HC Deb 23 February 1933 vol 274 cc1923-63

Order for Second Reading read.

3.50 p.m.


I beg to move, That the Bill be now read a Second time. In rising to move the Second Reading of this Bill, I must ask for the indulgence which the House always gives to one who addresses it for the first time in an official capacity. While one can always rely on physical support in the position which I now occupy, I rely more on the moral support which the House always extends to one in my present position. At the end of 1931 Parliament passed the Indian Pay (Temporary Abatements) Act, which authorised a reduction of pay of servants of the Crown in India by 10 per cent. That Act was of temporary operation from the 1st December, 1931, until the 31st March of this year. The purpose of this Bill is to extend the provisions of that Act for a further year, that is, up to the 31st March, 1934, and to reimpose the abatements in pay of the previous Measure at the rate of 5 per cent, instead of 10 per cent. The Bill is a simple Measure and re-enacts with this difference the provisions of the old Act.

The reasons for this legislation coming before Parliament were made clear during the previous Debate on this subject at the end of 1931. It may be helpful if I recapitulate them here. Under the Government of India Act, 1919, officers recruited before that date by the Secretary of State in Council were entitled to statutory protection for their pay, that is, it could not be reduced except with the consent of Parliament. Officers in this category are a comparatively small class, but it contains the majority of the highly paid men. It was thought at that time invidious for the Governments in India to impose cuts on their own Services while these men had no cuts. It was therefore necessary to seek the sanction of Parliament to a cut in the pay of officers who enjoy statutory protection in order that a general cut in the pay of the Indian Services might be made.

The House will remember the grave financial position in India in 1931. It was very similar to that prevailing in many other countries at the same time. The Secretary of State, when he introduced the previous Measure, made clear that it was for the purposes of a temporary financial emergency, and he caused Civil Service Associations in India to be informed that he had no intention of continuing the cut unless the financial situation made its continuance unavoidable. Unfortunately, though an improvement in the financial position has been shown in India by dint of stern economies and heavy taxation, it is not sufficient to meet the possibility of restoring the whole cut. While the withdrawal of the whole cut is impossible, in pursuance of the undertaking given it is proposed to reimpose a cut at a reduced rate of 5 per cent. instead of 10 per cent.

The continuation of the cut is to be accompanied by the withdrawal of certain Income Tax concessions. When the Finance Member introduced the supplementary Finance Act of 1931 in India, he imposed a surcharge on the Income Tax rates which had been included in the previous Finance Act of that year. At that time those who had been subjected to the 10 per cent, cut were let off the Income Tax surcharge which the Finance Member had introduced. It is now proposed to withdraw those concessions from the Services. This helps us to find the money to restore a portion of the cut. It also means that the Income Tax law will now be applied equally to all sections of the community, and that the Civil Services will not receive an exemption as before—a point often referred to by the commercial community in India. Perhaps I shall make clear to the House the effect of this combination of the restoration of part of the cut and the withdrawal of the Income Tax concessions if I take the case of individual officers. The advantage of this method is that it will mean that the Government are putting quite clearly before the House the exact nature of their proposals and not attempting to conceal anything.

Let me take the general range of relief which will result to officers as a consequence of the proposal. It will range from approximately 4.3 per cent, for an officer drawing 400 rupees a month to approximately 1 per cent, for an officer drawing from 4,000 rupees to 5,000 rupees a month. If I take one or two individual cases, I can explain it more clearly. Take the case of a man drawing £618 a year under the 1931 Act. He will be a man of four or five years' service in the Indian Civil Service, or from six to seven years in the Indian Police. He will receive relief under our proposals to the extent of 4.2 per cent. Take a typical case of a district officer with 11 years' service, who would be drawing £l,260 a year expressed in English money; he will receive relief under our proposals of 3.2 per cent,, while a commissioner drawing £2,130 a year will receive relief under our proposals amounting to 1.5 per cent.

The House will see clearly that this combination of a restoration of a part of the cut and the withdrawal of the Income Tax concessions helps the junior man most. It therefore gives help where it is most needed. At the same time the provisions of our proposals will apply to the personnel of the Army, Air Force and the Royal Indian Marine serving under Indian rules. In so far as the original Act was imposed on the fighting services, the modified cut will now be applied to them, and it will be right to say here that there may be certain individual cases as a result of our proposals which may find themselves not better, but worse off. We wish to say that in those cases adjustments will be made so that no one is actually worse off under the proposals we are now bringing forward.

The House may be interested to hear the saving to Indian Revenues under our proposals. The imposition of the 10 per cent, cut brought in approximately £4,500,000. The House must remember that we are dealing in this question with a great many different Budgets—the Central Budget, the Railway Budget and the different Budgets of the Provinces, so that I can give estimates in general terms only. If we take £500,000 as coming in by the withdrawal of the Income Tax concessions, we find that we will save approximately £3,000,000 to Indian Revenues by the proposals we are putting forward if the Provincial Governments follow the lead in this matter.

It is with the greatest regret and reluctance that the Government have come to Parliament to ask it to continue the cut at all, and it is very definitely our intention, at the first possible moment, that these cuts shall be removed. India, like most other countries, has to continue to economise by cuts in pay, and we hope that the remission of part of the cut will be of some help to the Services in their special difficulty. Government servants in India find a reduction of their expenditure more difficult than many of us do at home. They have, in many cases, a higher standard of living to keep up, particularly if you take the district officer, to whose particular condition I drew the attention of the House a few minutes ago. They have a public position to keep up. One of the chief problems is, of course, for the married man. He, very often, has to keep up two establishments, and he has to consider the education at home of his children from whom he is very often separated. As one who was educated in these circumstances, I sincerely hope that the investment on my education has been worth while, if it enables me to move a Bill affording some slight relief to a class of the community whom I may be biased in regarding as the very best of our country. Moreover, their cost of living in India has not decreased. Very often important articles for the household cannot be purchased in the internal market, and have to come in after being subjected to high tariffs.

Standing as we do on the brink of a great constitutional change in India, I think there are also strong reasons for relieving their financial embarrasments and giving to the Services in India practical proof of Parliamentary control. We hope by the reduction of the cut and by the undertaking that it will be removed at the first possible opportunity, we shall be doing something to set their apprehensions at rest. There may, perhaps, be one further source of satisfaction to the Services. There can be no continuation of the cut beyond 31st March next year, unless a new Bill be introduced in this House. This, in fact, is the best help that, under the exceptionally difficult financial circumstances, we have been able to give the Services in India, and though the help we give may be small, it carries with it our understanding of their apprehensions, our admiration for their conduct in difficult circumstances, and our definite assurance that the trust they place in the protection of Parliament will be, as on this occasion, not in vain.

4.5 p.m.


I should like to congratulate the hon. Member upon his very admirable speech in introducing a Bill for the first time as a Minister of the Crown. He said that he was conscious of his own limitations. I think after his speech he must be the only person in the House who is so conscious. I should like to ask one or two questions with regard to this Bill and its effect. The Bill was necessary owing to the fact that cuts in pay were to be reduced in the various services, and it was thought right that services which were in a specially protected position should be brought into the same position as the rest. I should like to ask whether this extension at a reduced rate is going to apply to the provincial services, because that, after all, is the chief point of this Bill. We want to know the total effect. The fact that a cut is necessary is, we understand, due to the fact that, though Indian finances are a great deal better than they were, they are not yet wholly restored. I notice that there is an improvement with regard to the central finances where, we are told, the Budget has been balanced. That certainly does not extend to all the provinces, and that is why I want to ask whether, as a matter of fact, this reduction from 10 to 5 per cent, in the cut is being extended to the provincial staffs. Bombay, for instance, still has a heavy deficit.

The next point I would like to raise is that of the general policy underlying this Bill. When the former Bill was introduced, proposing the 10 per cent, cut, we on this side of the House said that we objected to the principle of cuts altogether, and we suggested that there might be other ways of finding revenue in India, just as we had suggested that there were other ways of finding revenue in this country apart from cuts. Although the cut is continued, we must welcome its reduction, and I think that we should congratulate the Government in India on their realisation of sound finance. I was reading the speech made by the Viceroy in Delhi. He said that at the earliest possible moment, as soon as the Budget was in any way balanced, they were at once proceeding to reduce the cut and that they were proceeding, in fact, to expand public expenditure. The Viceroy said: We are now, I hope, approaching times when, aided by the consolidation of our financial position and the improvement of our credit, to which I have already referred, and with prospects of cheap money, we may be able to initiate plans which will not only permanently improve the economic productivity of the country, but in their execution help to set the money in circulation which is so necessary in the present depression. I take it that that speech was made with the full approval of the Secretary of State for India and the full approval of the Cabinet at home. I wish that the Secretary of State for India could convince his colleagues in the Cabinet here that the right thing to do at the present time is to restore the cuts made in the pay of so many classes of officials in this country, and particularly of the unemployed, and to take advantage of cheap money both for setting people to work and, as the Viceroy said, for setting the money in circulation. It seems to me that the Finance Member of the Government of India has a truer idea of economics than the Chancellor of the Exchequer at home. He realises that it is no good saying, "We have got cheap money, we have brought down the rates of loans, we have a balance at the bank and we are going to leave that money idle." He says that the right thing to do with that money is to keep it circulated, and he thinks that can be done in two ways, one by increasing the purchasing power of that very large class, the official class in India, and the other by setting on foot works which will not only permanently improve the economic position of the country but distribute the purchasing power of the country. I could wish that this Government would take an example from the Government of India.

There is one further point. There has been an agitation in India that, instead of restoring the pay of the people who work, there should have been relief to taxpayers who, in many cases, receive money for doing nothing. I am glad to see that the Indian Government has resisted a clamour to relieve various classes, commercial and so forth, before restoring the cut. There, again, I hope that the lesson will be taken to heart by this Government, that before there is any relief to persons who pay taxes from unearned incomes, they will restore the cuts both in pay and in unemployment benefit. It is very pleasant for us on this side of the House to be able in this matter to congratulate the Government of India on having sound economic views, though it may be all the sadder to think that we have a Government at home that is so unsound. I would like the Secretary of State to tell us, when he replies, a little more about the financial position in India, particularly with regard to the provinces.

This is a temporary Bill, and one gathers that in the last 12 months conditions have improved in India. I should like him to tell us something as to the prospects in India, especially with regard to the finances of the Provincial Governments, and also with regard to the point that was made by the Under-Secretary as to the rise in prices in India. I understand from him that prices are rising in India. We know that it is the policy of this Government that prices should rise, and it is quite clear that the Services are apprehensive that if there is a rise in prices, what they may get back by the reduction in the cut, or the ultimate abolition of the cut, may be taken away from them by a rise in prices. There is a similar feeling in this country. They have no prospect at the present moment of any restoration of the cuts made in the salaries of officials and police; on the other hand, we are told by Ministers that the great hope is in rising prices. Therefore, I hope that the apprehensions of the people in this country will be as much appreciated by the Government as are those of the Indian Civil Service. In conclusion, I think they have followed a thoroughly sound principle in restoring these cuts by tempering the wind to the shorn lamb, that is to say, giving the greatest amount of benefit to the poorest of the population. That, again, is in curious contrast to the action of the Government at home, who, when they wanted to "save the situation," as they said, proceeded to hit the poorest of the poor.

4.16 p.m.


The Under-Secretary of State for India has put the case for the Bill with great lucidity and with considerable sympathy; in fact, if I may say so, he inherits an aptitude for dispensing soothing syrup. He has explained to us that although we are supposed to get half a loaf that, as a matter of fact, at the end of the period of giving and taking, we shall be left with only a quarter of a loaf in the case of those members of the Services with whom I am, for the moment, identifying myself. Of course, that is disappointing to the Services, and one has to understand more of the details before one can judge what the real effect is. The House may be tempted to think that when a country is in a state of financial stringency the Services have not much to complain of if they lose only 7½ per cent, of their pay, but they have been affected not alone by the cuts in pay but by the fact that the Income Tax is much higher than it used to be and by certain cuts in allowances in the provinces. This whittling away of some of the allowances which those in the provinces used to enjoy, which are distinct from the pay, and are given for specific purposes, has been going on for some little time, and I am given to understand that the process is continuing. I have not the details before me, but I am assured that that is the case. The Under-Secretary, in spite of having put his facts very clearly, does not disclose everything, because I understand that whereas the Income Tax will go to the Central Government the loss by a reduction of the loans will fall on the provinces; that is to say, the Central Government gets all the halfpence while the provinces get all the kicks. When the Secretary of State replies I would like to be told whether that is the case.

The real hardship of these cuts is manifest to one who, like myself, was a member of the Royal Commission on the Services only so short a time ago as 1924. We had innumerable family budgets presented to us, and we were in a position to appreciate how much those in the Services had suffered in the matter of the education of their children, and in all those small luxuries and ordinary comforts which people serving in India and occupying a certain status expect to have and ought to have. Recently the cuts have gone much further than this. I hear constantly of cases in which insurances have had to be abandoned, of ever increasing debt and—this applies very largely to the officers of the Army— of the necessity of dispensing with the most ordinary comforts. For example, I am informed that a district officer, whose people I know, has been forced under this financial pressure to give up even the luxury or the comfort, or it may be called the necessity, of a punka, that is a fan, at night because he cannot afford the cost of a night punka man. In the meantime such expenses as rent have not diminished, indeed, in some cases they have increased, and one can hardly wonder that those who expected that the cuts would extend only to 31st March, 1933, are grievously disappointed.

The apprehensions of the Services are not confined merely to the temporary pecuniary loss which has been inflicted upon them by the cuts, because what this Bill does is to ask Parliament for the second time to make legal a breach of a contract which was embodied in such a solemn Act as the Government of India Act, 1919, by which Parliament promised to secure the Services in their emoluments and all their existing and accruing rights. They feel, and I do not wonder, that their sense of security is slipping from them. In this country if the Government felt able to restore cuts there would be no party in this House which would violently resist such a policy or would be disappointed with it or hostile to it, but in India the feeling is different. A great many Indian politicians not only approve of these cuts but are delighted with them; they would double them if they could and would make them permanent if they had the power. Does not that make all the difference to the spirit and the courage with which these officials have to bear their sacrifices? They are very much disappointed at the action which is now being taken, because they were encouraged by what was said by persons in responsible positions when the last legislation was enacted. It is quite true that the Finance Member in India and the Secretary of State here left themselves a loophole to enable them to ask for an extension of that legislation if it were necessary, but the feelings of the Services now will be well understood if I read two or three extracts from the speeches made on that occasion. The Finance Member of the Government of India, speaking in the Legislative Assembly on 29th September, 1931, said: It must he clearly explained that there is no intention that they should remain operative beyond 31st March, 1933. They will not be continued beyond that date without further consideration of economic conditions, and if economic conditions so re- quired or permitted we should reconsider them before that date. Elsewhere he said: A cut of this nature must be regarded as a very exceptional measure, which can only be justified in very exceptional circumstances. It is nothing less than a direct variation of the conditions under which an officer enters the Government service. … The security of those conditions represents an essential attraction.… It would be fatal to the public interest if that sense of security were destroyed. Further, he said: There are certain principles which we consider must be observed. Relief must come first in restoring the emergency cuts in pay.… I think we may predict, with as much certainty as possible for any such forecast, that these special impositions will not in any case be extended beyond March, 1933. The Secretary of State himself explained on the occasion when that legislation was passed that nothing short of a great national emergency, nothing short of an acute financial crisis, would justify the Bill, which was an emergency Measure to deal for a short time with the crisis, and that it was the firm intention of His Majesty's Government to safeguard in every possible way the rights and guarantees of the Services.

People in this House may think that those assurances would soothe and allay the alarms of the Services, but one cannot go on indefinitely making assurances of that kind and then produce further Bills to continue the cuts. Each time the Government come forward with such a Measure they weaken the sense of security which the Services feel they enjoy. I have had communications from representatives in this country of the Indian Civil Services Association and the All-India European Government Servants Association. The Indian Civil Services Association are so concerned with the continuation of the cuts and the policy which it involves that they ask if it is not possible to affix a preamble to this Bill which will make it clear beyond cavil that the occasion for imposing or continuing cuts of this kind is limited to the great financial stringency created by the present economic slump. I do not know whether the Secretary of State can consider that proposal favourably, but I am sure that some such declaration, embodied even by way of preamble in the Bill, would add to the security of the Services.

The All-India European Government Servants Association are not quite so easily placated. I think they have communicated their fears to the Secretary of State. They are not satisfied that the extension of the Act of 1931 has been entirely uninfluenced by political pressure, and are not satisfied that the financial circumstances of the country do require the sacrifice on their part. On this matter I would like to ask the Secretary of State one question: Whether it is not a fact that the Government of India, through their Finance Member or otherwise, had given the public, at all events, the impression that they intended to abolish the cuts altogether? If that be the case what is the influence which has caused the Government of India to change their mind? I would like to know whether the supposed intention— supposed as the public believed it—of not withdrawing the exemption from the surcharge on Income Tax has not been influenced by the protest made by European commerce and by Indian politicians.

The Secretary of State told the House yesterday that there had been a very substantial improvement in the condition of Indian finances, and also that the additional expenses of the projected new constitution would add very little over and above the cost of the present constitutional machine. The House will hardly realise oven now how the British members of the Indian Services are handicapped in making protests. The salaries to which this Bill refers are only those of officers whose pay cannot be reduced without the sanction of Parliament. Among thousands of officers in the higher Services, in the provincial subordinate Services and in most of the central Services, whose pay was cut down to the limit of those receiving about 40 rupees a month—in the case of the police I think the limit was a good deal higher, about 120 rupees a month—the position of the members of the higher Services is rendered very difficult.

If those lower-paid people have had cuts imposed on them, it is very difficult for the higher Services to protest about their own cuts. In fact, it is almost impossible for them to do so and to win any sympathy. They are in a very invidious position, although they may have very strong reasons for objecting to the cuts. It is also very dangerous to their security in the future, because, under the new form of government in India, as far as is projected, the provincial Governments, and indeed the central Government, will be able to make cuts in the pay of those under them, and will force upon the higher Services the necessity of submitting to the cuts merely because those poorer than themselves have had to bear them. There is great risk that the precedent given under the existing form of government will be more and more used hereafter by those who are hostile to the Services, and who deliberately desire to destroy their position and put them to discomfort and sacrifice.

We all know that some of the Provinces are in a much worse financial plight than others. If, for example, the finances of this or that Province are apparently flourishing, can it be said that in those Provinces the finances are in such dire straits that the continuance of the cuts is really unavoidable. I have received information that all the cuts, except those with which the House is now concerned, have been restored by the Government of Madras. I do not know whether that is true. If it is, it makes the position somewhat different. There is no reason why the cuts should be restored in one Province and not in another, when the test is merely one of dire financial stress. If the Province is flourishing, as I understand is the case with Madras, which has a surplus, how can those serving under and paid by the Government of Madras be forced to submit to the cuts which financial necessity does not require? I do not for one moment question the desire of the Secretary of State for India to deal fairly with the all-India Service. I am sure that he has done all that he could to mitigate the effect of financial stringency and to maintain the position of those civil servants. What I question is his power to resist political pressure when it is brought to bear upon the Government of India and the provincial Governments.

It is upon this, that the whole effectiveness of the safeguards such as those about which the Secretary of State told us yesterday must depend. I am afraid that even if his fortress—I am speaking of the Services as a whole—cannot be breached by direct attack, certainly it may be undermined. That is the great danger that exists with regard to the safeguards. While the Secretary of State may give us what assurances he can in this House, and give them honestly, he cannot prevent an uneasy feeling among the Services that they are being sacrificed to the financial necessities of the projected new Constitution. I cannot resist the feeling that those financial advisers who informed the Secretary of State that the extra cost of the new Constitution would be very small, must be numbered with some of the world's greatest optimists.

The SECRETARY of STATE for INDIA (Sir Samuel Hoare)

I must point out to the hon. Gentleman that I was speaking of the necessities of general Government expenditure and that I said nothing about the cost of the new Constitution.


I meant only in the Provinces, but there are expenses also in the centre. They are very heavy expenses. There is the size of the new Legislative Assembly, which I understand will be more than three times the size of the present Parliament. There is the creation of three new Governor's Provinces—one is already created—and that will be an additional expense upon the central Government. I readily accept once more the assurances which the right hon. Gentleman has given us that he will do all in his power to see that these cuts are not continued beyond the time mentioned in this Bill. I have no doubt that he will in his general supervision and as finances permit, endeavour to use his influence to reduce the heavy taxes, but I feel that if the safeguards for the Services prove to be elusive, there will be an end to the Services themselves and to the great work which they have done, for the maintenance of the Indian Empire.

4.39 p.m.


I did not intend to intervene in this Debate, and I would not have done so but for the very gloomy speech to which we have just listened from the hon. Member for the English Universities (Sir R. Craddock). He has given us, although I have no doubt unintentionally, in some respects a false impression of the whole situation, and it is in the public interest that I should say a few words, especially as he has not brought out certain facts. No one in this House can sympathise more greatly with the Indian Civil Services than I do. Although I hesitate to say it, because it might show a lack of modesty on my part, tributes have been paid to me. At the dinner of the Indian Civil Service, for example, at which I was their guest, a tribute was paid to what I had done on their behalf, and it was stated by one of the speakers that no junior Minister had done more to help the Services than I had done. I speak therefore with no lack of sympathy, and it is because I sympathise so deeply with them that I venture to correct the misleading— perhaps the word "false" is rather unfortunate—impression which my hon. Friend has given of the situation.

The first misleading impression which he gave was in the whole burden of his speech, which was that the cuts were being made in deference to Indian opinion and that that Indian opinion had always shown hostility to the Service. He said that it was in consequence of that hostility that the Government were acting. The hon. Member knows as well as I do that that is not a full statement of the case. He knows as well as I do that European business men in India have taken strong exception, through their representatives, to the cuts being restored in the pay of Civil servants, without very heavy reduction in taxation. Therefore, in stating the case, my hon. Friend should at least have done justice to Indians by admitting that those Indians who have, unfortunately, shown great hostility, were not alone in being hostile over this matter of the return to the Service of the pay cuts. He has not mentioned that.


I am afraid I have not understood the Noble Lord's point. I mentioned both those influences, and I combined them as the political influences of European commerce and of such Indians as are hostile. I was also referring to the feeling of the Services that they are liable to be sacrificed.


I am sorry if I misunderstood the hon. Gentleman, if he did make it clear that it was not purely the hostility of the Indians. I understood that the whole burden of his speech was purely because of Indian hostility that this was being done. That is not so. I am not supporting the attitude of European business men for one moment, nor am I attacking it. They take up the same attitude as business men the world over in objecting to improving the posi- tion of their Civil Service until taxation comes down. My hon. Friend does not accept that point of view. He thinks that the interests of the Civil Service are more important than the interests of the taxpayer. That is an arguable proposition, but in stating the case it is only fair to admit that there are two sides to the question. Having said so much, let me say that in common with everyone I should like to see the whole of these cuts restored at the earliest possible moment. Everyone would like to see that. I understand that the Secretary of State for India is as anxious to restore them as is anyone else.

Now for the next point where my hon. Friend gave a misleading impression. Anyone listening to that most gloomy speech would believe two things: first, that the Indian civil servants who are affected by this matter are worse off than they were, say, 10 years ago, and secondly, that relatively and absolutely they are actually worse off in comparison with people in a similar position in other parts of the world. I submit that neither statement is true. Unquestionably, all the Services affected by this Bill, and, of course, many other Services, were in a very serious position indeed immediately after the War. We have had constant reference to the pledge given in the Act of 1919, but no one knows better than the hon. Member, because he was in India at the time, that the pledge given in that Act was not of much financial benefit to the Services from the years 1919 to 1924.

I do not think that it is improper, or any breach of official tradition, for me to say that when I was in India unofficially in 1922, I was authorised by those in charge to make certain personal private investigations into the position of civil servants in India. Certainly, the financial position of several of them was deplorable. That evidence, in common" with other evidence which was collected, had something to do with the formation of the Lee Commission of Inquiry into the whole matter. After that Commission had reported, its recommendations were put into operation, and I myself had the honour of piloting the Bill through this House. The assertion that I venture to make with all confidence is that, as a result of the putting into operation of the Lee Commission's Report, even allowing for those calamitous cuts which the financial position in India necessitated, the position of civil servants, when regard is had to the passages to which they are now entitled and to the amounts affected by this Bill, is no worse, and, indeed, is slightly better, than it was 10 years ago. Who would have gathered that from the speech of my hon. Friend?


Did not the Noble Lord say that their position was deplorable then?


I say that they are better off now than they were 10 years ago. Again, who, hearing the speech of my hon. Friend, would have believed that civil servants all over the world are complaining of their difficult position? There has been a strike in France, there has been a strike in Germany, and serious unrest has been shown in many quarters in this country. The reason is a very simple one. In these days of financial difficulties in every country, and of immensely high taxation, naturally, civil servants suffer, because the general body of taxpayers say, "We cannot go on paying these enormous taxes and at the same time paying the same terms that we paid before to civil servants." If it can be shown that the position of these men has improved, surely that is something. I submit that my hon. Friend did not bring those facts out. I say all this in relation to the opinion, which I hold as strongly as he does, that the last thing we want to do, if it can possibly be avoided, is to reduce the pay of civil servants.

I am a very independent supporter of the Government, as the House knows, but I do not think that the Secretary of State has been treated too fairly in this matter, either by my hon. Friend the Member for the English Universities (Sir R. Craddock) or by others who have spoken. It has almost been suggested that he is the villain of the piece, but the experience has always been—and I base this statement, not only upon official knowledge, but upon historical knowledge —that the best friends of civil servants in India have been successive Secretaries of State. My hon. Friend, with his experience, will know that there have been occasions in the past when the Secretary of State has been in favour of doing something for civil servants which civil servants in high positions in India have not been prepared to do for others of their own profession. It is not fair to say that my right hon. Friend the Secretary of State has not acted fairly, and has not supported the legitimate interests of these Services.


I did say that the Secretary of State had done his hest. I was only referring to the feeling among civil servants in India, which is full of grave anxiety.


My hon. Friend made a suggestion which I do not think can be upheld, and that was that these cuts were being made largely because the Government had at the back of their mind the idea that they would have to provide for the future contingency of increased expenditure as the result of the new Constitution.


That is the feeling.


It may be the feeling, but my hon. Friend, having regard to his great experience and knowledge, has no right to mention it without saying whether or not he agrees with it. If he does agree with it, I think he would be completely wrong. The original cuts were made for the simple reason stated by the Secretary of State, and a portion of them is, fortunately, now being restored. The situation remains to-day as it was then, that cuts of some sort have to be made in consequence of the financial position of the Government of India. To-day, however, it is possible to make some progress towards the restoration of the cuts, owing to the improved conditions in India.

Incidentally, I should like to pay a tribute to the Government of India as being one of the few Governments in the world to-day that have managed to maintain a proper financial equilibrium. We never hear a word about that in all this gloomy talk about what is going to happen in India to-day and to-morrow— how the Government are being bamboozled, and how people who have been in India 10 years ago know very much more than anybody else. We never hear any references to the fact that the Government of India—as we are dealing here with financial matters, I think I am entitled to refer to it—have so managed their finances during the last year ox year and a-half in particular, which corresponds with the period of office of my right hon. Friend, that they are in as happy a position as any Government in the world. They have only been able to do that because they asked people to make sacrifices. If other Governments in some other parts of the world had done the same, they would not have been in the deplorable position in which they are to-day. I think that the message which should go out from this House—and I believe it will go out from the great majority of the House—is that they very much regret the necessity of having to continue these cuts, even in a modified form, but that they are convinced that the Civil Services in India will accept them in the same spirit as they did in the first instance, and will accept the assurance, which I am sure the House gives as a whole, that it has the utmost good will towards them.

4.51 p.m.


I cannot claim to be an expert on India, but, every time one hears India debated in this House, it is always a question of the services, of those who dominate the Indian people, and nothing is ever raised regarding the position of the ordinary citizens of India —the working people who, after all, have to pay all the taxes and all the salaries that are drawn from India. This country does not find any money so far as India is concerned; all the pay of the officers and all the taxation has to be found by the Indian people. Nevertheless, every time that we discuss India in this House, the only thing that matters is the position of the officers, their pensions, pay and so on. Surely we have a right to ask: When are the people of India going to have a voice in the Government of their own country? You have the Salt Tax, you have all kinds of taxes on the people of India; and all that hon. and right hon. Gentlemen on both sides of the House are asking is that India shall foot the bill for pensions.

After about 20 years of service, they come home, and they come here to represent East London constituencies or some other constituencies. They come here, not to talk about the places they represent, but about the places they have left with good pensions. There is one of them in my own district. He served for 20 years in India, and came home with a pension of £1,000 a year. He draws his money from India out of the taxation of the people of India—people whose average income is not above £l a week; and he comes home to grumble about the reduction in his Salary. These cuts are nothing to ours in the East End of London. A 10 per cent, cut on a workman's wage in London is more than a 5 per cent, cut upon your salary in India. You get a servant for £1 a week; we cannot afford to keep a house on less than £2, and we are lucky if we can get two rooms for 10s.; and yet you come here from India, with tears in your voices, and tell us all about it. Is it not nearly time that we began to talk straight to you?

Mr. DEPUTY-SPEAKER (Sir Dennis Herbert)

The hon. Member will please talk to me.


Yes, Sir, but I think you know something about it. Some of these people come here and talk with tears in their eyes about the terrible tribulations that they are suffering from, but I would bet that they could sign a cheque that I could not sign, with all their tribulations. They do not tell us about what happens in India. What about the poor unfortunate people who are not getting £1 a year, never mind £1 a day? You come here and tell us this story about the tribulations of the 5 per cent, cut—on what? On a wage of £1 a day. If the people of India were given the right to govern themselves, you would be put in your proper place, and you would be sent back with nothing in your knapsack.

I believe that all parts of the Empire ought to have the right to control themselves, and, if they want to engage these right hon. Gentlemen for the purpose of fixing up their taxation, let them do so. They come here moaning and groaning about the terrible troubles they have had to face—a reduction of 6 per cent, in their money; but, surely, in this country we are going through the same financial situation as they are. The members of my own trade union in this country have had to suffer reductions of more than 5 or 10 per cent—20 per cent, in very many cases; and yet these gentlemen with good salaries and good pensions come here groaning and moaning about the position in which they are finding themselves—retired officers from the Army and Navy and so on. It is nearly time that they began to realise where they are. You cannot go on for ever living upon nothing except the gullibility of the people.

So far as India is concerned, there is only one thing that we stand for. Of course, I do not pretend to know it all. I remember that there has been a number of famines in India, when officers of the Army were doing very well and the people were suffering from starvation, and we had funds in this country for the purpose of trying to give them something in the way of support. As regards the appeal which has been made to us to-day about these cuts in India, I wish to God that the cuts were so small in this country. I must ask the House to excuse me if I am not speaking very clearly. It is owing to the fact that I have lost all my teeth, and, therefore, my words may not be so distinct as they otherwise might be. In about a fortnight's time I shall be able to talk to you just as you talk to me. The hon. Member has made an appeal about the tribulations of officers in India. My tribulation is that the position of the great mass of the people of India is more important than that of all our officers. Until we give the people of India some control over their own affairs, we shall never get over this difficulty. You can draw what money you like in the way of pensions and pay, but you have to get down to the fact that the world has become a different place from what you imagined it to be when you went out to India.

4.59 p.m.


I rise, first of all, to join with those who have congratulated the Under-Secretary on his very clear statement in reference to this Bill, the first that he has introduced to the House. I am glad to add my congratulations to those which he has already received; but I feel, after what we have just heard, that I should also pause to congratulate the hon. Member for Silver-town (Mr. J. Jones) on the clearness of his enunciation, in view of the handicap from which he is suffering. He need not fear that the House has any difficulty in hearing him. Seriously I want to say what was said by several speakers some 18 months ago when a similar Bill to this one was introduced. I think almost everyone who spoke on that occasion stated in one form or another that he detested the Bill and the necessity for its introduction. Most of us are perfectly convinced that that detestation was equally shared on that occasion by my right hon. Friend who introduced that Bill and that our feelings are I am sure also shared by the representatives of the Government to-day. It was very definitely laid down that we agreed to that Bill for the clear and definite reason that we were faced with a national emergency and this was expressed by the Secretary of State when he said: Taking central and provincial cuts together they amount to about £6,000,000 a year, a sum so great that without it it would be practically impossible to balance the Budgets.—[OFFICIAL REPORT, 25th November, 1931; col. 411, Vol. 260.] After such a precise and vital statement it was practically impossible for the House to do more than express its regret at the necessity for the introduction of the Measure. But I would ask my right hon. Friend whether the argument applies to-day with the same weight and to the same extent. My Noble Friend the Member for Horsham (Earl Winter-ton) has said it is a pity that there should be a spirit of pessimism displayed when speaking of the future financial conditions in India. I agree and it is only the other day that a leading Member of the Government, the President of the Board of Education, in another place, rebuked one of his colleagues for being over-pessimistic in this matter. Is it really the case that the situation in India is as serious to-day as it was 18 months ago and that the same necessity exists to continue these cuts?


Is not there rather a difference between being pessimistic and being cautious? Does not a cautious financial administrator in any country, in view of the situation, wish to save as much money as he can? That seems to me to be a different thing.


I did not quarrel with my Noble Friend's objection to pessimism. I approved of it. At the same time I am not putting into his mouth any words which carry him further than those that he himself expressed. I do not suggest that the situation is financially an easy one or one that we can all be satisfied with, but the point is whether it is so serious as it was 18 months ago and does it justify the continuation of what is, after all, a very remarkable departure from the maintenance of the guarantees given to the Services in India which this House has hitherto always guarded very jealously? It has been said that cuts in pay have been made in this country. The hon. Gentleman who spoke from the Front Opposition Bench pointed out, as he was almost certain to do, the hardship which cuts in this country have entailed upon those who have suffered from them. He knows as well as I do that there is no real comparison between the situation in this country and in India. In this country there has been a very distinct fall in prices, and particularly in retail prices, in the last few years which leads me to thoughts and considerations of the results of that fall which in other circumstances I should much like to deal with. But I am only concerned now to point out that those who have suffered from cuts in this country—and I have great sympathy with them—had, to balance these cuts, a distinct fall in the cost of living, which is not the case in India, and particularly there has been no reduction in the cost of living in the case of the European Services in India. Officers of such Services suffer from the fact that their standard of life entails the consumption of articles which are in many cases subject to much heavier taxation to-day than was the case a few years ago. I dare say in this country most of us have had to do without a great deal which we were accustomed to enjoy in happier times, but conditions in India often make it impossible to do without in the same way or to the same degree. I do not carry it further than this, that there is not the same possibility of contraction of expenditure in the family budget in India as is possible in this country to meet an emergency.

Only the Secretary of State is in a position to say whether or not the continuation of these cuts is justified. If he feels that it is justified, I am certain that the members of the Services in India will accept this slightly reduced cut—for it is only very slightly reduced—as they accepted the original one 18 months ago. I think they will feel that, if we are still in a state of emergency and a contribution is required from them, they will meet the demand as they did before. But the circumstances which made me feel entirely justified in voting for the previous Bill do not seem to be quite so much in evidence to-day. I did not quite follow the Under-Secretary on the actual figures. I understood that the amount in question, as I have already quoted, was £6,000,000 for the total cuts. If that is cut to a half that would be, of course, £3,000,000, and I understand there will be an additional saving of £500,000 caused by the removal of the Income Tax concession, which seems a large figure. On the basis of £6,000,000, as I understand it, the position to-day would be that the Government of India are going to save by the proposed cuts throughout India plus the Income Tax change a sum of £3,500,000, of which this Bill deals only with a sum of £100,000 or £200,000. The hon. Gentleman mentioned the figure of £4,500,000, so it may be that the original estimate was not found to be the exact figure. But, whatever the figure may be, it should be made clear that we are just as reluctant to pass this Bill as we were to pass that of 18 months ago. It is almost impossible for any private Member to say whether a continuation of this cut is absolutely necessary, but, if the Secretary of State says that the position is still one of emergency, that it is essential that this revenue should be got in this way and that members of the Civil Service in India should make their contribution, I do not think we can do more than express our very deep regret that for a further period of a year a definite contract made between the State and some of its servants should have to be broken and that Parliament should be asked, by passing this Bill, to continue the breaking of that contract.

5.10 p.m.


I was one of a small group who, when the earlier Bill was introduced, divided against it, and I think it is well that we should make our position clear. I am sure the Secretary of State must welcome the Debate if for no other reason than to have heard his praises sung by the Noble Lord the Member for Horsham (Earl Winterton). The Noble Lord has appeared in many roles, but mostly as a critic. I never before heard him excel himself in exalting the virtues of others as he has done to-day. So far as the last Debate is concerned, it was obvious that the Secretary of State needed someone to defend him, and I must congratulate him on having made a good choice in his defender and the Noble Lord on having performed his job extremely well. When the Bill was before the House last, we were told that the amount in question was £3,000,000 and that the savings effected were to be 10 per cent, of £3,000,000. There was some slight confusion about it, and I asked if it was the case that savings amounting to £3,000,000 would be effected by the Bill. The Under-Secretary said: I must have misunderstood the hon. Member's question. I thought he was asking for the proportion. The sum of £3,000,000 is not the savings to be made under this particular Bill, but it is an estimate of the pay received by the people who come under the Bill. The savings under this Bill will be limited to a 10 per cent, reduction." — [OFFICIAL REPORT, 25th November, 1931; col. 440, Vol. 260.] Therefore, if £3,000,000 is the amount of the incomes paid to these people, the savings under the original Bill must be 10 per cent, of £3,000,000. They will now be less, seeing that the Government have made a proportionate reduction. I agree with a good deal that was said by my hon. Friend the Member for Silvertown (Mr. J. Jones) that many poor people here have suffered even worse reductions. I did not quite follow the Noble Lord when he said the position in 1919 was deplorable. The hon. Member for Kidderminster (Sir J. Wardlaw-Milne) said there had been really no decrease in the cost of living since then, so that, if the position was then deplorable, it must be even more deplorable now—either that or the two hon. Members must be at variance.


The hon. Member did not listen to what I said. I said things were bad in some places and the improvement had only been slight. I also said that their position had been improved by provision being made for free passages. There has been a change.


A lot of men have had to accept a 10 per cent, reduction. Allowing for the small concessions, a further tremendous concession is required to make up for the reduction.


I do not want the hon. Member to misquote me. What I intended to convey, and what, I think, I did convey, was that in the last few years against a possible fall of revenue in other directions Europeans sojourning in India suffered increased taxation on many things.


I cannot defend a reduction in regard to these persons. The real defence was made when the Bill was introduced on the previous occasion, and that was the defence made to-day, that certain other classes had received reductions, and it would not be fair or equitable to single out these people as not receiving reductions. I cannot quite follow that argument. I never could see the sense of a person who, himself having been reduced, desired another person to be reduced also. Take the Government themselves. They have not quite done it at home. For instance, the Noble Lord the Member for Horsham (Earl Winter-ton), with his knowledge of men in the Army, knows that the men who formerly received a shilling a day now only receive ninepence. That is a 25 per cent, reduction—double that imposed upon other sections of the community. One does not hear of these men wishing to reduce everyone by 25 per cent. They rightly say, "We want back our 25 per cent. but we do not object to others who may get back their percentage." I should like the Secretary of State for India to tell me the amount of the Budget deficit in India, because it has something to do with the matter. On the last occasion he spoke the Budget deficit was round about £14,000,000, but since then I understand from various speakers that the position has improved considerably in India although India is not yet in an absolutely solvent position. What is the real contribution which these cuts in wages make to the Budget position? What is the actual saving? I cannot for the life of me see that the actual saving at the very maximum can be more than £300,000.

We are not going to divide the House on this occasion, because, having regard to the convenience of the House, it would be sheer impertinence for three or four hon. Members to divide the House on a matter on which we have already taken a vote. We were defeated on the last occasion, when we totalled, including tellers, only four or five. Since then one hon. Member has left us and joined the Labour party and is bound by the rules and discipline of that party and will not be allowed to support us in the Lobby, and consequently our numbers are fewer. We do not intend to inconvenience anybody needlessly on a matter of this kind, but we have recorded our protest. Some of these persons in India are not wealthy and do not keep servants, and some are comparatively poor people. We are glad that the Secretary of State has, to some extent, eased the position of some of those not so well off, but we think that cuts in wages are the wrong way of tackling the problem. We have consistently put the alternative position. It may be argued that some of the servants could afford the cut. I have no doubt that they could. It must not be forgotten that we opposed the cuts in the school teachers' salaries, and there is no doubt that some of them could afford those cuts. We say that cuts are bad and that it is the wrong way of facing up to the problem. It is bad policy to cut down the purchasing power of the people. We do not think that the best means of trying to improve the position is to provide schemes of work. We cannot agree with the idea of chasing round looking for schemes of work. The wise and reasonable way to provide people with employment, either at home or abroad, is to increase the purchasing power of the mass of the people and so allow them to buy goods and help to keep up the production of goods. Consequently, taking that view, we are opposed to this Measure.

It was said by those who spoke for the Labour party on the last occasion that their only reason for not opposing the Measure was that they left India with the right of self-government and that, therefore, the Indian Government being in favour of the Measure, they did not intend to divide against it. I could have seen the reason of that argument if the House were not asked to consider the Measure. Once the House has been given the right to consider the Measure, it is for the House to give a considered verdict upon the subject before it. In my view it is difficult for the Labour party to vote against this Measure for other reasons. When this Government came into office only one section of the community remained free from attack. The unemployed were attacked. Everybody from the head of the country—Members of Parliament, the Cabinet—were cut by the Government, but one section did not receive cuts. They were the civil servants. The reason was that before the National Government came into office the Labour Government had cut them down to such an extent that the National Government could not cut them down any more. Therefore, they were left alone. When they had cut down civil servants at home they could not very well vote against a Bill which cut the salaries of civil servants abroad. Although I do not suppose that one in a thousand has the slightest political sympathy with us, we say that the cutting down of the emoluments of these servants is wrong. If people are receiving incomes which are considered to be too high let us cut down those incomes individually. The Bill cuts down the salaries of a class who have little to spare. While, as I have said, we do not intend to divide against the Bill, our opposition remains as strong as ever.

5.25 p.m.

Lieut.-Colonel Sir WALTER SMILES

If anything could make me accept these cuts to-day, it would be the eloquent speech of the Parliamentary Secretary who introduced the Bill, but the question the House has to consider is, Will these cuts ultimately be for the good of India? In my opinion, it will discourage some of the best people in the universities at present from taking service out there. The junior Member for the English Universities (Sir It. Craddock), with his natural modesty, has not painted a vivid enough picture of the responsibilities of the district officer in India. I am personally reluctant to do so, because after hearing the speech of the Noble Lord the Member for Horsham (Earl Winterton) one feels that in a very short time one is out-of-date in anything to do with Indian affairs. In fact, a man may board the P. and O. steamer at Bombay on Saturday at 12 of the clock and be out-of-date before it reaches Marseilles in 13 days' time.


Why not fly?


Perhaps Mrs. Mollison might be out-of-date too before she arrived. But anyone who ha-s seen the day-to-day responsibility of those members of the Civil Service—they receive about five times as many letters as Members of Parliament receive even when matters like the Beer Duty or Sunday Entertainments are being discussed—and realises the penalties suffered by civil servants for any slip on the part of subordinates, must feel very great sympathy with them and that they are hardly getting fair treatment or fair play for the responsibilities which they have to undertake. My authority is Sir Evan Cotton, who sent to me several figures showing that it was a case of an "Irishman's rise," and that, whereas some of those servants were cut by 6 per cent, last year, this year the cut had increased to 7 per cent. However, the spokesman of the Government has given us an assurance upon those points-We have seen in the papers the resolutions passed by the Chambers of Commerce of Bombay and Calcutta, and naturally, being an old non-official myself, I am, first of all, inclined to agree with those two bodies. But in this particular instance I disagree with them, because I do not think that if these cuts are continued it will make for the ultimate good of India. Income tax, in my opinion, should be paid by everybody whether he is a Government servant or a planter, or a business man in Calcutta. Just as every one of Napoleon's soldiers carried a, field-marshal's baton in his knapsack, so in the same way should every British subject carry a demand for Income Tax in his pocket. It should be almost as great an honour to pay Income Tax as to wear the Ring's uniform.

I would ask the Secretary of State this question: Is he satisfied that the personnel of the new recruits for the Services is as good as it was 25 or 30 years ago? In those days there was no doubt that the Indian Civil Service secured the cream of the public schools and the universities. I have known of the case of a man who passed into the Home Civil Service and was so disappointed with the work he received that he turned round and passed another examination and went into the Indian Civil Service. In those days the people who came out at the top always chose the Indian Civil Service. I do not believe that it is the case to-day. I believe that they are having difficulty in getting the best men. As proof of that statement, let us look where present Indian civil servants, ex-governors, and so on, send their sons. We have an instance on the Front Bench opposite, where one of the most distinguished governors of the Indian Provinces took very good care that his son did not follow in his foot- steps. I can quote other cases. The Commissioner of Delhi has one son who is a financial expert and writes leaders in the financial newspapers. He knows something about financial affairs and he took good care that his son was not sent into the Indian Civil Service. In another case one distinguished Indian civil servant has made one of his two sons a barrister, and the other a solicitor, so that one son can help the other in his business. In the case of the Governor of Assam, he has made one son a gunner and the other a doctor. I suppose that those sons help each other in their business. All these men are taking very good care not to send their sons into the Indian Civil Service.


The hon. Member is wrong.


I shall be very glad to be proved wrong. It would give a great deal more confidence. The Secretary of State needs the very best people he can get for the services in India, but the pick of the young men are going to the big commercial firms such as the Imperial Chemical Industries and the British American Tobacco Company. The son of the present Foreign Secretary is in India, but not in the Indian Government Service. He is in one of the big commercial houses. I could cite many other instances to prove the point that I have made. We want the very best men that the universities can give us, particularly Oxford and Cambridge. We know about the resolution which was passed at Oxford a week or two ago, but I do not think any of us pay much attention to it. I understand that there are some 27 ex-presidents of the Oxford Union in this House. [An HON. MEMBEER: "No!"] Well, there seems to be that number. I am sure that they would say that things are not the same to-day as they were in their days at Oxford. I agree, in principle, that cuts are necessary at times, but I should like to ask whether the cuts are necessary now. I agree with the "Times" that the Secretary of State has shown very great courage in his administration of India, and I hope that he will show even more courage this time next year and that we shall see these cuts completely wiped out, and that not even the 5 per cent, will remain.

5.33 p.m.

Captain FULLER

We are certainly at sixes and sevens in regard to this Bill. With the possible exception of some remarks by the hon. Member for Silver-town (Mr. J. Jones) I find myself in agreement with most of the speakers. There are one or two questions I should like to ask in connection with the Bill. I am not hostile to the Secretary of State, although I am in the unfortunate position that often when I speak I speak against the Government. I hope, however, that the Secretary of State will not attribute any hostile attitude to me. The hon. Member for Gorbals (Mr. Buchanan) raised a question as to the amount of money involved in this Bill. It is within my recollection that when we debated this Bill last year it only affected a very small sum, £300,000. What we failed to realise then, although we may realise it now, is that this Bill only refers to a very minute number of servants in India, whose position is guaranteed by the Government of India Act, 1919. It does not refer to the great bulk of the servants, whose pay has been cut by order of the Government of India.

The Noble Lord the Member for Horsham (Earl Winterton) said that the civil servants of India and the other servants were better off to-day than they were 10 years ago. I do not agree with him. I do not know whether I am entitled to call myself antiquated in regard to Indian affairs. It is only two years since I left India, but if the House thinks that I am antiquated, I have no objection. It is true to say that the servants in India are worse off to-day, but I do not think that was the case three or four years ago. They undoubtedly received great benefit from the finding of the Lee Commission, but during the last 18 months there has been a considerable increase in Income Tax and Customs Duties, on the top of the 10 per cent, cut in pay. It is not true to say that the cost of living has gone down. With regard to the cost of living, I should like to say, as the hon. Member of Silvertown seemed to be under a misapprehension, that the cost of living which has gone down in this country does affect certain officers who have retired from the Indian Service. I speak with certain feeling, because I happen to be a victim. I cannot speak for the Indian civil servant, but I know that an officer of the Indian Army on pension is subject to a cost of living cut up to 20 per cent, of his pension. The Secretary of State, in the generosity of his heart, has decided to stabilise it recently at 11 per cent., so that the fall in the cost of living in England does not benefit the pensioner from the Indian Army.

Coming directly to the Bill of last year, the Secretary of State when he introduced it sought to justify it on quite different grounds from those mentioned to-day. He said: If it is admitted that there have to be cuts in the salaries of the various Indian servants, it will further be admitted that, in the interests of justice, the cuts must be over all the services."—[OFFICIAL REPORT, 25th November, 1931; col. 410, Vol. 260.] That does not seem to be a principle with which I can agree. It suggests that because one class of servant has been unfortunate enough to sustain a cut through the action of the Government of India, all the other servants should be so cut. In this matter two blacks do not make one white. If we extend that argument further we must consider those servants who are now going into the Services in India on a lower scale of salary, and we should be perfectly justified, if we extended the principle of the right lion. Gentleman's argument, in saying that because they were going in at lower salaries there is no reason why the other servants should not be scaled down to that lower scale.

In another connection I think this Bill is rather serious, although my apprehensions may be groundless. It seems to me that the method which is being used is a direct attack on a safeguard. Yesterday there was a great deal of talk about safeguards. The very civil servants whose salaries are affected by this Bill have their position safeguarded under the Government of India Act, 1919. There is a Statutory provision that their pay, pension and prospects are safeguarded, and yet the Secretary of State comes to the House and says that it is unfair that one type of servants should be penalised and not another, and he brings forward this Bill in order to brush aside that safeguard which Parliament, in its wisdom, approved, in order to inflict a cut on these particular servants. In the Debate last year the right hon. Gentleman said: It is important to note that this is not a Bill repealing any Section in the Government of India Act, which would be a most dangerous procedure for us to adopt, because of the guarantees contained in the Government of India Act."—[OFFICIAL REPORT, 25th November, 1931; col. 411, Vol. 260.] That may be so, but the fact is that this Bill is practically a repeal of the safeguard in that Act in regard to the salaries of these servants. If the right hon. Gentleman comes to this House with a Bill of this nature to set aside a provision of the Government of India Act, it seems to me that we have every justification for apprehension when safeguards for the future Constitution of India are being deal with.

Last year the Secretary of State mentioned the question of hardship and said he was prepared to consider cases of hardship. I should like to know if any cases have been brought to his notice and if so, how they were dealt with. I would ask also how it comes about that the cuts in pay are again necessary this year in view of the most ruthless economy schemes which the Government of India have been pursuing in the last 12 months. I speak from experience. I found that there was no more ruthless government in the world in regard to economy than the Government of India when they got busy. They were always living under a cloud of financial stringency and they have done their work very thoroughly during the last 12 months." Over 7,000 civil servants have been discharged from the Services, because of economy schemes, and a number of Indian regiments and military units have been disbanded—-all in the name of economy. I hope that I am wrong in asking whether the Government of India are endeavouring to obtain financial solvency for the new reforms that are to be introduced into this House, at the expense of their public servants.

Under the economies, which have been so drastic, they must have saved a good deal of money. Has the money been swallowed up in the civil disturbance movement or in the Meerut trial, the expenses of which, curiously enough, approximate to the savings which this Bill intends to effect? We had the rebellion in Burma and there have been considerable remissions of land taxes and revenue. There have been additional military undertakings in the nature of new military colleges, as part of the Indianisation scheme. Can the right hon. Gentleman say whether these things have in any way offset the sums which have been saved as a result of the drastic economies which have been put into effect? I am very suspicious of these cuts. The Government of India, with all due respect to them, remind me of a hydra-headed sort of institution. They use one head when it suits their purpose and choose their own wave length. When economy has to be made we find quite a different tune being played from that which is played when there has to be a pronouncement on the financial situation of the country. In September of last year, for instance, the Viceroy, in addressing the Legislature, used these words, after commenting favourably on the improved condition of India: Since April we have floated three loans, one in sterling and two in rupees, of the total amount of 58 crores. The last of these, as you are aware, was over-subscribed in about four hours, though it gives a return of only 5¼ per cent, as compared with the 6½ per cent, for the loan issued about this time last year. We have also been able to reduce our floating debt in the form of Treasury Bills from 84½ crores at the end of August, 1931, to 24 crores at the end of this August, and to reduce the price we pay for accommodation from about 7½ per cent. to 3½ per cent. That, of course, is a satisfactory condition, but I should not like to believe that it is being aided by a reduction in the salaries of the servants of the State. Last year when this Bill was before the House the Finance Member of the Government indulged in a similar statement. He said: If we look round the world in the present times of difficulty there is no country in the world whose intrinsic financial position is sounder, or whose ultimate prospect of economic advance in the future is more bright. There is one other small matter to which I want to refer. There is a deep feeling in the Service in India with regard to the treatment they are receiving and the treatment which the Government are giving to political detenus in the prisons. After some 15 years service I was able to earn the modest salary of some eight or nine hundred rupees a month, but the treatment which is being meted out to certain political detenus is so generous—


That is not a subject which can be debated on this Bill.

Captain FULLER

All I meant to say, I admit I was doing it imperfectly, was this. Is there going to be any cut in the amount which is being paid to these people? Are they sharing in the same drastic schemes of economy which the Government of India is imposing on its servants?

5.48 p.m.

Wing-Commander JAMES

I apologise to my right hon. Friend the Secretary of State for intervening in this Debate, and I promise him that my remarks will be very short. I am glad of this opportunity because those of us who supported the Government in their Indian policy last night can be critical this afternoon without being suspected of being critical on anything but relatively minor details. I will not emphasise the bitter disappointment which these cuts cause, a disappointment which, I know, the Secretary of State shares. Let me emphasise the point that in order to make any proposed reforms workable in India the best type of British entrant into the service is quite as essential now, and in the future, as it was in the past. The question is: will they come forward in the present financial position of the service? I hope they will. But I must put the point to the Secretary of State, that the Government must balance the efficiency of the service against the economies. Mere economy is no good if efficiency is lost thereby.

The Under-Secretary of State gave us some rather reassuring figures as to the net result of the remissions by cuts balanced against the Income Tax remission, which has been withdrawn. I am afraid that that did not disclose the whole of the picture. The service has been subjected not to one but to three cuts. They have had a cut in their pay, and they have had the indirect cut by the increase in Income Tax, which was condemned last year by hon. Members so far apart as the hon. Member for Lime-house (Mr. Attlee) and the hon. Member for the English Universities (Sir R. Craddock). Can the Secretary of State give us any idea as to the ratio of Income Tax receipts from salaries and from trade? The sum of half-a-million has been mentioned as receipts from Income Tax. How does that compare with receipts from Indian traders? The third cut is imposed by the duties on imports essential to European consumption which have prevented Europeans living in India adjusting their scale of living as they would like to be able to do. They keep up the cost to Europeans more than they do to the natives.

There are three points I desire to put to the Secretary of State. First, how do the proposed net rates of pay compare with those recommended by the Lee Commission, subsequently implemented by the Government? This Commission went out in 1924 and made recommendations which were carried out. How does the present all-in financial position of the Service compare with the conditions which existed after the Lee recommendations had been implemented? Secondly, what power has the Secretary of State to safeguard the net remuneration of the Service? Thirdly, will the Secretary of State, under the proposed reforms, retain adequate powers to safeguard the financial interests of the Service? I hope my right hon. Friend will realise that I have put these points forward solely with a desire to help and to make the reforms workable.

5.53 p.m.


I am much obliged to hon. Members on all sides of the House for giving so much attention to this Bill, and for approaching a difficult question with caution and a deep sense of responsibility. A year ago when I introduced the previous Bill I hoped that I should never have to repeat the experience. I genuinely believed, 12 months ago, that a second Bill of this kind would not be necessary. A year ago the Measure was necessitated by the unprecedented financial emergency, and I hoped that the state of Indian finances would be such as to make it possible to restore the cuts altogether. My hopes continued for quite a period, but, unfortunately, through no fault on the part of the Government of India, chiefly as a result in the fall in commodity prices during the latter half of last year, my hopes have been disappointed. The revenue, although I believe it will be proved in due course to balance the Indian Budget, will not, I fear, prove sufficient to enable either the Central Government or the Provincial Governments to rid themselves of these cuts altogether. I am extremely sorry that this is the case; and I take this opportunity of repeating what I said last year, namely, that these cuts are solely and only necessitated by the extreme urgency of the financial position. I regard their restoration in full as a first charge on the Indian Budget when the time comes—I hope it will come soon— to remit the cuts altogether. Pledges have been made in India and in this country that we regard these charges as a first charge upon the Indian Budget, and, when there is a chance of making some restoration we shall take the first opportunity which is afforded us to make that restoration.

Let me remove from the mind of any hon. Member the impression that political pressure, either of Indians or Europeans, has had anything whatever to do with the introduction of this Bill. Let me also remove from the mind of any hon. Member any doubt he may have as to the future of Indian federal finance having had anything to do with the action which we are asking the House to take to-day. We have considered this question upon its merits, in view of the present financial situation both in the centre and in the provinces, and we have not been influenced in any way by pressure from any politician, Indian or European, nor have we been influenced in our decision by the European business community. We have faced the position as it is, and I tell the House, with full responsibility, that it is essential that the 5 per cent, cuts should remain in existence for a further period. Let me add that I hope this will be the last time the Bill will have to be introduced into this House. I cannot give a pledge because many of the factors are out of my control. There is the factor of world prices, which has an effect upon Indian revenue, but I say that if I am still in my office next year I sincerely hope that I shall not have to introduce again a Bill of this nature.

Several well-deserved tributes have been paid to various Indian Services this afternoon. I have paid my tribute so often in the past that hon. Members will not expect me to repeat it this afternoon. Let me only say this, that during the last 12 months they have had as difficult a time as any servants have ever had in the history of India, and the fact that in many respects the condition of India is better now than it was a year ago is mainly due to their splendid and disinterested service. The hon. Member for Blackburn (Sir W. Smiles) made some observations about the future into which it would not be in order for me to go it the moment. May I answer him in a sentence. It appears to me that the hon. Member is a whole-hearted believer in the caste system. Once in the Civil Service it must be assumed that every succeeding generation must necessarily go to the Civil Service. I wonder how far in his own family he fulfils the conditions which he seems to impose upon the Service in India. So far as my own family is concerned, I suppose I ought not to have come into the House of Commons, and ought to have remained a banker.


Each family has one prodigal.


It is quite outside the realities of the present state of affairs to suggest that families that for many generations have been connected with the Indian Civil Service are no longer sending their sons into that Service. It is very significant that the sons of perhaps three of the most distinguished Indian civilians at the present moment, Sir Harry Haig, Sir Charles Innes, who has just completed a very distinguished career as Governor of Burma, and Sir Herbert Emerson, the newly-appointed Governor of the Punjab, have all sent their sons into the Indian Civil Service. As my Noble Friend the Member for Horsham (Earl Winterton) reminds me, Lord Cromer's son is also a member of the Indian Civil Service. That is sufficient answer, I hope, to the doubts that were expressed by my hon. Friend.

I come now to some of the specific questions that have been asked in the Debate. The hon. Member for Limehouse (Mr. Attlee) at the end of a very helpful speech asked me questions to which I had better give an answer. He asked, first, whether the remission of the cut is going to take place in all the Provinces. My answer is, yes, that it is. Secondly, he put some wider points to me, and if I followed them it would lead me into a discussion far outside the rules of Order to-day. He tried to draw me into a comparison between the state of affairs here and in India. Each Government has to work out its own salvation. So far as India is concerned, the conditions in many respects appear to me to be very different from the conditions in this country. Anyhow, I am glad to think that we have been able to make this remission of the cuts in India, but I once again say that there is not necessarily any analogy between the financial position in India and the economic condition of the Services in India, and the financial position and economic conditions of the Service in this country.

Next the hon. Member asked me a question, to which I am afraid I cannot give an answer to-day, about the general position of the Indian Budget. The Finance Member of the Viceroy's Council will be introducing his Budget in the course of the next few days, and, like my right hon. Friend the Chancellor of the Exchequer, I must reply in the phrase that I cannot anticipate the Budget statement. But I can say to-day that the statement that the Finance Member will make will in every respect justify the action that I am asking the House to take upon this Bill.

A series of points was put to me by my hon. Friend the Member for the English Universities (Sir R. Craddock). He and I do not always agree on constitutional questions, but I should be the last person in the world to suggest that he is not well entitled to speak for the Services from his very long and distinguished career in the Indian Civil Service, and I am sure every Member of this House will pay the greatest attention to anything that he says upon a subject that he understands so well. But I would suggest to my hon. Friend that he took, perhaps, rather too pessimistic a view of the position. I agree that it is most regrettable that we should have a Bill of this kind, but the fact that such a Bill is necessary is not an example of the futility of Parliamentary safeguards, and is rather an example of their reality. It does mean that a Secretary of State for India, when any of the conditions for which we have Imperial obligations are to be altered, has to come to Parliament and to ask Parliament to alter those conditions, and I would have thought that that fact does show the reality of Parliamentary safeguards. So far from it proving futility it shows that in the case of the officials for whom there are Parliamentary guarantees, Parliament retains in its hands full powers to deal with those conditions.

Next, I suggest to him that even though the remissions in this Bill may not go as far as many of us would desire, the fact that we are making a change shows that we do not regard them as permanent. It would have been a very serious thing for the service if year after year these cuts had remained as they were last year, when the Bill was introduced. The fact that we are making a change this year shows that they are not permanent and that Parliament is watching very closely the position of the Services, and is eagerly awaiting the moment when the cuts can be restored altogether.

There were certain other questions of a more detailed description which have been raised. The hon. Member for Silver-town (Mr. J. Jones), whom I regret to see no longer in his place, made a very typical and very diverting speech. I would only say of it that I hope the members of the various Services in India will not take it too seriously. After all they do not know the hon. Member as well as we know him, and they must not think for a moment that any Member of this House, including the hon. Member for Silvertown himself in his more serious moments, really believes that a man, be he rich or poor, who has earned his pension by years of public service, is not entitled to that pension. I am afraid that if I did not make that observation on the hon. Member's speech some of my friends in the Service in India who do not know him may be inclined to take his speech seriously, and may fail to observe that he disclosed to the House the fact that he spoke under considerable physical disabilities, and hoped that in four months' time he would have a new set of teeth.

There were other questions asked by the representative of the not very numerous party belong the Gangway. I offer them a word of condolence on the loss of 25 per cent, of their number in recent times.


Not 25, but 20 per cent.


I accept the correction in the spirit in which it is given. The hon. Member asked me whether there was to be a Budget deficit. He must await the statement in the Budget. I hope there will not be a deficit; I feel sure there will not be. None the less it is necessary to have these cuts. The hon. Member was right when he said that the cuts in this Bill do not amount to a very large sum. They are cuts over the whole field of the Services, and this Bill is an essential part in the cuts generally, which amount to a sum, even with the remission of 5 per cent., of £3,000,000. That is a very considerable sum in the Indian Budget, which is very much less than the huge figures with which we deal in our Budget.


If the Indian Government in their wisdom and their knowledge of events do not agree to restore the incomes of these people to their former amount, am I to take it that the British Government is to be bound by that decision in future? Is the Secretary of State, apart from what the Indian Government may do, to reserve to himself power not to impose this cut in future?


Certainly, both the Secretary of State and Parliament always reserve complete freedom of action in dealing with public servants who are recruited out of Parliamentary guarantees. In this case upon the merits we reserve complete freedom for the future. We do think that in the present instance the cuts must stand or fall together. That in no way restricts our freedom of action either as Ministers or Members in any step that we may decide to take in future. My hon. and gallant Friend the Member for Wellingborough (Wing-Commander James) put a series of detailed questions, and I am not sure whether they are susceptible of any detailed answer. I suggest that it is really not relevant to the Debate to make such a detailed comparison as he wished between the state of civil servants now and nine or 10 years ago. He and I would agree that whatever the position of the Indian civil servant may have been in 1924 or 1921, he is by no means overpaid to-day, and that the sooner we can restore the cuts the better it will be for everybody concerned and the better pleased will be this House.

Wing-Commander JAMES

The point was that the Lee Commission laid down definitely a certain scale of standard; of living remuneration. Is it the policy of the Government to endeavour to adhere to the recommendations laid down by the Lee Commission and adopted by the Government?


The policy of the Government, in a single sentence, is to restore the cuts as soon as ever it can. I think I have now answered the greater part of the questions which were put to me. If I have forgotten any, perhaps hon. Members will remind me.


The re-imposition of Income Tax has been referred to by several Members as taking away the benefits of the 6 per cent, remission. Will that apply to those services which are not referred to in the Bill—that is, the services which come under the orders of the Government of India? Will the re-imposition of Income Tax inflict any greater injury on them than on the services which we are now considering?


The imposition of the normal Income Tax will be general but as my hon. Friend the Under-Secretary of State has said, nobody is going to be worse off under the proposals which we are making to the House to-day and the very great majority of officials and serving soldiers in the Army and Air Force will be substantially better off.


And that applies to all the services in India?


Yes. I hope I have now said enough to ensure the passage of this Bill through its Second Beading stage and I hope that it will be the last Second Beading of the kind for which my hon. Friend the Under-Secretary or I will be responsible in this House.

Question put, and agreed to.

Bill read a Second time.

Bill committed to a Committee of the Whole House for Monday next.—[Mr. Butler.]

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