EXCHEQUER AND AUDIT DEPARTMENTS BILL (Hansard, 14 November 1950)

§ The Financial Secretary to the Treasury (Mr. Douglas Jay)
I beg to move, "That the Bill be now read a Second time."
The purpose of this short Bill is simply to place the Comptroller and Auditor-General in the same position as the established civil servant in two respects, namely salary and pension. I am sure it would not be the wish of the House that the Comptroller and Auditor-General, who is, of course, a servant of Parliament, should be put in a less favourable position in either of those respects than the great body of civil servants.
The House will remember that the proposals of the Chorley Committee relating to the salaries of the higher civil service, although they were accepted in principle by the Government, were suspended temporarily after devaluation, during the period of what I might call "standstill" in relation to wages and salaries generally. But a pledge was given by the former Chancellor of the Exchequer in December, 1949, that that postponement of the increases in salary would not prejudice the pensions of any of those civil servants who might retire during that period.
After the previous Chancellor's statement on wages and incomes last July, after which the absolute standstill came to an end and we returned to the policy of the White Paper as it had been in force before devaluation, the Government were bound to carry out the proposals of the Chorley Committee both in relation to salaries and pensions. Therefore, assuming that we would all wish the Comptroller and Auditor-General to be in the same situation as civil servants generally, we were bound to take action in relation to him.
The House may ask why legislation is necessary in the case of the Comptroller 1572 and Auditor-General whereas, of course, the salary changes for civil servants were made simply by administrative action. The reason is that, as the House knows, the Comptroller and Auditor-General is in a special position which goes back as far as the Exchequer and Audit Departments Act, 1866. He is, of course, directly responsible to Parliament and not to the Executive for the exercise of his statutory functions, and for that reason his salary has always been paid out of the Consolidated Fund and is not borne on a Vote. Because of that special position, which I think we all recognise to be of great constitutional importance, legislation is necessary to make this comparatively small change.
The Bill before the House does three simple things. First of all, in Clause 1 (1), it fixes the salary of the Comptroller and Auditor-General at £4,500 a year, which is, of course, the salary of Permanent Secretaries after the Chorley increases now coming into force. Secondly, it provides that though that salary shall, in effect, operate from October, 1950—that is to say, from the date from which the Chorley proposals have begun to operate—it shall be regarded as having come into force for the purpose of pension from October, 1949. That, of course, places the Comptroller and Auditor-General, in the matter of pension, in the same situation as other civil servants. Thirdly, the Bill gives the Comptroller and Auditor-General a choice in the matter of pensions between two alternatives, one of which dates from the original Act of 1866, which I have mentioned, and the other is, in effect, simply the existing pension open to ordinary established civil servants. That is the whole provision and purpose of this Bill, and I hope the House will give its approval to it.

§ Mr. Assheton (Blackburn, West)
As I have been Chairman of the Public Accounts Committee during recent Sessions, I have naturally a special interest in this Bill and some knowledge of its subject matter, because it falls to the lot of the Chairman of that Committee to have the closest association with the Comptroller and Auditor-General. As the Financial Secretary to the Treasury told us, the Comptroller is a servant, and a very distinguished servant of this House. 1573 His salary is charged upon the Consolidated Fund and his independence is thereby ensured. Nor can he be removed except under conditions similar to those which apply to His Majesty's judges. It is, of course, entirely right—as I am sure the House will agree—that his salary should be adjusted in accordance with the circumstances which have been explained so clearly by the Financial Secretary. We on this side of the House will, of course, gladly support the Bill.

§ Mr. I. J. Pitman (Bath)
I, too, very much welcome this Bill, but I do not think it goes far enough. I ask the indulgence of the House for a few minutes to consider whether the figure in the Bill is enough for the purpose. I am glad that the Financial Secretary has made the point that the Comptroller and Auditor-General is a servant, not of the Executive, but of this House. It is very important, that it should be recognised by the House that we here paying directly our own servant, and that the figure has nothing to do with the Government. Moreover, we are in order, because of the terms of the Financial Resolution, which I am glad to see has been drawn in the widest terms, in discussing whether we are paying our servant enough and in carrying the desirable amendment.
Normally we recruit our Comptroller and Auditor-General from the Civil Service. After all, the servants of the Executive are the poachers who know all the dodges of getting away with spending our money, and if we want a really good gamekeeper to keep them in order, we are quite right to go to the Civil Service as a recruiting ground for such capable servants of the House. The Financial Secretary has mentioned the Chorley Committee. It is perfectly clear that there must be some degree of conformity between what is being paid to the poachers and what is to be paid to the gamekeepers but we are free within reason to choose our own figure.
I would point out, moreover, that the Chorley Committee clearly recognised that the Civil Service, as a whole, is very much underpaid. If Members will turn to Appendix II, they will see the number of people to whom the Executive are paying £8,500, in addition to expenses. A great number of people are receiving figures about £5,000, including all the 1574 full-time members of the National Coal Board. There is a very long and impressive list of people paid, at the instigation of the Executive, a sum very much higher than the amount proposed in this Bill. Personally, I think that the Chorley Committee, having accepted the view that all civil servants were underpaid, in fact "quantified"—to use the word that Sir Stafford Cripps so often used in this House—the corrective action insufficiently. They have recommended an increase in the salary of a Permanent Secretary of a major Department from £3,500 to £4,500, which was not sufficient to be in keeping, in my opinion, with the findings and arguments which led up to their recommendation.
If I am to claim that we are proposing in this Bill to underpay one of our servants, then I must justify that claim. I justify it, partly on the incidence of tax, and partly on the depreciation of the £. Let us suppose that such a man enters the Civil Service in the beginning, probably having gone to one of the major universities, having decided that he wants to work during his life. He may therefore be reasonably supposed to have an unearned income of say £550 a year. Instead of sitting down and doing nothing in life on £550, he decides to enter what is one of the finest vocations in the world—to serve the country in one of the finest, if not the finest, civil services that can be found anywhere.
Let us suppose that at the end of a very successful career he becomes Auditor-General and let us consider what his take-home pay has been in recent years. I have worked my figures out on the assumption that he has an unearned income of £550, and that he is a married man with two children. That brings him to the stage of just paying 9s. in the £. The comparison is that in 1910 out of a salary of £2,000, he would retain £1,925 take-home pay. In 1949, before the Chorley Committee's recommendations were given effect to, he would retain a take-home pay of £1,825 out of an income of £3,500. Even under the proposal in this Bill, of £4,500 he will take home only £2,161.
I think the Financial Secretary will accept the fact that, taking the £ in 1910 as having a purchasing power of 20s., it is now worth 8s. 6d. If we compare what the Comptroller and 1575 Auditor-General was getting in 1910, when the £ was worth 20s., he got £1,925, out of the £1,925 take-home pay. But from his £1,825 of 1949 he got a 1910 purchasing power of only £775 and he will get, even after the increase in this Bill, only £918.
I give notice to the Financial Secretary that I intend to put down an Amendment to ensure that the Comptroller and Auditor-General shall be no worse off than in 1910 and that his salary shall be put on a sliding scale so that if the pay of a Permanent Secretary of one of the major Departments should go up, it will not require an Act of Parliament to keep the salary of the Comptroller and Auditor-General in step with it. I ask the House whether we cannot pay our servants adequately, even if we cannot at least make the salary of the Comptroller and Auditor-General comparable with the salary he received in 1910. May I ask the Financial Secretary to give us any reason why we should not do so, since the Comptroller and Auditor-General is not his servant but ours?

§ Mr. Jay
I speak again, of course, by leave of the House. The hon. Member for Bath (Mr. Pitman) has adduced an interesting argument for raising the salary of Ministers, or any other member of that small class of persons who receive the same income as in 1910. He has proved that an income of £2,000 or £3,000 a year is, after taxation, worth rather less now than in 1910, but that has not any special relevance to the case of the Comptroller and Auditor-General. The reason why we have selected this figure is not due to any assessment of the relative value of the gamekeeper or the poachers, but simply that we have followed the precedent that the Comptroller and Auditor-General shall have the same salary as Permanent Secretaries.

§ Mr. Pitman
The Financial Secretary has omitted the fact that we are paying £8,500 to people who are not servants of the House, and have not this great responsibility to watch enormous expenditure.