INTERNATIONAL LABOUR OFFICE. (Hansard, 15 June 1932)

§ THE PAYMASTER-GENERAL (LORD ROCHESTER)
My Lords, I do not take it that the noble Lord is contesting the immense value of the International Labour Office, but that he is concerned at the expenditure attendant upon it. To deal with his Questions seriatim, the answer to the first one, in a word, is seven. Provision is made in the International Labour Organisation Budget of 1932 for the salaries of these seven officials whose emoluments, together with the pensions contributions paid on their behalf by the League of Nations, would at par rate of exchange amount in each case to £1,500 per annum. These seven are the Director, the Deputy-Director, four chiefs of divisions, and in addition one technical adviser. While those seven officials are the only ones falling within the exact term of the noble Lord's Question, I will be frank and add that there are seventeen officials in the next grade below them. They are chiefs of sections whose salaries rise by annual increments to 33,000 Swiss francs, which at the par rate of exchange is roughly £1,130. That is as regards the first Question.

LORD LOVAT
May I interrupt to say my Question is directed to the seventeen? The noble Lord says that at the present rate of exchange the salary of 33,000 Swiss francs will only be £1,130. My mathematics are entirely in error if that is the case. The noble Lord is quite aware of the present rate of the Swiss franc. If he will work it out—it is a simple arithmetical sum—he can see what the result is.

§ LORD ROCHESTER
I would point out to the noble Lord that I deal with the par rate of exchange. I admit the present rate of exchange is somewhere about 18, but I am dealing with the par rate of exchange which is 25, or approximately 25, and on that account I emphasize that these seventeen, although not coming within the exact purview of the noble Lord's Question, should be mentioned. At the par rate of exchange their maximum would be £1,130, and even at the present rate of exchange they would still be outside the purview of the Question.

LORD LOVAT
I ask in my Question for the amount to be stated in pounds and therefore at the present rate of exchange. If the noble Lord had not mentioned the seventeen gentlemen I should have done so.

§ LORD ROCHESTER
That is the reason I mentioned them. I wanted to anticipate the noble Lord. I would emphasize that after all these officials are living in Switzerland, where they pay correspondingly higher rates for everything they consume. Therefore it is only fair, for the purpose of comparison, to take the par rate of exchange, but, even if you take the present rate of exchange, I suggest that the noble Lord's mental arithmetic is at fault, because then they would come just under the maximum. The noble Lord has mentioned in his Question the amount of £1,500. But be that as it may, there are seventeen in the lower grades that would approximate to his Question. I want to be frank. The total number of the permanent staff of the International Labour Office is 411, of which number the seven senior officials I have mentioned represent 1.7 per cent. of the total. If I understand the noble Lord's second Question that is the point he wants elucidating.
To come to the third Question, which is a little more involved, the pensions scheme applicable to officials of the International Labour Office is the scheme approved by the Assembly of the League of Nations at its eleventh session in 1930. It is applicable to all officials of organisations of the League of Nations (including the International Labour Office) appointed after the 1st January, 1931, whose appointment is without fixed time 926 limit, or for a fixed period of not less than seven years. Officials appointed before the 1st January, 1931, who are members of the provident fund may, if they wish, transfer to the pensions scheme. Officials classed as belonging to the first division are required to contribute 6½ per cent. of their pensionable emoluments; other officials contribute 5 per cent. As to the ultimate cost of this pensions scheme, I think the noble Lord, upon reflection, will appreciate that it is almost impossible to estimate that exactly, because it is contingent upon so many uncertain factors, such as the number of staff and their expectation of life, but no doubt it will answer the noble Lord's point if I say that the League of Nations contributes a percentage of the pensionable emoluments of the officials, which is fixed annually by the Assembly. For 1932 the percentage was fixed at 9 per cent.
The scheme provides for a pension on retirement. Officials who have attained the age of sixty, and who have completed twenty-five years service may choose an annuity equal to one-half the average annual pensionable emoluments of the last three years of their service, or a capital sum equal to the present value of the annuity. Officials who do not satisfy such conditions but have completed ten years service, are entitled to pensions based on lower proportions of their emoluments. Provision is also made for invalidity pensions and for pensions to widows and to children of deceased officials. Detailed particulars of the scheme are already in print. I say that apropos of the noble Lord's request for Papers, and, as he is out for economy, I am sure he would not want duplication and have them printed again. He can find them set out in Staff Pensions Regulation, document A.25 (1) 1930 X, and a copy is available in the Library of your Lordships' House. The cost of the pensions scheme to Great Britain for 1932, so far as the International Labour Organisation is concerned, represents approximately £3,400 of the figure of £54,000 to which the noble Lord referred, and which was stated in your Lordships' House by my noble friend Lord Stanhope on the 15th March last as being provided in the Estimates of the Ministry of Labour.
May I say that His Majesty's Government are as anxious as the noble Lord to 927 see that any unnecessary expenditure is curtailed, or rather eliminated if there be such expenditure, but this is preeminently a case for agreement? After all this country is only one of about fifty countries who are members of the League, and they all have equal status as far as the Assembly is concerned; but it would be false economy to curtail expenditure to the point of impairing the efficiency of the League, and the International Labour Office is an integral part of the League. The only economy therefore that can be entertained by His Majesty's Government is that which can be accomplished without loss of efficiency. The history of the finances of the International Labour Office shows that so far from exhibiting a steady tendency to increase, as is sometimes represented, they disclose on the contrary a surprising stability when account is taken of the inevitable growth of the demands made upon the Office as its position and possibilities become more clearly recognised in the world, and the corresponding growth of its work, which has in fact taken place, in meeting those demands. Perhaps I may be allowed to add that the Budget of the International Labour Office is one of the most carefully scrutinised in the world. It is proposed by the Director and then revised by the governing body which includes Government, employers, and workers' representatives. It then has to pass the Supervisory Commission, and finally the Fourth Committee of the Assembly, and the Assembly itself, which votes it.
My noble friend's fourth Question, if he will forgive my saying so, is not very clear in the light of the facts. Presumably he has read the proceedings of the last session of the Council and desires to know the exact instructions which have been issued by the Council with regard to investigation into the expenditure of the International Labour Office. Perhaps it will be convenient if I refresh the noble Lord's memory as to the exact sequence of events. I ought to explain that the Budget of the League of Nations comprises expenditure of the League of Nations organisation proper, of the International Labour Office and of the Permanent Court of International Justice at The Hague. Although the International Labour Office is an autonomous body its expenditure has to be provided for each year by the Assembly of the 928 League. The Fourth Committee of that Assembly receives and passes each year the Budget which, as I have just said, includes the expenditure of the International Labour Office. Admittedly there is practically nothing in the nature of external control over the International Labour Office—that I concede—before the estimates reach the Assembly. What happens is that after approval by the International Labour Office the Budget goes to the Supervisory Commission, whose duty it is to examine the figures and to report to the Assembly of the League, but they are not in a position in any way analogous to that of the Treasury in this or any other country.
In the circumstances, therefore, His Majesty's Government at the last session of the Council in May put forward a memorandum drawing attention to the increased expenditure of the League and suggesting that unless the tendency to increase expenditure were checked strong criticism might be aroused in various quarters. They proposed, first, that an examination should be made into the whole organisation of the League—that is including the International Labour Office—with a view to effecting economies, and secondly, a review of the scale of the emoluments of the staff, including the staff of the International Labour Office. They proposed that these questions might be examined by a small committee of outstanding men of affairs outside the political fields in their own countries, with such expert advisers as they might find necessary and a secretary from the League staff. They expressed the opinion that it was essential that economy should be incorporated in the terms of reference to the proposed committee and that policy should not be excluded, though of course any question of real policy which emerged from the committee's labours could only be decided by the Assembly later in the year because by the constitution of the League of Nations the Assembly is the body ultimately responsible for finance.
The discussion of this memorandum occupied several sittings of the Council and it was finally decided that the memorandum of His Majesty's Government, together with the minutes of the various meetings, should be forwarded to the Supervisory Commission who should be requested to prepare a report for the 929 Assembly on the papers sent to it. The Supervisory Committee were left to decide for themselves which of the various points they could usefully and effectively examine. Questions relating to the activities of the League would not fall within their competence, while certain questions relating to the organisation of the Secretariat have been reserved for discussion at the next Assembly of the League, which is in the first week of September next, as the noble Lord knows. Three subjects however remain—namely, a possible reduction of staff, a possible reduction of salaries and a stricter control of expenditure. The Supervisory Commission were asked to examine these matters and to associate with themselves two or three experts in those subjects which the Commission should decide to examine.
The Supervisory Commission have received the papers and have met and have decided that they cannot usefully go into the question of the reduction of staff, but they are examining the questions of the possible reduction of salaries and of a stricter control of expenditure. The Chairman of the Supervisory Committee has invited Sir Malcolm Ramsay, who was until recently Comptroller and Auditor-General in this country, to assist them in their labours. It is not known whether any other experts have been invited from other countries. Sir Malcolm Ramsay is now in Geneva studying the question, and it is understood that the Supervisory Commission will meet at Geneva at the end of the month to continue the discussion and prepare their Report. The report of the debates at the meeting of the Council of the League last month at which our proposals were made are already in print and if they are not in the library of your Lordships' House they very shortly will be there. If only on the plea of economy, therefore, I would ask the noble Lord not to press his demand for Papers. If he decided to do so the Government would not withstand his demand, but it would only mean duplicating information which is already in print. The Government are quite alive to the anxiety of the noble Lord and those associated with him, and they are taking what steps they can to meet the case he has presented. If there is any other information I can give him I shall be only too pleased to do so, but the noble Lord 930 will recognise that I am speaking not for my own Department but for another and that therefore I am in a somewhat delicate position.

§ LORD LLOYD
May I be allowed to ask the noble Lord for one piece of information? I think I am right in saying that those States which have not paid their subscriptions to the League are just as eligible to vote as those who have paid their subscriptions. In this much-needed scheme of reform is that matter to be dealt with, so that those States who are in arrears with their subscriptions will not be allowed to vote?

§ LORD ROCHESTER
I am not sure whether the noble Lord is referring to the Supervisory Commission, but I might tell your Lordships that the constitution of the Supervisory Commission at present is as follows: Czecho-Slovakia provides the President, India, Norway, France and Venezuela are represented, and Poland and Hungary provide substitute delegates whore necessary. As regards the representative of India, we are fortunate in that he is a member of your Lordships' House, Lord Meston.

§ LORD LLOYD
I am afraid I did not express myself very clearly. Perhaps I might take a concrete case. China, for instance, is grossly in arrear with her subscription to the League, but has an equal vote with Japan. In this scheme of reform will China's voting power be reduced in conformity with the reduction in her contributions? That seem to be a matter of equity.

§ LORD ROCHESTER
My reply would be that twelve years membership of the House of Commons has taught me not to answer or attempt to answer hypothetical questions. I cannot anticipate the findings of the Supervisory Commission. I quite appreciate that this point is worthy of consideration, and no doubt it will be considered, but it is not possible for me to anticipate the findings of the Supervisory Commission.

§ LORD LLOYD
I do not wish the noble Lord to anticipate findings, but I was anxious to be assured that this was one of the things that would be brought up.

§ LORD ROCHESTER
I should like to be as noncommittal as possible and I 931 therefore say I will intimate to the Minister concerned the anxiety of the noble Lord in this regard.

§ LORD LLOYD
May I ask one more question Are officials who are the subjects of a country which has not recently paid its subscription eligible to be beneficiaries equally with those of other States under the pension scheme?

§ LORD ROCHESTER
I think the noble Lord must appreciate that I am really not in a position to give a categorical answer. I should say that the fact that a Government has not paid its contribution or is in arrear of contribution should not ipso facto disqualify members of the staff who are subjects of that Government from benefits that they admittedly are entitled to under contract, but this matter, too, I will refer to the Minister concerned and if I can give the noble Lord any further information at a later date I will do so.

LORD LOVAT
I thank the noble Lord for his answer to the questions that I put down. I am afraid I take exception to one or two of the statements he made, but on the other hand I think we can 932 congratulate him and the Government on the fact that these great rises of expenses, which have gone up I think I am correct in saying from 6,000,000 Swiss francs to 9,000,000 Swiss francs in the last few years, seem to be approaching a limit. I am quite aware that the noble Lord cannot give an answer to the question of the ultimate cost of the pension scheme, but I would point out that this scheme has been so liberal that I think I am right in saying that it out-balances that of any country in Europe. I propose to return to the charge in the near future when I have had an opportunity of considering the noble Lord's answers and, perhaps, after I have heard of actual economies that are effected in the meanwhile. I beg leave to withdraw my Motion.