REVENUE DFPARTMENTS. (Hansard, 22 February 1922)

§ Lieut.-Commander KENWORTHY
I beg to move to leave out "£150,000," and to insert instead thereof "£149,000."
I move this reduction in order to be in a position to divide without dividing against the whole Vote in case the replies to the questions which I am going to put are not satisfactory. The House will be aware that this Estimate for £150,000 was, by arrangement, not debated in Committee, on the understanding that it would be put down early for discussion on the following day on Report. I desire to ask, first of all, are the Government going to give us an explanation of the expenditure due to these additional retirements? I do not want to cover the ground that has been gone over with reference to the last Vote, nor to deal with the principle of pensions taking in War bonus or anything of that sort, but I want to know briefly from the Government why there have been these additional retirements in the Customs and Excise Department, and why they are called upon, in consequence, to find £177,000. I think it is necessary to get this information, because the Customs and Excise Department is one of the many Government Departments whose expenditure has actually gone up by well over £1,000,000 within the last 12 months. Their Estimate for 1920–21—

§ Mr. KILEY
They have had a lot more work to do.

§ Lieut.-Commander KENWORTHY
I am coming to that in a moment. Their Estimate for 1920–21 was, in round figures, £5,543,000, and for 1921–22 it was £6,675,000, showing, therefore, an increase of £1,132,000. That is even after the Government's blows is the air in respect of economy. We are now asked to vote this additional sum of £150,000 for addi- 1977 tional retirements, and I think we ought to have some explanation. Why have these additional retirements taken place? The hon. and gallant Gentleman, answering a question the other day as to delays in the Customs, said there had not been delays in spite of the fact that only a small extra staff had been taken on. Work in the Customs has been enormously increased in volume and complexity by the fiscal legislation of the Government. I do not want to discuss that inane policy. There will be many other opportunities. But the business men, who are the people who know when and where the shoe pinches, are complaining all over the country of the tremendous delays in getting their business through the Customs at present.

§ Mr. SPEAKER
The opportunity for that does not arise here. This Vote is solely for additional retirements—the same point as the last Vote.

§ Lieut.-Commander KENWORTHY
I was going to develop my argument in this way, that the Customs are understaffed. I wish to know why these additional retirements are being permitted, and in particular, whether they are permitted before the proper statutory retiring age in order to get additional pensions. Whether the Customs are understaffed or overstaffed there is great delay, and if those retirements are taking place that may be one of the explanations. In view of the extra work thrown on the Customs I think we should know why these additional retirements were permitted. The second matter I wish to raise is with reference to sub-head A—Appropriations-in-Aid. I see we are allowed £8,000 which is due to repayments by the Inter-Allied Rhineland Army Commission of the salaries, etc., of Customs and Excise officers. Where has this £8,000 come from? Does it come from some other Department? Do the Foreign Office or the League of Nations pay, or who pays it? Customs officials are, apparently, established on the Rhine and they are loaned from the Customs and Excise Department in this country, and their salaries are paid by some unknown body, and we actually put down £8,000 for their salaries as an Appropriation-in-Aid. Is it really a saving? Does it come from some outside source altogether? We know the German Government is not paying it because they 1978 are not even paying for the Army of Occupation. We are not searching their pockets successfully to the tune of £8,000 a year. If it is simply £8,000 from some other Department which will be buried in some obscure Vote and rushed through in the small hours of the morning, according to the usual practice of this Government, we ought to be told, because it is not really a saving. The last question I wish to ask is with regard to the last item on page 50—the repayment from the Government of Northern Ireland under Section 3 of the Government of Ireland Act, 1920, of £19,000. I do not see any representatives of Northern Ireland here, and I am sorry I cannot congratulate them on at last paying some money to the English Treasury. They owe us plenty, and I am glad this amount is coming in, but I want particularly to ask the Financial Secretary whether this money has actually been collected. Have we got it? Has the money been paid, or is it only a pious hope that it will be forthcoming? I think we are entitled to an answer on these three very simple questions.

§ Mr. KILEY
I beg to second the Amendment.

§ Sir D. MACLEAN
I want to ask the Financial Secretary to the Treasury a question with regard to pensions which has not hitherto been raised. It escaped my attention on the other Vote, but I think the information is of some very considerable importance to us. It is on Sub-section (2) of the Act of 1909: 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 a gratuity which may be granted to him under Section 6, a lump sum equal to one thirtieth of the annual salary and emoluments of his office multiplied by the number of completed years. The question I want to put is, how much, if any, of the lump sum due under that Sub-section is included in this Supplementary Estimate? It is, of course, in addition to the pension which the civil servant is entitled to, which we have just been discussing.

§ Viscount WOLMER
Is it not a fact that this additional Vote is required owing to the wholesale retirements that took place from the Civil Service last August? 1979 After the Government had given notice of what was called the "super-cut" in the bonus it became obvious to a great many civil servants that if they retired last August, instead of waiting for the ordinary time of their retirement, they could retire on very much better pensions than if they remained and served for a longer period. I think it is of importance that the House should know and appreciate exactly what has been happening during the last few months. As far as my information goes, this system was allowed to creep up, without the House of Commons properly realising it, under which civil servants could claim a pension partly based on bonus, and it was realised that as the bonus was then coming down it would be to their advantage to retire as quickly as possible, and a great number of our most experienced civil servants seized this very favourable opportunity to retire. The retirements were out of all proportion to what had been calculated by the Government, and this has resulted not only in the State losing the experience and the service of men who might be invaluable at the present moment, but also obliging this House to Vote several hundreds of thousands of pounds, not only on this Estimate but on other Suplementary Estimates, in order to pay for the scramble that took place last August. I shall be very much obliged if the Financial Secretary can tell the House whether that really was the case, because if it was I think it is a scandal that requires to be ventilated.

§ Mr. G. LOCKER-LAMPSON
I do not quite understand why the last Vote is divided up into superannuation allowances and additional allowances, whereas in this Vote it is all lumped together under superannuation and other effective charges. In looking at the Estimate it is quite impossible to see how much is to be allocated to superannuation allowances and how much is to be allocated to additional allowances. I have no doubt my hon. Friend will be able to tell us. The point I rose to make is this: In the Debate the other day he told us the Government had not called in a Government Actuary to consider the question of pensions which are based on the allowances. It seems to me strange that we should have a Government Actuary, a very able man, who is paid a very high salary, quite properly, with a Department, and that the Treasury should not 1980 have called him in on this very important question. The Geddes Report points out that on the question of teachers' superannuation allowance the Minister of Education never called in the Government Actuary.

§ The PRESIDENT of the BOARD of EDUCATION (Mr. Herbert Fisher)
The question of teachers' superannuation allowances had been under the consideration of the Board for five years. We had recourse to the best Actuarial experience. We had an immense mass of Actuarial information in the office. When our inquiries began the office of Government Actuary had not been established, and the question of what was the ultimate cost of teachers' superannuation would have been a perfectly futile question to address to the Government Actuary, because the ultimate cost of the Teachers' Superannuation Act would depend on two factors which could not be estimated, first of all, the ultimate salaries of teachers, and secondly, the ultimate number of teachers. What was the use of asking the Government Actuary what the estimate of ultimate cost would be? I gave the House the estimated cost for the next 10 years on the assumption that the salaries and the number of teachers remained constant, but I warned the House that those two factors were variable, and I could not give a closer estimate. If the Geddes Report creates the impression either that the then Chancellor of the Exchequer or I have not taken sufficient pains to frame a financial estimate as to the cost, that impression is wrong.

§ Mr. LOCKER-LAMPSON
After all, the public is rather at a disadvantage. It has this Report, and until some reply is made it is impossible to say really what the rights are on the other side.

§ Mr. FISHER
I am grateful to the hon. Member for having given me the opportunity.

§ Mr. LOCKER-LAMPSON
I would also point out that the Police Bill was introduced last year—not five years ago—and the Government Actuary was not called in then to discuss the very complicated actuarial questions which arose. My hon. and gallant Friend told us a moment ago that these questions of pensions need the most intricate acturial investigation. 1981 Why on earth did not he call in the Government Actuary? Will he make a rule in future that when the allowances are given, as pensions are dependent on these allowances, the Government Actuary is called in to give some kind of idea what the capital cost is?

§ Sir F. BANBURY
I am glad that my hon. Friend has raised this question, because he has drawn attention to the fact that while the Financial Secretary to the Treasury realises the importance of actuarial valuations, the President of the Board of Education thinks nothing of them, and prefers to give to the House his own opinion of what the result would be. I think he describes them as "fancy opinions."

§ Mr. FISHER
I gave no such description.

§ Sir F. BANBURY
Perhaps I may call the right hon. Gentleman's opinion a fancy opinion. I asked him what the cost of the Education Act would be and be said £10,000,000.

§ Mr. SPEAKER
The President of the Board of Education has given his explanation. The matter is not entirely relevant to this Debate.

§ Sir F. BANBURY
The relevancy was that my right hon. Friend said he had not had an actuarial valuation.

§ Mr. FISHER
I said quite to the contrary. I said that we had an immense amount of actuarial information at the disposal of the Board of Education, but I did not ask the Government Actuary what the ultimate cost would be because the ultimate cost would depend upon two factors which could not be estimated, the number of teachers 40 years hence, and the salaries of those teachers.

§ Sir F. BANBURY
What we wanted to get at was the ultimate cost. It is no use having an actuary if you do not ask him a question which he is there to answer. The right hon. Gentleman's Department is not different from any other Department which has superannuation funds. Nobody knows what the salary is going to be 40 years hence; nobody knows what the salary is going 1982 to be 10 years hence. We do not know whether my right hon. Friend will be on that bench in a year's time; but that is no reason for not having an actuarial valuation. This is only another example of the extravagance of the Government. The real reason why my right hon. Friend did not have an actuarial valuation was because he thought it would perhaps be so great that this House and the public might turn against the proposal. Therefore, he thought he would give his opinion as to what would be the ultimate cost. We owe a debt of gratitude to my hon. Friend the Member for Wood Green (Mr. G Locker-Lampson) for having raised this question and exposed the extravagance and reckless habits of the Government.

Mr. YOUNG
This Estimate covers precisely the same ground and involves the same principles as our recent discussion. The hon. Member for Central Hull (Lieut. Commander Kenworthy) and the Noble Lord the Member for Aldershot (Viscount Wolmer) in substance invited a renewal of a discussion we had already had.

§ Viscount WOLMER
I only asked for facts.

Mr. YOUNG
Let me deal with what is relevant to this Estimate. Generally speaking, the cause of the excess is additional retirements, and those additional retirements have to be looked upon as part of the working out of schemes of reduction of staff, which reductions were made possible and facilitated enormously, without compulsory retirement, by the fact that senior servants were willing to retire in view of the bonus scheme. The hon. Member for Central Hull asks me as to the Appropriations-in-aid. In regard to the Appropriation-in-aid of £8,000, he states that whoever pays it, the German Government does not. He has missed the bull's eye at the first shot. It is precisely the German Government that will pay the £8,000.

§ Lieut.-Commander KENWORTHY
It has not paid it yet.

Mr. YOUNG
It will, or has. Very probably it has. If it has not repaid this instalment, it will have repaid previous instalments, and will repay this in due course. There is cash coming in in the form of marks, through the Inter-Allied 1983 Rhineland High Commission, more than adequate to discharge such a charge as this. As to the repayments from the Government of Northern Ireland, that is in regard to agency services performed under Section 63 of the Government of Ireland Act by the Customs on behalf of the Government of Northern Ireland. Whether the sum has actually been paid or not, I think I can assure the House that, without any doubt, the Government of Northern Ireland will discharge its debts. In reply to the right hon. Member for Peebles (Sir D. Maclean), I would point out that the amount of the lump sum contained in this Estimate is £150,000 as a non-recurring item in the £177,000. The big sum falls in the first year through there having been the additional retirements this year. As regards the question put by the hon. Member for Wood Green respecting the form of the Estimate and why it does not show the difference between the recurring charge and the lump sum, whereas the former Estimate did, the first answer is the very unsatisfactory one that it always has been so for many years. I believe the actual reason is that the original Estimate for Customs and Excise contains very many sub heads, and probably those who were making the form of the Estimate thought it was better not to multiply the subheads more than was necessary while under the Civil Service Superannuation subhead there are only a few subheads, and there is not so much reason why the extra ones should not come in.
The hon. Member for Wood Green also inquired about the actuarial calculations, and he has caught me out in what I must admit must be a rhetorical use of the word "actuarial." We are well aware at the Treasury of the essential nature of the actuarial calculations, and I do not hesitate to give the assurance that wherever essential information can be obtained from such expert advice it will be taken.

§ Colonel P. WILLIAMS
With regard to item of £8,000, the Financial Secretary has told us that it is a payment by the German Government. When did the payments start? I have the original Estimates here for this year and I cannot trace any such item. Therefore, they must have 1984 started some time between the presentation of the original Estimate and the present time.

Mr. YOUNG
I cannot give the actual date of the payments at the moment, but they may have been made in such a period as that to which my hon. Friend refers.