Motion made, and Question proposed,
That a Supplementary sum, not exceeding £455,000, be granted to His Majesty, to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1922, for Superannuation, Compensation, Compassionate, and Additional Allowances, and Gratuities under sundry Statutes, for Compassionate Allowances, Gratuities, and Supplementary Pensions awarded by the Treasury, and for the Salaries of Medical Referees.
§ The FINANCIAL SECRETARY to the TREASURY (Mr. Hilton Young)
In introducing this first Supplementary Estimate that has appeared before the Committee this Session, I should like in the first place to give some explanation—I hope no apology is needed—of the shape in which the Supplementary Estimates are presented on this occasion, I think for the first time; that is, they are put into the hands of the Committee in an octavo shape instead of in the customary folio shape. As the Committee is well aware, hitherto the greater number, I think, of Parliamentary Papers, House of Commons and House of Lords, and Command Papers have been presented in the expensive and, I think, also cumbrous folio shape, but not all. Some have been presented in the octavo shape, and from that there resulted two extravagances. In the first place, there was the actual extravagance of the large folio form, and, in the second place, the extravagance of having to reprint all the octavo papers in folio form in order that we might get regular sets for binding in the library of the House. There was a strong recommendation against the continuance of this extravagance in a Report of the Select Committee on Publications in 1906, but a certain amount of reluctance is always felt, I think, by some Members of the House against any change in a customary 1128 form. However, the needs of economy are urgent, in small things as well as in great. Therefore, after consultation with Mr. Speaker, with the Librarian of the House, and with the officials, it has been thought right to come to the conclusion that in future all the publications shall be put before the House in the cheaper form. I believe that hon. Members, after glancing at this first instalment, will find that it is just as convenient really as the old and larger shape, and the actual economy which will result from the change will amount to the sum of £5,000 a year.
I should like to take the occasion of the presentation of this first Estimate to make a reference to the point of time in the Session at which it appears. The early date at which this Estimate is put before the Committee is a sign of that return to closer parliamentary control over expenditure which, I am confident, the whole Committee desires to see. In the old and spacious days of war finance and of Paulo-post-War finance, owing to the circumstance that there was a Civil Contingencies Fund with a very large capital, there was a margin of ease, if I may so express it, at the disposal of the Treasury, which made it possible to carry on, putting off the Supplementary Estimates till a comparatively late date. It will be within the memory of the Committee that last year, by a self-denying ordinance, that capital in the Civil Contingencies Fund was reduced to the old and normal peacetime dimensions. The result of that self-denying ordinance is to deprive us of the margin of time which we had and to make it necessary for us to come to the Committee for the Vote on the Supplementary Estimates at a very early time. As I think has been said by the Leader of the House in another Debate to-day, it is necessary for us to get authority for these Supplementary Estimates before the end of February and to confirm that authority with a Consolidated Fund Bill. Were we not to do so, owing to the fact that we no longer have the large Civil Contingencies Fund to operate upon, we should run short of cash.
Let me now come to the actual substance of the Supplementary Estimates which I have to present to the Committee to-night, and let me give a very brief explanation of their contents. Possibly, if any measures of controversy arise, I may have an opportunity of further explanation later on in the course of our 1129 deliberations. The two Estimates presented now are, in the first place, Class VI, Vote 1, Superannuation and Retired Allowances, and after we have dealt with that the Committee will be asked to go on to Revenue Departments, Vote 1, Customs and Excise. As a matter of fact, both these Supplementary Estimates deal with an exactly similar subject-matter. They are both the provision of further sums to pay superannuation allowances of various sorts in respect of expenditure due to additional retirements of civil servants during the year, and all that I have to say about that Vote with which the Committee is now dealing will really be applicable to the Vote with which the Committee will next be called upon to deal. I mention that at this point because I think it may save the time of the Committee if I give the explanation which is applicable to both on this Vote, and thus avoid any necessity for repeating it on the Vote which will follow. These Supplementary Estimates are, as I have said, for expenditure necessary to meet the superannuation allowances of civil servants who retired during the year, and the necessity for them is due to there being more retirements than were allowed for in the original Estimate. If the Committee will glance at the Vote with which we are now dealing, on page 35 of the Supplementary Estimates, they will see that it comes under two headings—first of all, A, "Superannuation Allowances," for which an additional sum of £95,000 is required; and, secondly, C, "Additional Allowances and Gratuities," for which the larger sum of £360,000 is required. The difference there is this, that when a civil servant retires he obtains a pension of one-eightieth of his salary and emoluments at the time of his retirement as a general rule—one-eightieth, that is, per year of service up to a maximum of 40 years. It is for expenditure of that nature that Sub-head A provides. Sub-head C, "Additional Allowances," is the lump sum which is paid to civil servants upon retirement. Upon retirement, he receives, in addition to his pension, an actual lump sum, which is calculated at the rate of one-thirtieth of his salary and emoluments at the date of retirement in respect of each year of service.
§ Sir D. MACLEAN
The hon. Member uses the word "emoluments." Does that include what is known as the War bonus?
§ Mr. YOUNG
I will come to that presently. Now as to an explanation of what makes it necessary to have a Supplementary Estimate. These retirements with which we are dealing are normal retirements due to age, and in some cases owing to reasons of ill-health. The latter cases are comparatively few of the total. The Committee, I think, should look upon this Supplementary Estimate as in close connection with the general schemes of retrenchment and reorganisation owing to the necessity for economy. The actual form in which the Estimate is presented prevents the Committee having all under their eye at once the total effect of what is taking place. We have here only one side of the account, as it were. Of course, the Committee will understand that when you are reducing personnel you have to increase your non-effective charges, pensions and so on. That is what appears here. What does not appear here is the actual saving upon the whole cost to the nation which is the consequence of the reduction. As to that, I will say that I have tried to make an estimate for the information of the Committee as to what the actual saving attendant upon these effective and non-effective charges may be.
I ought to tell the Committee frankly also, that as regards this Vote, I have found it impossible to get any arithmetical calculation of the actual saving to set against these non-effective charges, and for many reasons, but principally for such reasons as this, that when an officer retires at the head of a Department or section, or a senior officer very often, the retrenchment which will be made on his retirement is not in his own particular post, but in some other post subordinate. Similarly, often economy which you effect on the occasion of a retirement is effected by some general reorganisation of the section or the Department in which he was working, and not by actual abolition of his own office. For that reason I found it impossible to link the savings with the actual increase in the non-effective charges. In general, it can only be said that they are there, but I fear the only time and place in which we shall see them before our eyes is in the comparison of the Estimates for next year with the Estimates for last year. In one region, however, I have been able to secure something like an adequate Estimate. Owing to the regular and concentrated nature of the organisation of 1131 the Board of Customs, it has been possible, subject to all reserve, and explaining that it is only the best I can do to make a mathematical calculation, I should say that, as regards the Board of Customs, the saving that there will be to set against the increases in non-effective charges will be £150,000 in this financial year.
I observe that the Committee has before it here a Supplementary Estimate which should be viewed in close relation to the general retrenchment, and the reorganisation dependant upon retrenchment, which is actually in progress. In order to show how these savings are secured, I think the best I can do is to read a short passage from a Circular issued by the Treasury to the Departments dealing with the whole question of the filling up of vacancies and promotions at the time of retirements, such as we have evidence of in the Supplementary Estimate. On 25th August, 1921, the following Circular was issued from the Treasury to the Departments. After dealing with other matters, it said:I am further to say that as an exceptional measure, and having regard to the possibility of transferring redundant staff from one Department to another. My Lords consider it necessary to prescribe that as from the date of this Circular no vacancies shall he filled and no promotions made, whether substantively or on an acting basis, in the authorised establishments of Departments, without prior reference to the Treasury, and that each such application to the Treasury shall be accompanied by an explanation of the necessity for filling the vacancies or making the promotions, as the case may be.Thus the situation has been taken under control and the Board have effected economies provided by the retirements under the safeguards placed in the hands of the Treasury by this provision. Of course, it is the function of the Treasury to discharge these duties as the co-ordinating Department for the whole Civil Service. I would refer here to the question which has just been asked me by my right hon. Friend the Member for Peebles (Sir D. Maclean). There is no doubt that an impetus has been given to retirement by the effect of the War bonus on pensions. It will be within the knowledge of some Members of the Committee that amongst the salary and emoluments is included a War bonus to the extent of 75 per cent. The Committee may also 1132 remember the controversy and criticisms upon the subject. It was said that no War bonus ought to be pensionable. The answer given was that a civil servant was entitled to pension upon salary and emoluments at the time of his retirement, and that as soon as the War bonus became more than a casual payment, and became, a part of the regular salary and emoluments, he was entitled to have it taken into account in having his pension fixed, and it was not in the discretion of the Treasury, as the authority responsible for the administration, to ignore it.
In the second place, if I remember rightly, the criticism advanced was that if the War bonuses be made pensionable, the pension based thereon should be made subject to review and periodic assessments. To that the answer given was as follows: In the first place that it would have been worse in the long run and worse immediately for the Exchequer. A periodical revision of pensions as affected by the cost of living was an administrative task involving an expense which would have been enormous. I do not think I go too far in saying that what might have been gained in the reduction of pensions would have been eaten up by the expenditure involved in the cost of the enormous staff necessary, and so on.
§ Mr. YOUNG
The more important consideration was not the point of view of the Government but of the servants themselves. I think nothing is more widely appreciated than that fairness, and consideration for your pensioner demands that he should know what his pension is likely to be, and that it should be a fixed sum upon which he should be able to make his plans for retirement, knowing just what his pension shall be. There should not be uncertainty about that. It amounts almost to cruelty for an aged pensioner not to know ahead what his income is likely to be when he retires. For those reasons, the expected fall in the cost of living was discounted once and for all on the basis that it would fall about 50 per cent. The pension was fixed once and for all upon the basis of 75 per cent. of the bonus at the time of the retirement of the servant. That is an answer to the questions of my right hon. Friend.
1133 Finally, in that connection I would only like to observe that whatever view may be held by any Member of the Committee on this controversy as to the question of bonus, it is clear that, as people regarded it, it has worked for good. Let me suggest to the minds of hon. Members the position in which-this Government or any Government must find itself when it is confronted with the necessity, owing to urgent economic considerations, of great reductions in staff. It is confronted with the possibility, nay with the probability, of having to formulate special schemes of retirement, of expenditure for compensation and the abolition of offices, and it is confronted with all discontent, and a not unnatural sense of grievance in the persons who are reduced and thus deprived of the legitimate expectation of honourable careers. Over these regions of economy the effect of the War bonus reduction and the pensionability of War bonuses has been to promote voluntary retirement, and this has been most economically taken advantage of for the purposes of the reorganisations and retrenchments which I have mentioned. I have dealt with the general services of the Supplementary Estimate in as far as it is possible to anticipate what information the Committee desire on the subject, but if further information is required, or criticisms are advanced in the course of Debates, I may perhaps have the opportunity later of dealing with them.
§ Sir D. MACLEAN
The Committee is indebted to the hon. Gentleman for the lucid statement he has made, for the general explanation he has given to the Committee of the Supplementary Estimate, and the principles upon which he asks for the grant from the Committee to-night. First of all, I am sure I shall voice the feelings of the Committee when I say we appreciate very much the new form in which these Supplementary Estimates are presented. It is an added pleasure to know that convenience is not inconsistent with economy, for we have heard of the result in the saving of some thousands of pounds. The hon. Gentleman also indicated that the general scheme of these Supplementary Estimates was evidence of a return to pre-War days of a closer Parliamentary control than was possible during the War, which was not possible in the early days after it, but, as we think, was quite possible very soon after the Armistice.
1134 Not by way of going into the merits of the matter at all, but by way of letting the Committee know how these Estimates work, I think it will be of interest if—without going into the policy of it—I inform hon. Members how the original grant was made. The original grant of these war bonuses was made in the unclassified services, House of Commons Estimates, 1920–21. That was for the sum of £9,500,000. This was followed at no very distant date by a Supplementary Estimate of £2,350,000 making a total of round about £12,000,000 for 1920–21. I am quite certain that a substantial part of the sum now asked for would have been saved if the House of Commons had the opportunity then of discussing the policy for which this huge sum was asked. Unfortunately, however, it was passed by what is popularly known as the guillotine, and not a single word of discussion took place upon that very important departure. The first discussion that arose upon this subject was about this time last year when another Supplementary Estimate was presented for £800,000. As some hon. Member will recollect, I have more than once drawn attention to the circumstances under which the discussion commenced. It was about half-past twelve or one o'clock in the morning, and some of us were doing our best to obtain explanations of the figures before the Committee, and as far as I was concerned I found it a very heavy burden to deal with all the duties of an Opposition when our numbers were so few. It was the first time I had heard that, as a result of a Departmental Committee sitting quite privately, the nation was committed to this very heavy sum. Now we have before us once again a further request for a sum totalling very nearly £500,000.
I am glad to gather that we may expect a, diminution of this amount in the future. I hope that will be so, and that this expenditure will be on a descending rather than an ascending scale, in so far as grants will be asked for coming under the purposes of this Vote. I wish to say at once that when the State has entered into a contract with its servants it must stand by it whatever the consequences may be. At any rate, it must achieve the same standard of fairness and justice as the best employer would be expected to maintain. This scheme is a statutory one, and the whole of this 1135 large sum with which I have been dealing comes within that, single word to which I called attention at the early part of the statement to which we have just listened. It is said that these officials are entitled to a lump sum, and the emoluments of their office, and that is where it comes within the statute.
Let me come at once to the main points of my criticism, and that is the War bonus being taken, as has been explained with perfect candour and fairness, as part of the retiring pension of the civil servant. Should that have been accepted in the way in which it has been? When a, civil servant retires the emolument is in addition to his regular salary, and, as I suggest, it is a permanent part of the sum to which he was entitled from the State in connection with his services. This was not a temporary thing for a year or more, but it was something which a civil servant would normally expect to carry with him to the end of his service. But does that principle apply to a. war bonus? I think not. What is the essence of the war bonus which the hon. Gentleman has so frankly discussed? Surely it is a grant made either by a private employer or by the State to the person employed in order to enable him or her to meet the special stress of temporary circumstances. The anticipation of all of us was that the very heavy cost of living during the War and immediately after the War would show a steady decline until we arrived at something like a pre-War basis of existence. I do not think the time is very far distant when the. general cost of living will not exceed much more than 20 or 25 per cent. of what it was in 1914. It must come down. The general conditions of the employment of labour make it almost certain that it will come down before very long. Is it a proper use of the statute to bring war bonus under the term emolument? The right thing to do is what is being done in other departments of social life, namely, that these war increases should be subject to periodic review. Servants of the State should bear along with others their share of the impact of the arduous conditions under which we are all compelled to live. What happened in the case of railway employés? They had very large additions to their wages, and they were fully justified, and I am 1136 certain with regard to many civil servants they were underpaid and their regular salaries ought to have been increased. But it was accepted as part of the conditions under which these additions were made to railway servants and other employés on a large scale that if and when the conditions of sale and of the purchase of commodities so developed that there should be a review and they should accept a lower wage. That has been done already to the extent of millions. Railway companies are paying millions less per annum to-day than they were some months ago.
What is the explanation of the Treasury? They say that such a periodic review would be so costly as to really make it not worth while. I am bound to say I am far from agreeing with that argument, and surely what can be done when you are dealing with men by hundreds of thousands and of different grades, as in the case of railway labour, can be done with equal ease in dealing with, comparatively speaking, the limited number and a less number of grades of the civil servants affected by this Vote. For these reasons I do not think the argument which the hon. Gentleman put before the Committee carried the weight which some of his arguments usually do. There are one or two question which I should like to ask, and I think the hon. Gentleman will agree with me that the Committee is entitled to the information. If the hon. Gentleman cannot answer now he may be able to do so on Report. I want to know how many of these civil servants have taken the opportunity—I do not deny their right, for they are entitled to do it—to retire voluntarily not by reason of ill-health or any condition of that kind, but through just having come within the time at which they could retire.
I want to know how many have seized an opportunity to retire taking their retiring allowance on the pre-War standard plus the 75 per cent. of the emolument popularly known as the war bonus? How many have retired on their retrenchment compulsorily and not wishing to retire? In what Departments have these retirements voluntarily and involuntarily taken place? I would like to know how many there are in each Department, and will the hon. Gentleman also inform us—I do not want to press for an elaborate return which is difficult to get out involving a 1137 multitude of figures—who have retired on a salary, with bonus, say of over £500 a year. I think the Committee will see how extraordinarily favourably this scheme acts in the case of the civil servant. I repeat that I do not say he is not legally entitled, under the terms of his contract, to take advantage of it. But take the case of a civil servant with a salary of £800 a year. I think I am not unfair when I say that, with the war bonus as it stood 9 months ago, he would be then receiving, in addition to his other emoluments which I do not take into calculation, a sum of about £1,376. He would get on his pre-War arrangement under the Statute about £400 a year as a retiring allowance. In addition to that, he would get 75 per cent. of the war bonus of £570. I calculate—I may be wrong—he would be actually receiving as pension—and a fixed pension—slightly more than the total of his pre-War salary. I do not think that is really quite bearing a fair share of the burdens which we all have to bear. This is the main criticism that I make. It is just because this House did not have an opportunity to discuss the original Estimates and its policy when a grant amounting to many millions was made at the end of the Session that a state of affairs was created which, while quite legitimate so far as the civil servant is concerned, is regarded by the general body of citizens as unduly favourable to the civil servant on his retirement. If we had had at the outset the chance which we now have of criticising it, I am certain the civil servant would not have complained and the public would not have felt that sense of injustice which has been widely aroused throughout the country.
The right hon. Gentleman is now dealing with the original Estimate on which this sum accrues. It is not in order to do so on a Supplementary Estimate.
§ Sir D. MACLEAN
I am sorry if I transgressed the limits. The statement with which the Financial Secretary opened the Debate was a general one, and when that is the case it is usually open to 1138 Members of the Committee, within limits, to follow him. I am very much obliged to the hon. Gentleman for doing as he did. I was anxious to have the whole thing debated so that we might know exactly where we stand. As this operates under Statute and the House of Commons has already granted this sum, I do not feel justified in moving a reduction to-night. These ladies and gentlemen who have taken advantage of the position were fully entitled to do so, and I leave the subject with the criticism which I have addressed to the Committee, thanking hon. Members at the same time for their indulgence in listening to me so patiently while endeavouring to explain a very complicated question.
Sir J. D. REES
I am sorry to be a discontented member of the Committee, but I am not quite satisfied with the form of these Estimates. I am sure my hon. Friend will point out later on that it is owing to my lack of intelligence that I cannot follow them, but I do not feel that that is a sufficient answer, because Members of the House ought to have these Estimates presented in so cut and dried a form as to be intelligible even to those wanting in intelligence. The Notice of Motion relating to the Order of the Day reads:Civil Service and Revenue Departmental Supplementary Estimate, 1921–22, Class 6, Vote 1; Revenue Department, Vote 1; Class 2, Votes 13 and 10; Class 3, Vote 22; Class 6, Votes 10 and 10a; and Class 2, Vote 49.Looking at the Estimate, Class 2, I find no Vote 13 and 10, while in Class 3, Vote 22, I find only Q and R. Class 6 is entirely wanting. All this may be capable of immediate explanation, but it is not clear, it is not transparent. Then I turn to the Index, and I find there nothing to help me. I have always found these Estimates presented in such a form that they take a great deal of hunting about, and involve the asking of many questions before one can find out where one is. There seems to be no object in all this. There was an object in having the Bible printed in Latin, because the ecclesiastical authorities did not want anyone to understand it. The same applies to the Koran and other holy books, but what is the object of having these Estimates in this form instead of in a transparently simple form suitable to the least intelligent. Member? So much for 1139 the form. Let me now ask my hon. Friend a question as regards the substance. At the commencement of the first page with which we are dealing to-day we have, "Salaries of Medical Referees."
That is not the Vote that we are on now, although discussion of the new form of the Estimates would be in order on any Vote. I beg the hon. Baronet's pardon—I see that the salaries of medical referees are mentioned, after all.
Sir J. D. REES
The Estimate seems to be more difficult to understand even than I thought. I find the medical referees referred to in the first sentence, and I want to ask my hon. Friend whether they include the 30 doctors at £1,000 a year—one or two of them rising to £1,200—appointed upon his death-bed by the expiring late President of the Local Government Board. I rather think they are included.
§ Major MACKENZIE WOOD
On a point of Order. Is there anything in this Supplementary Vote for medical referees?
I thought at first that there was not, but I find that my vigilance was not sufficient to discover the fact that there is
Sir J. D. REES
It seems as if the unintelligent Member is able to hold his own against the extremely intelligent—indeed, superintelligent—interrupter. If I am right in supposing that the 30 medical officers, whose appointment I myself have most bitterly resented, are really included in this Estimate, there is nothing to show it. They may, however, be there, for even 30 medical officers at £1,000 a year can hide themselves with complete success in a Supplementary Estimate of £6,724,000. Are they there? If so, will the Parliamentary Secretary to the Treasury kindly tell me what I have long wanted to know, namely, what duties these gentlemen perform? Their public duties, I protest, are really negligible. I understand that they perform certain duties in connection with the National Insurance Act.
The hon. Baronet is certainly out of order now, because he is discussing the original policy of having medical referees at all, and not the reason for an extra amount in the Supplementary Estimate.
Sir J. D. REES
I see that, and I apologise. Will the Secretary to the Treasury kindly tell me why more money is required for these gentlemen, to whom I regret very much that any money is paid at all? I hope that that is not out of order. Will the hon. Gentleman kindly explain what is the excess?
Sir J. D. REES
Then, while I am wrong as regards the medical referees, my hon. Friend is wrong as regards the form in which he presents this Estimate, because, if you pick up an Estimate and see in large print the words "Supplementary Estimate," and see at the end of the sentence, "Salaries of Medical Referees," it is extremely natural that a Member of this House should think that the medical referees come under consideration on this occasion, and I have really been furnished, quite by accident, with another proof of the justice of the accusation which I launched against my hon. Friend. I am sure he takes it in the same good-tempered spirit in which I launched it against him. As regards retirements, for which there is an excess of £360,000, I must say, as an old Government servant and an old public servant, that I accept altogether the reasoning of my right hon. Friend the Member for Peebles (Sir D. Maclean). It seems to me that it is not right that superannuation allowance should be calculated upon an accidental, temporary and special allowance. It seems to me that it is no more fair to calculate retiring allowances upon the war bonus than it would be to add in travelling allowance, supposing that these gentlemen draw it, as some of them probably do, as part of their emoluments, in order to get the total upon which the pension may be struck. I never served in the English Civil Service, but the rules in this behalf are very much the same all the world over, and are copied in various foreign services from the rules obtaining at home, which are supposed to be the very height of wisdom. In this instance I am sorry to say that I think 1141 the taxpayer suffers unjustly, and that it is a case of Quicquid delirant reges. Whatever the King and the Parliament say, the taxpayer's part is to smile and pay. It would have been quite easy for the Treasury to come to the House of Commons and say, "We are in rather a fix over this." On their right and on their left are civil servants, who are, no doubt, the most admirable men, but they have great influence with those whom they supply with material for their work and all that they do in their offices, and, therefore, it would have been quite easy to have come to the House before committing the House and the taxpayer to the striking of the superannuation allowances upon a figure which included a temporary, accidental, and special allowance like the War bonus. I do feel that very much, and though, like my right hon. Friend the Member for Peebles, I have no intention of moving a reduction, and, indeed, realise as fully as anyone can the great difficulties under which any Government labour when they are surrounded on every side by those who are wanting to do that which they naturally would hesitate to do for them, still, at a time like this, I believe that of all men in the world the most deserving of sympathy and encouragement is not the halt, the sick, the lame, and the blind, not the person out of work even, but nobody so much as the ordinary man who gets up and comes out of the stable and does his work every day, and who has got the whole country on his back under one pretext or another.
§ Major M. WOOD
I hope nobody will consider that we who object to this Vote do not desire the civil servant to get full value for his work and to get his proper pension, but we are entitled to point out to the House that, as a result of what the Government has done, civil servants are going to be given for all time a pension which is calculated, not upon the salary that they have been earning while they have been working, but on a salary which was fixed at a temporary high figure on account of the high cost of living, and are therefore going to get an advantage from the War, and expect those who remain at work to pay for it. That is the result of what the Government has done, and if the Government come forward now and say that this is a statutory right which, through accident or for any other 1142 reason, the civil servants are entitled to have and cannot be prevented from having, then I suppose the civil servants must get it; but we are entitled to condemn the Government for the mistake they have made, because they have put a burden upon the taxpayer which he should not have to bear, and which he would not have had to bear had they done their duty. The hon. Gentleman has been asked to give some figures about retirement. I think if he will look into the figures he will find that, during August in particular, there was a perfect stampede of civil servants to retire, and that was simply because, on 31st August, there was a drop in the bonus, and all civil servants knew that, if they were able to retire in August, they would get a bigger pension than if they remained another month. That in itself shows up how bad the system was. I should very much like the hon. and gallant. Gentleman to give us some figures to show in particular how many civil servants and what type of civil servants retired during August. I feel quite certain they would be very illuminating, and would prove up to the hilt the case we are trying to make against this Supplementary Estimate. The hon. and gallant Gentleman stated that in any case, apart from what I have said, it would have been too costly to revise periodically the bonus which the civil servants were to get when they retired. If that is so, is it too costly to revise, as I am sure is being done, the salaries of the civil servants who remain? I understand bonus is still payable to civil servants, and that that bonus is liable to be revised and reviewed from time to time. I should have thought that the same work expended on the salaries of those civil servants that remain would have been quite sufficient, and all that was necessary to determine the amount of bonus to be paid to those who have already gone. So far as I can see there is nothing at all in that particular defence which the hon. and gallant Gentleman advanced.
The next thing that the hon. and gallant Gentleman said was that it would he most unfair on these poor old pensioned civil servants if they were to leave the Civil Service without knowing exactly how much they were going to have. If that is a grievance and a hardship for pensioned civil servants, surely it is 1143 equally a grievance and a hardship for civil servants who are not pensioned. So far as my information goes, half the people of this country at present are being paid salaries which are liable to review at any time, and no one can say that at the same time next year he will have the salary he has to-day. The great majority of people are living under the same uncertainty to which the hon. and gallant Gentleman thinks it would be an undue hardship to submit retired civil servants. There is nothing in that argument at all. I cannot see why the Government should have committed themselves to this great expenditure. Anyone who looked into the question would have been bound to see that this would be the result. I should like to draw the attention of the Committee to what the Chancellor of the Exchequer said a few months ago, when he came down to the House and with a great flourish of trumpets told us he was going to make a cut in the Civil Service bonus.
The hon. Member is not in Order in discussing the merits of the Civil Service bonus. He is only in Order in asking for an explanation of how these particular increases arise.
§ Major WOOD
I quite understand that I cannot discuss the bonus, and I do not propose to do so. I want, however, to draw attention to the fact that when the cut was made it was supposed to be a great saving, and that these Supplementary Estimates show that the promise which the Chancellor of the Exchequer held out has not been fulfilled. He told us a few months ago when that cut was made in the Civil Service bonus that it was going to result in a saving of something like £500,000. It has not been so, and this Estimate shows it, because, although that cut was going to be made, immediately it was announced the civil servants in great numbers came forward and retired voluntarily. They got the increased pension as a result, because the pension was calculated on a higher bonus. They have been able entirely to nullify the saving which the Chancellor of the Exchequer held out to us. Therefore that £500,000 which sounded so well at the time, is nowhere. I think we are entitled to draw the attention of the Committee and the country to what has been done here, because the 1144 Chancellor of the Exchequer and the Treasury have been very bad stewards of the public purse.
§ Sir F. BANBURY
I am sorry the hon. Baronet the Member for East Nottingham (Sir J. D. Rees), has left the Committee. I am glad that he is a recruit to the ranks of those of us who are desirous of stopping the extra expenditure which has been going on so long, but he does not seem quite to understand the proper way to go about that task. I was going to point out to him, if he had only remained—perhaps, if the Committee will allow me to say so—it may be of some advantage to other hon. Members who are desirous of criticising the expenditure of the Government, if I point out—that as a matter of fact the form in which the Supplementary Estimates are presented this evening is really very simple. The hon. Baronet was misled by reading the paragraph which appears at the top of page 25. What he ought to have done was to have gone to the Vote Office and asked for the Civil Service Estimate for the year 1921–22. He then would have found all the particulars of the Civil Service Estimates for the year we are discussing, and would have been able to see whether the additional sum required was in respect of certain services or of other services. Though it, entails the necessity of getting a large book, which I see an hon. Friend below me has already obtained, it is perfectly easy to find out what we are discussing if you only know how to do it.
I was unfortunately unable to be here to hear the statement from the Secretary to the Treasury, but I understand that all we are discussing at the present moment is whether or not we should approve of an additional sum amounting to £95,000 being added to the superannuation allowances under Sub-head A and £360,000 for additional allowances and gratuities to established officers. I am opposed to these sums, because I do not think we can afford them. I would point out to those hon. Members who say that a contract has been entered into, that the Government have no power to enter into a contract to spend money until that expenditure has been authorised by this House or by a Committee of this House. That is the object of the Estimates. If the Government were able to come down and say: "You have got to pass these 1145 Estimates because we have agreed to spend the money," we might just as well go home as sit here and discuss them. The matter is in our hands. We can say: "We will not pass these Estimates," and the Government then, if they had made a contract, would have to find the money out of their own pockets, which would not be a bad thing. That would deter them from this kind of action in the future.
I apologise to the Financial Secretary to the Treasury if I ask him questions which he has already answered, because, like my hon. Friend the Member for East Nottingham, I rushed back from dinner in order to be here and to say a few words upon these matters. I understand that the £95,000 under Subhead A, Superannuation Allowances, is required to make up the sum necessary to pay additional superannuation allowances based upon the bonus. The bonus is a temporary thing. I have had some experience of superannuation allowances. I was chairman of the Superannuation Committee of many of the great railway companies of this country. We have never recognised bonus as entitling anyone to an additional superannuation. "Bonus" is a Latin word which means "good." It does not mean that it is anything hut an exceptional grant for an exceptional circumstance. In this Supplementary Estimate, however, we are going to give for all time an increased bonus to certain people because the cost of living two years ago had increased. That, so far as I can see, subject to any contradiction by the hon. and gallant Gentleman, is the fact. I object to that. There are a very large number of people who have never had any advantage whatever from anything; neither from any increase in their investments, nor from earnings, if they were in business, or whatever they were doing, but they have had to bear the whole cost of taxation. Why should the Civil Service be put in an exceptional position? Why should they not bear a share of the burden, as everyone else has to bear it, with the exception of members of the trade unions?
§ Sir F. BANBURY
I have never met one. If there were one I should possibly change my opinion. It is really quite out of order for me to reply to hon. Members, but so far as I know not a single railway director—
§ Sir F. BANBURY
I was seduced from my ordinary observance of the rules of debate by hon. Members opposite. This Supplementary Estimate is for a sum of £360,000, and it is forAdditional Allowances and Gratuities to Established Officers.Again I apologise if it has already been explained. I see no reason for giving these additional allowances and gratuities. What has become of the Geddes Report? There is nothing in the Geddes Report which would suggest that the House of Commons should vote—
The right hon. Baronet knows that the established rule of debate is that the policy of the original Estimate cannot be questioned. It is open to him to ask for an explanation of, or to comment on miscalculations whereby the original Estimate was exceeded, but it is not open to any hon. Member to question the original policy.
§ Sir F. BANBURY
I was not questioning the original policy, and I say humbly that it is open to me, or to any other hon. Member, to object to voting this £360,000, and we have a right to give our opinion and our reasons for objection. I referred to the Geddes Report, because when the original Estimate was before the House there was neither a Geddes Committee nor a Geddes Report, nor was there any idea that such an inquiry was to be instituted. Therefore I say that the whole situation has changed, and that we should not vote this £360,000, because the Government are pledged through the Geddes Committee to economy and a reduction of expenditure, and the first thing in which we can help the Government, as I am desirous of helping them, is by refusing to vote this £360,000.
I am sorry that the right hon. Member for Peebles (Sir D. Maclean) has left 1147 the Committee. He was always a very vigilant watchdog ever the expenditure of the country, and I was rather hoping that he would have said, not that he would move a reduction of the Vote, but that he would vote against the whole thing. It is no use getting up and making speeches if you do not mean to go through with the matter. We have done a great deal too much of that; we have criticised the Government, and after we have done that we have gone away. I think we ought to do something more. When the Government ask for additional money we ought to say, "We will not give it to you, however good the object." I do not want to argue the merits of the case. It may be quite right to give this £360,000, if we had it, but we have not got it, and if we go on like this we shall become bankrupt. I am sorry there are so few Members in the House, but I hope that even if they do not vote against this £360,000 there will be such an expression of opinion that the Government will abandon their Supplementary Estimates where they entail increased expenditure.
§ Mr. E. HARMSWORTH
I beg to move to reduce the Vote by £100,000.
I endorse what has been said by the right hon. Baronet about the Estimates now before the Committee. It appears that we have very little control in the matter. These allowances and gratuities seem, like the war bonus, to have been decided upon by the Departments themselves. The Departments have, more or less, decided amongst themselves that the war bonus shall be calculated in the pensions. It would be a most excellent thing if the country could afford it. Many of these things are excellent; but in present circumstances, after we have had the financial position put so clearly before us by the Geddes Committee and after we have had the Government on every possible occasion telling us that they are doing all they can to economise, though I must admit that we have seen very little of it in reality, a matter such as this should not have been brought before the House before any Parliamentary decision was taken on it. It is very little use our coming down here to discuss in the dinner hour matters that have already been decided and of which we have practically no control. 1148 That is my first criticism. My second criticism is, quite frankly, that I think it is wrong that war bonus should be calculated for pension. It is quite obvious to everyone that the war bonus was purely a temporary thing to combat the cost of living, so that civil servants who, owing to the rise—
The hon. Member is now putting an argument which would very likely be relevant on the original Vote. The only question now before us is whether this additional commitment shall be honoured. He can, of course, say that the amount is so great that it should not be honoured, and he can comment on miscalculations in the original Estimate, but he is not entitled to discuss the policy of the original Estimate.
§ Mr. HARMSWORTH
I intended to point out only that the War bonus was a temporary matter and should not be calculated in the superannuation. The sums before us, totalling £455,000, are extremely large at a time when the revenue of the country is decreasing week by week. Were no more than this sum concerned, and were we then finished with the matter, there would be very little more to be said. But apparently in the future, probably next year, we shall be called upon to pass another Supplementary Estimate for a similar sum of money to be devoted to the same purpose, for a great many civil servants will retire during the course of this year. I simply wish on this matter, on which the range of discussion is very limited, to make my protest against this Vote coming before the Committee, and I certainly wish the right hon. Member for Peebles (Sir D. Maclean) had moved an Amendment, because I think it is a most important matter that, on a question of this kind, where we have sums of money which we do not agree, a division should be taken. It is our only control. We have no other control over a Minister at all except what we can do view of an Amendment. I move to reduce the Vote as a protest. against this large sum of money coming before the Committee at a time when the country cannot afford it, and when the taxpayer is very hardly pressed. As far as I can see there is no prospect whatever of taxation becoming lighter, and at such a time 1149 as this the Government should have only one thing in view, namely, economising in every possible way.
§ Sir G. COLLINS
My right hon. Friend the Member for Peebles (Sir D. Maclean) is not in his place at the moment, but as he has been in the House for several hours I am sure the Committee will understand the reason. If I understand it correctly, the reason we have not moved a reduction is a simple one, that this is a statutory obligation, that pensions have already been granted, and so far as this year is concerned it would be a supreme breach of faith, the State having undertaken that definite obligation towards certain individuals, in the closing days of the financial year for this House to refuse to grant the necessary supplies. But I am sure the Committee will realise that my right hon. Friend is strongly opposed to the policy and to the Supplementary Estimate. It is interesting to observe that the Treasury when submitting the original Estimate provided only £275,000 as the additional amount, and this evening we are asked for £635,000. They must have seriously miscalculated their policy in this matter. They have definitely bought out of the Service, through the taxpayers' money, a large number of individuals who in the early days of the present financial year the Treasury thought would be serving the State. I am not in any sense of the word blaming a single civil servant for being so wise as to seize a generous offer made by an unwise and extravagant Government with the hard-earned money of the taxpayer. The responsibility rests with those who are directly responsible for incurring this yearly and permanent charge on the State It may well be that in the coming year, instead of the revised Estimate of £635,000, if precedent is any guide in this matter and experience teaches the value of these generous pensions, the State will be forced to find nearly £2,000,000 for the purpose of superannuation and retired allowances. The Estimate at the beginning of the year was £1,000,000. It has been increased by 40 per cent. It is rather remarkable that in the first day set apart to discuss the expenditure of public money, which involves a yearly and permanent charge on the State, when the Government is pressed from this and other quarters to modify what I think all will 1150 agree are extravagant pensions, they flatly refuse to listen to the voice of a single Member in the House of Commons. The first fruits of practical economy is the statement made by the Government this evening that they refuse to modify these generous pensions paid to civil servants. I think the public outside will take note that the Government may be anxious to preach economy, but when it comes not only to practising it, but to passing the necessary legislation to effect that economy, they refuse to do it.
If I understand it aright, the pension at present being granted is based on the war bonus. Compare the position of these fortunate individuals with retired civil servants and Army and Navy officers who retired from the service of the State before 1914. They retired on the old pension based on the old rate. They have not received since the outbreak of the War any increase of their pension, but they hear and they know of civil servants drawing these increased pensions based on the war bonus. Further, how difficult the attitude of the Government makes it for local authorities. How difficult is the position of every individual in every education committee, county council and all the numerous public bodies throughout the country to be faced, as they are being faced, with increased demands or to maintain the rate of pension paid to their employés. Countless thousands throughout the country will point to the attitude of the Government and will say that where a war bonus was granted, pensions should be paid on that rate, and what civil servants have secured they will endeavour to secure, and rightly so, in their own particular spheres of action. Economies cannot be effective throughout the country unless the Government themselves give a lead in this matter. This evening the Committee is being asked to vote this sum of money, placing an increased burden on the shoulders of the taxpayer year by year, which it is in the power of the Government during the coming months to modify. That is our charge against the Government. I hope the Financial Secretary and other members of the Government will take note of the exceeding interest shown in the Geddes Report, and wisely, because that Report for the first time places the details of expenditure in a way which can be clearly grasped by every individual in the country. 1151 When we compare page by page, as in that Report, statements showing how money has been spent, the ordinary citizen is able to grasp where the money is being wasted. He is able to see where he is getting value for his money in some Departments. Therefore my plea to the Financial Secretary is that the Government should remodel the whole form of their Estimates, and present them to the House and the country in such a manner and in such a form that we shall be able to grasp them by reading them. How many established officers are receiving their superannuation allowance under this Estimate? The form of the Estimate gives no information on that point. I am not blaming the Financial Secretary, because he is dealing with a system which has been handed down to us from bye-gone days; but we do appeal to the Government, in view of the exceeding and deep interest in the subject of public expenditure, to accept the recommendations of the Select Committee on National Expenditure made several years ago, and that every Department of the State will remodel their forms of Estimates and present them in such form that the House of Commons and the country will be able to grasp them.
I am exceedingly sorry that we have found it unwise or impracticable to remove a reduction of the Estimates, but I do call the attention of the Committee to the fact that, on the first day set apart for the discussion of public expenditure, the Government turns once again a deaf ear to the cry which has gone up to them this evening from all quarters of the House to secure economy in the public service.
§ Mr. G. LOCKER - LAMPSON
I sat here all day and had to go to dinner. Therefore, if the question I am about to ask has been answered in my absence, I will sit down. Everybody knows that these additional allowances very much affect the superannuation pay. I do not know when these additional allowances were decided upon?
§ Mr. LOCKER-LAMPSON
The pay has been raised, and there is a certain 1152 amount of bonus on the top of it. Did the Government, when it agreed to this increase of pay, call in actuarial advice, because that is enormously important? If you do not call in actuarial advice, you find very often an amazing result in superannuation pay on the top of ordinary pay. In the First Interim Report of the Geddes Committee, speaking about teachers' pensions, they point out that the full cost to the taxpayer of the burden of teachers' pensions was clearly not appreciated when the arrangement was made, and that, in fact, the Government Actuary was not consulted. The Government have the services of Sir Alfred Watson, one of the ablest actuaries in the world, and he was not even consulted when that was decided upon. I find in the Second Interim Report of the Geddes Committee that when the present Government dealt with the Police Pensions Bill, 1921, there, again, they never called in the Government Actuary. The Geddes Committee say:We consider that it would have been advantageous, in view of the great addition of pay made by the general adoption of the Desborough scale with its immediate effect upon the superannuation liability, if the scheme had been actuarially tested. … As in the case of Teachers' Superannuation, we think the question should receive early investigation.10.0 P.M.
Did the Government take actuarial advice on this question? If not, we are being asked for a sum for superannuation pay which is probably vastly in excess of what would have been decided upon had actuarial advice been taken. The Government have Sir Alfred Watson at their disposal, a Government servant, the greatest actuary, or one of the greatest actuaries who has ever lived in this country, as I know from having been in constant contact with him during the Debates on the Insurance Bill. If they have not called in his advice it is a gross piece of negligence. I should like to know definitely whether or not they called in Sir Alfred Watson to advise them actuarially as to the result of this increased pay on superannuation.
§ Sir COURTENAY WARNER
Could the Financial Secretary tell us when the Statute which has been referred to which gave one-thirtieth of the pay as pension was passed?
§ Sir C. WARNER
There is a note at the bottom of the page which says:Expenditure due to additional retirement.Does that refer to both items, or only to one of the two items?
§ Sir C. WARNER
It is some satisfaction to see that most of the money is the lump sum, because that will not recur. One of the points that has been raised is not so important as it looks, because the bonus is being reduced every year. At the same time it is important that the House should take note of, and urge upon the Government the necessity of altering, this scale so as not to include bonus. We understand that so far as the money has been voted according to Statute we cannot go back on it, but we must draw attention to the fact that the Government have given a superannuation allowance based not only on the increased pay which this House voted, but also on bonus which this House did not know about when it voted the increased pay. The House was not informed about the bonus when it voted the increased pay.
I do not quite see my hon. Friend's argument that we must not move a reduction on this Vote. It is true that we cannot stop this money being paid, and this Committee does not wish to do so, but how is the Committee to express an opinion which it holds except by voting against what it considers is improper expenditure? Does the Committee think this is an improper payment? The Government has more or less jockeyed us ail through on this subject, and we are asked to vote upon a Supplementary Estimate of which we never approved. It is true that the original Estimate was passed and the principle was agreed to so far as that goes; but this shows that the principle was bad, because the increased expenditure is due to additional retirements. The increased number of retirements comes from a very natural feeling on the part of civil servants that if they retire now they will get a better pension than if they wait for two or three years. It is obvious that any man who 1154 knew that he would get a better pension by retiring now than by serving two or three years more would chose to retire when he would get the larger pension. The retirements have been more numerous and the cost of this comes on the taxpayer.
This is a matter of which the Committee ought to take notice and I, for one, although I do not in the least propose to stop these men getting these pensions, because it can be set right in another way, will vote for the reduction as a protest against what is a careless system. We have on the Paper a very sketchy definition of what has taken place. For whom are these pensions and grants? Are these people clerks and others retiring on a pension of, say, £100 a year, or men retiring on a pension of £1,000 a year? It makes a great difference. We should like to know what were the salaries of the men who have taken the lump sum, to what sort of men are we voting this money; to very poor men or men comparatively well off, who could well afford a little reduction in their pension? There is nothing about that on the Paper. We want to know something about these things. From beginning to end this whole business has been rather hidden from us. When the bonus was given originally we were not told before the bonus was granted. The whole question requires to be gone into carefully, and unless the Government tell us that they are going to alter the present system and strike the bonus out of the pensions the Committee ought to take a vote on the matter.
§ Mr. MOSLEY
I notice that an important point has been introduced into the discussion by my hon. Friend the Member for Wood Green (Mr. G. Locker-Lampson); but before I address myself to that and other subjects, I would like to join in the chorus of congratulation to the Financial Secretary for the new form of these Estimates. When I saw that these Estimates were in a new and more convenient form, and when I heard that a saving of £5,000 had been effected through this novelty, I at once suspected that the business genius, which lurks within the Geddes Committee alone, was responsible, and therefore my gratitude to the hon. Gentleman is all the warmer when I hear that alone and unaided the Treasury have actually effected an economy of £5,000.Apparently, the 1155 form of these Estimates was not submitted to the test of the business method which, according to the Chancellor, exists alone within this committee of business men and, ex hypothesi, must be entirely lacking in the Treasury. Therefore, I felicitate with all my heart the hon. Gentleman on this new economy which he has effected.
The hon. Gentleman also found a subject of congratulation in the fact that these Estimates had been introduced at an earlier stage than had been customary in previous Sessions, and for a moment, again, we were almost moved to feel that a change of heart had taken place in the Government, and that they were reasserting Treasury control, and actually taking us into their confidence in matters of finance at this early stage. But it was disappointing when the hon. Gentleman went on to inform us that the reason of the earlier introduction of the Supplementary Estimates was the depletion of the Civil Contingencies Fund which, in former years, had enabled the introduction of these Estimates to be postponed to a later stage, so that, after all, even this reform was a matter of necessity rather than of choice. The hon. Gentleman explained, with his customary lucidity and candour, the reason of the Supplementary Estimates, but there are one or two points still outstanding as to which I am not quite clear. He told us that some of these retirements were not entirely unexpected, and that they are due to normal conditions, the attainment of the age limit, and such like events. If that is so, if some of these retirements are to be ascribed to such causes, why were they not calculated and included in the original Estimates? If they are due to normal conditions, surely they ought to have been included in the original Estimates submitted to us; so that, at all events, is a matter of pure miscalculation.
The hon. Gentleman told us that some of the retirements were part of the general economy scheme which is now being introduced; but unfortunately when we are being asked for this additional money, in order to effect an economy, we are not in possession of the saving that is effected as a set-off against this expenditure. The hon. Gentleman explained that it was impossible for him, prior to the introduction of the Estimates, to afford us that 1156 information. That is a rather curious position in which to find the House of Commons. We are asked to vote a substantial additional sum—about £450,000—to effect what we are told is an economy; while at the same time we are informed by the hon. Gentleman that he cannot give us the round figures or even the vaguest idea of what the economy will amount to. I have not the hon. Gentleman's advantage either in inside knowledge of Departmental matters or in access to the documents which are at his disposal, but I do feel that with a slight exertion on the part of his very able staff, he might possibly have been able to afford us some idea of the scheme which he has under discussion and of the saving which it is hoped will be effected by that scheme.
The specific question raised in this Supplementary Estimate is that of taking war bonus into consideration in the granting of pensions. I find myself in entire agreement with the hon. Baronet the Member for the City of London (Sir F. Banbury) when he points out, with complete accuracy, that this scheme is in effect giving a permanent advantage as the result of a period of temporary conditions. The Government argue that because in the last year or so the cost of living has been high, and because, in order to meet the increased cost of living, a bonus was given to the civil servants for the duration of that period, that therefore these men are to benefit for the rest of their lives by a permanent increase in their pensions which, as the right hon. Member for Peebles (Sir D. Maclean) pointed out, will in many cases raise those pensions to a higher level than their total pre-War salaries. That is a most extraordinary proposal to introduce in this House. It has always been remarkable to me, that it can be seriously argued that the Civil Service alone of any section of the community should be immune from the economic stringency which to-day affects every class and every section in this country. That in itself is a remarkable contention which has long been sustained by this Government. But when they come down here and say that because they are giving the Civil Service this special consideration to meet special temporary conditions, that therefore when those conditions have changed and when the cost of living has fallen, these men are in perpetuity to have their pensions 1157 raised proportionately to the bonus, then I submit that is an argument which cannot be sustained on any ground of logic or of justice. It certainly has not been sustained by the hon. Gentleman this evening. He has pointed out that this House is in some respects committed to that policy, but he did not attempt in any way to justify the extraordinary proposal which he is now recommending to the House, in a far more aggravated eventuality than was ever contemplated when we originally passed this scheme. It was passed, as has been pointed out by the right hon. Member for Peebles, in one of those blind votes to which the House has occasionally been invited to accord its assent, and was only discussed for the first time on the Supplementary Estimates last year. It is now becoming apparent as yearly these Supplementary Estimates come up, exactly the appalling extent of the burden to which the Government has committed the country, a burden which in future years is likely to aggregate to a very large sum indeed.
I hope, in conclusion, that the hon. Gentleman, when he comes to reply, will be able to enlighten us on these various points and will afford us some justification of the scheme which he has presented to the Committee, and will tell us why it was impossible to foresee in the original Estimates that some of these people who are retiring under normal conditions would retire during the course of the present year and therefore might have been included in the original Estimate, and, further, I trust that he will be able to give us some idea of the ultimate sum which will devolve upon the Exchequer as a result of this plan, a part of which is revealed in these Estimates.
§ Mr. A. SHAW
I want to ask the Financial Secretary to the Treasury a question. It may be that in some way the public are saddled with this burden owing to a misunderstanding, but I must say I think it is a very ridiculous misunderstanding. Here we have a situation which will probably last but a very few years, on the authority of perhaps the greatest expert in the country, whom I had the honour of consulting a few days ago, and who believed we may be back on to the pre-War scale in a very few years. We have got still, however, very substantial War bonuses, and we are giving permanent pensions in which the 1158 bonus is taken into account to people who may live for a quarter of a century, and who may, therefore, for 15 or 20 years enjoy pensions which are quite out of place. I think this is no time to be splashing the taxpayers' money about in this fashion, and although we are willing to support the hon. Gentleman, I do not think we can do it unless we get a pledge that this clear consideration is present to his mind, and that this sort of thing will be stopped now, henceforth, and for ever more. It is perfectly intolerable that when we have got a falling scale of the cost of living, we should go on laying up for 15 or 20 years this entirely unjustifiable burden upon the public. I do not think the hon. Gentleman has really given any satisfactory explanation, and unless he is prepared to give us a pledge that, in view of the review which has been made by the Geddes Committee, and the strongly-expressed opinion of every Member who has addressed the Committee this evening, he will stop this sort of thing, I shall feel myself forced to join those who go into the Division Lobby against him.
§ Mr. N. MACLEAN
I take exception to the Estimate on account of the lack of information that it gives us as to the class of individuals to whom these superannuation allowances and gratuities have to be paid. I also take exception to it on the ground of the amount that the Committee is asked to vote away. To be asked to vote away a sum relating to additional allowances and gratuities that is greater than the sum that was originally estimated for by the Government is, to say the least of it, very bad management on the part of the Treasury. It may, of course, be advanced on their behalf that they could not foresee the large number of people who would take advantage of the pension scheme which, seemingly, it had suddenly dawned upon those people, was also to include a pension upon the bonus. The Government of this country, speaking and acting on behalf of the people of this country, ought to be the last to break any pledge that they have made to any class of servant they have working for the community, but I have yet to learn that this House was told at any time that the bonuses which were to be given, and the bonuses that had been given, to civil servants in order 1159 to compensate them for the increased cost of living were to be looked upon as something on which pension would also accrue.
So far as I am concerned—and I think I can speak with a fairly wide experience of industrial matters—there is no industrial firm in the country that has a superannuation scheme in operation for its employés, and that had during the War to give those employés increased wages to meet the increased cost of living, that has not been compelled to bring down the wages, with the natural result that if they retire at the present time it will be on a much lower superannuation allowance. The bonuses are not taken into account by those firms in assessing the retirement allowance. The bonus is given for a specific purpose. When that purpose ceases to obtain, the bonus should disappear, but, even although the circumstances should still remain that would necessitate the payment of a part of that bonus in order to compensate for the increased expenditure, would that bonus be taken into account by any firm in this country in assessing the superannuation allowance? The Government appointed five brainy men to bring down the expenditure of the country, and yet the Government come forward seven days after the publication of their Report asking the House to give them a larger sum of money than they asked in the original Estimate. And they say they have a desire to economise!
I should like to ask the Financial Secretary to the Treasury to how many individuals in the Civil Service does this additional superannuation allowance apply? It may be 1, or it may be 100,000. It is concealed from us. It is not shown in the statement in our hands. We have a right to know when we are being asked to vote the money to these people, for how many people we are voting the money. That information is withheld from us, and we are asked to go into the Lobby behind the Government to give them this sum. I have gone to the trouble of getting the original estimate. I find even there the most meagre details. In order to find particulars of how the money is to be allocated, we must go into the Library and take out Acts of Parliament and trace them back as far as 1854 to find out the purposes to which the money is being voted. I think 1160 it is time this Government should be taught a lesson by the Members of this House. They have been preached to from all sides. The hon. Member who preceded me said he was quite willing to support the Government if they could justify the case. That sort of thing is so often said, and they can always justify their case in such a way that they draw the wool over the eyes of their supporters. Hon. Members on the other side threaten again and again what they are going to do unless the Government climb down. In the end, however, we find it is they who have climbed clown. I am not asking for a vote against. the Government. But if the hon. Members who moved the reduction are prepared to carry it to a Division I, for one, am prepared to go into the Lobby with them at once. I want to pull the Government down—though I would not do it for that purpose alone willingly—but because I wish this House to be in possession of facts that I think we have a right to know. We ought to know the full facts upon which we are to be asked to vote away money so that when we go before our people we can explain the votes we have given in this House, and the purposes for which the money is to be spent by the Government.
§ Mr. HOGGE
It is a very short point I desire to be assured upon before I support, or otherwise, the Supplementary Estimate. There are two classes of men who have been affected by the cost of living. There is the civil servant that we are asked to supply this extra money for, and there is the discharged soldier and sailor who did the actual fighting for us. If I remember rightly, in April, 1917, we had what was then known as the Barnes Warrant, and from the issue of that Warrant until 1919, when the Select Committee on Pensions reported with regard to a disability pension being paid to discharged men, there was no increase in the amount of pension paid so far as the cost of living went. In 1919 the disablement pension for the fighting services was raised to meet the increased cost of living, in the exact percentage of the figure of, I think, 110 per cent. The Government at that moment refused to accept the recommendation of the Select Committee to review the pensions of the disabled men from year to year in accordance with the cost of living as it went up and down—and it went up as 1161 high as 170 per cent. The Government said: "We will not review these pensions until April, 1923."
I want the House to bear in mind that fact, in contrast to what hon. Members are now asked to vote. You cannot deny the fact that the man who fought for us did infinitely more than any man who remained at home. Everybody agrees to that. But the men who fought for us are getting less increase and no chance of retirement on a basis of this kind, and are not even having their pensions revised yearly according to the increased cost of living. Yet you have here civil servants, with good pay, security, good holidays, and good pensions, who are moving out of the country's service and taking advantage of the war bonuses to which they are not entitled. I hope every Member of the House who, over and over again in my hearing, has spoken of the debt we owe to the men who fought for us, will bear in mind, if they vote this money for civil servants who did not fight and did not put up with sacrifices, that he is doing an injury to other men, and an injustice to the taxpayer who is asked to contribute the money.
§ Mr. FILDES
The point I wish to emphasise is that apparently the position the Government take up is difficult to justify from *he point of view that we have been inviting the working classes of this country, the mining industry in particular, to increase their output in order to decrease the cost of living. I think that is going to be a particularly difficult thing to justify in the country when we find that the Government are prepared to let a considerable number of civil servants to go out of the service of the country with a pension on the basis that the cost of living is going to remain at its present level for years to come. I hope the hon. Gentleman will be able to give us some assurance that this indefensible procedure is not going to be persisted in. With the information before me, I cannot see my way to vote for such a proposal.
§ Sir F. BANBURY
May I put one question? I understood the Financial Secretary to the Treasury to say that this right to the pension was conferred by Statute. When he was asked to give the date of the Statute he replied, "About 1909." That is what we want to know. We want to know the date of the Statute 1162 which he says gives power to add the bonus to the salary, and to found the pension upon the salary plus the bonus.
§ Sir D. MACLEAN
In the opening statement which I made, I put it to the Financial Secretary that the basis upon which they granted the War bonus and the basis upon which they thought they were entitled to bring the War bonus in was the use of the word "emolument." I quoted the Statute at the time, and I put it that the War bonus was another interpretation included in the word "emolument." I said that I thought it was not a proper use of the word to apply it to a temporary arrangement.
§ Mr. YOUNG
I am much obliged to my right hon. Friend. I think we have now arrived at an explanation as to how the two views stand. The first view is that the pension is based upon 75 per cent. of the bonus at the time of retirement. The position, as I ventured to put it before the Committee in my opening observations, was this, that under the Statutes a civil servant on retirement is entitled to be pensioned on his emoluments. What is based on the agreement with the National Whitley Council is not that general right to be pensioned on his emoluments, but on a figure of 75 per cent. at which the war bonus is appraised for pension. It is my contention that the right of the civil servant to be pensioned upon his war bonus is a statutory right, because the only reasonable interpretation of the word "emolument" in the Statute must be taken to include the war bonus. [HON. MEMBERS: "No, no!"] I would quite agree with these hon. Members who have dissented if the war bonus had been a casual payment, but I also suggest to the Committee that to take that view as regards 1163 the war bonus in the state in which it has been for some time would be too narrow an interpretation. The reasonable thing is to say that it having been paid now for some years, and as it is certain it will have to be paid for some substantial time to come, it is only equitable to say that the war bonus is practically an emolument of the civil servant.
I do not think that justice has been done by some of my critics to the provision made in the actual scheme by the agreement with the National Whitley Council. It has been said how unfair it is that the pension should not come down with the decrease in the cost of living. Very briefly I went into that in my opening observations. The reason was this, that it was thought unpracticable and unnecessarily expensive and unfair to the pensioners to give them a variable pension. It has been said it is not more expensive to reassess the pensions than to reassess the salaries of civil servants. But that does not take into account the actual fact that, whereas the reassessment of salaries can be by large classes, owing to the way in which pensions are calculated practically no two pensions are the same. The elements which constitute the pension differ, and the calculations Which would be necessary in order to bring the pensions into line with the cost of living would be laborious and different in each case. Let me add I am not sure it is fully appreciated by the Committee that in the present scheme account has been taken of the fall in the cost of living, because under the contention I have advanced the pensioner was entitled under the law to be pensioned on his full emoluments, which would represent 100 per cent. of the War bonus. That was reduced by 25 per cent., and he is pensioned only on 75 per cent. The effect was to discount the fall in the cost of living, allowing for its fall by about 50 per cent. below the level at the date of retirement. I think that it ought to be clearly appreciated by everyone who wants to pass a fair judgment upon the effect of the scheme, that the effect of the fall in the cost of living has actually been discounted to the extent of allowing for its fall to 50 per cent. above the pre-War figure. It has been said that the nation is being fixed with a charge in perpetuity 1164 in respect of a temporary emolument, Indeed that is not so. This fall is discounted, and let me remind the Committee that you are dealing here with a class of persons advanced in years. These pensioners die off, in some cases, with great rapidity. I do not know what is the average age of retirement. It is about 60, but in many cases retirement does not take place till the age of 65, and the charges are short-lived. I cannot but think that an unduly optimistic view as to the prospects in connection with the cost of living was taken by my right hon. Friend and others, who threw out the possibility of its falling, in the immediate or near future, as low as 25 per cent. above the pre-War level. Nothing seems to me more improbable, and nothing seems to me more fair than the contention that in discounting the fall as we have done we have taken a very fair figure.
Let me now try to deal with one or two other questions that were put to me in the course of the discussion. The medical referees about whom the hon. Baronet the Member for East Nottingham (Sir J. D. Rees) was troubled, are not those to whom he referred with so much criticism. They are three special referees, who receive very small fees, and, as I mentioned at the time, nothing in any case is taken for them in this Supplementary Estimate. My right hon. Friend the Member for Peebles asked certain questions. He asked me, in effect, how many of the civil servants dealt with in this Estimate retired voluntarily, and how many were retired under retrenchment. If I may say so, that exhibits, though very naturally, a little misconception of the position. All these retirements with which we are dealing are, as I sought to explain in my opening observations, normal retirements, either at the age of 60 or through ill-health. The situation is that after 60 a man can retire on pension unless the head of his Department requires him to remain, so that it would be indeed impossible to distinguish between those retiring voluntarily and those retiring compulsorily under retrenchment. As a matter of fact, the large majority of cases would be of this nature, that your men would retire voluntarily, and would be allowed to retire by the head of their Department, but it is not possible to make any classification. My right hon. Friend the Mem- 1165 ber for Peebles, the hon. Member for Lichfield (Sir C. Warner), and also the hon. Member for Govan (Mr. N. Maclean) desired to know what range of salaries was covered by this Estimate, and some rather severe strictures were passed upon me for presenting the Estimate without those figures. Let me observe that in doing so I have merely followed what has been for a long time the customary form of Supplementary Estimates.
§ Mr. MACLEAN
I was not charging the Government with any such desire. I took exception to the manner in which the Estimate was presented, which I think is the right of every Member of the House. Whether it is customary or not is immaterial; Members have a perfect right to criticise the form, even though the custom be a bad one.
§ Mr. YOUNG
Of course, I accept. the hon. Member's explanation. I have no doubt that I misunderstood the emphasis of his remarks. I fear that, as the actual information which he seeks is of a detailed nature., I cannot give it on the spur of the moment. I fear, also, that to give accurate statistics of all the civil servants covered by this Estimate would entail a laborious inquiry through very many offices. I will consider the matter and see whether such figures as those asked for by my right hon. Friend, of increases over £500, can be obtained without what would. be an undue expenditure of time and money. I would, however, make this clear to hon. Members beyond all possibility of controversy that by far the larger number of the civil servants referred to in this Estimate—and only a small percentage of the money is provided in this Estimate for these services—are the civil servants in the lower grades, the small men in the Post Office, and so on; the men on small salaries. The first division civil servants with the higher salaries, above £500, would only account for a very small percentage indeed of the Estimate
1166 I was asked by the hon. Member for Central Aberdeen (Major M. Wood) whether there had not been an acceleration of retirement to take advantage of the higher bonus. Undoubtedly, as I think I mentioned in my brief opening statement, the effect of the bonus has been to promote retirement. I cannot give him the figures to which he referred, at any rate at, the moment, but certainly, for instance in the quarter before September, the number of retirements would have been greater than in the preceding quarter. That has worked fortunately by accelerating promotion, and in that sense it has facilitated those schemes of retrenchment and reorganisation which the Government desire to carry out. The hon. Member for Wood Green (Mr. G. Locker-Lampson) asked whether actuarial advice had been taken and certain calculations made as regards, if I understand him rightly, the inclusion of part of the bonus in the assessment of pensions. The calculations to which he refers were undoubtedly made. I should not agree with him that they were what you would technically call actuarial calculations. Special actuarial skill would not be necessary to make such calculations, but the calculations which he considers necessary were undoubtedly made at the time of those changes by the Treasury, though in fact they did not pass the actuarial skill which is available amongst the officials at the Treasury.
I would refer, in a single word, to an element in this Supplementary Estimate to which I alluded in my opening observations. This Supplementary Estimate must be looked upon in close connection with the question of economy and reform. Where economy depends to a large extent upon reductions of personnel you cannot get the economies you want without. an increase of non-effective charges. Owing to the form of our Estimates we cannot show you here the economies against which this increase of the non-effective charges stands, nevertheless they are there. They will tell in the Estimates for next year. I have given some account of why I have been unable, though I have sought, to give to the Committee on this occasion an estimate of the actual savings in this general Civil Service Vote. On the Customs Vote I can make a calculation; the saving will be £150,000 1167 here. You must have increases in non-effective charges if you are to effect economies by reduction of personnel. Let. me deal with the pledge to which my hon. Friend has just referred. As I understand it, it is that the Government are pledged to insist on economy.
§ Mr. A. SHAW
The votes of some of us depend on this, and in order that there may be no misunderstanding I say that it is a matter of some importance that the House should be treated with seriousness and not be fobbed off with pretences. The pledge I asked for is this: If the hon. and gallant Gentleman admits that it is unsound to base a pension which may last a quarter of a century on what has arisen out of the particular circumstances of the moment, will he say that the Government are prepared to stop this sort of thing in future? Leaving out of account present and past pensions will the Government in future make it a condition of the grant of such pensions that there shall be some method of reducing them in accordance with the fall in the cost of living, just as other classes in the country are affected?
§ show that we have reasonably discounted the approaching fall with the bonus. It is unsound finance to base a permanent charge, by way of pension, on a temporary increase. I am certainly in entire agreement with my hon. Friend on that.
§ Sir D. MACLEAN
I am sorry that I shall feel compelled to vote for the Amendment. The pledge required was that this shall stop. I have been looking at Section 1, Sub-section (2) of the Superannuation Act of 1909, and it reads as follows:(2) The Treasury may grant by way of additional allowance to any such civil servant who retires after having served for not less than two years, in addition to the superannuation allowance (if any) to which he may become entitled or the gratuity (if any) which may be granted to him under Section six of the Superannuation Act, 1859, a lump sum equal to one-thirtieth of the annual salary and the emoluments of his office multiplied by the number of completed years he has served, so however that the additional allowance shall in no case exceed one and a half times the amount of such salary and emoluments.Though I do not like doing it, I am compelled to vote for the Amendment.
§ Question put, "That a sum, not exceeding £355,000, be granted for the said Service."
§ The Committee divided: Ayes, 39; Noes, 121.1169
|Division No. 9.]
|Banbury, Rt. Hon. Sir Frederick G.
|Locker-Lampson, G. (Wood Green)
|Thorne, G. R. (Wolverhampton, E.)
|Benn, Captain Wedgwood (Leith)
|Maclean, Neil (Glasgow, Govan)
|Bruton, Sir James
|Maclean, Rt. Hon. Sir D. (Midlothian)
|Warner, sir T. Courtenay T.
|Casey, T. W.
|McMicking, Major Gilbert
|White, Charles F. (Derby, Western)
|Cautley, Henry Strother
|Mallalieu, Frederick William
|Williams, Aneurin (Durham, Consett)
|Entwistle, Major C. F.
|Williams, C. (Tavistock)
|Murray, Hon. A. C. (Aberdeen)
|Williams, Col. P. (Middlesbrough, E.)
|Nicholson, Brig.-Gen. J. (Westminster)
|Wilson, Rt. Hon. J. W. (Stourbridge)
|Hogge, James Myles
|Roberts, Samuel (Hereford, Hereford)
|Holmes, J. Stanley
|Robinson, S. (Brecon and Radnor)
|Wood, Major M. M. (Aberdeen, C.)
|Jones, G. W. H. (Stoke Newington)
|Rodger, A. K.
|Young, Sir Frederick W. (Swindon)
|Jones, Henry Haydn (Merioneth)
|Shaw, William T. (Forfar)
|Sykes, Sir Charles (Huddersfield)
|TELLERS FOR THE AYES.—Mr.
|Lawson, John James
|Thomson, T. (Middlesbrough, West)
|E. Harmsworth and Mr. A. Shaw.
|Agg-Gardner, St. James Tynte
|Carr, W. Theodore
|Falcon, Captain Michael
|Ainsworth, Captals Charles
|Chamberlain, Rt. Hn. J. A. (Birm. W.)
|Flannery, Sir James Fortescue
|Astbury, Lieut.-Com. Frederick W.
|Clough, Sir Robert
|Ford, Patrick Johnston
|Baldwin, Rt. Hon. Stanley
|Coats, Sir Stuart
|Banner, Sir John S. Harmood-
|Colvin, Brig. General Richard Beale
|Fraser, Major Sir Keith
|Barlow, Sir Montague
|Conway, Sir W. Martin
|Fremantle, Lieut.-Colonel Francis E.
|Barnett, Major Richard W.
|Coote, Colin Keith (Isle of Ely)
|Gee, Captain Robert
|Barnston, Major Harry
|Cope, Major William
|Gibbs, Colonel George Abraham
|Bartley-Denniss, Sir Edmund Robert
|Davidson, J. C. C.(Hemet Hempstead)
|Gilmour, Lieut-Colonel Sir John
|Birchall, J. Dearman
|Doyle, N. Grattan
|Glyn, Major Ralph
|Bowyer, Captain G. W. E
|Green, Albert (Derby)
|Breese, Major Charles E.
|Edwards, Major J. (Aberavon)
|Green, Joseph F. (Leicester, W.)
|Bridgeman, Rt, Hon. William Clive
|Elliot, Capt. Walter E. [Lanark)
|Guest, Capt. Rt. Hon. Frederick E.
|Broad, Thomas Tucker
|Hacking, Captain Douglas H.
|Buckley, Lieut.-Colonel A.
|Burgoyne, Lt.-Col. Alan Hughes
|Eyres-Monsell, Com. Bolton M.
|Hancock, John George
|Hannon, Patrick Joseph Henry
|Middlebrook, Sir William
|Scott, A. M. (Glasgow, Bridgeton)
|Harmsworth, C. S. (Bedford, Luton)
|Mitchell, Sir William Lane
|Seager, Sir William
|Henderson, Lt.-Col. V. L. (Tradeston)
|Molson, Major John Elsdale
|Hood, Sir Joseph
|Moreing, Captain Algernon H.
|Shortt, Rt. Hon. E. (N'castle-on-T.)
|Hope, Sir H.(Stirling & Cl'ckm'nn, W.)
|Munro, Rt. Hon. Robert
|Stanley, Major Hon. G. (Preston)
|Hopkins, John W. W.
|Murray, John (Leeds, West)
|Stophenson, Lieut.-Colonel H. K.
|Hopkinson, A. (Lancaster, Mossley)
|Murray, William (Dumfries)
|Strauss, Edward Anthony
|Hudson, R. M.
|Sturrock, J. Leng
|Hurst, Lieut.-Colonel Gerald B.
|Newman, Sir R. H. S. D. L. (Exeter)
|Sugden, W. H.
|Inskip, Thomas Walker H.
|Parry, Lieut.-Colonel Thomas Henry
|Sutherland, Sir William
|Jephcott, A. R.
|Pease, Rt. Hon. Herbert Pike
|Johnson, Sir Stanley
|Perkins, Walter Frank
|Thomson, F. C. (Aberdeen, South)
|Jones, J. T. (Carmarthen, Llanelly)
|Pickering, Colonel Emil W.
|Thomson, Sir W. Mitchell- (Maryhill)
|Kellaway, Rt. Hon. Fredk. George
|Pollock, Rt. Hon. Sir Ernest Murray
|Thorpe, Captain John Henry
|Pownall, Lieut.-Colonel Assheton
|Tryon, Major George Clement
|King, Captain Henry Douglas
|Pratt, John William
|Larmor, Sir Joseph
|Prescott, Major Sir W. H.
|Walters, Rt. Hon. Sir John Tudor
|Law, Alfred J. (Rochdale)
|Purchase, H. G.
|Weston, Colonel John Wakefield
|Lewis, Rt. Hon. J. H. (Univ., Wales)
|Randies, Sir John Scurrah
|Wheler, Col. Granville C. H.
|Lewis, T. A. (Glam., Pontypridd)
|Rankin, Captain James Stuart
|Whitia, Sir William
|Lloyd-Greame, Sir P.
|Rees, Sir J. D. (Nottingham, East)
|Young, E. H. (Norwich)
|Locker-Lampson, Com. O. (H'tlngd'n)
|Remer, J. R.
|Young, Robert (Lancaster, Newton)
|Renwick, Sir George
|Loseby, Captain C. E.
|Royds, Lieut.-Colonel Edmund
|TELLERS FOR THE NOES.—
|McCurdy, Rt. Hon. Charles A.
|Samuel, A. M. (Surrey, Farnham)
|Colonel Leslie Wilson and Mr.
|Meysey-Thompson, Lieut.-Col. E. C.
|Sanders, Colonel Sir Robert Arthur
Question put, and agreed to.
§ Resolution to be reported To-morrow; Committee to sit again To-morrow.