Colonel NEWMANasked the Financial Secretary to the Treasury whether the war bonus paid to the Civil Service is based on a comparison between the cost of living of a working-class family of five persons in 1914 and in 1921, and in which no allowance is made for any change in the mode of living of the working or other classes since 1904, when the actual inquiry into the cost of living of the working classes was unofficially under- 861W taken; and, in view of the unfairness to the taxpayer in having to pay war bonus on this basis to a civil servant who is a bachelor and who draws a salary of £500 with increment and pension prospects, what action does he propose to take?
Mr. YOUNGThe bonus is based upon an index figure, which is calculated on the basis of the average increase in the cost of maintaining the pre-War standard of living of working-class families, irrespective of whether or not such standard was adequate. The method of calculating the index figure is more fully explained in an article published in the "Labour Gazette" for February last, of which I am sending a copy to the hon. and gallant Member. It is not correct to assume that civil servants of all grades receive a bonus directly equivalent to the index figure. Such increase applies only to the first 35s. per week of salary or wages, or to wages of 35s. per week or less; and a civil servant with basic salary of £500 a year receives, on a cost of living figure of 165, a bonus, not of 165 per cent., but of 80 per cent. The bonus payable to civil servants of all grades falls automatically, by arrangements agreed at the National Whitley Council, as the index figure falls, and I am satisfied that this arrangement should not be disturbed.
Captain TERRELLasked the Financial Secretary to the Treasury whether it is possible to calculate the bonus paid to the Civil Service for a period shorter than six months, in view of the bad impression caused by paying all-round higher wages during a time when other classes are submitting to a reduction of pay?
Mr. YOUNGI beg to refer the hon. and gallant Member to the reply given on the 24th March last to the hon. and gallant Member for Rotherham (Major Kelley). The hon. and gallant Member no doubt recognises that the rate of bonus lags behind the cost of living when that is rising, as it does when it is falling, and to the same extent.