INDIA—BENGAL UNCOVENANTED SERVICE PENSION FUND. (Hansard, 3 August 1900)

§ *THE EARL OF NORTHBROOK
My Lords, I rise to call attention to the proposed reduction of interest on the capital of the Bengal Uncovenanted Service Pension Fund; and to move for copies of any letters from the Government of India to the Secretary of State for India on the subject in 1896 and 1899. I am exceedingly sorry to have to trouble your Lordships at this late period of the session, but, in my opinion, a grievous hardship has been inflicted by the Secretary of State for India upon a most deserving class of men—namely, the Uncovenanted servants of the Government of India. They are the men who do the best portion of the hardest work in the offices in India. They receive, most of them, very low salaries, and when they retire they are granted very moderate pensions. About sixty years ago a fund 612 was formed for the widows and children of the Uncovenanted servants in Bengal. The Government encouraged it in every way, and assistance was given from the State to the extent of 6 per cent, interest on the capital. There were 1,700 subscribers to the fund, and everything went on smoothly till a year or so ago. The rates which the subscribers paid were considerably in excess of the actuarial death rate, and that, coupled with the 6 per cent, interest, enabled the fund to dispose of a considerable surplus year by year. That surplus was wisely used for the purpose of making an abatement on the sums paid by the subscribers, so that these deserving men, who had subscribed for many years for pensions for their widows or money for their children, were able, on leaving the service at the expiration of their term, to go home and live upon their small pensions, with a very small annual sum to pay to the fund, and very often none at all. This had been going on for many years, but in February last the Secretary of State decided to reduce the rate of interest from 6 per cent, to 4 per cent. He accompanied that resolution with an announcement that even 4 per cent, was not to be relied upon, and that the rate of interest might be still further reduced. Although fully warned beforehand what the result to the fund would be, he issued this order, and in his despatch there is not a single word of sympathy for the effect of the order upon the unfortunate subscribers to the fund. The reduction of 4 per cent. will, in the opinion of two of the best accountants of the day, prevent the fund from meeting its liabilities. In point of fact, it will kill the fund. Those who managed it took the course, in order to struggle on, of altering their rules so that the unfortunate men who have already subscribed the whole of the money required under the regulations of the fund to provide pensions for their widows are now called upon to pay the full amount of the subscription which they paid when they began their subscriptions. Now, my Lords, how is this working? because it is just as well to see what the actual cases are. I know of three cases. The first case is a man who for many years subscribed to the fund for three daughters. His subscription, according to the rules of the fund, had ceased. He is eighty years of age, and he is now called upon to pay the original rate of subscrip- 613 tion, which it is impossible for him to do, and his daughters when he dies will be left without support. Another case is a man who subscribed to the fund for twenty-seven years. He has got a small pension. His subscription ceased three years ago, and now he is called upon to pay £30 a year, his original rate of subscription, and that unfortunate man will not be able to live in the small house he is now living in. Another case is a man who subscribed for many years for his wife, two sons, and three daughters. About three years ago his subscription ceased according to the laws of the fund. He has now been called upon to pay £75 a year, which it is altogether beyond his power to do. In short, this is the case of the fund now as contained in a letter written on the 10th July by the secretary— Subscribers have in a large number of instances withdrawn their children from the fund. Subscribers, when called upon to pay subscriptions at the full fixed rates, have expressed their inability to do so. Applications for admission to the fund have almost entirely ceased. So that your Lordships see that in point of fact the action of the Secretary of State has killed this fund, which was established sixty years ago, and put into conditions of very great hardship indeed the unfortunate members of the fund, who have subscribed for so many years. The whole correspondence has been published. I looked at the Papers to see if I could find what reason the Secretary of State could have, or what justification he could produce, for the action which he has taken, and I tell your Lordships that I was never more pained in my life than when I read that despatch of the Secretary of State, addressed to the Government of India. Will your Lordships believe that, in order to justify his action, the Secretary of State dug up an old letter, written by the Court of Directors about the year 1840, in which they said then that they could not guarantee continuing the 6 per cent, rate of interest on the fund? That is the justification of the Secretary of State for his action on the present occasion. He takes no notice of what has happened since that time. In the year 1849 the Court of Directors published a despatch, in which they praised the management of the fund, and declared that 6 per cent. interest on the capital should be paid, without one single word of reservation. 614 Was not that quite enough to get rid of the reservation of 1840? Worse than; that, in the years 1877 to 1883, when the noble Marquess opposite (the Marquess of Salisbury) was Secretary of State for India, when Lord Cranbrook was Secretary of State for India, when the Duke of Devonshire was Secretary of State for India, when my noble friend behind me (Lord Kimberley) was Secretary of State for India, a very long correspondence took place, and the Government of India said that it was necessary to put distinctly on record the exact position of the Government with respect to the fund, and the interest that they were to pay upon the fund, and how far it extended, and they declared that the interest to be paid upon the fund was what I described to your Lordships just now—namely, 6 per cent, on the capital representing the net liabilities of the fund, with a small reserve. I should have thought that if ever there was a contract between a Government and a body of that kind, this was a contract between the Secretary of State in Council and the Government of India and this fund. Now, my Lords, what have the Government of India done in this matter? How far have they committed themselves to this rate of interest? I hold that they have committed themselves to this rate of interest in a manner which it is impossible f r them to escape, because they have actually issued orders in some parts of India that no Uncovenanted servant shall be promoted who does not belong to this fund, or some other fund of the same kind; and they have actually given orders that if an Uncovenanted servant leaves the service, without going through the whole course and taking a pension, to take another appointment, he is to refund to the Government certain sums of money in order to get the advantage of the rate of interest. My Lords, that is the condition of things now; and during the whole of that correspondence, from the year 1877 to the year 1883, in no one single Paper that has been printed in the collection which I have read since the assumption of the government of India by the Crown, is there one single word of warning to those who subscribed to this fund that there was a liability that the rate of interest should be reduced. If that liability had been openly stated, and people who were about to subscribe to 615 the fund had been warned of that, is it likely that anyone would have subscribed to the fund at all? because the main reason of people subscribing to the fund was the assistance they got from the Government by the exceptional rate of interest. The contrast between the manner in which these unfortunate Uncovenanted servants have been treated, and that in which other funds in which the Covenanted servants were interested have been treated, is rather painful, but I will not dwell upon it. I will only say, in conclusion, that I trust the noble Earl representing the India Office will be able to assure your Lordships that the Secretary of State for India is prepared to reconsider this matter, and that he will take into consideration the equity of the case, the hardship of the case, and that he will restore the fund to the position in which it stood before his unfortunate despatch; or do what was done in the case of the Covenanted Service Fund— let the Government take the whole fund over, let them deal with all those who have at present a claim upon the fund on certain fair conditions, and then let the Uncovenanted servants start a new fund for themselves. So far, my Lords, for my question to the noble Earl, to which I hope he will be able to give a satisfactory reply. Now as regards the despatches. The Secretary of State has acted in this case contrary to the opinion of the Government of India. That is admitted in one of his own dispatches— that the Government of India when Lord Elgin was Viceroy said, as I think any person who looked at the matter from an equitable point of view would have said, that after this favour had been shown for fifty-seven years to this fund, the Government of India hoped that the Secretary of State would not interfere with the rate of interest. I should like to see that despatch produced, and also I should like to see the despatch which Lord Curzon's Government has written upon the same subject. I do not know what was in that despatch, because it is not mentioned, but I cannot see the slightest reason why these despatches should not be produced. This is a matter of business. The Government of India are properly the protectors of the Uncovenanted servants in India. They have a right to express their opinion to the Secretary of State if they think that these men are being treated unfairly, and I think I am justified 616 in asking, that those despatches from the Government of India should be laid on the Table of your Lordships' House.

THE UNDER SECRETARY OF STATE OF INDIA (The Earl of ONSLOW)
My Lords, the noble Earl, at the commencement of his remarks, apologised to your Lordships for bringing this matter before your notice at so late an hour of the evening, and at so late a period of the session. I have no complaint whatever to make against the noble Earl on either of those heads, but I must confess that I should have been glad if it had been possible for him to have given a little longer notice of his intention to bring the matter under the notice of the House, and for this reason: The Secretary of State for India has for some time past, been in communication with the Government of India with, a, view to the reconsideration of the matter to which the noble Earl has referred. A telegram was addressed to the Viceroy on the 22nd. June, and we were informed that the managers of the fund—who, your Lordships will understand, are the official representatives of the beneficiaries under the fund—were awaiting a report from, their actuary, and were meanwhile preparing a case to lay before the Government of India. It was the intention of the Secretary of State to wait until that had been presented to the Government of India, to have learned the views of the Government of India upon it, and then to have formed his own conclusions thereon. But since the noble Earl has placed this notice on the Paper a communication has been made by two members of the Committee of the Uncovenanted Servants' Pension Fund in this country, and they have produced the actuary's report to which the noble Earl refers, and upon that report we learn that in their opinion—and I have no reason to doubt that their opinion is a sound and correct one—on the 6 per cent. basis the widows' branch of the fund would show a surplus of R.1,913,000, while on the 4 per 617 cent. basis, to which it is proposed to reduce it, it would show a deficiency of R.355,763. (Of course, I am presuming in both cases that the contributions remain as they are at present.) In the children's branch the surplus on the 6 per cent, basis would be R.686,000, while on the 4 per cent, basis it would show a deficiency of R. 1,040,000. Well, no doubt that is a very startling position as a result of the change in the percentage, and the Secretary of State is the last person in the world to withhold his sympathy from those who have done such work for the Empire in India as the members of the Uncovenanted Service, both in Bengal and in Bombay; and I cordially agree with the remarks that have fallen from the noble Earl as to the value of the services they have rendered. I am not able at present to say exactly what will be the ultimate decision of the Secretary of State, because he has to consult, first, the Government of India, and, secondly, his own Council in this country; but I may say this: that, while he certainly would adhere to the right to fix the rate of interest at whatever he thought was the proper rate for the time being, he would not wish to inflict a hardship upon individuals or upon the whole service by reducing unduly the rate of interest to be paid in cases of those who have already contributed towards the fund. But I think the noble Earl will agree with me that it is entirely within not only the right of the Secretary of State, but also the justice and the equity of those concerned, that so far as those who have not yet entered into the service— that is, the new entrants—he should fix the rate at whatever may appear to him to be right for the time being. That is the view which the Secretary of State takes; and when the Papers come home, and after careful consideration of the matter, the Secretary of State hopes he may see his way to leave those who are at present subscribers to the fund in the position in which they now are, and so avoid inflicting any hardship. I am sorry that I cannot comply with the request of the noble Earl to lay the Papers on the Table of the House. If he, next session, will repeat that motion, I may be able to give him a more favourable reply, but for the moment the matter is very far from being in a condition that I may call settled, and it would be, I think, unwise to lay the 618 Papers in an incomplete condition upon the Table of your Lordships' House, and I would prefer when the matter is finally settled that the noble Earl should renew his application, when I hope to lie able to comply with it.

THE EARL OF KIMBERLEY
Certainly after hearing my noble friend's statement I have been very glad indeed to hear the answer of the Under Secretary of State. I would merely press this point: that I hope no reliance will be placed upon some technical power which may be shown to have existed long ago, and not to have been used for a very long period of years, of reducing the rate of interest. I hope that no such technicality will be put in force against those who entered the fund at the time when it was determined to revise the rate of interest, for the very good reason that they had no notice of it. We must look in these matters, and we always have looked in those matters, not to the technical rights of the Government, but to treating with generosity those who are employed under it. I am sure that in India our servants, both Covenanted and Uncovenanted, deserve the greatest sympathy and generous treatment. It has always been the custom not to look merely at technical right, but to see that they do not suffer any serious injury of any kind at the hands of the Government. As regards those who joined the fund later, of course it is clearly absolutely within the power of the Secretary of State to fix whatever he thinks equitable and fair, and there will be complete notice to all who then enter the fund. I merely wished to say this, because I sympathise very much with what my noble friend has said, and. I feel sure that it will not be the intention of the India authorities to treat in any way harshly people whose case deserves equitable and favourable consideration.

§ *THE EARL OF NORTHBROOK
After the very satisfactory answer that I have received from the Under Secretary of State, I shall not press for the Papers in this matter, because I think it is better that they should be presented,, if at all, when the matter is settled. I understand the noble Earl to have informed your Lordships that the Secretary of State is prepared to take measures to provide that the present subscribers to 619 the fund should not suffer by the alteration in the rate of interest. I quite agree with him that as regards those who have not joined the fund now it is perfectly open to the Secretary of State to make any arrangements he pleases in respect of the future.