HC Deb 02 July 1875 vol 225 cc911-8

, in rising, pursuant to Notice, to call the attention of the House to the absence from the Reports of the Civil Service Inquiry Commission of any investigation into the complaints made against the system of Trading now carried on by the servants of the Crown under the guise of Co-operative Stores, said, that last year, when he put a Question to the Chancellor of the Exchequer on the subject, the right hon. Gentleman declined, and very properly declined, to give any positive answer while the Commission was still pursuing its inquiry, and until its Report was presented. He was surprised, therefore, to find, in an answer to a Question he (Sir Thomas Chambers) put to the right hon. Gentleman a short time ago, that there was no fresh information upon the subject worthy of his attention. That answer was confirmed by the fact that they had now the Report before them, and the absence of any reference to that most important subject had naturally and inevitably led to very great and general disappointment, not unmixed with surprise. There was overwhelming evidence to show that the Civil Service Stores were not, in fact, co-operative stores, but gigantic joint-stock trading companies, with some singular distinctions to which he would presently allude. There were no fewer than 4,500 subscribers or partners in one of these concerns; 15,000 tickets had been issued to outsiders; and the business was carried on just like that of any ordinary joint-stock trading company. It was the greatest sham that ever existed; and he maintained that, both on general principles and on grounds of public policy, Civil Service trading ought to be forbidden. So long ago as March, 1849, a Treasury Minute was issued affirming the right of the Government to the whole time of the Civil servants, and that they could not be allowed to accept office as directors of companies; but the gentlemen against whom the Minute was levelled did not do one-tenth of what the directors of the Civil Service Stores were now doing. So much for the general principle; but what had been the policy of the Government on this subject? The evils against which that Minute was directed were much more serious at the present moment. Very recently another Minute had been issued forbidding Civil servants becoming directors of a company which had undertaken a publication which was much engaged in discussing subjects connected with the Civil Service. The Minute set forth that gentlemen in the Civil Service taking upon themselves editorial duties could hardly fail to render themselves liable to misrepresentation, and pointed out that their acceptance of such positions must necessarily disturb the confidential relations which ought to subsist between members of that Service and their official superiors. The National Chamber of Trade, having that Minute in view, wrote to the Chancellor of the Exchequer to inquire whether the authorities of the Civil Service would not forbid their servants engaging in trade under the guise of co-operation. To that communication the Chancellor of the Exchequer replied by saying that the cases of Civil servants engaging in editorial duties and in co-operative societies did not appear to be exactly parallel. Such pursuits, however, were not parallel, but they were analogous, for they were strictly alike, because they infringed the principle that the Civil Servants were bound to give their whole time and energy to the country. He did not complain of co-operation—what he complained of was joint-stock trading with certain signal distinctions between the honest, ordinary, bonâfide joint-stock trading, and that which was carried on under pretence of co-operation; and it was a question for the Government to decide whether this Civil Service trading was to be permitted to be carried on. The dockyard workmen were precluded from engaging in any other occupation; so were the police, while postmasters were absolutely forbidden even to sell newspapers. Those facts and regulations proved that the Government perfectly understood that the principle of the contract between the Civil servant and the State was that the whole of the man's time should be given to the State. Further than that, these large joint-stock trade associations, which were carried on under the name of Civil Service Co-operative Stores, turning over millions in the course of the year, had several advantages over ordinary trading firms, inasmuch as by registering themselves as provident and industrial societies they escaped the payment of income tax, and to some extent stamp duties. It was a double fraud. It called itself co-operation when it was simply a joint-stock trading society, and it availed itself of the advantages allowed to provident societies because they were conducted by the poorer classes; yet they were not tidewaiters, or clerks, or porters at Somerset House, but Civil servants of the higher grades, who were just about to divide £400,000 out of their profits. On the whole, therefore, he hoped Her Majesty's Government would take the subject into serious consideration.


said, he must apologise to the hon. and learned Gentleman for the rather abrupt manner in which he had answered his Question on the subject the other day. He had just referred to the speech he had made on this question last year, and he found that it was substantially what he thought it was. He had said that in dealing with this subject there were two questions to be considered—first, how far this system of Civil Service trading was one which ought to be checked in the interest of other traders as being in the nature of an unfair competition with them; and secondly, how far it ought to be checked in the interests of the Government, on the ground of it not being advisable that their servants should engage in these pursuits. He had also endeavoured to point out the difficulties which the Government had to encounter in attempting to deal with the matter from the point of view taken of it by those whom the hon. and learned Gentleman represented, and he had endeavoured to show how difficult and unfair it would be for the Government to lay down principles with regard to the Civil servants which would exclude them from the privilege and the right of co-operation, and how very difficult it would be to draw a line between co-operation and trading. The upshot of his remarks was that he could not upon the grounds mentioned see his way to any interference with the system. At the same time, however, he was always ready to accept and to listen to representations which might be made as to any unfair advantages that might be taken of their position by Civil servants who were engaged in this kind of business, and, therefore, he should take care that the allegation that the Co-operative Stores contrived to escape the payment of income tax and stamp duties should be inquired into, because such associations had no right to put themselves into such a position as to give themselves an unfair advantage over all other traders. Upon the other points of this question, the Report of the Civil Service Commissioners might throw some light. It was difficult to say where the line should be drawn with regard to what branches of business Civil servants might engage in, and he did not know that the Report of the Commissioners at present had thrown much light upon that point. Their labours were, however, not yet concluded, and the Government had not taken any steps upon their Report. They would, no doubt, in a short time have to take the Report into consideration, and probably some steps in consequence, and it might be that they would have to go into the question as to the employment of Civil servants in the manner referred to in connection with the general subject. One such question arose the other day in reference to Captain Tyler, and he only referred to it to show that it was difficult to lay down general rules to govern all cases that might arise. His hon. and learned Friend said that the Government had dealt with the question, and asked them to carry out the same principle with regard to all Civil servants, and he referred to the Treasury Minute with respect to contributions to newspapers by Civil servants, and the entering upon other employments by dockyard labourers. His hon. and learned Friend must, however, have been misinformed. Dockyard labourers were not forbidden to enter upon any other engagement. They were only restrained from becoming keepers of public-houses or marine stores, and from entering upon any business of that sort in which it was thought that mischief might arise from temptations to which they might be subjected in respect of Government stores. Then with respect to newspapers, the step was taken not to prevent undue competition between one editor or publisher and another, but to put a stop to a practice which was found to be productive of mischief and scandal to the public service. From time to time letters, paragraphs, and articles appeared in certain newspapers which were obviously written by persons who had obtained official information which ought not to have been made public, and it was therefore found necessary to issue a Minute prohibiting such communications being made and warning the contributors that they would be held responsible in the event of official information being improperly communicated. With respect to the general question, he could only say, as he did last year, that he must draw the line between two different considerations. As regarded the question of competition with private trade, it was a difficult matter to interfere, and interference must be limited to prevent any unfair advantages existing on the one side, such as exemption from income tax or stamp duties. That branch of the question should have his best attention. The other question related to the employment of Civil servants in the manner complained of, and having had their attention more or less directed to it, it would be their duty to consider whether some regulation should not be made or some expression of opinion given in reference to it.


said, he concurred generally in what had fallen from the Chancellor of the Exchequer. While in office he had stated more than once, in answer to his constituents who took a great interest in the matter, that he considered it unfair that Civil servants should be placed under restrictions which did not apply to those who were engaged in other walks of life. Civil servants were, no doubt, paid out of the public funds, but they were as freely entitled to make use of their leisure in any way they thought fit as were any other class of Her Majesty's subjects. He agreed with his right hon. Friend the Chancellor of the Exchequer that it would be impossible to hold out any hopes to the tradespeople of the metropolis that the competition they complained of could be put a stop to, save so far as the preferences to which reference had been made, and which ought most rigorously to be examined and removed. The second branch of the subject—namely, how far, from the point of view of the public service, it was right that Civil servants should be allowed to engage in those operations—remained to be considered. There could be no doubt, however, that they were under the same limitations, both as regarded their time, strength, and honour, as the servants of private companies. As a matter of course, it would also be unfair that they should be allowed to take advantage of official information for their private benefit in their relation to those societies. If a gentleman were, for example, engaged in the Government Contract Department, it could not be tolerated that he should use his special information of the effect upon the market of Government operations to promote the interests of a co-operative society with which he might happen to be connected. They must, he thought, rely upon the good sense, right feeling, and honour of the Civil servants to see that no stone could be thrown at them in that respect. Then, again, came the question of interference with their capacity to serve the State, which was their first duty. It would, he thought, be improper to allow persons who were placed in high position, and whose energies, freshness, and health were vital to the proper discharge of their duties, to take any great share in the management of those companies. As an illustration he might mention that the point was brought under his notice in a peculiar way when he held the office of First Lord of the Admiralty. There was a most eminent Civil servant who was also an eminent director of one of the co-operative societies, one of its founders, and the life and soul of the society. He worked hard at the Admiralty and also at the society, and it appeared that the strain on him was so great as to threaten his health. The question of promotion arose, and he was recommended for promotion to a higher position than that which he enjoyed. Under these circumstances, he (Mr. Goschen) pointed out to that gentleman that if he could give his whole time to the fresh post, he should consider him an eligible person; but that if he continued the other work and the strain was too great upon him, he should decline to promote him. That gentleman adopted the course of resigning his lucrative post in the co-operative society, and received the promotion to which, as being most eligible, he was entitled. In taking that step he (Mr. Goschen) thought he was discharging a duty he owed to the public.


said, that last year the Chancellor of the Exchequer promised to make an inquiry into the subject, and unless he had done so, the public would think he did not consider it worth his while to do so, and was content to let matters remain as they were. Now, if the Chancellor of the Exchequer had made up his mind on the subject, it was desirable that the public should know what the Government intended to do. Traders did not object to co-operative societies. If Civil servants combined to buy goods wholesale and sell them to themselves at the wholesale price, traders could have no objection; but what they did object to was, that Civil servants should form themselves into a society for the purpose of competing with tradesmen. There was another point to which he wished to call attention. Civil servants were paid by salaries taken from the taxation of the country, and the public had a right to expect that their whole time should be devoted to the performance of their public duties. Now, it was well known that the whole time of the chairmen and directors of co-operative societies was not given to the public. Another objection was that Civil servants were sometimes able to obtain information with regard to duties which enabled them to make advantageous purchases while the other trades were entirely in the dark, and were unable to do so. General traders were therefore placed in an unfair position, as compared with co-operative societies.