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APPENDIX
1. I discuss below the Royal Commission's proposals in rather more detail.
PRINCIPLES OF PAY
2. The recommendations under this head are eminently fair and reasonable, and I am sure that the Government should accept them as the basis on which they will deal with Civil Servants' pay and other conditions of service.
3. As to the application of the main principle of "fair comparison," the Commission propose more elaborate machinery than exists at present, including the setting up of a fact-finding unit independent of the Establishment Divisions of the Treasury. There are some practical difficulties here, but I am sure that every attempt should be made to arrive at a solution broadly on the lines of the Commission's proposals.
4. The Commission also make some sensible suggestions about how much attention should be paid to relativities within the Service. And they say that, in times of unusually marked and rapid rises in wages and salaries outside the Service, central settlements covering all the lower and middle ranks of the Service are the best arrangement-as distinct, that is, from a series of grade-by-grade settlements on the basis of a strict fair comparison with the outside analogue in each case. I would accept this.
THE HIGHER CIVIL SERVICE
5. At present the higher Civil Service—that is, Assistant Secretaries and their equivalents and upwards-are remunerated on a span of salaries from £1,800 to £4,500. The Commission propose that this span should be £2,000 to £6,000, the former being the Assistant Secretary's minimum and the latter the pay of Permanent Secretaries and of a few top posts in the scientific and professional classes. With my approval, the Treasury's evidence to the Commission was not specific as to higher salaries, merely indicating that a pulling-out of the concertina was due.
6. I see no reason why the Government should dissent from these proposals. They result from a very careful review of salaries in other occupations-commerce, industry (public and private), local authorities, universities, and so on; the Commission are unanimous about them; and they have not met with any serious adverse reaction in the press. Their early application is perhaps particularly important in the case of the higher grades of scientists, engineers and other professional staff; otherwise a number of key men, who are conscious of getting very much less than they would command in other employment, may leave the Service.
7. There will be a number of repercussions on the salaries of bodies outside the Civil Service which always move in step, such as the British Council and the Research Councils, and also elsewhere in the public sector where the case for an increase is much the same as the case in the higher Civil Service--for example, County Court Judges. I have no doubt, too, that, as is already clear from Parliamentary reactions, these proposals will again bring to the fore the question of increases in Ministerial salaries and the salaries of M.P.s. Logically, there ought to be no reactions in other occupations not mentioned above, since the Commission's proposals are based on what men in those other occupations are already paid. But I dare say that the movement towards higher salaries in the nationalised industries, started by the Fleck Report, will receive a further impetus. 8. The Royal Commission also propose that there should be a standing body to advise the Government about the pay of the higher Civil Service, in preference to formal arbitration machinery at these levels. This is a proposal which specially concerns the Prime Minister, and I have sent him a separate minute.
REST OF THE SERVICE
9. The pay-structure for the rest of the Service depends, of course, to a large extent on the ceiling which is set by the remuneration of the higher grades. Thus, the new figure of £2,000 as the Assistant Secretary's minimum enables the Com- mission to propose a much-needed loosening in the highly-compressed structure
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