Class Vi.

Orders of the Day — Civil Services and Revenue Departments Supplementary Estimate, 1921–22. – in the House of Commons on 21st February 1922.

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"That a supplementary sum, not exceeding £455,000, be granted to His Majesty to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1922, for Superannuation, Compensation, Compassionate, and Additional Allowances, and Gratuities under sundry Statutes, for Compassionate Allowances, Gratuities, and Supplementary Pensions awarded by the Treasury, and for the Salaries of Medical Referees."

Resolution read a Second time.

Photo of Mr Donald Maclean Mr Donald Maclean , Peebles and Southern

I beg to move to leave out "£455,000" and to insert instead thereof "£454,900."

I wish to raise more particularly the question of the pensions included in the Vote which has just been laid before the House. The Vote is a very substantial one. It asks for a further sum of £455,000 beyond the amount originally estimated for, and if hon. Members will look at the bottom of page 35 of the very handy volume in which these Supplementary Estimates are now presented, they will find there the real reason for it. This expenditure is due to additional retirements. I wish to remind the House very briefly of the basis of this Supplementary Estimate, without going into the question of policy involved in the original grant. The House may remember in 1920 the Whitley Council in regard to the war bonus of civil servants. The amount which was originally estimated for—over £9,000,000—was not discussed in Committee or on the Report stage at all, but fell under what is popularly known as the guillotine. In addition to that sum of £9,000,000 a further Estimate by way of Supplementary Estimate had to be submitted, making a total amount of somewhere about £12,000,000. There are one or two hon. Members present who joined in a discussion in the early hours of the morning on the question which was then raised. After all the notice which has been given with regard to it—even so late as it was at night or so early in the morning when the matter was discussed—I should have thought the Government would for this year have been able to calculate with much greater accuracy the number of retirements which were likely to take place. They estimated for £275,000, but the revised Estimate shows that no less a sum is required than £635,000. So that over £300,000, a larger sum than the original total, is the additional sum required to meet the cost of additional allowances and gratuities to established officers. Why is this great rush going on? Probably there are two reasons, but I should like to know more particularly when the Financial Secretary comes to reply. Probably one reason is that the Treasury has been able to make some reduction in the numbers of the staffs, but a second reason may be the additional attraction to civil servants to retire by reason of the fact that their war bonus is calculated in the pensions to which they are entitled.

4.0 P.M.

The Statute itself is 9 Edward VII., Chap. 10, Sub-section (2) of Section 1. After settling, in the first Sub-section, the proportion, instead of dealing with 1/60th, as it used to be, is now 1/80th. It went on to say that the Treasury "may grant." The first part of the Section is mandatory, the second part is at the disposal of the Treasury. They may grant by way of additional allowance to any such civil servant who retires after having served not less than two years— in addition to the superannuation allowance, a lump sum equal to 1/30th of the annual salary and emoluments of his office. On that word "emoluments" the Treasury have in the exercise of their discretion, brought in a war bonus. It is not for me to enter on arguments, even if I were qualified to do so, but the "better opinion," as we say in the law, appears to be that war bonus should be strictly read as an emolument. However that may be, I can only express my surprise at it. I should have thought that a war bonus was not exactly a windfall in a particular year, but one of those purely temporary payments which would run off in the salary and might quite naturally, I should have thought, be also permitted to run off in the pension. I should have thought that that would be accepted, setting apart the legal interpretation, by the ordinary person as an act of fairness and justice.

When I spoke last, I made a miscalculation, which I desire at once to put right. On the first occasion when this was raised by me, in the first Amendment to the Address, I had the figures correctly. I said that taking a man with a salary of £800, allowing for half of it.—£400—and then the 75 per cent. of the bonus—adding those two together, you will get a pension of about £616. That was correct, but I was incorrect when I spoke last time. By taking figures, not as they should have been, not adding the 75 per cent. of the bonus plus the half of the £800 and then dividing that total to get the pension, I added on the full 75 per cent. of the bonus to the half of the salary, and got the sum of round about £800 when it should have been £616. To the extent that I misled the Committee on that point, I regret it and apologise for it. But it does not affect the principle on which I have been making my criticism of the action of the Treasury in this respect, and what I would urge upon the Financial Secretary and the Government is that they are doing an injustice to the taxpayer of the country at a time when the whole bent of our ideas are towards economy, but not economy with injustice. I suggest, indeed I put it rather stronger, I claim that it is not an injustice to the civil servant that the emoluments, including the permanent part of their pension, should in future run off as the cost of living declines. I do not press it more than that. I should be very much surprised if the Financial Secretary, when he comes to reply, will be able to displace the terms of that statement which I have just laid before the House. No one can blame the civil servants for their desire to retire under these very favourable circumstances. They have been given by the State these exceptionally favourable conditions, of which, by way of illustration, I have taken one as an example. But our duty in this House and in this Committee, is rather a different one. It is to see that, consistent with justice, every measure of economy should be ruthlessly taken. How, on that basis, can the Financial Secretary justify the Estimate which he has laid before us. There is not the slightest doubt that if this process goes on, before the calendar year is out there will be another Supplementary Estimate, if the Financial Secretary does not calculate on evidence which is afforded him by this Estimate of the very widespread and natural and justifiable desire of the members of the Civil Service to take advantage of existing conditions.

What I press upon the Financial Secretary and the Government is that they should take advantage of their power in the Statute and review the whole situation. In regard to this Estimate, I suppose we can do nothing because the money has already been spent or the Treasury has been already fully committed to it. But what is he going to do for the future? No one can really be damnified if proper and adequate notice is given to them. That is the real reason why I move, in this Vote to-day, that the whole of the Civil Service should be fairly affected by notice of what is, I believe, the view of the House as a whole in regard to this particular incident, and for the future civil servant s should, under the power given to the Treasury, be brought within the scope of the power to review that part of their pensions now granted to them which is allocated to the war pensions. I do not deny—everyone candidly acknowledges—the great zeal and untiring ability which the civil servants show in the discharge of their duties; but I am sure that they would not claim for themselves that they should be specially exempt from the hardships which fall upon the community as a whole. All, that we ask is that they should be as fairly a possible put upon a level in bearing the burdens of the State and of the arduous times through which the whole community has to pass in accordance with the best form of service under the best kind of employer.

I do not think that, if you take the whole range of employment in this country, outside the Civil Service, you would find such a position as this. Compare the great services of the State which are not what we call nationalised. Take the railway servants, or any other of the great fundamental services of the community. One of the main factors in the agreement with the railway servants was that their wages should fall or rise with the cost of living, and the argument which was adduced to the Committee the other day, that it is not possible to make a review of these salaries of the civil servants—was that it could not be done without costing more than the economy that would be effected, because of the complicated nature of the calculations which would be incurred thereby. I do not know what is the difference between calculating what is due to a railway servant and what is due to a civil servant. It is not beyond the wit of man to devise a scheme of calculating a matter of that kind, which would result in a net economy to the State. But I am sure that that argument cannot bear the weight which my right hon. Friend the Financial Secretary desires to put on it. I conclude by stating once again that the position which I have laid down to-day is one which commends itself to the ordinary sense of fairness and of justice. It is no attack on the Civil Service as a whole or to the civil servants in particular, but simply a desire to see that justice is done and that economy is effected.

Photo of Mr Frederick Banbury Mr Frederick Banbury , City of London

There are two or three questions which arise on this Vote. First of all I would like to call attention to the Supplementary Estimate for the amount required in the year ending 31st March, 1922, to pay superannuation and compassionate and additional allowances and gratuities under sundry Statutes. Beading that without knowing the facts of the case, the House would come to the conclusion that they were compelled by "sundry Statutes" to do what they are asked to do, whereas, as a matter of fact, they are not compelled to do anything of the kind. I do not for a moment suggest that the wording was deliberately put in; but I do ask the Financial Secretary whether he will see that, in the future, where the power of the Treasury is permissive, attention is drawn to that in the Estimates. That, I think, is a very reasonable request, and one which is absolutely necessary if the House or the Committee is to have the power of control over the Estimates which the great majority of the Members of the House. desire to have. After that the question resolves itself into two. The first is, is emolument a bonus? I am not a lawyer, and I do not venture to give a definite opinion upon the question whether "emolument" means "bonus," or whether it does not. But I should have thought that the commonsense point of view, apart from the legal point of view, was that "emolument" and "bonus" were two different things. Let us suppose that a man has a salary of £500 a year and an allowance for a house, or that he has certain allowances for certain things that he does. I understand that even judges have held that the tips of railway porters were part of their wages. Therefore that kind of emolument, no doubt, will be included in the aggregate of the sum which the civil servant receives from the State. But, first of all, the emolument we are discussing is a War bonus. Throughout the period of the War we were told that there was to be a War bonus. I never could quite agree to the definition "War bonus," but still, it was a War bonus. Over and over again it was said that it was necessary to give a War bonus to meet the high cost of living. Therefore, it is perfectly clear to the ordinary mind that this was a special emolument connected with the War, and the War only. It was an emolument which lasted only for a given time, namely, the length of the War. There is no doubt that the original intention was that the War bonus should be given only during the War. Therefore, I conclude that the bonus is not, in the ordinary sense of the word, an emolument.

The two things to consider are whether this is obligatory and whether it is an emolument. It certainly is not an emolument, in my view, and equally certainly it is not obligatory, for the Statute is permissive. That being so, I wish in all seriousness to ask the Financial Secretary whether the Government think that this is the proper time to be extra generous to anyone? Why pick out this time, when they have appointed a Committee to reduce expenditure and when everybody is groaning under the burden of taxation, to stretch a point and to do something which they are not obliged to do, either by contract, implied or otherwise? I have heard it said seriously that the civil servant is not in any better position than certain clerks in banks. I saw a notice to that effect in the newspapers the other day. I would point out to civil servants that they are in a very different position from that of clerks in banks, because the shareholders of the banks have done fairly well during the War, and the taxpayer has not. It is doubly hard upon the taxpayer that he should be called upon to find employment—which he is only too glad to do—for the civil servant, that he should be called upon to put them in the position in which they were before the War, and that they should now suffer practically no hardship. It is an impossible position and one which the taxpayer is perfectly justified in resenting.

There is the question of the number of civil servants who are retiring. I must confess that their wish to retire is only to be expected of human nature. If I were a civil servant and I knew that if I retired I could obtain much larger pension than that which I would receive by remaining in the service, in all probability I should retire. But what about the advantage to the State? Is it an advantage to the State that the man who thoroughly understands his duty should retire when in full possession of all his faculties? Is it an advantage that he should retire, when he is to receive a pension larger than that which he would receive if he remained in the service a little bit longer? I know that the War bonus varies with the cost of living. Therefore the pension varies. What are you to do with a man who retired two years ago when the cost of living was high? For the sake of argument let us say that he now receives £800 a year. Another man in the same position in the Civil Service and receiving the same salary, retires now, but receives only, say, £750. How can you justify that? Therefore I say that the only course open to the Government is to acknowledge having made a mistake and to reconsider the whole position.

I understood the right hon. Member for Peebles (Sir D. Maclean) to say that it was impossible to alter this Supplementary Estimate. Is that so? It may be that the Government have told various civil servants that they will bring before the House this Vote, and that if the Vote is passed the Government will do certain things. But surely does not the old rule apply, that until the Government have the money, that is to say until the House has voted it, the Government is not under obligation to give the money to the persons concerned? Everything depends on the House voting the money. If the Government alter that rule, if they come to the House and say, "Well, we do not suppose that the House likes it very much, but we have promised it and the House has to vote it." I ask what is the use of our coming here and suspend- ing the 11 o'clock rule if, after all, it means nothing? Is it the fact that the Financial Secretary to the Treasury has already made a bargain and that we are obliged to carry it out? I have no wish in any kind of way to minimise the very excellent services which civil servants have always given, but I must have regard not only to the taxpayer but to the financial equilibrium of the country. I am certain that if we go on in. this way we shall not be able to make both ends meet. It is no earthly use for the Government to say through the newspapers and on platforms that they intend to economise, or for them to send out letters, as they did two and a half years ago, to the Departments telling them that if they did not cut down expenses someone would be sent who would do so, and then to do nothing. It is true that the Government appointed a Committee six months ago, but I would remind them that every month is telling, and that we cannot go on in this way. I shall, therefore, have very much pleasure in supporting a reduction of the Vote.

Photo of Mr Thomas Inskip Mr Thomas Inskip , Bristol Central

The Debate that took place on this subject a night or two ago must have convinced the Financial Secretary to the Treasury that there was a great deal of genuine feeling in the House on this question. I hope that when he comes to reply he will realise that it will be putting a very great strain on those who desire to support the Government if he persists in the course which he indicated was the considered decision of the Government a night or two ago. I understand that what we are considering is the second of the two additional sums required, "Additional allowances and gratuities to established officers." I think it will be inconvenient and perhaps unnecessary, especially in the absence of the Law Officers. to consider what "emoluments" means. The question comes down to this: are the Treasury bound to make this allowance? I do not. suppose that the Financial Secretary to the Treasury will contend that in the words of the Statute the Treasury are hound to make any such allowances or gratuities as have led to the necessity for this Supplementary Estimate.

It seems to me that you may consider these additional retirements which have led to the necessity of a Supplementary Estimate as either favourable to the Civil Service or unfavourable. Suppose that any particular retirement is favourable to the Civil Service. It is a fair inference to say that the retention of that gentleman's services was not desirable. I do not know that in such a case there is any reason for giving him an additional allowance which the Treasury are not bound to give. Why should he be remunerated to an additional extent for a retirement which is conducive to the public welfare? That is a very odd way of regarding the services of civil servants. I suppose we may assume that in the great majority of cases the retirement is not conducive to the welfare of the Civil Service or in the public interest, that the Civil Service would have been very glad to have retained the services of these gentlemen who have retired. From that point of view, why should we remunerate in a special way gentlemen the retention of whose services the State desires? Why should we remunerate them specially for retiring from duties which they are still able to perform? Whichever way you look at it, it is a curious thing to give them additional allowances which the Treasury may with-hold at discretion.

It is an extension of the principle of the labourers in the vineyard. They, at any rate, were remunerated, or those that came in after the first, on the ground that they were ready to work but there was no man to hire them. These gentlemen are to be remunerated because they are unwilling to work though there is someone prepared to hire them. That is not a principle on which any service, public or private, can be conducted. Either these gentlemen ought to be continued in their position or they ought not. On either ground they ought to be content with the remuneration which is fair under the circumstances. What is the remuneration that is fair under the circumstances? Surely it is something which is related to the salary that they contracted to take when they entered the service. From all points of view the bonus, whether it was fair and right or not, was an additional emolument—if emolument is the right word—which they had no right to demand from the State but which they received, though many other persons not in the public service never did receive for equally patriotic and valuable services. And yet they carry into retirement this advantage. We have heard the Financial Secretary speak on this subject. He always makes his statements with such courtesy and fairness that they influence the House perhaps beyond the weight of the arguments by which he supports his views. At the same time on this occasion I hope he will realise that the Treasury are under no compulsion, and whether economy was or was not the dominant consideration, the Treasury at the present time ought not to force this expenditure on the House. I hope everybody will be prepared to support the right hon. Member for Peebles in persuading, and if necessary compelling, the Government to alter the decision at which they have arrived on this question.

Photo of Lieut-Colonel Sir Assheton Pownall Lieut-Colonel Sir Assheton Pownall , Lewisham East

I wish to add my criticism to that which has fallen from the previous three speakers with regard to this very large Supplementary Estimate. The question is not a new one to those of us who served on the Estimates Committee which sat for a few weeks last year, because we thrashed out this question there, and we were told, as we were told last week, that the reason it was thought fair to continue the existing rate of bonus which the civil servant was drawing at the time of his retirement was because of the heavy expense of re-assessing these pensions. I can only say, with regard to that point, that if that holds good, surely you cannot re-assess pay which has been drawn by civil servants. Surely if it can be done in the case of pay every six months it can be done in the case of pensions at intervals, say, of a year or two years, and it seems grossly unfair to the taxpayer that a very large number of civil servants who retired last August, when the cost of living was some 65 points higher than what it is now, should draw pensions based on that rate. I know they only get three-quarters of their war bonus assessed for this purpose, but they will for the rest of their lives be drawing pensions assessed on the cost of living rate which applied a year ago, and if, in the course of the next year, there is, as we all hope, a further large fall in the cost of living, those who retire now will get the benefit of that, and those who retired last August will be doubly benefited. I think the Government ought seriously to re-consider the whole question in view of the big decreases there have been in the cost of living in the last year, and which, I think, we may reasonably expect in the course of this year also.

This surely is a reason for having on the Whitley Councils, which have a great deal to do with the recommendation if these questions, non-official members, because having only official members gives colour to the suggestion that the officials themselves benefit by recommendations they themselves make on these Councils. Those of us who know the Civil Service would be above thinking that, but it is rather an unfortunate position that the Whitley Councils dealing with these questions are composed entirely, as I understand, of civil servants, who may eventually benefit by bonuses of this sort, which is, as I say, a strong reason for non-officials being on these Whitley Councils. What is done elsewhere is that pensions are re-assessed at the end of every three years. It may be said that that is an injustice to the pensioner, but I do not agree. If the cost of living has gone down, the pensioner may get a lesser sum, but in view of the decreased cost of living it would go just as far as the higher sum which he had before. As a loyal supporter of the Government, I would urge that it is placing a very heavy strain upon us to be asked to vote for Estimates when there is a supplementary sum of £360,000 on top of the original Estimate.

Photo of Sir Henry Craik Sir Henry Craik , Combined Scottish Universities

I am sure the House desires to do what is fair and reasonable in the circumstances, but if we examine this Supplementary Estimate very closely, we shall see that we are here being asked to do more than is fair. What is precisely the question? Surely it is, What were the terms which were arranged between the civil servant and his employer at the critical moment when the terms of the engagement were made. It is clear that no person entered upon his office under any understanding that he should have this extra emolument. It is perfectly certain that all these people who are now retiring had made their terms long before, and that they suddenly, four or five years ago, were given an increase which they had no reason to expect and which they had not the smallest right to expect. It may have been just and reasonable, but they could not have enforced it at law. This bonus is not paid on the basis of any right which they had to form such an expectation; they got it because of the special circumstances. As my hon. and learned Friend the Member for Central Bristol (Mr. Inskip) refused to give a definition of the word "bonus," I am afraid we must, as common-sense men, take the bonus as we interpret it in ordinary life. I have turned up several dictionaries, and I found in "Webster" the definition: "Something which is in addition to what is ordinarily received, or strictly due to the recipient." This is something which you cannot consider as amongst the emoluments strictly due; it is given in addition, as a gratuity, beyond.

The question then comes to this: Is there anything in this bonus that is sacrosanct and cannot be altered and that you must keep inviolate when you are considering the question of pensions? The Financial Secretary to the Treasury must know that he himself and his Department have already interfered with that sacrosanct bonus. They made certain terms with the civil servants by which men in the higher grades were to receive a bonus of £500 a year. We thought that an excessive amount for these men to receive, and apparently, on reconsideration, the Financial Secretary to the Treasury came to the con[...]lusion that we had formed, because we were told that that bonus, in the case of men receiving over £2,000 a year, was to be withdrawn. I think I am giving a correct account, and that surely proves beyond the shadow of a doubt that the Treasury held themselves entitled to revise and reconsider that bonus which had been granted. Now why should that bonus on any reasonable ground be taken into account for those civil servants, and those civil servants alone, who retired during a particular short period? I understand—my hon. Friend will correct me if I am wrong—that civil servants who I tired while this large bonus of £500 was still in operation have had it taken into account in the calculation of their pensions, but those who postponed their resignations until that bonus was revised or recalled by the Treasury will he placed at a very great disadvantage. Is there any fairness there? Is there anything there that makes the present attitude on the part of the Treasury something that cannot possibly be revised? If they maintain that they feel themselves bound by Acts of Parliament, they have already broken these Acts of Parliament. What right had they to withdraw a bonus already granted? Those who have retired, naturally retired in exceedingly large numbers during that specially favourable period, which they knew would very soon come to an end. I do not presume to say that the retirement was due to the fact that the Treasury suddenly woke up to the fact that the number of these officials had been increased to an exaggerated and lavish extent, but is it necessary that the Treasury, having been generous, should carry that generosity further?

I know it has been suggested—and I have been asked to take part in an agitation—that you should revise all pensions. I refused to do it, and I think the Treasury is not called upon to do it. A bargain has been made, and the people who made it—I am one of those who did make it—have made their bargain, and I do not think it would be a proper thing to revise the pensions of those who have already retired, but when it comes to be a question of new retirements I think a better case than the Treasury has yet made out should be put before us before we agree to this Estimate. Do not let us he told that the Treasury are tied hard and fast by an Act of Parliament. I have shown that they themselves have shown that they are not so tied. Do not let us be told that a bonus, an ex gratia payment, which a man had no right to expect, however fair it might have been, stands on the same footing as a salary offered to him when he took office and on the faith of which he entered the service of the State. That is not the case. This is something quite different, and I say that it is for the civil servants to leave it to the House of Commons and to the Treasury, as the officers of the House of Commons, to say how far this bonus should apply when it comes to the consideration of the pension.

Lieut.-Colonel A. MURRAY:

I have listened very carefully to this Debate, and I cannot see that there are two sides to this question. Indeed, I imagine that the Financial Secretary, after the speeches which have been delivered from every quarter of the House will now give way. The right hon. Member for Peebles (Sir D. Maclean) suggested that it might not be possible to make an alteration of this particular sum, but that the Government should review the whole situation. The right hon. Baronet the Member for the City of London (Sir F. Banbury) and other speakers have suggested that it is quite possible now to review the whole situation, not merely for the future but now, and that is certainly a view to which I incline. The right hon. Member for the Scottish Universities (Sir H. Craik) said: "Do not let the Treasury tell us it is bound by Acts of Parliament."

Photo of Sir Henry Craik Sir Henry Craik , Combined Scottish Universities

They are bound like everybody else, of course, but I say there are no Acts of Parliament here to bind them to do this particular thing.

Lieut.-Colonel MURRAY:

That, I think, is the case, and if the Financial Secretary says that they are under a pledge, I shall be inclined to ask, what is nowadays the value of a pledge? Pledges have been made in recent years to various sections of the community, but they have been broken by one stroke of the pen. A pledge was made to agriculturists in the year 1920, under which many farmers bought their farms, and have since suffered very great losses. There was also the pledge to the agricultural labourers. Those pledges have been broken. The path of the Government is strewn with broken pledges, and an extra broken pledge here and there, so far as I can see, would make no difference at all. The real question is, what is just for the taxpayer, and what is just for the civil servant in this particular case? Listening, as I have been, to the speeches which have been made, so far as I have been able to form a judgment, it, is that this particular sum should be reviewed now, in the light of those speeches, and earnestly hope the Financial Secretary will be prepared to do that.

Photo of Mr Edward Young Mr Edward Young , Norwich

There is one observation which, I think, has fallen from every Member who has taken part so far in the Debate which I particularly welcome. It is that the criticisms which are advanced against the Government in this respect are intended to have, no recoil of any sort or kind upon the heads of the civil servants themselves. I know the House, will pardon my laying emphasis on that at the beginning of my observations, lest any of the deserving old servants of the State, when they come to read our deliberations, were to suppose that they were being attacked by the Mem- bers of the House, or needed any defence from me. In what I have to say I recognise and welcome that I am not called upon to defend the servants of the State for the action of the Government. I cannot but feel that a certain amount of the criticisms which have been advanced against this Estimate have been based upon, not a misunderstanding as to the principles, but a misunderstanding as to the way in which those principles work out in, practice. It is, I think, present in the minds of many Members of the House that the pensionaires are leaving the service of the State, and going away with some large permanent increase to their pensions, exceeding anything to which they are fairly entitled in respect of what is likely to be the permanent increase in the cost of living during their lifetime. I believe I can satisfy the House that that is not so. In the first place, let me recall this to the attention of the House. We are dealing here with lives that, owing to the course of Nature, have only a comparatively short number of years to run. These are not permanent charges on the State. A pension to a man of over 60, and averaging substantially over 60 in the whole pensionaire class, is nothing in the nature of a permanent charge.

What is the actual way in which this scheme works? It is somewhat intricate, and, in order to give the House any clear idea of how it works, I must ask the House to follow me through a very brief explanation. The amount of the bonus pensionable, in the first place, is not the whole bonus, as has been quite clearly explained by the right hon. Member for Peebles (Sir D. Maclean). It is only 75 per cent. of the bonus that is pensionable, and, as he has also explained very fairly, correcting the financial error into which the fell on the previous occasion, the pension does not consist of 75 per cent. of the bonus, but only 75 per cent. of the bonus is pensionable. The maximum pension anyone can get is forty-eightieths of his retiring salary. He gets one-eightieth for every year of his service up to 40 years, so that the maximum he can get is one-half, and, therefore, the maximum pension of one who has served the State long and well for 40 years, so far as the bonus is concerned, is one-half of three-quarters of the bonus. That is, three-eighths of the bonus, which is nothing like the whole bonus.

Now, what is the bonus? Not, perhaps, among Members of the House, who have studied the question, but outside, in less well-informed quarters, it is no doubt supposed that the bonus is calculated to compensate a civil servant for every rise in the cost of living at any time. That is, of course, very far from being the case. The actual bonus to the civil servant is only a fractional cost of the statistically calculated rise in the cost of living at the time the bonus is paid. Let me take the range of salaries which has attracted, and is likely to attract-, most criticism; that is, the range of salaries of £500 and over. What is the amount of the bonus on the Civil Service salary of £500 at the present time? It is nothing like the actual total rise in the cost of living since the pre-War level. The bonus on the salary of 2500 now is 45 per cent., so that it is not the amount of the rise in the cost of living, which is at the present time 88 per cent., but 45 per cent., or, roughly, half, that he gets by way of bonus. That is not all. That is the actual bonus scheme, but the House must remember that quite lately we have, by a special cut of the executive, reduced that normal bonus of 45 per cent. on this man's salary of £500. That is what has usually been referred to in the phrase of the day as the "super-cut," which ranges from 10 per cent. redaction on this bonus of 45 per cent. in the case of a man with £500, and no less than 60 per cent. reduction in the case of a man with £1,600 a year. On a salary of over £2,000 a year, as the House knows, the civil servant gets nothing at all in the way of bonus. So that it comes to this. A man who has served 40 years for his maximum pension gets in the way of pensionable allowance one-half of three-quarters of the bonus.

Photo of Sir John Butcher Sir John Butcher , City of York

I think it would help us very much if the hon. Gentleman would tell us, without going into all these fractions, what is the bonus on salaries of £500, £750 and £1,000 respectively.

Photo of Mr Edward Young Mr Edward Young , Norwich

I was coming to that. As I say, all that the civil servant, so much abused in this respect, gets in pension in respect of the bonus addition is three-eighths of the approximate increase in the cost of living at the present time. The figure which I will give the hon. and Learned Member for York (Sir J. Butcher) is an illustration of that. In no case in which the bonus addition is given can it be bigger than on a pension of £538 a year, and there the increase due to making the bonus pensionable is about 1150.

Photo of Mr Stephen Walsh Mr Stephen Walsh , Ince

The first £200 does not count.

Photo of Mr Edward Young Mr Edward Young , Norwich

I have taken now the very strongest case against myself, that in no case can the increase due to making the bonus pensionable be more than £150 a year, and that happens to be a pension of £538.

Photo of Lord Robert Cecil Lord Robert Cecil , Hitchin

Can the hon. Gentleman tell us what it would be without the bonus, and what with?

Photo of Mr Edward Young Mr Edward Young , Norwich

Without the bonus it would be £538, and with the bonus £151 more.

Photo of Mr Frederick Banbury Mr Frederick Banbury , City of London

May I ask if that was the highest bonus in existence two years ago?

5.0 P.M.

Photo of Mr Edward Young Mr Edward Young , Norwich

Yes, that would be on the peak scale. I think that interests the House most, because, as I say, it is the peak of the bonus addition to the pension. In no case could it be more, and I hope I have convinced the House that it is not unduly large. [HON. MEMBERS "What is the salary?"] I have not got that just at the moment, but I will get it. I have selected this instance because it is the instance in which the bonus addition to the pension is the biggest possible amount. It is the worst case against me. I can now give to the House what the.salary is on what that bonus is based. It is £1,077, the normal pension being £538 without the bonus, and the effect, of the bonus is to add £150 to that. In the case of any other salary and any other pension it would be even smaller than that. I believe, however, the House will regard more the actual facts of the total figure in the light of the experience of what is a fair pension than they will regard the mere ethical points as to what is a right basis of a calculation for making a pension. I freely recognise that it is my task to convince the House in this matter. I quite recognise that what affects the mind of the House in this matter is that we are casting burdens upon the taxpayer which the taxpayer ought not in fairness to be called upon to bear. In the course of discussion it is evident that the House is more interested—and rightly—in the practical aspect of the question than in these rather fine, almost casuistical, discussions as to what is the right basis for the pension.

I ask the House in the first place to recognise that we are here dealing with figures which depend for their significance on the total, and not upon salaries of over £500, not upon the highly-paid civil servants, about whom I think it is not possible to make such a strong case as to need and urgency, because those with larger salaries, no doubt, will not feel the pinch and difficulty of the state of the times such as those with smaller salaries. The matter is much more pertinent to those whose salaries are under £500. In our previous discussion of this Estimate in the Committee of Supply, I was asked for information as to the whole range of the salaries which was covered by this Vote. The House will, I am sure, recognise that to give accurate statistics for the amounts covered by Supplementary Estimates, by only adding something additional to the main Estimate, is not wholly to the point. But I have done my best to get illustrative figures which will demonstrate to the House the sort of range of salaries with which we are dealing in these Supplementary Estimates. The figures will enable the House to see where in the pensions the burden lies.

In the first place, as regards the general Civil Service Estimates, like we are taking now, the number of pensions awarded in the quarter ending 30th September, 1921, which is the most important quarter, and the quarter covered by this Supplementary Estimate was 1,453. Of that number 1,124 were pensions on salaries and bonus below £500, and only 329 were pensions on salaries above £500 and bonus. The whole weight of the thing lies on the small salaries and not on the big salaries at all. Further, as regards the Customs which, as the House knows, is rather a specialised service where high salaries are numerous, the total number of retirements in 1921–2 was 641. Of this number the number above the £500 salary was 261, and the number below the £500 was 480. I have quoted these figures to the House, and I believe they imply support to the statement which I made to the Committee when this Estimate was being considered previously, that we are not here dealing with extraordinary salaries, with large salaries and the pensions of higher civil servants, but we are here dealing with lowly paid civil servants in a small position, in close touch and closely at grips with the great difficulty entailed by the increase in the cost of living. I have to convince the House by illustration that the pensions we are paying in the case of such salaries are not excessive or unreasonable. That is really the root of the matter.

Let me quote to the House certain figures. I begin with an instance of the postman, who is about typical of the great run of the more lowly-paid members of the Civil Service. Take the weekly wage of a postman in a large provincial town. His weekly wage, with bonus, is altogether a maximum of 88s. 6d. per week. This is the highest pensionable income. At the present time the full pension on which be can retire at 60 years of age, after 40 years' service, taking, under this scheme, against which the criticism of the House has been directed, is 38s. a week. I venture to ask any Member of the House who is acquainted with the possibilities of living at the present time whether any reasonable employer would be objected to on the ground of extravagance if, after 40 years' service, he was to retire a servant who has served him well on a pension of 38s. a week?

Photo of Mr James Wilson Mr James Wilson , Dudley

The employer never gives them anything.

Photo of Mr James Wilson Mr James Wilson , Dudley

The employer does not give them 38s. a week for working for him.

Photo of Mr Edward Young Mr Edward Young , Norwich

Supposing none of the bonus had been pensionable at all, supposing we had simply said that we would retire the postmen on their usual salary, it would have meant that men of 60 after 40 years' service would have been given a pension of 20s. a week. With great confidence I ask the House whether it would be possible to contend that that would be reasonable?

Photo of Lord Robert Cecil Lord Robert Cecil , Hitchin

I thought my hon. and gallant Friend told us that the highest possible difference was in the case of a pension of £538 a year, and that it was £150, something between a third and a quarter addition. Now he tells us that in this case of the postman it is nearly double. I do not understand how that is.

Photo of Mr Edward Young Mr Edward Young , Norwich

The difference in that case is about a quarter the £150 to which I referred as the biggest sum that can be paid. The point, however, I was making was this—and I return to it because I believe it is the root of the matter and that the attention of the House should not be diverted from it. Here we have a typical civil servant who has been retired under this scheme, and I would ask the House not to adopt so much the higher salaries, which are of little significance with regard to this Estimate, but the typical civil servant for whom the bulk of the money is needed.

Photo of Mr Frederick Banbury Mr Frederick Banbury , City of London

I understand that 38s. is what the provincial postmen, not the London postmen, would retire upon. What would that man's wages he in 1913?

Photo of Mr Edward Young Mr Edward Young , Norwich

I am afraid I cannot lay my hand upon figures of that sort in the middle of what is intended to be a Supplementary Estimate, but I should be very glad to obtain the information for the right hon. Baronet before I he close of our discussion. The figures which I quoted—which have already been too numerous—are those which appear to be essential to convey to the House the impression I desired to convey. Let me ask the House not to divert its mind, but to concentrate it upon what seems to be most significant in connection with this discussion and this scheme which we are now criticising, under which we are able to put the typical civil servant, that is the postman, on a pension of 38s. a week. I submit that is reasonable and that it not imposing upon the taxpayer a burden more than should be imposed. Had it not been for this arrangement of a pension and bonus we should have had to dismiss the postmen on a pension of 20s. a week. I believe with great confidence that the House will say that that would have been a disgrace, a disgrace to the State if it has to observe any sort of standard as reasonable.

In the course of our previous discussion a point was made against this scheme that it was unduly favourable to civil servants in comparison with other services of the State. I rather understood the right hon. Gentleman the Member for Paisley (Mr. Asquith) to be brushing over that argument when he challenged me to produce in the whole range of employment outside the Civil Service any scheme as favourable to the pensioners as this one. I feel that I am certainly under an obligation to satisfy the House that as regard the Civil Service no favour is being shown it as against the other servants of the State, the Army, the Navy, and so on. If I can satisfy the House that the effect of this scheme, in winch a bonus is made for the special purposes pensionable, is only to make the pension about as good for the civil servants as other schemes are for the soldier and the sailor—that it is only reasonable for the Civil Service—then it will he well. I may perhaps say this: that the increase in the pension of the naval officer per cent. over the pre-War basis is 50—that is a long service pension. The increase in the pension of the Army officer over his pre-War pension varies from 50 per cent. to 100 per cent.—I cannot give any average figure—while the increase on the war bonus of the civil servant with £800, say, whom I take as comparable to the naval and military officer with the peak pension, is 50 per cent. In view of this test of reasonability there has no evidence been given that the civil servants' scheme—

Photo of Mr Donald Maclean Mr Donald Maclean , Peebles and Southern

Will the Financial Secretary to the Treasury tell us whether in the statistics he has just given us by way of comparison in the Civil Service and in the Army and Navy, these additions made of war bonus were additional to the cost of living or additional to the salary?

Photo of Mr Edward Young Mr Edward Young , Norwich

The addition to the military and naval pay was made to meet the increased cost of living, but it did not follow the line of the Civil Service bonus scheme. What I have taken are strictly comparable figures of the increases of the pensions over the pre-War pension. I trust that figure will satisfy the House, and it shows how much more this class got before the War in comparison with which the civil servant is no better off than the naval or military officer. The same in true as between the naval ratings and the soldiers of the Army, and the lowly-paid civil servant in the lower ranks of the Civil Service. I think it is necessary to give these figures in order to remove the wrong impression that very large and unreason- able increases of bonus were being made to the Civil Service above the rate of bonuses paid elsewhere, and to remove the impression that what was being paid was absolutely unreasonable and out of all relation to any rise in the cost of living.

I trust these figures will satisfy the House that so far from that being the case, taking them in comparison with what you need to live upon, the pensions being paid are not too large, and in comparison to the pensions paid to other servants of the State they are not disproportionate or too big. If you compare them with the increase in the cost of living, the allowance made to the civil servant in respect of the rise in the cost of living is very trifling in comparison, and so far from giving him the whole rise in the cost of living, we only give him a very small part of the actual estimated rise.

Photo of Mr Thomas Warner Mr Thomas Warner , Lichfield

The hon. Gentleman has given the case of the officer in the Army and Navy and compared his pension with the higher civil servant's pension, but he has not given the case of the sergeant or the petty officer who served for a long time and compared him with the postman.

Photo of Mr Edward Young Mr Edward Young , Norwich

I have not done so, because I did not wish to weary the House, but I will give the figures. The increase in the pension of the naval rating, in comparison with his pension before the War, is very nearly 200 per cent. The increase in the pension of the man in the Army is 150 per cent. If you take the postman with the maximum service, his increase is 120 per cent., se that, as a matter of fact, in the case of the lower-paid ranks the Civil Service compares less favourably than with the pension of the man in the Navy or the Army.

Photo of Sir William Pearce Sir William Pearce , Stepney Limehouse

We do not happen to know what the exact figure is in the Army and the Navy.

Photo of Mr Edward Young Mr Edward Young , Norwich

I find very great difficulty in giving a corresponding figure, but I do not think if I could give it that it would inform the House very much. In such a rapid summary it appears to me better to concentrate attention upon the real key figure which is, as regards this comparison between Military and Civil Service pensions, that the soldier's pension has increased 150 per cent. in comparison to what it was before the War, and that the postman's pension has increased by 120 per cent.

Photo of Mr Frederick Banbury Mr Frederick Banbury , City of London

Was not the pension in the Army and the Navy very small before the War?

Photo of Mr Edward Young Mr Edward Young , Norwich

Yes, and so was the postman's pension. It is by no means admitted that, as regards a pre-War comparison, an equally strong argument might be advanced that the pensions of the postmen and the lower-paid ranks of the Civil Service were as inadequate as the pensions of the soldier and the sailor. One or two general arguments were advanced upon which I would like to say a word of elucidation. A very natural error has been made in interpreting the actual hearing of the Estimate. As I have previously explained, the second sub-head is the amount necessary in order to provide for the statutory lump sum which would have to be paid whether the bonus was pensionable or not, and the actual amount added by the pensionable bonus is a very much less sum than that represented by the second sub-head. The argument was advanced by the right hon. Gentleman the Member for the Scottish Universities (Sir H. Craik) that because the Treasury were free to re-allocate the percentage allowance of bonus on the super cut, they should be able to revise this scheme of dealing with the pensions. I think that shows a misconception of the whole basis of the pension which I advanced on a previous occasion as to the necessity for this amount. The bonus itself is based upon the Whitley Agreement for the Civil Service, but the necessity for making part of the bonus pensionable is not based at bottom upon any such agreement, but it is based upon the fact that the emoluments paid to the Civil Service are to be pensioned. The argument which has been used is that a sum which is only paid for a number of years is not strictly an emolument.

Photo of Sir Henry Craik Sir Henry Craik , Combined Scottish Universities

Is it not the case that this bonus, paid over a series of years, necessarily varies from year to year in its amount, and may in time disappear altogether?

Photo of Mr Edward Young Mr Edward Young , Norwich

Yes, and I think that is an inherent difficulty in the argument advanced by the right hon. Gentleman and others who have taken the same view. Any pension is based upon the salary which the man receives at the time he retires, and that salary often varies over a period of years. The fact that the bonus varies does not make it different to his ordinary remuneration. You do not pension a man on his average salary, but upon the salary paid to him at the time of his retirement, and upon his emoluments. I fail to understand how this particular allowance cannot be called an emolument. I submit for the consideration of the House that common sense, as well as the legal view of what the true rights of pensioners are, is this, that you calculate the man's pension on what he is getting at the time he retires, leaving out of the question whether it is a matter of bonus or not.

The real question is what his actual remuneration is when he retires, and you pension him on that. Surely you must take into account the fact that if the man had gone on in the service, his salary would have fallen with the fall in the cost of living. My answer to that argument is that we have done this, and that is just what I explained on the previous occasion. The effect of reducing part of his bonus upon which you pension him is, in fact, taking into account the fall in the cost of living. Hon. Members argue that you ought to allow for the coming fall in the cost of living but my answer is that this has been done by reducing the pensionable part of the bonus by 25 per cent. I believe that to some extent these criticisms have been made because it has not been realised that the actual bonuses are not more than is barely necessary, and which any good employer would give at the present time. For these reasons I think the pension paid on the temporary bonus is justified.

Photo of Mr Stephen Walsh Mr Stephen Walsh , Ince

I am very glad to have heard the concluding remarks of the hon. Gentleman who has just sat down, because this Estimate has given rise to considerable searchings in the mind of the Committee. I do not think there is a single hon. Member who has a complaint to make as to the zeal and ability of the civil servant, and I would like to re-echo from these benches my appreciation. There is not a single hon. Member here who has been brought into contact with the Civil Service who could fail to recognise the great zeal and, indeed, the self-sacrifice that many of them have shown. I think, after all, this is a matter of whether the obligation into which this House has entered shall or shall not be observed.

Some years ago there was nobody in the country so keen upon the desirability of entering into Whitley agreements for removing the causes of friction between employers and employed as the Members of this House; indeed, the Whitley Council became one of daily usage, and the name of the Speaker of this House is most honourably associated with that particular endeavour on the part of employers and employed to lessen the causes of friction if not entirely to remove them. An hon. Friend near me reminds me that this occurred when wages were going up. I am not going for one moment to carp at the motives that animated practically every Member of this House when they urged on the nation generally the need for removing causes of friction between employers and workmen. If that need ever existed, as it undoubtedly does, it surely exists as much on the part of this House in its relations towards its servants as it does on the part of employers of labour outside. I am speaking subject to some little correction, but I think four or five years have elapsed since the Civil Service Whitley Council was established. It was about 1915 that the Whitley Council was set up with the complete assent of this House, and there has never been a single word spoken by anyone in this House or outside against the composition of the Council. It has never been suggested for a single moment that its composition was such as to throw doubt on the honesty of its findings. It is, therefore, I think, rather late in the day now to suggest that the composition of the Whitley Council in respect of the Civil Service is not such as would justify us in placing full reliance on the honesty of its findings.

What are those findings? Remember that everyone of these pensioned men, as the Financial Secretary has stated, had been for a very long time in the service of the State. As time progressed the civil servant chose what he conceived was the proper time to retire, and he retired on conditions that were perfectly well known and had been openly agreed upon between Parliament and the service. These men retired when they had done 40 years' service, or at such other period as they were entitled to. They are of course all established men. Every penny of this Vote applies to men who have been in the established service of the State, and in retiring as they did they took no unfair advantage of any conditions of service. They retired in fact under conditions which were fully justified, and they got their 40/80ths or whatever the amount was and took not a single copper more than they were entitled to. During the War events took place which raised the cost of living enormously. Can anyone imagine that a servant of this House should be debarred from receiving a legitimate increase in his emoluments when affected by the rise in the cost of living just as in the same way people outside this House got their wages and salaries increased? Surely the people whom we employ have the same right to urge upon Parliament that in respect of the cost of living having gone up there ought to be proper consideration paid to that fact. When the War itself ended the conditions of peace times were not restored, and even to-day the cost of living, according to the official figure, is 88 per cent. above the pre-War figure. Personally I think it is much nearer 108 per cent above pre-War cost, but taking the lower figures, can anyone justify this House in saying to these men, "You have given us 40 years or more devoted service, but utterly regardless of the fact that the War has resulted in conditions which have greatly increased the cost of living, you are not to receive in your pension any recognition of the bonus we paid to our servants. We will pay no attention to the rise in the cost of living, we will pension you on the salary you actually received, but the bonus we allowed you shall not be taken into account? "

Have we taken an undue proportion of that bonus into account? I submit the Financial Secretary is entitled to say that we have not. Only 75 per cent. of the bonus is pensionable, and only one-half of that is really brought into this account. To speak more accurately, only three-eighths of the amount is brought into the account. It should be remembered also that it was a very long time after the cost of living had commenced rising enormously that any recognition of it was made to this class of honourable public servant. The Financial Secretary is also right in saying that we have discounted in advance the value of the pension chargeable on the actual amount of the bonus paid. When it is seen we are only giving 50 per cent. of the three-fourths increase in the cost of living, surely it must be admitted that provision is made for years in advance for any possible fall in that cost. The 50 per cent. now paid is by no means equal to the enormous increase in the cost of living which these people have to meet, and therefore we are not entitled to vote against this Estimate. To carry my point further, I ask hon. Members to believe that the party with which I am more directly associated has often been very seriously aggrieved when the State has, as we conceive, broken its obligations to them. I could enumerate cases—it would serve no useful purpose now to do so—but the mere fact that in our opinion the State has departed from its pledged obligations does not justify our continuing that kind of policy. Two wrongs never make a right. It is quite true to say that the Government have departed from their obligations to the miners, the agriculturists and many other people. But that is no justification—

Photo of Mr John Whitley Mr John Whitley , Halifax

The right hon. Gentleman is carrying his point far beyond the Supplementary Estimate.

Photo of Mr Stephen Walsh Mr Stephen Walsh , Ince

These arguments have all of them been dealt with in this Debate without the slightest attempt being made by you or your predecessor in the Chair to rule them out of order.

Photo of Mr John Whitley Mr John Whitley , Halifax

I understood the right hon. Gentleman was bringing in contentious matters.

Photo of Mr Stephen Walsh Mr Stephen Walsh , Ince

Oh, no. I was not doing that, except to point out that the mere fact that obligations have been broken in the past does not justify this House this afternoon in breaking further obligations. It is true that the Civil Service Whitley Council went fully into this matter, and that from the lowest paid civil servant to the highest paid the whole position was reviewed. This is the result of their findings, and I think it would be a grievous departure on the part of this House if it allowed the impression to develop more widely than at present, that the House is unmindful of its obligations to its servants. We ought to see to it that, whatever we may do with regard to our own emoluments and our pensions, if we ever live to receive them, at least in the minds of servants who have admittedly given faithful and efficient service, there shall not dwell any feeling that the State is unmindful of the fact that it had the best of their service before they retired. Very few years will still remain to many of them to receive this pension guaranteed by the State, a pension determined by their Council, and it would be a grievous error on our part if we did anything to create distrust. The precedent would not rest there. Every employer would be entitled to say, "It is true that in the industry with which I am associated we have set up a Whitley Council, and have agreed upon a certain wage and a certain retiring pension, but it is not binding on me." There is no ill-conditioned employer who would not think he received encouragement and assistance in taking similar action to that which had been taken by the State in breaking its obligations, as it would do if the House this afternoon agreed to act on the lines suggested in this Amendment. I hope we shall not do anything of the kind. Let us see to it that the bond we have entered into with these people is honoured. I speak for the party with which I am associated when I say we shall give the Government our assistance this afternoon, although possibly it is a rather unusual course of procedure to adopt.

Photo of Viscount  Wolmer Viscount Wolmer , Aldershot

We all know that when the Government wish to perpetrate a piece of extravagance they can rely on the absolutely undivided support of the Labour party. I am glad to see the right hon. Member for Ince (Mr. Walsh) in his old role of supporting the Coalition Government in some wasteful extravagant policy. But there was one remark which fell from the right hon. Gentleman with which I most heartily agree. I think every Member of this House agreed with him when he said that he did not wish to see the State repudiate its obligations. That is a question on which I am entirely with him, but I do not see how it arises on this Vote. These civil servants entered the service of the State on certain conditions. During their period of service the State gave them a bonus in order to enable them to keep pace with the increased cost of living. That was a bonus given by the State. There was no obligation on the part of the State to give it, and therefore the civil servant has no right to claim that the bonus shall form part of the pension.

Photo of Colonel Josiah Wedgwood Colonel Josiah Wedgwood , Newcastle-under-Lyme

Did the Noble Lord say the State gave the bonus in order to keep faith with the Civil Service or was it in order to keep pace with the increased cost of living?

Photo of Viscount  Wolmer Viscount Wolmer , Aldershot

To keep pace; I said, with the increase in the cost of living. The right hon. Gentleman the Member for Ince said there was an obligation on the part of the State to assess the pension on the bonus. With that argument I entirely disagree. I can see no obligation on the part of the State to treat this bonus as an emolument on which pensions should be paid. If the hon. Gentleman can convince me that there was an obligation, that the State had given an undertaking, that these civil servants had entered their profession on an under standing of that sort, I agree that that, would be an entirely different matter. Therefore, the only question that remains is whether these civil servants are entitled to this increased pension as an act of justice. Let me take the instance that the Financial Secretary gave to the House, namely, that of a postman in a provincial town, who at the present moment is receiving a salary of 88s. 6d. a week, and who, if he retires after 40 years' service, under the Government proposals will get a pension of 38s., while, if this Estimate were rejected, he would only get a pension of 20s.

Photo of Mr John Mills Mr John Mills , Dartford

And come on the guardians.

Photo of Viscount  Wolmer Viscount Wolmer , Aldershot

The point that I want to put to the hon. Gentleman and to the House is this: is this a scale on which the other wage-earners of the country are being remunerated at the present moment, and is it a scale on which it is possible that they could be remunerated? It is an entire fallacy to think that the rich pay all the taxes Everyone knows that the poor contribute to the taxes, and must contribute, just as much, in proportion, as the rich; and, as representing an agricultural constituency, I ask what right you have to tax agricultural labourers, who are only getting at the present moment 35s a week, and who, when they retire, will receive no pension at all, in order to give a pension of nearly £2 a week to a civil servant who is at the present moment receiving 88s. 6d.? The hon. Gentleman spoke of these pensions as being miserable to the last degree. He spoke as if he would like to increase them very much, and, of course, everyone would like to increase pensions if the State could afford it; but what right have we to give pensions on a scale for which other wage-earners in the country can never hope? The hon. Gentleman seemed to think that a pension of £1 a week was an impossibly low figure for a civil servant, but there are thousands of wage-earners in this country who will never get, and can never get, a pension of £1 a week. Would the hon. Gentleman argue for a moment that industry in this country is capable of paying a standard wage of 88s. and a pension at the age of 60 of 38s.?

Photo of Mr Edward Young Mr Edward Young , Norwich

The figures given by the Noble Lord are perfectly right, but I am not sure whether he heard my observation that the wage of 88s. 6d. per week is a maximum wage, after a definite period of service.

Photo of Viscount  Wolmer Viscount Wolmer , Aldershot

I did hear that, and to make my narrative complete I should qualify my hypothesis. Would the hon. Gentleman pretend for a moment that it would be possible, in the interests of this country, to have a scale of wages which enabled every man who had done 40 years' service to be paid at the rata of 88s. 6d. a week, and then to retire on a pension of 38s.? It is not a question whether we should not like it. Of course, everyone would like to see such a state of affairs. The question is, can the country afford it; can the industries of this country afford it? We know that it is quite impossible for the industries of this country to pay wages on that scale or anything like it in the general run of employment. What justification is there, therefore, for paying civil servants who are doing the same sort of work—that is to say, work that requires the same amount of skill and education and ability—that is performed by other wage-earners, a remuneration so vastly in excess of what other wage-earners can ever hope to obtain. The money has got to come from the wage-earners of this country in the long run. You cannot get away from that fact. The idea that all the taxes in the land can be placed upon the shoulders of the rich and then can be distributed in large salaries and pensions to civil servants, to the employés of the Government, is a complete fallacy. That is what the country is suffering from at the present moment. These vast Estimates, these swollen Budgets that greet us, are the result of the Government trying to create a new heaven and a new earth within their own Civil Service. They have fixed a standard of remuneration which represents the ideal rather than what it is possible to pay, and if this country wants to get back to solvency we must look the facts in the face. I venture to maintain that the Government has no right to pay these civil servants more than the market rate for labour. It cannot afford to pay more than what a good employer—

Photo of Mr James Hope Mr James Hope , Sheffield Central

The Noble Lord is getting on rather wide ground—a good deal wider than the actual pensions which we are now considering.

Photo of Viscount  Wolmer Viscount Wolmer , Aldershot

I am arguing whether it is right to increase the pensions of civil servants in relation to their bonuses, and I have endeavoured to argue that it would be impossible for industry as a whole to follow any such course. Therefore I say that the Government is not warranted in following that course, because it is not fair and right to the other wage-earners in the country that civil servants should be paid at a rate so grossly above the market rate of wages. If these civil servants had any contract with the Government that they were to receive such a pension when they retired, then, no matter how exaggerated thought the pension, I would not oppose it, because it would have been a question of contract. But confessedly there is no contract at issue at all. It is purely a question whether the Government are going to be generous to these men or not, and I say that they are being generous to men who are already better paid than most wage-earners in this country, and they are proposing to give them pensions to which hardly any wage-earners can dare to look forward. The Government is not justified in spending this money; the country cannot afford it; there is no statutory obligation on them to pay it. The money has to come out of the pockets of the wage-earners in the end, and, although they can always rely on the support of the Labour party in any extravagance, I hope they will not get the support of the rest of the House.

Photo of Sir Cyril Entwistle Sir Cyril Entwistle , Kingston upon Hull South West

I was interested in the speech of the hon. Member for Ince (Mr. S. Walsh) and agree with every word that he said in praise of Whitley Councils. The only criticism I have to make is that I do not see what is the relevance of what he said with regard to Whitley Councils to the point at issue. It was also very interesting to hear the right hon. Gentleman give general support and admiration to the Civil Service, as to which also I am in entire agreement with him. I think that some criticism might even be levelled at the hon. Gentleman who is in charge of this Estimate, that, in their various dealings with the question, the Government have not been too generous in their acknowledgment of the services rendered by their own officials, and therefore I am far from disagreeing w the general admiration of the character and nature of the services rendered by our civil servants: but again I say that that also is quite irrelevant to the issue on which we are asked to vote this afternoon. No adequate answer has been given to the point which has been raised that we are here awarding permanent pensions for life on the basis of a salary plus a fluctuating bonus. Obviously the natural and logical way in which to deal with this question, if there be any hardship in pensions being awarded on permanent salaries at the present time, is by adding a bonus to the pension, that bonus being variable on a sliding scale. If that were the proposal which the Government were putting before the House, I have no doubt that it would meet with general support, and it would have this great advantage to the country, that, if the cost of living falls to pre-War level or anything like it, the country would get that permanent benefit of a reduction in the pensions We are told, however. by the hon Gentleman that if the Government adopted that system it would result in so much inconvenience of machinery and administration, so much greater trouble to the officials, that the cost would not be worth the trouble involved. To my mind that is an argument which can hardly commend itself to the common sense of the House. Let us think what it means. The cost of living may fall to something like pre-War level in the course of a year, or two or three years. I do not know on what actuarial basis the average life of a pensioner is taken, but, at any rate, it is a considerable number of years. It may be 10, 15, 20, or 30 years; I do not know what it is, but it is certainly far longer than the cost of living is likely to continue at its present figure. Can we say that the slight additional expenditure during this temporary period of increase in the cost of living would more than counterbalance the permanent saving to the country on these pensions when the cost of living falls? The House will need a good deal more argument and a good deal more figures and data to convince it of that.

6.0 P.M.

We are told that the Government were bound to do this because, by Act of Parliament, pensions have to be based on the emoluments of civil servants. I believe that the right hon. Gentleman the Member for Peebles expressed a view rather contrary to the legal interpretation of emolument as including a temporary bonus, but I am not sure that I agree with him. I happen to have some knowledge of law, and am rather inclined to think that the term "emolument," having a very wide meaning, probably does include a bonus; but I say that that is no defence for the Government at all. This temporary war bonus was put on, and it would have been the simplest thing in the world, before any obligations had been incurred, before any hopes had been raised on which civil servants might be relying, to pass an Act of Parliament of one line merely saying that emoluments should not include for purposes of permanent pensions a temporary war bonus. I venture to think that on one would have challenged such an Act as being at all unfair or a breach of faith, in fact, it would have been one of the most popular Measures that this Government could have brought forward. There can, therefore, be no excuse on legal grounds. Admittedly, the term "emolument" was never designed to cover such temporary and fluctuating factor as the enormous increase in the cost of living due to the War and the exceptional thing known as a war bonus; so that it could not be said that there was any breach of faith or letting down of the permanent official by declaring that "emolument," under the Act, should not include a temporary bonus. I think, therefore, that that argument is on entirely false ground. There is another thing which strikes me as very extraordinary in the attitude of the Government in dealing with these questions of pensions, and that is that when they were dealing with the general bonus for officials in their last Estimate, the Chancellor of the Exchequer, with a great feeling of self-satisfaction, announced that the bonus of the higher-paid civil servants had been taken away altogether. That saved, I understand, about £500,000. At the very time when he was arrogating to himself this saving of a temporary charge of 1500,000 he was encouraging the civil servants to retire on pension when the bonus was at its very highest. I believe every encouragement was offered to get rid of these servants, partly, again, because they could gain credit in the country for exercising economies by reducing the Service, and a nice way that was of saving money to the State! By means of saving £500,000 in one hand of a temporary charge they were adding a permanent charge to the liabilities of the country. That is an instance of the mentality of the Coalition and its general workings. Being pressed in one direction they exercised economy and, as the result of it, in order, again to obtain a certain amount of popularity, they are adding to the charges more than the amount by which they are already saving the country. That is a very important consideration which the House ought to take into notice.

The hon. Member for Ince (Mr. S. Walsh) thought that any opposition to this proposal of the Government was attacking the Civil Service, and he thought that general support of the Civil Service was necessary. That argument is entirely beside the mark, because if you really asked for the honest opinion of the civil servants who are left in the Service to-day they would also be opposed to this system of giving to those particular servants who are fortunate enough to retire at this moment a higher pension than they will get. Here are civil servants who are continuing in the Service and going on to serve their country. They are to receive a much lower pension than servants who have not served their full period, but have been encouraged and induced to retire, and I understand there was a huge block of applications to obtain retirement because of this very system of pension based on temporary bonus. It is very unfair and unjust to the far larger mass of civil servants who have remained behind doing their duty than this smaller body of servants who have taken advantage of this illogical and ill-conceived plan of the Government to retiring people on permanent pensions, assessing the pension on the basis of a temporary and fluctuating salary. No answer at all has been given to the only logical course which the Government could have taken, which was to award the pension on the permanent salary, and if that was not sufficient under the present exceptional conditions, to award a bonus on the pension, which would be subject, on a sliding scale, to revision when the cost of living fell.

Photo of Lord Eustace Percy Lord Eustace Percy , Hastings

Some of us sitting on these Benches cannot help feeling a certain resentment when we are lectured by right hon. Gentlemen on the Front Bench opposite as to how we ought to carry out our obligations. I have been a civil servant myself, and I have had a bonus, which I did not keep long enough to be pensionable, and I am not going to be told by any hon. or right hon. Gentleman in this House that I have not got as high a feeling of gratitude for the Civil Service, and respect for it, and as great a determination to carry out my obligations towards it as they have. The right hon. Gentleman seemed to think that this was entirely a question of carrying out the agreement of a Whitley Council. It is no such thing. Even if it were, I think the House would be in a very difficult position if it were to allow the Government to shelter itself behind the agreements of an extra Parliamentary body. The Government is responsible for whatever their Whitley Council may decide, and responsible to us, but it is not in great part a question of the Whitley Council at all. Salaries above a certain level were excluded from the consideration of the Whitley Council and consequently the pensions on those salaries were excluded.

Photo of Mr Edward Young Mr Edward Young , Norwich

The Noble Lord is quite right about salaries over £500 a year being excluded, but the question of allowances was not excluded.

Photo of Lord Eustace Percy Lord Eustace Percy , Hastings

I think we must say that if any questions of pensions on higher salaries have been considered by the Whitley Council they should not have been so considered, and the Government should not have allowed them to be considered, because neither on the official side nor on the Civil Service side was there anyone who could take an impartial attitude on such a question. I know the Government tried to exclude this question from the Whitley Council, and if they failed to exclude any such question they failed very seriously in their duty. On this question of emoluments I am no lawyer and I will not quarrel with the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) on that subject, but the Treasury has always strenuously insisted that overtime was not pensionable. I have come across, as every other Member has done in his constituency, cases of very great hardship because of that rule that if a man during the last two years or year of his service works very hard indeed and increases his salary by reason of the amount of work he gives to the State, that is not to be considered in his pension at all—it is not an emolument —but if he does not give any extra work but gets his increased emolument automatically, it is to be pensionable Surely that is absurd. I know it is very easy to score off the Financial Secretary.to the Treasury on the Pension Laws. There is no set. of legislation in this country that wants revision, codification, and improvement so urgently as the Pension Laws. But in the situation which has been insisted on by almost everyone we feel fundamentally dissatisfied with the action of the Government in this matter and their lack of foresight, and when the Financial Secretary tells us that this makes no measurable difference, the difference it makes is the £380,000 in he Supplementary Estimate, and the right hon. Gentleman knows as well as anyone in this House that as a matter of fact he never anticipated that this pension bargain, so far as it was a bargain, which he came to would cost anything like this sum. In that situation we cannot bat feel intensely dissatisfied with the Government and cannot but vote against them.

Photo of Colonel Josiah Wedgwood Colonel Josiah Wedgwood , Newcastle-under-Lyme

I know what will happen to-morrow. Everyone of the stunt newspapers will come out with large flaring headlines—Alliance between Wastrel Labour and the Wastrel Government. We shall have the usual allusions to Poplar and, so far from the Government being the read villains of the piece, it will be Labour. No doubt, it is our gradual approach to power which creates this hostility. But apart from that altogether, let us make quite clear the standpoint of the Labour party in this matter. The Noble Lord opposite and the hon. and gallant Gentleman (Lieut.-Commander Kenworthy), having listened to the Debate, which has now gone on for two days, can still say that the Whitley Councils have nothing whatever to do with the Vote we are giving to-day. As a matter of fact, the Whitley Councils have everything to do with the Vote the Labour party is giving to-day. I think the decision of the Whitley Council in connection with the civil servants is wrong, or, at least, most unfortunate, but, having got that decision, we and the Government, and even the wastrel Labour party, are bound to stand by its decision as long as we stand by the Whitley Councils. I have always looked on the Whitley Councils with some suspicion, whether it be in connection with the civil servants or any of the great industries of the country. I think they are apt too often to become combines of worker and employer for the robbery of the public. But for good or evil we set up Whitley Councils in connection with civil servants. There seems to be still some doubt as to whether we are bound by the decisions of these Whitley Councils. The bonus was first made pensionable in part in connection with the Civil Service Arbitration Board Award of March, 1919. Subsequent agreements endorsed the principle and the present arrangement, under which 75 per cent. of the bonus received at the date of retirement reckons as an emolument for pension purposes, was embodied in the Civil Service Whitley Council Cost of Living Agreement, dated 14th May, 1920.

Photo of Lord Eustace Percy Lord Eustace Percy , Hastings

To what salaries did that agreement apply?

Photo of Colonel Josiah Wedgwood Colonel Josiah Wedgwood , Newcastle-under-Lyme

The Whitley Council Agreement in connection with civil servants applies to salaries under £500, but in that case they went beyond the ostensible scope of the Whitley Councils. I am afraid we must either throw over the Whitley Council on the ground that they went beyond their power or that their decision does not bind the House, or stand by them. On these benches we have complained of the action of the Government in not standing to their agreements. We think they have betrayed the working classes, for instance, over unemployment Insurance. Having guaranteed 20s. a week they cut them down to 15s. We think that they also broke the agreement with the agricultural labourers when they threw over the Wages Board, but two wrongs do not make one right. It will not be for us to complain of the action of the Government in connection with the agricultural labourer, or in connection with unemployed insurance benefit, and at the same time to urge the Government to break this agreement that they have come to with members of the Civil Service. I am impressed on the Labour Benches, as I was on any other bench on which I have sat, with the absolute necessity of any Government, whatever Government is in power, sticking to its agreements and keeping faith with the public, and with every section of the public, and it is on these grounds that I am asking my party, in spite of their own predisposition, which has been increased within the last two days, to take the line of action I have suggested. We must put our foot clown firmly, and say that agreements to which the Government is pledged have to be honoured, not only by the Government but by the Members of this House who take their responsibilities seriously.

It is all very well for the Noble Lord to get up and make a speech which will be invaluable to the "Daily Express" tomorrow; but that is not statesmanship. It may be politics as understood by his class, but it is not what the people ought to lend themselves to who desire to gain the confidence either of the Civil Service of this country or of the people to whom they are ultimately responsible, the electorate. We hold that this Agreement must stand. Personally, I would never have made the original arrangement. I think it is a ridiculous arrangement to which the Whitley Council came; an arrangement under which people must hurry up to get out of the Service now while the bonus is high. I would point out to those who desire to get out of the Service that they must be quick about it, because there is another cut of 20 per cent. coming on the 1st March, and if they wish to seize what I think is the foolish decision of the Whitley Council they must take advantage of it quickly. Whether that decision is wise or foolish we have to stick to that decision, and we mean to do so in the Lobby.

Mr. TREVELYAN THOMSON:

Many of us who are supporting the Amendment do so with the intention of keeping faith with the Civil Service, and also with a desire that so long as the cost of living is up the bonus should be paid on that account. What we object to is capitalising for all time the cost of living, which may be abnormally high at the present time. The Financial Secretary suggested that the. 75 per cent. which had been agreed to was a fair figure to arrive at, but I submit that the very fact that this Estimate for this year has been so tremendously increased is evidence that those who are to draw the pension imagine that they are going to score at the expense of the Government, and at the expense of the public, by the terms offered. To suggest that the Estimate can be exceeded by £360,000 in one year is surely evidence that the terms offered were more favourable than was originally anticipated. Whilst we keep faith with the Civil Service, and whilst we pay the bonus so long as the cost of living is up, we maintain that when the cost of living falls the State have the right to revise the bonus. The Financial Secretary suggested that in the Army and Navy there had been greater increases. I should like to ask him whether it is not a fact that in the pensions given in the Army and Navy part of the pension is open to reduction as the cost of living falls. If that is so, that surely means that his comparison is fallacious, and the illustration which he gave in support of his case as to the experience of the Army and Navy is surely an argument in favour of the contention put forward that there ought to be a variation in the pension according to the cost of living. Whilst it is perfectly reasonable to suggest that 38s. per week pension is not too much to pay to the postman, yet when the cost of living falls that pension should be gradually reduced. If not, who are you penalising?

We want to be fair all round. What about the old age pensioners who are getting their pre-War pensions? What about those in the Post Office service who are getting pre-War pensions? What about the pre-War civil servants, and the pre-War Army man who retired on pension? They have not been increased to this extent. While we desire to be fair to the Civil Service, we want to be fair to that larger community outside who, in one way or the other, through their food taxes or in other ways, will have to provide this extra payment, which some of us suggest is nor really due if the cost of living falls. Therefore, if we keep faith with what has been done in the past, so far as the payment of the bonus is concerned while the cost of living remains high, surely the Government might consider whether it is not possible to vary the pensions payable on bonus according to the cost of living. By capitalising the cost of living in the pension the Government are setting an example to the local authorities which will be hard for them to follow. In many industrial districts the rates are mounting up by leaps and bounds, and if the Government set up this wrong financial standard, and apply it to their civil servants, it will be very difficult for the local authorities to resist claims put forward by their employés when they are drawing up superannuation scales. Therefore, in the interests of the large industrial areas, we advocate a sound policy based on the lines put forward in the lines of the Amendment.

Photo of Hon. Esmond Harmsworth Hon. Esmond Harmsworth , Isle of Thanet

The hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood), on behalf of the Labour party, adopted a somewhat hilarious tone in reference to the two recent by-elections; but I would warn him that the result of those by-elections is not due to love for the Labour party, but to hatred of the Coalition in producing Estimates very similar to the one now before us, and forcing them through the House of Commons. The Financial Secretary to the Treasury wandered right round the real point. There are only two points at issue. First of all, why should a temporary War bonus be counted for the purposes of a permanent pension, and not on a sliding scale according to the cost of living, to which no one would object? The system that has been adopted means that in future these retired civil servants will be receiving a pension based on war bonus, irrespective of any fall in the cost of living. In the second place, the vital thing at the present time is that we should economise, but I do not think the repre- sentatives of the Government fully realise the state of the country. When this Vote came before the House in Committee last Wednesday, and was defended by the Government, and we failed to get a reduction, a deputation was actually interviewing the Chancellor of the Exchequer, representing the business men of the country, and telling him that unless we secure a reduction in expenditure and a reduction in taxation a financial crash is coming in the near future. No doubt many hon. Members read the result of the deputation.

Is it realised what this Vote cost last year and what it is costing this year? Last year the Vote cost £1,020,505, and this year,£1,607,604, or an increase of practically £500,000 for superannuation and retired allowances, while on the Vote for Customs and Excise the amount is £1,750,000. How does the Financial Secretary account for this enormous increase in the present year? When the last revision of bonus was made, the cost of living was 130 per cent. higher than in 1914, but the cost of living to-day is only 88 per cent. higher than the cost of living in 1914. Therefore, we are reckoning a cost of living basis which is 40 per cent. higher than that which prevails to-day, and all because the Treasury find it inexpedient or too troublesome to revise the cost of living at less than an interval of six months.

Are we going to get any reduction in any of these Estimates? The Government will come down on every one of the Supplementary Estimates and give reasons why we should not have a reduction. If any Estimate deserves to be reduced this Estimate does. When the division is taken to-day it will be an extremely interesting one, because if we are ever to get a reduction of expenditure it is going to be shown in to-day's division. The Labour party may vote for the Government, but I hope that the remaining Members of the House will give a majority against the Government on this question, in order to show that we do think seriously about this question. I ask the Financial Secretary if he will consider taking this matter back for further consideration, and giving another day for discussion. Consideration is required as to whether the war bonus should not be revised earlier than at six months' intervals. We shall have this Bill, year after year, coming up. Before we take this great burden upon us, as we shall do if we pass the Vote to-day, I hope we shall seriously consider the whole matter, and that the Financial Secretary will withdraw the Vote.

Photo of Mr Robert Young Mr Robert Young , Newton

The last speaker is evidently very optimistic that at no very far distant date the cost of living will fall to the pre-War level. I do not share that opinion, and I do not think there are many hon. Members who will agree with that opinion. The amount of bonus which we are discussing this afternoon, and upon which the pension is based is, so far as I can understand it, not equal to the cost of living at the present time. Even if it were, we have no right to run away from an obligation entailed upon us first by statutory enactment, and secondly by the decision of the Whitley Council. Last week when this matter was under discussion there was some surprise expressed that the Labour party, for some mysterious reason, did not vote. We were in quite a justifiable quandary for the moment. We recognised that something required investigation in relation to the bonus as to why it should become a part of a definite pension paid to any civil servant. I was under no misapprehension, I listened very carefully to the explanations given, and I heard it laid clown that emoluments were considered in the statutory Act as binding upon the Government, and that the word "emolument" included, for that purpose, the war bonus paid to civil servants.

I have got to ask myself not whether the word should be included, but whether the Government have given a just interpretation of the Act which they cited to us on that occasion. The right hon. Gentleman the Member for Peebles (Sir D. Maclean), if I remember aright, in the early part of the Debate was rather inclined to agree with the Government. Later on he changed his mind, because he had looked up the Statute and found that there were some words of a permissive character in the Statute. I would remind the right hon. Gentleman that the worst feature of legislation in this country in days gone by, whether passed by his party or by other party, has been that it made certain things permissive for the purpose of contracting unjustly the interests of those who are supposed to benefit. But I find this afternoon that the hon. and gallant Member for South-West Hull (Major Entwistle) is quite sure that the word "emolument" does cover war bonus. Then the first thing to determine—we have determined it to our own satisfaction—is that we have an obligation to the Civil Service as a result of that Act of Parliament. Not that we think that the war bonus is a good thing to be included in such a pension, because what we are doing to-day is not so much criticising the present Government as criticising the past Government who should have passed an Act of Parliament preventing bonuses becoming a part of the emolument.

That being our first position we find this second difficulty. The Civil Service, having made no claim, as I understand, as to the interpretation of the word, and asking that it should be added to their pension, the emolument was determined as part of the interpretation of the Act. Then the Whitley Council agreed that 75 per cent—they were very generous in my estimation in allowing 25 per cent. to be knocked off—should be the basis for pension. Having agreed to it we again find ourselves in the position of having to support the Government because we believe in Whitley Councils and are desirous that whatever decisions they come to should be carried out in the interests of all parties concerned. This is not a mere question of cutting down expenditure. It is a question of dealing honourably with people with whom you have entered into obligations, and of fulfilling duties to those people which you have undertaken. The civil servant in this particular instance is in the position of only receiving what is his just right under the Statute. Again I must impress upon the House that what the civil servants are receiving in addition, as the result of a war bonus, is not equal to the increased cost of living at present, and probably not for many a long day will the cost of living fall to that extent that those who have received a pension will be reaping anything on the increased cost of living as compared with the increased pension. Therefore, if there were any doubt as to the attitude of the Labour party on the last occasion, I being one who went into the Lobby in support of the Government, there will be no need to have any doubt on this occasion. We wish to observe the agreement which we think the Government are bound to carry out.

Photo of Mr Godfrey Collins Mr Godfrey Collins , Greenock

Two or three hon. Members have argued that, as the Whitley Council has inquired into this matter and come to some agreement, the House of Commons should therefore support their decision. I submit that if there be one subject which the House of Commons should examine and determine for itself, it is the decisions of the Whitley Council. To-day it is the custom of Departments to endeavour to influence the House of Commons. The Vote this evening will show, I think, that the House of Commons once again is going to reassert itself and take charge of this important matter. The Financial Secretary endeavoured to raise sympathy in all quarters of the House by his references to the case of postmen who to-day are receiving 88s. and will receive a pension under the present scheme of 38s. It is easy to raise the sympathy of hon. Members it is shared in all quarters. But the point is: is it fair to-day, when the War bonuses which my constituents and the constituents of every hon. Member receives are being reduced radically, that the Government should choose to standardise for all time the War bonus which the taxpayers are paying? There can be no compromise on such a simple matter.

My right hon. Friend the Member for Peebles (Sir D. Maclean), whose attitude on this matter is very simple and clear, presses upon the attention of the House the fact that the War bonus was granted for a specific and temporary purpose and that when men come to retire their pensions should not be based upon the amount which they have received, but that the question should be reviewed as the cost of living falls. One cannot say what the cost of living will be three of four years hence. It may well be only 25 per cent, above pre-War level. The value of money is falling. [HON. MEMBERS: "Rising!"] The price of commodities is falling, the rate of interest is falling, and this will tend to lower the price of goods which will directly affect the cost of living. Every hon. Member in every part of the House is anxious to see large pensions paid to the civil servants, but is it right for our sympathies, when they are aroused, to allow us to create a grave act of injustice? The Financial Secretary endeavoured to make light of the amount involved. Several hon. Members have already reminded the House that it is a considerable sum—nearly £500,000. It may be a small matter to the Government, but if they will go into the unemployment districts and hear the complaints of men who consider that they are receiving insufficient amount for unemployment benefit, and compare that with the generous regard under the present scheme for the civil servants who are receiving their pensions, I think that the Government will take up a different attitude in the matter.

My right hon. Friend the Member for Peebles reminded the House that civil servants who are to-day about to draw a pension of £660 in pre-War days would have drawn a pension of £423. The facts are not disputed. The Financial Secretary gave some figures to the House. His main figure was this, that the civil servant whose pension to-day under the present scheme is £688 would have had under the old scheme £538, which is a permanent increase of 25 per cent. The Government may think that that is not unfair to the general body of taxpayers, but in these days to place upon the taxpayers, whose burden is so heavy, such a burden as this is unfair. I have endeavoured to find the reason which prompts the action of the Government in this matter. It is a policy of largesse. They pour out public money to public servants in every Department. It now dawns on me where the Government have adopted this policy. According to the Chancellor of the Exchequer, the size of our National Debt is immaterial. An internal debt, whether large or small, is simply the transfer of money from one pocket to another. Therefore the size of our national expenditure is immaterial—

Photo of Mr John Whitley Mr John Whitley , Halifax

The hon. Member is going wide of the question which is under debate.

Photo of Mr Godfrey Collins Mr Godfrey Collins , Greenock

I am trying to probe the mind of the Government from their action in this matter. I submit-and this is a proposition which is supported by hon. Members in all quarters of the House—that to place this burden upon the taxpayer is an unsound and extravagant proposal.

Photo of Mr John Whitley Mr John Whitley , Halifax

Before this discussion goes further, I think it incumbent on me to remind the House of Standing Order No. 19, which is too often forgotten. It says that Mr. Speaker, after having called the attention of the House to the conduct of a Member who persists in the repetition either of his own arguments or of the arguments used by other Members, may direct him to discontinue his speech.

Photo of Mr George Barnes Mr George Barnes , Glasgow Gorbals

I shall endeavour, in the very few words I have to say, to keep within Mr. Speaker's ruling. I have not heard this Debate, except for the last 40 minutes or so, and I had no intention of taking part in it but for the extraordinary arguments which I heard addressed to the House by the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood), and by my old colleague the hon. Member for Newton (Mr. R. Young). The hon. Member adduced what seemed to me extraordinary arguments, and I was sorry to hear him putting up those arguments on behalf of my old colleagues of the Labour party. I am always sorry to vote against them, and sorry to speak against them, but I do so under a strong sense of duty. We are told that this House has to endorse an agreement made outside because civil servants have a right to benefit under that agreement. What authority has the right to deprive this House of one of its great functions, that of looking after the expenditure of the country? For my part, I decline to be bound by any such arrangement. I go further, and I say that I decline to be bound by an agreement of this kind entered into by two parties, both of whom will benefit under it. I do not recognise that as binding on the nation. We are told, forsooth, that the Whitley Councils are above Parliament. I do not admit that. But when it comes to seeking to bind Parliament by a Whitley Council consisting of civil servants on both sides, then it seems to me you are reducing these councils to an absurdity.

For my part I am going to assert my right as a Member of the House to look at this matter on its merits. My hon. Friend and old colleague (Mr. R. Young) has told us about the argument as to the cost of living being so much and so on. I agree with the right hon. Gentleman who has last spoken, that it is absurd. These pensions are to last a long time. Pensioners live a long time. One died some months ago at the age of 98 and that gentleman had drawn from the country something like half-a-million of money. I remember another one died within the last few years in Lancashire, at Grange-over-Sands, who had been 30 or 40 years living on the public Exchequer We should very carefully see to it, that we do not grant pensions based upon a temporary cost of living. How does the society of my hon. Friend and the society to which I have the honour to belong, deal with these matters? Do they give, pensions and allowances based upon the cost of living at the present time, and assume it is going to last for all time? Not at all. He knows as well as I do, that at this very moment tens of thou sands of his fellow-members and my fellow-members are walking the streets of every industrial centre, looking for work and unable to find it. What do they get? Do they get aliment based upon the increased cost of living? Not a single halfpenny. They get according to what the funds can stand, to which they have to look all their working lives I am going to apply exactly the same principle here. I do not blame the society for not increasing the benefit at the present time, because those who guide the destinies of the society know perfectly well that the funds will not stand it. Will the country's funds stand these constant inroads? After all, what are civil servants that they should be regarded as sacrosanct. I am sick and tired of public servants applying pressure to the Members of this House and getting what they are not entitled to. Therefore I am going to vote for the Amendment, and, in so doing, I think I shall be voting, not only in the interests of my constituents, but in the interests of the large numbers of men now out of work—who will have to contribute, by their rates and taxes, to the fund from which these pensions may come—and in the interests of the community as a whole.

Photo of Mr Robert Young Mr Robert Young , Newton

I feel I can save some time in regard to some matters of controversy by making a further explanation and an offer of what it, may be possible to do in order to meet the strongly expressed opinion of the House. [HON. MEMBERS: "Hear, hear!"] Perhaps the House will wait to hear the terms of what I have to lay before them, and I hope they will consider it very carefully. May I say, first of all, that this Estimate deals with the actual amount of all pensions already granted, and therefore, in any case, it is quite impossible not to press upon the House the necessity of giving us this Estimate as it stands. I am convinced the House would be unwilling to make any difference or inflict any change in regard to rights which have already accrued. What I understand to be the contention advanced with great force in our previous Debate, and also in this Debate, is that this system should not continue for the future, and that we should be prepared now to make some difference in it. That is the direction in which I think much can be done in order to meet the markedly expressed view of the House. It is clear, I think, that the main criticism, and that which is most strongly advanced—and I have had an opportunity of hearing and appreciating the points of different speakers—is that permanent pensions should not be unrelated to a subsequent fall in the cost of living. I have already given the reasons for what was done originally by the Treasury, and what we did in a very rough and ready way to meet the situation. I recognise the force of the contention which has been advanced that it does not adequately meet the case, and that it does leave future pensions insufficiently related to arty actual decrease in the cost of living.

I think that is really what is at the bottom of the criticism and that the House desires to see the pensions better related to the actual cost of living. What I will undertake to do is this: I will undertake, before any further Estimate is introduced to the House for pensions, to investigate the possibility of a scheme—we cannot put it too simply—for making pensions vary with the cost of living, by periodical reassessments. Without investigating the matter I can say little more than that. I am myself confident that we can find and work such a scheme, and I will ask the House for the present to allow me to leave it in that rather general way. I think the words I have given cover the real point in regard to which it is possible to meet the desires of the House. We shall investigate the possibility of a scheme for making pensions vary with the cost of living by periodical reassessment. [HON. MEMBERS: Both ways."] I should think so. The variations must be both ways. As I say, I am myself confident we can find and work such a scheme to be introduced before the next Estimate is laid before the House.

Photo of Sir Frederick Young Sir Frederick Young , Swindon

If the bonus forms the statutory basis for pension rights, how is it possible for the Government to vary it. after the officer has retired from service?

Photo of Mr Robert Young Mr Robert Young , Newton

The hon. Member must not have followed my argument on the subject, but, of course, it is a very technical matter. We never contended that it was possible to make public pensions vary with the cost of living from time to time. What we did say was that a man was entitled to a pension on the bonus at the time. We were, however, quite entitled to take into account the fact that the cost of living might go down. That is what we are trying to do in a rough and ready way. There can be no doubt there is no legal bar by agreement against our introducing some such scheme as I have mentioned.

Photo of Viscount  Wolmer Viscount Wolmer , Aldershot

What does the hon. Gentleman mean by "accrued rights"? Does he mean that this is money actually acquired by members of the Civil Service who have retired and have taken their pensions on the understanding it would be assessed on that basis?

Photo of Lord Robert Cecil Lord Robert Cecil , Hitchin

May I suggest that it is very difficult to follow at a moment's notice a proposal of this kind and see exactly if it will meet the views which have been expressed in the House and which I personally share? Would it not be possible to withdraw this Estimate and bring it up later? Before the House actually parts with its control over the matter, we should be quite sure we are really getting something effective. I am not suggesting, of course, that there is any want of confidence in the absolute good faith of the hon. Gentleman, but the matter is a complicated one and raises a very important question of principle, and it would be a great pity if we passed this Estimate and then found that the offer of the hon. Gentleman really did not meet the views of the House as expressed in this Debate. It might well be that the next occasion on which the matter would come up would be upon an Estimate coming under the Guillotine, which we would have no opportunity of discussing. If the hon. Gentleman can make some offer, either by way of withdrawing the Estimate or in some other way to meet this point, I should be very grateful to him. If not, of course, it will be open to us to move to adjourn the Debate.

Photo of Sir Frederick Young Sir Frederick Young , Swindon

I do not think the request of the Noble Lord is very reasonable, and I hope it will not be pressed. It will be remembered that our time-table for financial business is a very short one, extending only to the end of this month. Therefore, the House will understand that, as far as I am referring to the question of time and the business of the House, I am not merely making a point of punctilio or a point of no importance in asking the House to give us this Vote on the present occasion.

Photo of Lord Robert Cecil Lord Robert Cecil , Hitchin

Why is it so urgent?

Photo of Sir Frederick Young Sir Frederick Young , Swindon

We must get the Consolidated Fund Bill before the end of the month.

Photo of Lord Robert Cecil Lord Robert Cecil , Hitchin

Why is this Vote so urgent?

Photo of Sir Frederick Young Sir Frederick Young , Swindon

Because it is one of the large Votes. In these circumstances, I would point out to the House that there really can be no apprehension in view of the undertaking I have given. I quite realise the difficulty of following a complicated matter on the spur of the moment, but I would submit two considerations. In the first place, there is, I believe—subject to the bigger point—no real contention against the point that, in the case of the pensioners who have already got their money, that money must be voted for them, at any rate this year, on the ground that their rights have absolutely accrued for this year, and the House will scarcely refuse them the money for this year.[HON. MEMBERS>: "Why not?"] Need I argue that point? That is all that is contained in this Estimate. In the second place, I put it quite generally that, for the future, we shall introduce a scheme for making pensions vary with the cost of living by periodical reassessment. The Noble Lord has been good enough to.say he does not doubt the bonâ fides of my intention in giving that assurance. It is a simple one, and I think the House need have no apprehensions but that it will be possible to fulfil it.

7.0 P.M.

Photo of Mr Donald Maclean Mr Donald Maclean , Peebles and Southern

With the permission of the House, I wish to make this suggestion to the Financial Secretary to the Treasury. It is a very complicated matter as he has said, and I am quite certain that a very large number of hon. Members do not fully grasp the offer which he has made. I have had a better opportunity of following the Debate than perhaps most hon. Members, and there are at least two points that I should like cleared up. What I suggest is that the hon. Gentleman should postpone this discussion and take the Vote to-morrow night. Let us have an opportunity of seeing exactly what he means, and I can assure him, so far as I can speak for those who are associated with me, and perhaps there are more than that number who are in agreement with me on the general discussion to-day, that we would, in no delaying sense, discuss the matter. If we could have an opportunity of seeing in the OFFICIAL REPORT what the hon. Gentleman has said to-night, and if ho would draw up and place in the Vote Office to-morrow a wider memorandum, I think he would get his Vote to-morrow night without any discussion at all, on the understanding, of course, of the suggestion which he has made, which goes a long way, I admit, to meet the criticisms which we have advanced. I think that is the best way to treat the House of Commons, rather than that it should lose complete control to-night by passing this Vote as he has suggested. I assure the hon. and gallant Gentleman that we will treat the whole matter in no party spirit at all, but that it is the general desire that we should arrive at a clear understanding and having done that the House should let the Vote go.

Photo of Mr Carlyon Bellairs Mr Carlyon Bellairs , Maidstone

It is a little difficult to understand what the hon. Gentleman means. For the purpose of clearing my own mind I want to ask him one question. What does he mean by "accrued rights"? Does he refer to the pension for this year only of those who have already gone or does he refer to the pensions for all time and for all succeeding years. Secondly, does the understanding which he previously had in his mind lapse from the moment of this declaration with regard to those who may go out to-day or to-morrow or thereafter? If he would answer those two questions he would clear my mind considerably.

Photo of Mr Godfrey Locker-Lampson Mr Godfrey Locker-Lampson , Wood Green

I have listened to every single moment of this Debate since 4 o'clock, and I must confess that to my mind the speech made by the hon. Gentleman does alter very considerably the whole question. My hon. Friend knows very well that I have been very hostile indeed to the financial proposals of the Government, and that I continually vote against them in the Lobby. I do feel, however, that whenever the Government really and sincerely show a desire to economise and to meet the wishes of this House they ought to be encouraged to do so. Personally, I agree that it would be much better to postpone this Vote until to-morrow night; but in so far as it affects my own vote, while I had intended to vote for the Amendment, yet, in view of what my hon. Friend has said to-night, I feel that I cannot vote against him. I feel that the Government ought to be encouraged in economy. I believe that my hon. Friend, who sat on these benches a little time ago, is an economist at heart, and that he is doing his best. On the strength of what he has said, I, so far as this actual Vote is concerned, shall feel obliged to vote for the Government.

Photo of Captain William Benn Captain William Benn , Leith

I beg to move, "That the Debate be now adjourned."

In view of what has taken place and of the change of attitude, commendable as we think it, of the hon. Gentleman, I move the Adjournment in the interests of the convenience of all, and in order to give us an opportunity of considering the proposals that he makes.

Photo of Lieut-Colonel Leslie Wilson Lieut-Colonel Leslie Wilson , Reading

I am sure the House will realise how important it is to get these Supplementary Estimates. It is absolutely essential that this particular Supplementary Estimate should get through the Report Stage, so that it may be added to the Consolidated Fund Bill, of which it is necessary to take the Second Reading on Thursday. I want to meet the wishes of the House, and if I can get an understanding across the Table that this Vote will be taken as the first Order to-morrow, together with the-Report Stage of the other Supplementary Estimate—Customs Excise—I should then be willing to meet the wishes of the House that there should be an Adjournment of this Debate. I hope, however, in view of what has already been said, that the House will not use too much of the time to-morrow, because we have already given a considerable amount of time to this Estimate.

Photo of Mr Donald Maclean Mr Donald Maclean , Peebles and Southern

The hon. and gallant Gentleman has met the general sense of the House very fairly. I say, as far as I can pledge anybody, that the Debate to-morrow will be short and business-like, and I hope that there will be no difficulty whatever in arriving at a general agreement.

Question, "That the Debate be now adjourned," put, and agreed to.

Debate to be resumed To-morrow (Wednesday).