§ 36. Mr. PURCHASEasked the Chancellor of the Exchequer whether all grants of war bonus have been made on the clear understanding that such are dependent upon the rise in the scale of living; and whether he anticipates any fall in such scale, and that he will be able to effect any and, if so, what saving under this heading during the present financial year?
Mr. CHAMBERLAINI presume that my hon. Friend is referring to the Civil Service bonus. If so, the answer to the first part of the question is in the affirmative. As regards the latter part of the question, I entertain no doubt that the cost of living will fall, but not in time to affect the current year in respect of the bonus. The bonus payable from 1st November next to the 31st March, 1921, 915 will be based on the average cost of living for the four months ending 1st October, and the recent rise in the index figures will increase the amount of bonus payable during the remainder of the financial year.
I have given this answer as I had drafted it before the decision of the miners to strike. I am afraid, however, that one effect of the strike may be an increase in the cost of living, owing to the decline in the value of sterling and the increased cost of inward freight caused by the diminution of exports. This result may be delayed for a time by a fall in consumption; but an increase of production was a necessary condition of a permanent reduction in the cost of living, and whatever the immediate effect of the strike on prices, it appears to me that it must in the long run be injurious to the national welfare in this as in every other respect.