopt in the superannuation of our civil servants. When the la- 887 bours of the Committee are completed and their Report is before the House, we shall have a proper opportunity to enter into a complete discussion upon the subject. I must look upon this Motion as virtually one to refer to a Committee, proposed and sanctioned by the Government, the consideration of the whole case. [The CHANCELLOR of the EXCHEQUER: Hear, hear!] If I have rightly gathered the meaning of the right hon. Gentleman, the Committee will have not merely to consider his Bill, but also to make such suggestions on the subject as they may think expedient—in short, to recommend to the Government the course which in their opinion ought to be adopted in reference to the subject they were appointed to consider. It would, therefore, be unadvisable, as well as uninteresting, to enter at present into any discussion upon the details of this measure. I approve of referring the whole question, whether in the shape of a Government Bill or otherwise, to a Select Committee, and I shall defer greatly to any recommendations they may make to the House. The right hon. Gentleman gave the House a very perspicuous historical narrative of the whole topic under our consideration, but that narrative did not very much facilitate the solution of the difficulties we have to encounter. The history of superannuation in this country is the history of spoliation. It is a very short history, for it may be condensed into one sentence—"You promised a fund, and you exacted a tax." You will find that this fatal error is at the bottom of the whole business, that it is the origin and cause of all the difficulties which present themselves, and which you have to overcome. This is not the time, however, and, after what the right hon. Gentleman has proposed, this is not even the place to enter upon the perplexing subject of these difficulties; but I trust the Committee will be appointed speedily, that it will be composed of those who, from their acquaintance with the subject generally, and their position in this House, will arrive at conclusions which, if they do not command the sanction, will at least deserve the attention of Parliament, and that this question will, at last, receive the most practical solution they are able to give to it. I was a little disappointed when I heard from the right hon. Gentleman that this Bill is the greatest measure of administrative reform we are to expect from Her Majesty's Ministers. The right hon. Gentleman, told us, that the question of 888 superannuation was a great branch of that question of administrative reform which he and his colleagues were prepared to advance as much as lay in their power, and when I learnt, in a subsequent part of his observations, that the result of their great effort in favour of administrative reforms was a measure upon this, not little, but comparatively speaking, inferior question, which is, after all, to be referred to a Select Committee, I confess that I felt some disappointment. I do not think it is a fulfilment either to the letter or to the spirit of that consent to the Amendment proposed last year by my hon. Friend the Member for Hertfordshire (Sir B. Lytton) on the subject of administrative reform, which alone saved the Government from a defeat in this House. I did expect, although the House was placed in a difficult position, and called upon to exercise great patience and forbearance towards Her Majesty's Government—I certainly did expect that, when the subject of administrative reform was introduced by Her Majesty's Ministers, they would have felt their responsibility and have been prepared to hold out to us a prospect of far more extended and important measures than we are now led to believe it is the intention of the Government to introduce; and I think that, whether we look to the formation of the new measures, which have been intimated, or to other circumstances connected with the Administration of the country, if the right hon. Gentleman the Chancellor of the Exchequer did think fit to advert upon this occasion to that question, he might, I think, have found it convenient on the part of his colleagues to inform the House what were the intentions of Her Majesty's Government with respect to that Resolution which was carried last Session with their sanction. I should not have referred to this subject had not the right hon. Gentleman, with some parade and ostentation, announced to the House that, the question having been under their consideration, the Bill which is to be laid upon the table to-night is the first, and as I collected, the most important fruit of the deliberations of Her Majesty's Government.
SIR FRANCIS BARING
said, he could not avoid expressing his regret that the right hen. Gentleman who had just spoken should have made the question of the civil service an opportunity for a display of party feeling. He hoped the Committee which was to be appointed would enter 889 upon a consideration of the subject in a different spirit to that displayed by the right hon. Gentleman. He would suggest to the right hon. Gentleman the Chancellor of the Exchequer that the question would be brought more satisfactorily before the Committee if the form of his proposition were a Committee to inquire into the superannuation question, and to refer his Bill to that Committee, and thus bring the whole question before it; for he could not see how the Committee could go into the whole subject with only the right hon. Gentleman's Bill before it. For what would be the use of discussing the Bill before the Committee without having all the circumstances of the case before it? There had been so much canvassing, so much unfair representation, that he thought it would be for the public advantage to have an inquiry into the justice of the charges and allegations which had been made on the part of the civil service. He considered the right hon. Gentleman the Chancellor of the Exchequer had disposed of the allegation of fraud practised on the civil service, which, it was said by the right hon. Gentleman the Member for Buckinghamshire (Mr. Disraeli), had been promised a fund, and got a tax. He (Sir F. Baring) had something to do with the Act of 1834, and would ask whether there was any concealment then about its objects? He had heard it said that that Act promised a fund, but it did no such thing. Such a thing was not mentioned in the Act; it was not intended. He held in his hand the Estimates for 1836, when, if it had been intended there should be a fund, it must have appeared as a separate article; but instead of that, in 1836, there was a deduction made from the vote for civil superannuation allowances. If there had been any promise of a fund, hon. Gentlemen opposite, who had served in civil departments, and who were then in communication with civil servants, would not have failed to urge that point. There was an impression that the Committee had recommended that the deductions should be such as to cover the whole superannuation allowances. That was true, but he must say he never believed that those deductions would cover all the allowances the public would be called upon to pay. It had been alleged that the sum which was or would be received was larger than that which was necessary for the purpose of fairly paying those charges. That was, therefore, a fair subject of inquiry. 890 He did not believe there were on the last occasion, or would be on the present, any means of ascertaining what the real charges were likely to he. His impression was, that if the right hon. Gentleman the Chancellor of the Exchequer on the part of the public, could hand over to the Bank of England the whole deductions upon the condition of paying all the charges, he would make an exceedingly good bargain. His own impression was, that this was a simple question of salary. It was quite true that payments were made, and that in consequence retired allowances wore made, and, therefore, if the deductions were not made, it would be an increase of 5 or 2½ per cent to the salaries of the public servants, an arrangement of which he could not approve. He thought the whole subject could be discussed in a Committee with advantage to the public, and the House would do well not to be led away by papers circulated among Members, but to wait and see what the real facts connected with the question were.
§ MR. ROEBUCK
said, the civil servants had done him the honour to address to his charge their petition to that House, which he should shortly present. In justification of some statements made in that petition, he wished to answer an observation of the right hon. Gentleman who had just sat down. He said that the House would take an exceedingly good step if it were to hand over the sums taken from the salaries of the civil servants to anybody who would take upon themselves the obligation of paying the superannuation allowances. That might be true; and it might be a good bargain if all the superannuation allowances were included in the obligation; but there was this peculiarity—that the civil servants were divided into two classes: the first class was not taxed at all; the second was taxed under this Bill; and there was a third class, including the people in the dockyards, who also were not taxed; but all the three classes came upon the superannuation fund. So that, in fact, one class was now taxed for the benefit of all three. Therefore the people who were taxed complained, and said that they were suffering an injustice because they were taxed for the benefit of the other two classes. But as the whole question, and not the Bill only, was to be referred to the Select Committee, he should, when he presented the petition of the civil servants, move that it also be referred to that Committee.
§ SIR STAFFORD NORTHCOTE
said, he hoped the Committee would be appointed in such a manner as to have the opportunity of considering the question of the deductions; for, as he understood, the Bill of the right hon. Gentleman the Chancellor of the Exchequer contained no provision to abolish those deductions. In the speeches which had been made a good deal had been done to remove or alleviate the feeling of injustice which had certainly rankled in the minds of many who considered they were wronged by the Government, which, having promised them a fund, inflicted a tax instead. The right hon. Gentleman the Member for Portsmouth (Sir F. Baring) had shown that, technically, such was not the case, but it must be borne in mind that civil servants generally were not aware of what had taken place in Parliament in 1834, and, knowing that schemes for a superannuation fund had been sanctioned by Parliament, it was not unnatural they should suppose that the deductions were made for the purpose of providing for them, and, when it was shown that those deductions were more than sufficient to provide their own superannuation allowances, it was not surprising they should consider themselves ill treated. He would submit to the right hon. Gentleman the Chancellor of the Exchequer, that it was not expedient the civil servants should even suppose themselves labouring under injustice. The hon. Member for Richmond (Mr. Rich) had said that if there was any case of injustice there was none of expediency, as there were plenty of persons knowing all the circumstances who were ready to enter the civil service. He (Sir S. Northcote) could point out that, although the civil service had been going on in a satisfactory manner to the public, it had not been doing so without discontent. They had been told they were paying, what many of them for a long time believed to be, a deduction for their own benefit, but which they were now told was a tax imposed on one portion of the civil servants, not for their own benefit, but to pay a certain portion of the charges which ought to be borne by the nation. If civil servants had now no pensions in any shape, and when superannuated were sent about their business, there would be a good reason for establishing pensions to get good servants, even as a matter of true economy. Even now it was in the power of the Treasury to give or withhold the retired allowances, and if 892 they were withheld a feeling of injustice would be natural when sums had been paid for a certain number of years in expectation of a return. He believed they would consider themselves better off if the deductions were taken away, and the allowances left in the hands of the Government, so that they could apportion the rewards to good services, which they could do now certainly, but not without creating a sense of injustice in the breasts of those who, feeling that they had paid money, thought that they ought to have the benefit of it. The whole system required arrangement and supervision all the more from the tendency of late years to create offices at low salaries, and he thought the scheme proposed should have embraced some such supervision. If it was intended to improve the condition of the civil servants, it would be much better to effect that object either by abolishing the present system of deductions or increasing their pensions. He was not one of those who thought both should be done, for he conceived that it would be better to do away with the deductions, and give the Government power to grant pensions according to the deserts of the civil servants.
§ SIR JAMES GRAHAM
Sir, I shall not prolong the present discussion by many observations, since the Chancellor of the Exchequer has expressed his willingness to refer the Bill to a Committee. This system of superannuation has been called spoliation by the right hon. Gentleman opposite (Mr. Disraeli), who said that not only was a fund promised, but disappointment had been created, inasmuch as the Government had, moreover, imposed a tax, and the hon. Baronet the Member for Dudley had repeated that assertion. [Sir S. NORTHCOTE: I only said that such is the feeling in the minds of the civil servants.] The right hon. Member for Portsmouth (Sir F. Baring) has cautioned the House not to believe all they hear on this subject, and I go further, and caution them not to believe all that they read on the subject, for a circular has been distributed among hon. Members which I regret to see proceeding from civil servants, some of them of high station. When I had the honour to deal with this subject in 1834 I had some experience of the civil servants, and since then I have had a larger experience of their merits. Every successive year has confirmed me in the opinion that they are the most valuable class of men in the service of Her Ma- 893 jesty, and that their integrity and exertions cannot be overestimated, and ought to be liberally remunerated by the public whom they serve so effectively and zealously; and nothing would induce me to take any part against them if I thought their case demanded any further concession. But, in 1834, so far from the superannuation fund being considered an exaction, the converse was proved. As has been stated most accurately by the Chancellor of the Exchequer, between 1818 and 1829 there was great indecision on the part of the Legislature, and the proposition for the fund was more than once made and abandoned. In the Finance Committee of 1828, in which sat Lord Althorp and many distinguished Members, and over which Sir Henry Parnell presided, this question was considered. They made a Report on the subject, part of which has been read by the Chancellor of the Exchequer this evening, and in 1829 a Treasury Minute founded on that Report was introduced. So far from that Report promising a distinct fund, it was based on the opposite principle. The enactment of 1834 only gave legislative sanction to the Treasury Minute of 1829, and was not based on any idea of a separate fund, but upon a tax which was to be carried to the Exchequer generally, and in consideration of that tax a limited interest was given to the parties paying it in respect to their own contributions. To this extent, and on certain considerations, pensions were to be granted varying in amount according to the extent of service of which the Treasury was to be the judge. The hon. Baronet who has just sat down has said that, technically, if not really, a fund was promised. I know not the meaning of that expression, for nothing can be more precise than the enactment, and I cannot believe that persons could enter the civil service without well understanding the conditions offered them. It is again said that these conditions are hard, but I never heard that there has ever been the slightest want of persons for the performance of the duties of the service. The inconvenience is the other way, because the pressure of applications to obtain situations is extreme, and I cannot see any justification for any parties objecting to the existing arrangement unless it be those who, having small salaries, suffer from the pressure of the income tax. I think that is a portion of the case which does require the 894 consideration of the House. There are hon. Gentlemen opposite who in 1849 and 1850 voted for the reduction of 10 percent in the salaries of those very officials who are now said to be treated unjustly— and the Motion having been rejected—the salaries maintained—the sweeping deduction of 10 per cent having been refused— the right hon. Gentleman (Mr. Disraeli) now talks of the history of superannuations being a history of spoliations. Surely it is in the power of Parliament prospectively to diminish salaries, and it was only prospectively that the Act of 1834 operated. Vacillation on this subject unhappily marked the conduct of the Legislature up to 1828, but since there has been a firm adherence to a fixed principle, and while I am willing to see this Bill referred to a Select Committee, yet I should feel great difficulty, if I were called upon to vote for the Bill, in departing from the principle established in 1834, and before giving such a vote I should be anxious to study the details of the measure. I certainly shall be ready to give the most calm and indulgent consideration to the claims of those public servants whose salaries are small, and on whom there falls the pressure of an income tax, as heavy as it is at present, in addition to the reduction of their salaries for the purpose of providing pensions; but I should be sorry if my right hon. Friend, through any pressure on the part of the civil servants, were to consent to a measure which would be equivalent to a remission of the tax imposed on them, as well as a direct augmentation of their salaries. I certainly hope he will not listen to a proposal on their part that there shall be not only an increase of salary, but an increase of pension, a proposal which appears to me to be altogether unjustifiable, and to which I hope this House will not think of consenting.
§ MR. DISRAELI
said, he must beg to explain that he had never designated the Act of 1834 as an Act of spoliation. He had spoken generally only, and had said that the history of superannuation was the history of spoliation, referring more particularly to a statement made by the Chancellor of the Exchequer with respect to the superannuation fund of 1811—a period of war—which was appropriated by the State—an act for which the Chancellor of the Exchequer could find no excuse except in the circumstances of the time.
§ MR. MONTAGU CHAMBERS
said, 895 he was of opinion that the civil servants of the Crown entered the service without knowing the precise state of the law, and the nature of the contract they were making, but with the belief that the full amount voted by that House would be paid to them. He thought it would be much better for the Government to give their servants the amounts which they intended to pay them, instead of naming a certain sum, and afterwards making deductions from them, and it appeared to him that the Act of 1834 was founded on that false system. Those individuals appear also to have imagined that the deductions that had been made from their salaries had been made for their benefit, but such was not really the case, and hence the errors and misunderstandings that had occurred. The explanations that had been given by the Chancellor of the Exchequer and the right hon. Members for Carlisle and Portsmouth on the subject had been satisfactory, inasmuch as they had stated that their superannuations had never been promised or carried into execution. He would suggest that in future instead of telling a man his salary was £100, and then deducting £5 from it, it should be stated to him as only being £95 without deductions. With regard to the State obtaining suitable servants, he was of opinion it was the height of absurdity to prevent gentlemen holding high positions in the service of the Crown from introducing to subordinate offices their relations, who were possessed of talents and ability sufficient for the discharge of their duties. He was an administrative reformer, but he was afraid that in many instances the term was perverted. The offices of the State should be open to all persons capable of discharging their duties, whether they be the relations of persons high in the service of the State, or strangers to them.
§ Leave given.
§ Bill ordered to be brought in by the CHANCELLOR of the EXCHEQUER and Mr. WILSON.
§ Bill read 1o.