Dáil Éireann díospóireacht -
Thursday, 11 Jun 1931

Vol. 39 No. 2

Public Business. - Civil Service Cost-of-Living Bonus.

Debate resumed on the following motion:—

"That in view of the discontent prevalent amongst the lower grades in the Civil Service, the Dáil is of opinion that the Executive Council should set up a Commission of Enquiry to investigate and report on the present method of computation of the cost-of-living bonus and its application to civil servants' salaries and wages."

Mr. MacEntee

When the debate adjourned last night, I was discussing the factors which determined the accuracy or otherwise of the cost-of-living index as an indicator of the relative variations in the cost of maintaining a certain standard of living. I showed that the standard of living selected as a norm might be lessened quite arbitrarily, that it might have no relation whatsoever to the actual living conditions of any section of the people, that the value of the index depends upon the degree to which the price movement of each group correctly represents the price movements of the group covered by the index as a whole. I also stated that the value of the index depends on the quantity of the articles actually consumed as well as on the prices of the articles, and that any change in the quality or quantity of the articles destroys the accuracy in the cost-of-living index as a reflex of actual living conditions. In general, I pointed out that over a period a cost-of-living index is reliable only so far as the commodities and the quantities upon which the index is based remain truly representative of the actual consumption of the class of the community to which the index is to apply.

The practical difficulty of maintaining the representative character of a cost-of-living index is very great, being due to the fact that the consumption relative to the aggregate consumption of the several commodities is not the same for all sections or classes within the community, and indeed is not the same for all individuals within a class. We find that exemplified in the report of the Cost of Living Committee itself. For instance, in a household where the income is under £3, we find that 61 per cent. of the total expenditure is upon food. Where the income is £3 that percentage decreases to 60.4. Where the income is £4 it falls to 56.3. Where the income is £5 it falls to 48, and where the income is £6 and upwards it falls to 41.4, upon food. In a household where the income is £6 and upwards 41 per cent. of the expenditure is represented by the purchase of food, whereas in households where the income is under £3, 61 per cent. of the expenditure is made upon commodities within that group. I have shown that as the income increases within a household the proportion which is spent upon food tends to decline. The converse of this is true with regard to rent and certain other groups of commodities upon which our cost-of-living index is based. For instance, in a household where the income is £3 and under, 15 per cent. of the expenditure is upon clothing, but where the income is £6 a week and over, the proportion of the expenditure upon that item rises to 17.7 per cent. In the case of rent in households where the income is under £3, the proportion of the expenditure ascribed to rent is 5.3 per cent. Where the income is £6 and upwards expenditure upon rent rises to 12.4 per cent. According to our classification here sundries include soap, pipe tobacco, cigarettes and miscellaneous items. That expenditure forms 9.2 per cent. of the total household expenditure where the income is £3 and under, and rises to 19.5 per cent. where the income is £6 and upwards.

The very fact that there is this extreme variation between the expenditures, not only, as I have said, between the several classes of the community in regard to one particular group, but also even for individuals within the same class, makes it impossible to construct a cost-of-living index for the country as a whole which, at the moment, will indicate with reasonable accuracy the change in the cost of maintaining the standard of living in any other section of the community except that in which the primary data to calculate the index have been originally secured. This fact receives attention in some countries.

In Belgium five series of cost-of-living numbers are applied to corresponding classes in the community, and in Switzerland there are three. In this country we have only one cost-of-living index. Remember that index, moreover, is based upon an entirely inadequate number of returns, as I showed last night. Our cost-of-living index is based upon 308 complete returns made between, I think, the 10th June, 1922, and 4th August, 1922. I submit that those returns are entirely inaccurate and entirely unreliable for the purpose of calculating what should be after all, so far as we can make it, a precise and reliable indicator as to the variation in the cost of living. Those returns, moreover, have been procured mainly from one class. According to the Report itself, the budgets received were from a very varied class of households, which, as will be seen from the following lists, embrace the principal industrial occupations. In that list there are unskilled labourers, fishermen, messengers, servants, pilots, barmen, carpenters, boatmen, dressmakers, bakers, embroidery workers, knitters, plumbers, road engine drivers, etc., but not a single civil servant. Out of the 308 returns which were received, according to this list, so far as I can see, there is not one return, and certainly no significant number of returns, no such number as would affect the result of the calculation, were made by civil servants. Notwithstanding that the index in this country at least is applied in the most general and most rigorous way to a large body of clerical workers, the privates and corporals in the cuff and collar brigade, whose mode of life is different, even if the real standard of living be lower, from that of the skilled industrial worker. The expenditure which the civil servant, particularly in the lower class grade, has to incur upon articles such as food, rent and furniture, I think it must be admitted, is very much higher than that which has to be met by a worker in an industrial occupation. He has got to maintain a decent appearance during all the hours of his work. The fitter or boiler-maker or motor mechanic can work all day in his dungarees, and can go home and change at night. In that way he can economise on the question of clothes, but a man who has to go into a Government office has to maintain at all times a dressy appearance, to put it that way. He has to be clean and tidy, and have clothes which are not ragged, torn or tattered. To me, looking at the rates of pay which some of the smaller civil servants have, it is a constant wonder how they are able to maintain the appearance they do. I can only assume that they do it by spending upon clothes what might be much better spent on food. Again, while the industrial worker may not have to spend so much upon clothes, he has, on the other hand, because his labour is manual, to spend a greater portion of his weekly income upon more expensive kinds of foodstuffs. For that reason it is quite clear to anyone who has examined this question that a cost-of-living index which has been constructed mainly upon household budgets which have been procured from industrial households cannot be properly applied as an indicator of the change in the cost of maintaining the standard of living which might be properly enjoyed by the lower grade civil servant or by any civil servant. In saying that, I do not mean to be taken that the standard of living which the present wages and salaries afford to the lower grade civil servant is an adequate one. I am merely discussing the cost-of-living index, to indicate the change in the standard of living, which, as I said, has no relation whatever to the actual standard on which the civil servants live.

Again, as I think I pointed out last night, the difficulties in compiling an accurate cost-of-living index are created by reason of the fact that variations in the prices of the groups are not uniform throughout the whole territory, if that territory be widespread. That fact also receives recognition abroad in certain countries. Speaking off-hand, at the moment, I think in Austria and in Germany there are regional cost-of-living indices and it would seem to me that if the wages and salaries of the civil servants are to be made dependent in any way upon the cost of maintaining a certain standard of living so far as this country is concerned we would almost want to have recourse to regional indices because the cost of living in Dublin is very different from the cost of living in Cork, Waterford, Limerick, and greatly different from the cost of living in some of the smaller towns throughout the country.

Last night I referred to the statement with which the Ministry of Economic Affairs in August, 1922, prefaced its report in which they say "The inquiry applied to the whole of Ireland, and its basis is therefore broad enough to be reasonably dependable for any practical purpose to which a calculation as to changes in cost of living can usefully be applied." I deny that in toto. I think it is a ridiculous statement. I think it is generally recognised that you cannot get that sort of basis in this country which the Minister for Economic Affairs in the Provisional Government claims to have found in August, 1922. Certainly a cost-of-living index compiled on returns secured from the whole of Ireland cannot be made to apply in any fair or just way to the variations in the standard of living of the civil servant. The great mass of civil servants are concentrated in our large cities. The overwhelming mass is concentrated in Dublin. There are many factors which would make it reasonable to say that a cost-of-living index for the city of Dublin alone might be compiled, but to say that a cost-of-living index which has been compiled as a result of returns secured in the first place from an inadequate number of households and in the second place mainly from industrial workers, and in the third place from 308 families scattered throughout the length and breadth of the country, would be fair and just in its application to a section of the community which is largely concentrated in Dublin, I think, as I said before, is ridiculous and could not be defended in any way.

I would like to hear the Minister addressing himself to that aspect. There are circumstances here the mere recital of which ought to convince the Minister of that. The cost of housing in Dublin is very much higher, and it tends to go higher. I do not believe that there has been any significant fall in the cost of houses in Dublin during the past few years. Houses which for many reasons may be available in the country— fairly large houses which have become vacant owing to the fact that sections of the people have left this country and which have helped to solve the problem of housing the middle classes—are not available here in Dublin except at rents which hear absolutely no relation to the figure for rent which was selected and which was chosen by the Committee as the basis for its loading of that item in the cost-of-living index. I will give the House the exact figure and let them judge as to whether what I am saying is true or not. In page 10 of the report, paragraph (c), the Committee prefaced this part of the report by an admission which is intended to disarm criticism: "A point likely to give rise to criticism is the low percentage increase shown for rent. This figure is, however, the result of comparing the actual returns sent us by the town clerks and rate collectors." According to this the average weekly rent in July, 1914, was 4/-; March, 1922, 5/2d.; June, 1922, 5/2d. It is on that percentage, the variation of just a little over 25 per cent. for the cost-of-living index, which applies to the majority of civil servants living here in Dublin, where you would not even get a dog kennel let alone a house for 5/2d. a week, has been based.

There is one other point I should like to deal with, and that is the method of calculating the index figure. It is based on the old British cost-of-living index, which was calculated according to the system of arithmetical averages. That system has fallen greatly into disfavour. It is admitted on all hands that it gives rise to serious inaccuracies. The method of calculating the index figure by the geometric average is coming into favour, and is practically accepted as being the only correct one.

One other argument in favour of the motion is the fact that it is now universally recognised that the calculation of this cost-of-living index should be examined from time to time; that the commodities in the groups should be examined individually to see that they are actually representative of the purchases of the community as a whole; that the loadings according to the groups have to be checked periodically, and that in short there is an unanswerable case for a general periodic revision of the cost-of-living index. This cost-of-living index of ours was originally compiled in March and June, 1922, when conditions in this country were very unsettled, compiled at a time when the variations between prices in each locality were wide, when the variations from month to month were wide, and when there was really no representative figure that could be taken to form a basis of any cost-of-living index. Even on this ground alone, revision is necessary, but in addition to that ten years have passed.

I have shown that the index in its present form could only apply, if it applies at all, to certain sections of the industrial workers. It certainly could not apply to the general body of civil servants, to whom the Government apply it in its full rigour. There is undoubtedly a case, which I do not believe the Minister can answer, for investigation and examination as to the manner in which the cost-of-living index is computed. If we are to continue to try to regulate wages by means of a cost-of-living index—and we do, either consciously or subconsciously; the general tendency is in wages disputes and in matters like that to appeal to the cost-of-living index as an arbiter, as setting a norm by which the issue in dispute may be decided—it is essential that it should be as accurate as human ingenuity and mathematical skill can make it. We should have that cost-of-living index for more than one section of the community. We should have it for the industrial worker, because the commodities which he consumes and the rent which he pays, and his expenses upon certain items, such as clothes, differ considerably from the expenditure, say, of clerical workers upon the same things. There should be an index for the industrial worker, there should be an index for the clerical worker, and, if we want to regulate remuneration higher than that by means of the standard of living, there ought to be an index for the middle-class worker.

Attention called to the fact that a quorum was not present, House counted and a quorum being found present.

Mr. MacEntee

I was arguing that we should have a separate series of indices for the several classes in the community, but whether we should have a separate series or not, there is one thing we ought to be sure of and that is, that the index which is to be applied to determine the remuneration of civil servants should be an accurate one and one in which they could have confidence. The general body of civil servants is composed of men whose very training makes them interested in statistics, because they have a knowledge of statistics and because they know the weakness in the present system.

We are told that discontent is widespread through the Civil Service. We have heard Deputy Anthony refer to it, and we see it in the journals of the Civil Service that come to us. I am not surprised that such discontent should exist, particularly amongst the lower grades, because they see that an entirely unfair standard has been adopted to determine what is going to be their remuneration from quarter to quarter. It would be a good thing if the Minister would bear in mind the facts which I have put before him, if he would remember that the general mass of the civil servants are capable of appreciating the factors which should be taken into consideration in compiling the cost-of-living index, and the factors which vitiate the cost-of-living index when it has been compiled, and the fact, above all things, that a cost-of-living index compiled from a working-class budget makes it impossible to apply that index to the budget of a clerical worker or a civil servant. That fact is before the general body of civil servants and, I am sure, it rankles there and causes discontent. If the Minister wants to have a satisfied Civil Service he ought to meet Deputy Anthony in the motion which he has before the House; he ought to set up this inquiry into the present method of computing the cost-of-living index, and its application particularly to the lower grades of civil servants. He will be doing a service not only to his own administration, not only to the general mass of civil servants, but to the community as a whole. It is an inquiry which can be carried out at comparatively little cost. He has already a statistical Department. He has a Department which is accustomed to calculating the index. The only thing now is, instead of continuing to calculate as heretofore on a wrong basis, they should calculate it upon a right basis, and compile an index which will give confidence to the general mass of the people to whom it is applied.

Minister for Finance (Mr. Blythe)

I think a great deal, in fact, almost all of what Deputy MacEntee has said is without relevance to the case that we really have to consider. Deputy MacEntee has proved, as anybody could prove, that it is impossible to have an index figure that would apply with equal fairness to everybody. He has proved that, in fact, if we wanted to have something that would enable salaries to be adjusted absolutely to the cost of living of each individual, we would want to have that particular individual's family or personal budget before us and to fix a cost-of-living index figure for himself. That is what Deputy MacEntee's argument amounts to if carried to its logical conclusion. But the thing to remember is that this particular method of dealing with the bonus represents a contract between civil servants and this Government.

The British cost-of-living figure which is admittedly based on the budgets of industrial workers, was accepted in 1920 by the Civil Service, by the Whitley Council on which both the staffs and the official side were represented, and it was agreed upon as the figure by which Civil Service bonuses would be regulated. The Saorstát civil servants, a majority of whom are transferred civil servants, were transferred to us with that as their right, to have the bonus variable by reference to the variation in the cost-of-living index figure, and the cost-of-living index figure which is a good and well-founded figure is constructed on the same lines as the British figure and is, in fact, more favourable to the civil servants. In fact, civil servants here are receiving more in the way of bonus than they would be receiving to-day if there was no change of Government and the British index figure was being applied.

Deputy Anthony, both in his original speech and in last night's variation or second edition of it, appealed for a cessation of cuts. In fact, no cuts in any true sense of the word take place. There are these adjustments according to the agreed principle. There was a time when there were great additions to the bonus, sharp increases in the amount of the bonus, and there were no protests naturally then. There are protests now and the protests are quite natural. It is quite natural that a civil servant who finds his salary being reduced should be discontented over it. He would be super-human, or inhuman, if he was not discontented. It is very difficult for any individual even when the value of money is rising, because the prices of commodities are falling, to adjust his expenditure, and any decrease in the amount of income that person receives always involves him in a certain amount of hardship and difficulty. Even if we were to adopt Deputy Anthony's term of cuts there has not been this series of 10 per cent. and 5 per cent. cuts to which the Deputy referred. One would think, listening to him that every month salaries were going down by large amounts.

Let us look at the facts of the case. The total decrease in the remuneration of the civil servant, that is the civil servant who is getting the full bonus since it was at its highest figure in 1922, is just over 10 per cent. That index figure, at its highest, since the setting up of the Saorstát, was 190. It is now 170, so that the total decrease has been 20 points, or 10.5 per cent. In nine years, therefore, the amount of the decrease has been roughly 10 per cent., yet Deputy Anthony talked about all these cuts, and about 10 per cent. and 5 per cent., as if there had been several decreases as high as the total decrease over the whole period.

[Deputy Fahy took the Chair.]

Now, the suggestion that this cost-of-living bonus should not apply, and that we should not follow the index figure in dealing with the cost-of-living bonus, is simply a suggestion that at this time, when prices are falling, when there is some tendency to a decrease in the yield of taxation, we should, in effect, increase the real salaries of civil servants all round. That is what it amounts to: That we should, perhaps, pay £70,000 or £140,000 more than we bargained to pay, and that civil servants, in spite of this arrangement about the bonus, which was accepted by representatives of the Civil Service, should, in fact, get an increase in their real remuneration at a time when people outside have in many cases to accept decreased remuneration; when the farming community, with the tendency in prices that exists, is faced with accepting decreased remuneration.

Everybody who talks against the present arrangement suggests that this decrease in prices does not affect anyone. Apparently, no matter how prices go down, they do not affect the civil servant who has a bonus, but, as I admit, and as is apparent, while the adjustment will not fit every individual case precisely, and no figure can ever be got that will fit every individual case precisely, there is no doubt that the movements in the index figure do represent pretty closely the variation in prices as they affect any individual, except, perhaps, those who are relatively wealthy, and that they do affect, pretty closely, not merely skilled industrial workers, but the lower grades of the Civil Service also.

Deputy Anthony departed a good deal from the narrow ground of the cost-of-living figure and talked about the representative council and the need for hearing the point of view of civil servants. Now we are quite willing, at any time, to discuss the whole matter of the bonus with representatives of the civil servants. We are anxious that the representatives of the staffs should discuss with us anything they wish to put up in relation to the bonus. But the peculiar thing was that when the question of the cost-of-living bonus was put down by the Department of Finance for the representative council the staff representatives refused to attend and discuss it. There is a representative council which is still in existence, though great bodies of civil servants are not represented on it. If they care to attend on that body they can have as good discussion as it is possible to have on the matter. There will be present representatives of the Department of Finance and the heads of other Departments. All the important classes of civil servants, if they wish, can be represented and can put forward their point of view. They can not merely put forward their point of view and be listened to, but can have that discussed across the table.

Deputy Anthony suggested that what we wanted in this matter was something in the nature of Whitleyism. Whitleyism will not carry us very far. Whitleyism is all right as long as prices are going up, as long as there is an increase in revenue, and as long as you have conditions bordering on something like those that prevail when there is inflation, when new concessions can be given every week, when bargains, if they must be adjusted, will be adjusted in the interests of the Civil Service. But it is quite a different thing in present conditions when prices are falling, when revenue yields are less, and when if any changes have to be made must, if possible, be in the nature of reducing or limiting expenditure. The present bonus arrangement was adopted by the Whitley Council. It was agreed to by both sides. As long as there was an increase in the bonus, as long as it was steady, well and good, but now that the bonus has fallen we have a widespread demand for the setting aside of the arrangement. If we had Whitleyism to-morrow there would be no more satisfaction with it than there was with the representative council. The real objection to the sort of representative council that we had was not to its constitution, but to the fact that under conditions as they exist, with agriculture in its present state and the difficulties that agriculturists have to face, it is not possible to give general increases and improved concessions to civil servants. No matter how the Council was constituted that would have to be so.

Suggestions have been put forward from time to time that any differences of opinion that might arise in relation to the Civil Service bonus or salaries should be submitted to arbitration. In my opinion, in spite of the fact that the arbitration system was established in Great Britain just as the Whitley Council was established there, the system is entirely unsuitable for this particular work and entirely unjustified. The claim for it has no regard to the real facts of the situation. When there was a dispute a year or two ago about the wages of the Dublin tramway employees and when an arbitrator was appointed, he was able to look at the two sides of the case; to examine not merely the claim put forward by the workers, but the facts submitted to him by the Tramway Company as to the state of its business. If you were to have an arbitrator to deal with Civil Service salaries only one side of the thing would be looked at. The condition of affairs relating to the real employer of civil servants would not be looked at at all. It is not a fact that the real employer of civil servants is the Executive Council, the Government of the Oireachtas, but rather the ordinary taxpayers of the country. The Government is only a representative and the only proper arbitrator that you could have for dealing with civil servants' salaries and conditions of employment in the Civil Service is, I venture to assert, the Minister for Finance. He is the person, who, by his position, must look to the two sides of the case. He must try to recruit, and keep in existence, a Civil Service sufficiently satisfied to do its work satisfactorily, fixing salaries that will bring in the right type of material, material good enough to do the State's work. On the other hand he is in the position to have regard to the burden on the ordinary taxpayer, and must have regard to that.

The Minister for Finance, unlike the ordinary employer, has no personal interest in keeping down civil servants' salaries or in trying to reduce them. He is actually in the position of an arbitrator trying to give fair play to civil servants on the one hand and to the ordinary taxpayer on the other. I think the claim which some people have made for an arbitrator in connection with Civil Service salaries is en- tirely and essentially unreasonable. That is because they have not examined the question. No person can be put in a position to exercise the functions of an arbitrator in regard to this matter other than the Minister for Finance who must look to the two sides of the case.

Deputy Anthony referred to the case of a civil servant who in a salary and bonus had, I think he said, £5 6s. Od. a week, and mentioned that he had suffered a loss of 35s. a week. I would like to say this, that the major part of that reduction had taken place before the change of Government. The Deputy did not inform the House that the particular individual he referred to, since coming over to the Free State service, had been reduced not more than 12s. or 13s. instead of 35s. The agitation in regard to this matter has got a great deal of its fuel from the mere fact that the present Chancellor of the Exchequer in Great Britain, who is a Labour Chancellor, at one stage refrained, or at any rate agreed, that the bonus should not fall in accordance with the cost-of-living figures. But since then he has been obliged by the general economic conditions in Great Britain to declare that hereafter the cost-of-living figure will be rigidly adhered to. I think if that concession had not been temporarily made in Great Britain we would not have half the agitation here.

People who talk about the contentment that would be caused by agreeing to examine this matter, thereby holding out hopes that we were going to let any variation in the bonus cease, cannot have followed events on the other side of the Irish Sea because the operation in regard to the bonus there certainly did not lessen discontent.

They multiplied discontent enormously, and I am positive if we were to suggest that by passing this motion we were prepared to put the civil servants who were transferred in a better position than they would be if they had remained in Great Britain, that we were prepared to vary the contract against the ordinary taxpayer, and found at the end of the investigation that nothing happened, instead of stopping discontent we would have fanned it into a flame. The position of the Government is this, that the civil servants who were transferred— and they are the bulk of the Service— are getting what they are entitled to. They are getting more than they would have had if the British Government were still here and if they were servants of the British Government. In view of the economic condition of the country we do not see that we would be justified in varying conditions so as to improve their financial position.

I have defended civil servants here when attacks were made on the bonus. I have defended civil servants here when the main bulk of them were charged with negligence and incompetence, and I have the highest respect for the whole mass of the civil servants for their capacity and their zeal generally. But there are more people in the country than civil servants, and there are other people who are just as important as civil servants. I think the ordinary farmer who is faced with falling prices, or the trader who is carrying on under the difficulties of falling prices, is entitled to just as much consideration as the civil servant who, in most cases, has probably suffered a fall in his real remuneration. There is no reason why we should adopt measures to increase the real remuneration of civil servants.

I do not want to go at great detail into the arguments of Deputy MacEntee. With some of them the Minister for Industry and Commerce wishes to deal. As I have shown, they simply indicate, if you carry them to a logical conclusion, that nothing should be done by reference to the cost-of-living index figure at all, that no cost-of-living index figure will be fair when you come down to the individual. As he pointed out, the cost-of-living figure here is compiled on a method based on the method adopted in the British index. The only thing we did was this: we varied the weighting, and we varied it in favour of the Civil Service. If we had done in 1922 what we were perfectly entitled to do, adopted the British weighting, the cost-of-living index figure would be constantly five points lower here right through. By the variation which we made we have thrown on the taxpayers since 1922 a burden of some £70,000 a year.

What we did then was, we took the 1922 standard of living back to 1914. We got the 1914 prices from the various records, and we calculated our basic figure in that way. I do not understand what Deputy MacEntee meant when he said that there were no representative figures in 1922, and when he tried to argue, I think, that everything was vitiated since, because we began in 1922 when there were disturbed conditions. As I pointed out, the fact is that we got the budgets for 1922, and we got the prices of commodities from traders' records as they were in 1914, and calculated the basic figure in that way. The various figures issued at intervals indicate the variations that have taken place since that time. They certainly represent pretty closely, even for the lower-paid civil servants, changes in the cost of living.

Some Deputies referred to the fact that the reduction in the bonus did not affect the higher-paid civil servants as much as the lower-paid. You cannot have it both ways. The higher civil servants never got the full bonus, and at one stage they suffered what was called a super-cut. If you take the bonus off, it does not remain to be taken off at a later stage, when the cost-of-living index figure falls, so that there is nothing to complain of in that respect. Most of the civil servants are transferred civil servants. If we were to change the method of calculating the cost-of-living bonus in some way, it must be all take and no give so far as the Civil Service is concerned, or all give and no take as far as the Government is concerned. We cannot reduce the bonus by adopting some new system for those to whose advantage the new system would prove to be. It would simply mean that we would actually have increased the bonus in some way beyond what civil servants are entitled to. We could not adopt a new system which would mean that the higher civil servants were going to lose all the bonus, because they would be entitled to retire under the terms of the Treaty. There is no argument for making any change, and there is no argument, therefore, for going into an investigation.

The only argument I can see for going into an investigation would be that if the Government desired to retrace the step it took in 1922 that investigation might give it an opportunity of doing so. If it wanted to go back to the British weighting an investigation would certainly provide the occasion on which it might go back. We do not want to do that and, therefore, we say the matter is closed, and so far as we are concerned remains closed. It is easy to exaggerate this question of discontent in the Civil Service. You could never have a contented Civil Service. You could never have a contented group of employees in any industry, unless they are able to compare their conditions as being tremendously better than those engaged in similar work outside. Everyone who has a particular rate of remuneration feels that he could do comfortably with a bit more, and no one should blame him for that. Consequently I would think that if there was not a fair measure of discontent in the Civil Service something had gone wrong. So far as the soreness that follows a reduction in actual remuneration is concerned, that is what in times of falling prices, such as we have at present, everybody has got to suffer, and there is absolutely no ground for exempting the Civil Service. A great many of the civil servants, it should be borne in mind, are actually on incremental scales which are going up. A great many, of course, are at the top of their scale and actually do suffer a complete net loss of the amount of the cut on each occasion, but others do not, and are in that way favourably situated as compared with many people engaged in somewhat similar work outside.

Mr. T. O'Connell

At the beginning of his speech the Minister complained that Deputy MacEntee was irrelevant, but I think that the Minister himself was almost equally so.

Mr. Blythe

I followed Deputy Anthony a little.

Mr. O'Connell

I do not know whether that is an excuse or not, but the Minister did not seem to deal at all with the motion or to attempt to defend the present method of computation of the cost-of-living bonus. After all, that is what the motion asks, an inquiry into the present method of computing the cost-of-living bonus. The Minister, in my opinion, did not address himself to that question at all. He said that that was the method that was adopted in 1920. That was practically the only thing he said about it. It was agreed by the Whitley Council and accepted by the civil servants at the time. It was a kind of rough-and-ready method of fixing salaries, but I do not think that there was any civil servant or any member either of the Whitley Council or of the Civil Service Arbitration Board, when that arrangement was fixed in 1920, who believed that it would be operative in 1931. I do not think that it received that measure of consideration which any scheme that would be expected to be in operation for a period of ten or eleven years should get. The Minister made great play with Deputy Anthony's statement in regard to cuts. I think that the Minister displayed a considerable amount of courage when he said that there were no cuts. I think that he would take some time to convince civil servants that that is the position, but he did make some play with the statement, and it seemed to impress the House, that there was only a 10 per cent. cut in civil servants' salaries. He, however, managed to slip in the qualification quietly, the significance of which I am sure many Deputies did not quite catch, "that is, those qualified for the full bonus."

Mr. Blythe

Less in the case of others.

Mr. O'Connell

I do not think it was sufficiently emphasised that the number of people who are qualified for the full bonus is comparatively small.

Mr. Blythe

Eleven thousand, I think.

Mr. O'Connell

I do not know the proportion as to the whole number, but there are quite a number of people in this country who regard civil servants as a bloated class of people, enjoying very comfortable salaries. They do not, however, always advert to the fact, for instance, that the ordinary postmen in the country, even auxiliary postmen, are subject to these reductions and variations that take place in regard to the cost-of-living bonus. The ordinary man working in a clerical grade, who has nothing like big wages, is also affected. To come back to the point which I was making, I would stress the fact that it is only those who have a salary of 35/- a week and under who get the full bonus. There is quite a common belief in the mind of the public that if the cost of living is 70 points higher than it was in 1914 the civil servant first gets his salary and then an increase of 70 per cent. above the cost-of-living figure of 1914. The Minister knows quite well, and could tell the House, that that is not so. It is only on the first 35/- that the full bonus is paid, and any bonus which is paid above that is paid on a gradually reducing scale, so that, when the Minister said that the reduction was approximately 10 per cent., he did not intend it to apply to the whole of the Civil Service. I felt when he was making that statement that many Deputies here took it for granted that it did. I could not follow him in his statement in regard to Deputy Anthony's illustration about the man who was reduced from £5 to £3 6s. The Minister said that most of the reductions took place before this Government took office, but I understand that no reduction or cut took place until August, 1922.

Mr. Blythe

Before that.

Mr. O'Connell

In the earlier portion of his speech the Minister said that in 1922 it began to fall.

Mr. Blythe

No, 1921.

Mr. O'Connell

I do not think that the Minister would be right in saying that the greater portion of the cut took place then. According to my memory the greater portion took place after the Provisional Government came into office. I was concerned with the matter then, because I was a member of the Post Office Commission which arose out of that proposal: it was probably the second drop in March, 1922. I think that the Minister will find that he is entirely wrong in saying that the great bulk of that reduction took place before this Government came into office. He will find that that was not the case. The only helpful suggestion, or the only suggested solution which came from the Minister was, that there was a Representative Council at which the civil servants could discuss this question of bonus. There are more than civil servants interested in the method of computing the cost-of-living figure because, as the Minister pointed out. practically every body of employers and employees will, consciously or sub-consciously, take that into account when wages are being determined. I do not think that it would meet the case merely to suggest that the question of bonus, as applied to civil servants, might be discussed at a Representative Council meeting.

The motion suggests that there ought to be an enquiry which will enable not only the civil servants, but the public generally, to see whether or not this method, which was, as I say, in my view, merely a rough and ready method adopted in 1920, is applicable to the conditions prevailing in 1931. That is all the motion asks. There have been long statements here as to other matters entirely outside the motion, but I suggest that the Minister in his statement made the case entirely for what he thought should not occur, namely, an increase in the remuneration of civil servants. We are concerned with the method of computing the cost-of-living bonus. It has undoubtedly been shown that there have been anomalies in regard to this method, and its application especially to the Civil Service. I think it would be well if there were an inquiry into the whole method of computation, and of its application also. The reductions which have taken place under this cost-of-living figure seem to be out of proportion to those which have taken place in industrial occupations. A case could be quoted in respect to the lower grades of the Civil Service to show that proportionately the reductions which took place in the Civil Service lower grades were greater than those which took place in industrial occupations.

If that is so, and I feel it is, I believe it is a question worthy of examination and I think from the public point of view and from the general point of view an inquiry would serve a very useful purpose. I quite recognise what the Minister says, that the general taxpayer is in effect the employer of the civil servant but I think that the general taxpayer is not anxious to do other than what is fair by the civil servant. The general taxpayer is and ought to be anxious that the work which is done by civil servants in the interests of the State should not be interfered with or should not be made less effective by a feeling that the civil servant is not being treated fairly. If an inquiry served no other purpose than to demonstrate to the civil servant that he is being treated fairly in all the circumstances, it might have a very good effect and it might be well worth while granting it—that is, into the method of computing the cost-of-living bonus, as required by the motion. I think that the Minister is making a mistake in so strenuously opposing the resolution. I think in every sense it would be better if he agreed to accept it and to have this inquiry into the method of computing the cost-of-living bonus which, as I say, was hastily arrived at, at a time when conditions were in a very unsettled state and when it was quite impossible to give to the question the consideration which a question of this importance deserves.

Mr. Blythe

I would like at this stage to give the index figures of the cost-of-living bonus which Deputy O'Connell referred to. The cost-of-living index figure in March, 1921, was 165, in September, 1921, it was 130, in March, 1922, it was 105, and then when the Provisional Government took over in September, 1922, the figure was 90. The man to whom Deputy Anthony referred would be at his peak in March, 1921.

Mr. Finlay

I would ask the Minister to consider favourably this motion. As I conceive the position, the complaint made here on behalf of the lower grades of the Civil Service is that the present method of computation of the cost-of-living figure does not really show the true bearing of that figure on the expenses which these men in the lower grades of the Civil Service have to bear. The men in these grades of the Civil Service, who have to support themselves and their families, find that when these reductions take place, so far as they can ascertain, the amounts which they are called upon to pay for the various necessaries of life, do not show the reduction to the extent to which the present method of computing the cost-of-living figure, correspondingly reduces their bonus. The Minister for Finance has agreed that there is a certain amount of discontent in the Civil Service owing to this matter. He said that he really would be rather disappointed if there was not a certain amount of discontent in the Civil Service, that he would really feel that something was wrong. It would appear to me that if this was the only matter upon which discontent existed amongst the lower grades and if it were possible to remove that discontent, then it would be undoubtedly in the interests not alone of the Civil Service but of the taxpayers in the country as a whole to have such discontent removed.

What exactly is the point at issue here? The civil servants claim that this method of computing the cost-of-living bonus does not really represent the figures which it is sought to say it does represent. The answer of the Minister, on the other hand, to us is that this method of computing the cost-of-living bonus is a very fair and a very accurate method. If that be his case, I think, and I would suggest to him, that he should not object in any way to setting up this inquiry which, if his case be correct, would certainly find that the present method of computing the cost-of-living figure is a proper one. Accordingly, civil servants would have no complaint to make. I quite accept the contention of the Minister for Finance that in fixing these salaries and in allotting work to the civil servants of the country, he is really acting in the capacity of an arbitrator. He has fixed salaries and those salaries, as a matter of right, carry a cost-of-living bonus for civil servants. The sole question at issue now is what the amount of the cost-of-living bonus should be, and in deciding what the cost-of-living bonus should be I do not think that the Minister for Finance, strictly speaking, if he were to determine it, would still be acting in the capacity of an arbitrator. His duty as an arbitrator, between the taxpayers and the civil servants, is to decide on the scale of salary that would attract suitable people to the Civil Service and to decide the work that should be done by civil servants for the benefit of the people. He has decided what the scale of salaries should be, and the only question is whether a particular part of the salaries which he has decided to give really represents the cost-of-living figure of to-day. The civil servants say it does not, and the Minister says it does. I suggest to him that the proper method to deal with the matter is not to act as an arbitrator upon it himself but to set up an inquiry. If the Minister be correct in his contention the inquiry will find in his favour, but if he be not correct the inquiry, I presume, will find against him. In doing that, they will be according nothing more to the lower grades of the Civil Service than what is just and in accordance with the scale already fixed by the Minister.

Minister for Industry and Commerce (Mr. McGilligan)

I would like to divide the discussion upon this matter into the two parts set out in the Resolution. The Resolution reads: "That in view of the discontent prevalent amongst the lower grades in the Civil Service, the Dáil is of opinion that the Executive Council should set up a Commission of Inquiry to investigate and report on the present method of computation on the cost-of-living bonus and its application to civil servants' salaries and wages." I have really to deal only with the first part of the motion which has been called into dispute, that is to say, the present method of computation of the cost-of-living bonus. Its application to civil servants' salaries and wages is not a matter for my Department. As Deputy Finlay explained, it is not a matter of establishing some criterion by which the cost of living which civil servants have to bear has to be determined. That is not the matter that is in question. The civil servants accepted a particular contract. If they seek to vary the terms of that contract they have got to make a case for doing so, and the question as to the precise way in which the cost-of-living bonus is to be calculated has nothing to do with the rest of the question.

A great deal of argument has been wasted on this question of the present method of computing the cost-of-living bonus. Deputy MacEntee has referred to the conditions under which this figure was established, and we heard Deputy O'Connell making the same references to the matter. Deputy MacEntee yesterday referred to one single fact with regard to this figure; he referred people to the report on the cost of living in Ireland published in June, 1922, singled out this particular part of one paragraph, and said that only 308 forms of the 5,000 forms sent out were returned so completed that they could be used by the Committee who were drawing up this report.

The Deputy might have been honest when he was about it and read further from the paragraph. The Deputy could have read when presenting an extract from this report that 5,000 forms were sent out, but, as far as the 308 returns that were sent in he might have read this paragraph:

Notwithstanding the difficulties of the time when these budgets were called for, and the fact that a number of forms were held up and perhaps lost in the post, we were able to use 308 completed budgets of wage-earning households received from 112 towns;

and then the report continues:

This number was quite sufficient for our purposes. These budgets were excellently filled in.

Mr. MacEntee

I deny the conclusion.

Mr. McGilligan

I am not trying to impose anything on the Deputy's judgment, but I am saying that the Deputy was not honest in his quotation from that report. The report stated: "We were able to use 308 completed budgets of wage-earning households." Not that only 308 forms were returned. They go on to state: "This number was quite sufficient for our purposes," and they continue to state "These budgets were excellently filled in, and, apart from the fact that such a number is in itself a fair guarantee of the statistical results obtained, we are satisfied for reasons given below of the substantial accuracy of the budgets." That was surely an item that the Deputy might have brought into the discussion. Here again the Deputy has made a mistake or else not expressed himself effectively in this matter.

Deputy O'Connell and the Deputy have spoken as if that reference was to prices, as if prices were established in 1922, and as if it had any relation to the particular prices established at that time. That is in the section which deals with a collection of household budgets. There was a previous section in the report which dealt with the collection of retail prices. They had a number of retail prices in the collection, and they give a number of retail prices in 1914. They sent out forms, and these forms were filled in to the number of 308 household budgets that have been referred to. These 308 budgets merely mean that if one takes a figure of 100 representing the expenditure of a particular type of household from a town living and depending on wages and makes a division of that into separate items as between clothing, fuel, light, rent and sundries, it will be found that all that emerges from the 308 forms was the allocation of the expenditure of these families as between the different items. In other words, it was the weighting and not the prices.

Anybody who casts a doubt upon the accuracy of that report by saying that the forms were sent out in disturbed times and that accordingly the prices ascertained on the basis of these forms can be of no relevance at this moment, has not read the report correctly, even on the matter of wages and on the matter of how a budget was made up and how the money of a particular household was spent. They do say that the number was quite sufficient for their purpose. "The budgets were excellently filled in, and, apart from the fact that such a number is in itself a fair guarantee of the statistical results obtained, we are satisfied for the reasons given below of the substantial accuracy of the budgets." There are many reasons why the Committee came to the conclusion that the allocation of a given expenditure as between the different items may be taken as correct. They gave different reasons why they came to the conclusion that the figures showed that the allocation was a sound allocation.

Mr. MacEntee

May I point out to the Minister what I actually did say last night? I said that of these 5,000 forms only 308 were returned so completed that the Committee was able to use them. I did not say that only 308 forms had been returned. I made it quite clear that only 308 forms were capable of being used.

Mr. McGilligan

Will the Deputy say whether he was speaking in the context of prices or budgets? Prices, I think. The Deputy will find nowhere in his speech the quotation I have given from the report: "This number was quite sufficient for our purpose. These budgets were excellently filled in, and apart from the fact that such a number is in itself a fair guarantee of the statistical results obtained, we are satisfied for reasons given below of the substantial accuracy of the budget."

The Deputy pulled out this single item that only 308 returns were so completed that they could be used out of 5,000 sent out, but he did not refer to the fact that the Committee based its own judgment on that number. The Committee said that the number was enough to give them a complete test, and they added that they "satisfied us of the substantial accuracy of the budgets."

There have been other comments made upon this cost-of-living figure computation, apart from the time at which it was compiled. The Committee itself deals with that. Apart from the matter of prices, the 1922 prices have a very small relevance to the whole matter under discussion because they are joined up with the 1914 prices previously obtained, and they are tested by the prices obtained at this time.

This further fact has to be taken into consideration in connection with these figures—the British cost-of-living figure with which ours is constantly compared is based upon an examination made in 1905 and brought up-to-date in 1914. But ours was taken in 1922, and we very definitely did take in that year the "weighting" for the 1922 period. We know how each household was spending its money in 1922. We took, in fact, the increased standard of living by reason of the big war prices paid for produce here. We took the allocation of that money for certain matters and we carried that back to 1914 prices and brought it forward again to the 1922 period. Our figure consequently represents in the method of weighting not merely a judgment as to the increased cost of living in this country but it also indicates an increased standard of living, and that is where the difference of five points arises. It amounts sometimes to more than five points, but at no time to less than five points. This has to be attributed entirely to this increased standard of living as represented by our figure as compared with the British figures.

The figures have been queried on another basis—that the number of items brought into consideration is not adequate; that not sufficient tests are applied, and that the figure is not on the whole properly compiled. At one time I put that to an investigation from the point of view of the number of items taken into consideration in something like twenty-four countries. We examined the figures in 1924 and found that there is only one country, the U.S.A., which examined a greater number of items than we did ourselves. There was one other country, Denmark, that came near to us. We examined these 68 items and added rent as well. Denmark examined 68 items alone, but we have included rent and that makes 69. The U.S.A. examined something like 150 to 165 items. No other country comes anyway near to our number of 69 except Denmark. Generally they range about 24 to 25 items. It varies from time to time, but on the whole it can be said that the towns and localities from which we took our figures are round about the number of 100. They never fell below that number. Two other countries did make an examination extending over a greater number of towns. That would be quite natural in bigger and more industrialised countries. Great Britain, so far as food is concerned, examined in 600 places. In regard to other things, clothing in particular, Great Britain examined in less than 100 localities. One of the central European countries, Czecho-Slovakia, examined in about 400 localities. Very few countries had anything like an examination of over 100 localities, and nothing like the same examination as we had here.

Mr. MacEntee

What was the examination in Switzerland like? According to the figures I have before me there were no less than 84 groups examined in regard to rent, fuel and lighting, and there were 24 groups examined in regard to clothing.

Mr. McGilligan

Over how many localities did the examination extend?

Mr. MacEntee

The Minister was making the point that there are very few States which examined so many items or which covered so many items as we did. That is quite right in regard to certain classes of commodities, but in so far as food is concerned our figure is not one of the highest.

Mr. McGilligan

The items which are given include commodities bearing on the cost of living. The number of places in which the examination was made, and the number of items over which the examination extended—on the combination of these we lead, although we may be outdistanced by the United States.

Mr. MacEntee

And by Switzerland.

Mr. McGilligan

As far as the small countries are concerned, we lead in the matter of an exhaustive examination.

Mr. MacEntee

Belgium has a figure of 65 in the three principal groups.

Mr. McGilligan

In how many places?

Mr. MacEntee

I do not know the number at the moment.

Mr. McGilligan

I can say, without fear of contradiction, leaving out America with its tremendous territory and Great Britain with the necessity of investigating so many industrial centres, that, on the combination of items and localities, we would have the best returns. As to the accuracy of the returns, certain comments have been made. There are two checks imposed. This report was published in 1922, and it contains certain references to tests that were made at that time. These were afterwards carried out in practice. The returns are got through the employment exchanges, and also through the medium of postmasters. In no case are these people allowed to give their impressions of what the prices are. In each case they must quote the particular shops from which the prices are obtained. They must sign everything they put up, and a comparison is made, as each return comes in, with the previous return. If there is any big discrepancy the return is immediately sent back for verification. One return is used as a check against the other.

Unless we are going to complicate this whole system to an extent that will not represent the trouble and expenditure involved, I do not see that any fairer system can be got for establishing a cost-of-living index figure. I may point out that the cost-of-living index figure was never intended for civil servants; no one pretends that it was ever so intended. It was purely to regulate or reflect the cost of living that the civil servant has to submit to. In the case of the civil servant, it is purely a matter of contract. I am now coming to the question of whether any case has been made that the cost-of-living figure is not properly arrived at. There has not been any case made. Deputy MacEntee attempted to make a case on the single point of the time in which the returns were sent out, and he mentioned that there were then disturbed conditions in the country. The Deputy founded the main portion of his argument on that.

Mr. MacEntee

Not at all.

Mr. McGilligan

He founded the main portion of his argument on the cost-of-living figure.

Mr. MacEntee

The Minister was not here when I was speaking.

Mr. McGilligan

I have read what the Deputy said. If the Deputy will refer me to any portion of his speech beyond the reference here, I will be satisfied. Deputy O'Connell had much the same point of view. The other point was that the number of items might not be sufficient. I think that might be covered by the Deputy's term "inadequate." I want a scheme suggested with regard to a larger number of localities. Let us take the simple issue, is the cost-of-living figure properly built up? Let us not look at it from the point of view, is it properly applied to civil servants? That is another part of the resolution altogether. There has been no case made for an enquiry into this. I would like to advert to one point made by Deputy O'Connell. He said that one test he applied convinced him that the civil servants were in the right in this matter.

[An Ceann Comhairle resumed the Chair.]

He said that if one made a comparison between the decline in wages in certain industrial occupations, and the decline in wages in the Civil Service, it would be found that the civil servants had suffered more than others. Quite probably they have suffered more than others. If there were an enquiry, and if the enquiry brought out that the Civil Service decline was a proper one, would the Deputy accept the logical conclusion that the others ought to suffer more in the way of a decline than is imposed upon them at the moment? I personally think that the cost-of-living index figure does this State considerable harm in one respect. There hardly ever has been a dispute about the one important aspect of industrial conditions—wages—in which there has not been a comparison with the conditions across the water. If there is any discrepancy shown as between the wages paid here and across the water, the answer is that it is attributable to the excess in the cost of living that we have to bear here. That is founded on the fallacious comparison between our cost-of-living figure and the British figure. Our cost-of-living figure differs from the British, and cannot be compared with it for two reasons, one on account of the weighting, and the other on account of the increase in prices. The prices here bore no comparison, in a great many cases, to the prices as they were in England in 1914. We get a comparison here as to the increase now in Ireland, as compared with 1914 and the increase now in Britain as compared with the prices ruling in 1914. And the easy conclusion is drawn that the actual cost of living imposed upon people in this country is so much greater here than across the water. I do not think it even requires an examination. I think a short paper could be submitted easily which would reveal that that is an unfair comparison, which is generally brought in when any wage dispute crops up. Personally, I would like to see a second cost-of-living figure. Even though it would not be a proper one it would serve a better purpose than the present one.

Leaving out of consideration the question of whether or not prices were equal in 1914, take Irish prices and weight them according to the English method; that will at any rate give a price somewhat nearer the true comparison than the figures we have at the moment. On the average, it would never represent a less difference than five points as between the figures at the moment. So if there is a difference of ten points, weighting according to English weighting would represent a difference of five points. I, personally, would like to see that particular thing examined. I would like to see it, in fact, explained. I have made attempts to get it explained here on two or three occasions. I think it could very easily be put in a document, and it requires no committee to examine the thing.

The second point in this motion deals with the application of this figure, however arrived at, to civil servants' salaries and wages. On that we have always had one point of view that the civil servant is a person who, by reason of the occupation in life he has chosen, never enjoys any great boom when there is any prosperity in the country. That being the case, it is only equitable that he should be saved from the severity of the slump when the slump comes. For that reason this particular cost-of-living figure addition to salary was arrived at when these civil servants were under the control of an English Government. That was accepted as a proper addition at that particular time. We took over civil servants on those conditions. What is now sought here, and it really should not be camouflaged by any attempt to criticise the computation of the cost-of-living bonus, is an alteration in the terms of employment. It is quite possible that such alteration may have to be made. We have always resisted an attack upon the bonus system because we hold that it is the only fair way to put these people into any sort of decent position. They do not enjoy the good time when the good times come. They should be saved the worst features of the slump when the severity of the slump is being felt, but I feel that a motion from that angle is ill-advised at this moment.

This country has so far survived, without very much bad effect, the worst part of the economic depression that prevails throughout the world. We have done that simply because this country has had a particular type of agricultural economy. That has saved it from all the worst effects of the present economic depression. It has been noted in international documents recently that the only countries that stood the strain of the present bad times are those countries which have specialised in animal products and not gone in for cereals. This country has survived by reason of a particularly good type of agricultural economy, but if that particular type of agricultural economy comes in for a set-back it is no time to start making changes in the conditions of a big number of State employees. A committee might easily be set up at a somewhat later date to consider the question of stabilising, if we find we are near the time when prices have fixed themselves for good or bad at a particular point, when the present cost of living is not going to move back any further towards what is regarded as the normal, towards the 100 set for the index in 1914. But while economic depression is still prevalent not merely in Europe but in all the countries of the world, and while there is a danger of our still being drawn into it, this is no time to have an inquiry established with a view to raising certain conditions.

I do not know if it has been alleged—it can scarcely have been alleged—that there was any breach of the conditions under which these people were taken over. So far as that being right, the allegation can lie the other way, that the conditions of employment only entitled civil servants to a bonus addition based upon the English cost-of-living figure. At the best, take the equities of the situation and the changed conditions of Government which might entitle them to an addition by way of bonus to a salary based upon Irish prices, weighted according to the old English figure. In other words, the cost of living addition would be regulated simply by an increase in prices and not by an increase in the standard of living. I heard the Minister for Finance say that if there was to be any committee set up and any investigation made on this point it would have to be with every alternative open. In other words, if the investigation revealed that the conditions of service entitle civil servants only to a bonus based on the English figure they should be prepared to accept that. But I think this is no time to change the conditions of ser- vice of a very loyal body at a time when tremendous attacks are being made upon it. I would resist it on that ground as from the other angle of having an increase made at this time. The bonus system is simply, for the purpose of party politics, being made the object of an attack. The word "bonus" is very unfortunate in that connection, but it has been made the object of an attack by political parties, by local authorities that resented it, by all sorts and conditions of people in the country, and it will undoubtedly excite a still greater attack if there is any investigation ordered at this moment which has for its aim a bettering of the bonus conditions of the Civil Service and that we should do that at a time when no case is being made either on the matter of contract or the matter of the system under which the bonus is compiled, would be madness.

Mr. Lemass

I move the adjournment of the debate.

Debate adjourned.