HC Deb 24 February 1930 vol 235 cc2007-13

Motion made, and Question proposed, That a Supplementary sum, not exceeding £30,000, 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, 1930, for the Salaries and Expenses of the Inland Revenue Department.

The FINANCIAL SECRETARY to the TREASURY (Mr. Pethick-Lawrence)

There is only one point involved in this Supplementary Estimate. It is on account of a concession to civil servants in the matter of the bonus.

Sir BASIL PETO

Can the hon. Member give us the exact date of that con cession?

Mr. PETHICK-LAWRENCE

The facts are these: For some time past the payment of the Civil Service has been subject to a sliding scale dependent on the cost of living. It has worked out in this way: That the six months from March to the end of August were taken, and on the average cost of living for those six months the bonus for the following six months was based. From this a curious result happened that was not anticipated when the plan was originally proposed. In the summer months on the whole the cost of living is less and the bonus as taken for the following six months, the winter months, was therefore less at a time when the cost of living was higher. In other words, in the six months with the high cost of living there was a little bonus, and in the six months with a low cost of living there was a big bonus. That was a most undesirable state of affairs. The matter was presented to the Chancellor of the Exchequer, and after giving it full consideration he decided, and announecd on 25th July of last year, that for the six months from 1st September, 1929, to 28th February, 1930, the bonus would remain at 70 per cent., instead of being cut down to 65 per cent., as would have happened if that concession had not been made. So far as the Inland Revenue is concerned, that involved an additional item of about £65,000, but of that £65,000 £35,000 is met out of the Vote originally agreed to, leaving a sum of £30,000 which it is necessary to ask for in this Supplementary Estimate.

Mr. ARTHUR MICHAEL SAMUEL

I beg to move to reduce the Vote by £100.

The whole explanation of this change of policy—

The DEPUTY-CHAIRMAN

I ought to remind the Committee that the principle of the retention of this bonus was affirmed by the Committee on the Colonial Office Vote, and that the Debate now must be confined strictly to the Inland Revenue Money Resolution, now before the Committee.

Mr. SAMUEL

The principle of the bonus I am not contesting. I am arguing that there was an arrangement which was broken. I wish to point out to the Committee that an arrangement was arrived at originally and that it was broken. Although we do not contest the principle of the bonus we do not agree with the breaking of it by bringing the allowance to 70 per cent. instead of 65 or CO per cent.

Captain CROOKSHANK

With all respect, was the principle definitely affirmed on the Colonial Office Vote? Would it not be more true to say that it applies to each Vote as it comes up, unless the prinicple is first affirmed on the Treasury Vote itself? Surely this is a decision of the Treasury as a whole, and as the Chancellor of the Exchequer has not put down the Treasury Vote as a Token Vote on which we can discuss the principle, surely the principle has to come up on each Vote in turn?

The DEPUTY-CHAIRMAN

I have already stated that the Committee having affirmed the principle on the Colonial Office Vote, the question before the Committee now is merely the Vote for this particular Department.

Mr. BALFOUR

This Vote is headed "Registrar-General's Office, England." [HON. MEMBERS: "Wrong Vote!"] Surely, we are not bound by a Colonial Office decision in a former Estimate.

The DEPUTY-CHAIRMAN

What I have ruled is that the Committee has affirmed the principle in the case of the Colonial Office Vote, and therefore the discussion now is confined to this particular Vote, and note the general principle.

Mr. A. M. SAMUEL

We never had this matter before us until the Financial Secretary explained it to us, and I do not think any of us realised that the policy of the bonus pivoted upon the question of 65 or 70 per cent. On reading the original Estimates of last year, I find that we had a margin of £176,000 on a Vote of £5,000,000. I myself drew up that Estimate, and we made a reservation in the figures to allow for the bonus on the scale laid down on a certain percentage basis according to the rise or fall in the cost of the index figure. I am not in any way guilty of varying that arrangement. It is said that hard cases make bad laws, and, whatever t/he merits, the change in the agreement might be to the disadvantage of the very poorest of the civil servants. It is a bad principle to break agreements, for if you do it in one case then others will claim to do it in another. Agreement is the basis of human intercourse, and, if you break an agreement, whether between man or woman, or nation and nation, it always leads to trouble. You should keep your bargain whether you win or lose.

I sympathise with the fact that the fall in the bonus would have injured the wages of the very poorest of the civil servants, but I remember when the late Government was in office, we made an offer to get over what the hon. Gentleman has described as the jolt. [HON. MEMBERS: "It would not have cost anything!"] I remember very well that the offer we made was in excess of the bargain we had come to. [HON. MEMBERS: "No!"] I happen to have been party to the offer, so I must ask the Committee to believe me. The offer we made was to give a slightly larger bonus over the period and for a longer time, so that a greater advantage accrued to the recipients than would have been received by them if we had stuck to the strict letter of the bargain. Now we find that directly an application was made to hon. Gentlemen opposite they at once gave way. I do not object to an amelioration to the poorer ranks of civil servants but to breaking a contract.

This reduction would have operated very hardly upon them, but I do think it is a very bad system if you are going to alter an arrangement. Is the hon. Gentleman wiping out the system upon which we adjusted the bonus based on the cost of living? He must realise that when we made the offer to stabilise the bonus at 65 per cent. for 12 months the cost of living was not as high as it is now and the recipients would have benefited very considerably. If he looks at my minutes, he will find that I said that, although it was said 65 per cent. might seem hard upon the recipients, the cost-of-living figure would fall very considerably, so that if they accepted the offer their position would be a very great deal better in a few months than it was then. Events have turned out as I foresaw, and if the hon. Gentleman looks up the cost-of-living index figure he will find that there has been a considerable fall, and that by stabilising the figure at 70. a very much greater benefit has been conferred than was ever anticipated. I would like to know, does this adjustment apply to every rank? I know that as regards certain incomes, such as £1,500 or £1,800, there is no bonus, but I should Like to know to what extent the altered bonus affects the whole scale of emoluments in the Civil Service? As this is an accomplished fact and as we cannot recall what has been done, will the Financial Secretary also tell us whether this arrangement is to apply permanently, or only for a period? Is he going to make a new start, on a new basis, or is he going to maintain the agreement which was entered into some years ago? The Committee ought to be informed whether or not this is a temporary arrangement, and i move this reduction in order that we may have a further analysis of the position and some idea from the Financial Secretary as to what will be the future of this arrangement about bonus adjustments.

Sir H. YOUNG

I wish to emphasise the question put by my right hon. Friend the Member for Farnham (Mr. A. M. Samuel) to which, I think, the Committee are entitled to an answer. I hope it will be possible for the Financial Secretary to give one, even within the strict observance of the principle which you, Mr. Chairman, have laid down for the conduct of this Debate, because, I confess, that the explanation given by the Financial Secretary has left me in complete doubt as to the actual arrangement made with the valuable servants of the Revenue Department. The original agreement which is familiar to us all may be defined as a bonus based upon a "lag" of six months and now we are told that, by this concession, the "lag" of six months has been converted into a "lag" of 12 months. Is this to be a permanent arrangement? Does it mean that the bonus received by the servants of the various Departments has been stabilised at 70 per cent. increase. That appears to be so from the Financial Secretary's statement. If it be not so, if there has been no stabilisation at a 70 per cent. increase, ten what is the arrangement as to the future? How is the review to be made and for what period is the "lag" to operate? The Committee will appreciate that the matter is one of great importance as regards the future basis of remuneration of the Civil Service. This is not the occasion on which to argue whether or not the bonus should be abolished and the salaries of civil servants stabilised, but it is an occasion upon which the observation can be made that we ought to do one thing or the other—either stick to the bonus, or make a reasonable fixation on a permanent basis. But this system of unreasoning concession—if I may so describe it without offence—by which a bonus system with its attempt at scientific accuracy, is allowed gradually to relapse into fixation, is surely the most undesirable of all courses for us to adopt. We still remain in complete doubt—

It being Eleven of the Clock the CHAIRMAN left the Chair to make his Report to the House.

Resolutions to be reported To-morrow; Committee also report Progress; to sit again To-morrow.