Service Pay and Allowances.

– in the House of Commons on 10th February 1942.

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Photo of Mr Winston Churchill Mr Winston Churchill , Epping

I have two statements to make to the House, one on Service Pay and Allowances, and the other on the new office of Minister of Production.

I take, first, the question of Service Pay and Allowances. As was promised before Christmas, His Majesty's Government have given careful consideration to the remuneration of the Armed Forces and have examined the various suggestions which at that time were put forward in debate in the House. We regard the improved War Service Grants Scheme, which was introduced as recently as last October, as an effective and flexible instrument for ensuring that the families of fighting men shall be guarded against hardship. We have, nevertheless, decided as a result of our review to make certain improvements relating both to current conditions and to post-war needs. Details of the proposals are contained in a White Paper which will be available to-day, and which I ask hon. Members to study.

There are three proposals designed to meet the wish expressed in the House for immediate improvement in the position of those with family responsibilities. In the first place, the Government have accepted the suggestion for a reduction, at the expense of the Exchequer, of 3s. 6d. in the compulsory allotments from their own pay made by men claiming family or dependant's allowances, thus increasing the total family resources by 3s. 6d. per week. The cost to the public of this improvement will be £17,500,000 a year. The second improvement is an increase in all children's allowances of 1s. per week per child, and the third a similar increase in the allowances paid to certain classes of dependant. The annual cost to the public of these improvements in allowances will be £5,000,000 more.

We have sought also for the best way of meeting the criticism—with which I must say that I personally always felt much concerned and very much disturbed about—that Service men are at a disadvantage, by comparison with civilians, in regard to the provision which they are able to make for the financial needs which they will have to face after the war. To my mind, it would be a very anomalous and invidious situation if those who had worn uniform had no nest-egg and everybody else had one as a result of savings from higher pay or through the Income Tax credits. We have decided to institute a system of post-war credits under which a sum of 6d. per day, or approximately £9 a year, will be set aside for all other ranks and ratings; the sixpences will be accumulated on behalf of the men, and will form a nest-egg available for use after the war and after discharge from the Forces. It is the intention of the Government that the introduction of this credit shall not prejudice the question, when the time comes to consider it, of granting a war gratuity to the Forces on appropriate lines. The cost to the public of this bonus will be £32,500,000 a year.

We have thus sought to combine immediate improvement in those cases where family responsibilities constitute a claim for the most sympathetic treatment possible, with a general provision for the difficult days which may face many of us when the war is over. The total cost, both current and deferred, of these improvements is £55,000,000 a year, and this figure will rise as the Forces expand further to over £60,000,000 a year. These are large figures, but I have no doubt that the burden which they represent will be patiently and cheerfuly borne.

Photo of Sir Harold Boyce Sir Harold Boyce , Gloucester

Can the Prime Minister state from what date these improvements will take place?

Photo of Mr Winston Churchill Mr Winston Churchill , Epping

There will be a White Paper, but, if my recollection serves me correctly, the nest-egg dates from the same date when Income-Tax deductions begin to run for wage-earners.

Photo of Mr James Milner Mr James Milner , Leeds South East

While these improvements will be widely welcomed, is the Prime Minister aware that they are still deficient in some respects, particularly in the case of allowances for children, which are wholly inadequate and cannot be justified? Will he look into that question in particular?

Photo of Mr Winston Churchill Mr Winston Churchill , Epping

I think that I should first of all ask the House to consider the statements in the White Paper.

Photo of Mr James Milner Mr James Milner , Leeds South East

How can the Prime Minister justify a payment of a maximum of 8s. 6d. per week in respect of one child?

Photo of Sir Percy Harris Sir Percy Harris , Bethnal Green South West

Will there be an early opportunity for the White Paper to be discussed by the House?

Photo of Mr Winston Churchill Mr Winston Churchill , Epping

Yes, Sir, I certainly think so, although I cannot say when it will be convenient. The whole position of serving men may be considered as a whole; then I think it will be very proper to have a Debate, although I shall not myself be able to take charge of this matter.

Photo of Colonel Albert Ward Colonel Albert Ward , Kingston upon Hull North West

Will the Prime Minister consider the advisability of not paying this nest-egg and the gratuity in one lump sum, but distributing it [Interruption.]

Photo of Mr Winston Churchill Mr Winston Churchill , Epping

We cannot count our eggs before they are laid.

Photo of Mr Frederick Bellenger Mr Frederick Bellenger , Bassetlaw

Do these improvements apply to the Auxiliary Services, as well as to the male members of the Forces?

Mrs. Rathbone:

Does the Prime Minister's statement mean that nothing further is to be done about officers' pay and allowances?

Photo of Mr Winston Churchill Mr Winston Churchill , Epping

Some concessions on that question have been made quite recently. In reply to the hon. Member for Bassetlaw (Mr. Bellenger), I think that they will certainly apply to whole-time services, but consideration is being given to that aspect of the question.

Photo of Dr Edith Summerskill Dr Edith Summerskill , Fulham West

Is the Prime Minister aware, in spite of the increases, it will mean that the allowance for a second child will be only 6s. 6d. per week, and for a third and subsequent child only 5s. a week? Does he think that that is sufficient adequately to feed and clothe a child?

Photo of Mr Winston Churchill Mr Winston Churchill , Epping

When you have taken into consideration all the circumstances and all the different forms of remuneration which the Services receive, I feel that these proposals constitute a very fair settlement to the questions which arise, although, no doubt, it is always possible for anyone to go one better, especially when one has no responsibility. Yet I trust that the House will give their unprejudiced consideration to the proposals, rather than directing attention to a particular point.

Photo of Sir Ian Fraser Sir Ian Fraser , Lonsdale

Will the Prime Minister instruct the Minister of Pensions to see how far consequential adjustments should take place so far as the families of ex-Service men are concerned, so that they may not be left wholly behind in this generous action?

Photo of Mr Winston Churchill Mr Winston Churchill , Epping

That is quite a different subject and it is obviously not applicable to some of the aspects of the statement I have made. I think that it would be much better to discuss these matters in Debate.

Photo of Mr Thomas Levy Mr Thomas Levy , Elland

While appreciating everything the Prime Minister has said, are we to understand that no reconsideration is to be given to the incidence of Income Tax levied on workmen, which is causing so much unrest throughout the country?

Photo of Mr Winston Churchill Mr Winston Churchill , Epping

I do not think that that has much to do with this question.