399
। ?| ༄། ། ༅། །
RECORD OFFICE
Reference
C.O.882/12
PUBLIC RECORD OFFICE, LONDON |
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
COPYRIGHT PHOTOGRAPH-NOT TO
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to officers now in the service on their promotion. I understand that the Commissioners intend to make this proposal in their final report. Some such proposal is foreshadowed in paragraphs 12 and 20 on pages 7 and 9 of this report. I also considered it essential that before I was committed to any course of action I should have received your instructions in regard to those very drastic proposals which I have described as the Commissioners' emergency measures. These are the general questions with which I propose to deal in this despatch.
5. The fears which I expressed in my despatch of the 22nd March, 1932, that the Commissioners might not be able to treat their subject with that breadth of view which is so essential to an inquiry of this nature, have proved not altogether ground- less. I feel bound to comment, in the first place, on the paucity of the argument with which they support their recommendations. The impression one gathers from the report as a whole is that the Commissioners have allowed themselves to be strongly influenced by current political opinion, and that the issues they deal with have there- fore been largely prejudged. It is impossible to escape the conclusion that they have been at some pains to frame their recommendations to fit the known opinions of the State Council. The special recommendations which they have put forward in Chapter 11, for instance, are little more than echoes of some of the Council's most commonly expressed opinions and it is little wonder, therefore, that the Commissioners have not troubled to support those recommendations with adequate argument; they are assured of a welcome from the very fact that they are known to be precisely the recommendations which the Council hopes to receive. In submitting their conclusion that drastic reductions in the pay and allowances of public officers are necessary, the Commissioners have relied almost entirely on such general grounds as the seriousness of the financial situation, the high percentage of the total expenditure represented by personal emoluments in the Estimates, and the weight of existing taxation. No attempt whatever has been made to demonstrate that the present salaries and allowances of public officers are more than adequate for their needs. The current political view is that salaries and allowances are excessive; demonstration of the fact was therefore presumably considered unnecessary. Recommendations for the most drastic reduction of salaries and allowances and curtailment of pension and retirement rights, many of them startlingly unequal in their incidence and most of them affecting officers now in the service, are put forward without a serious attempt at justification and with complete disregard of the consequences to the services.
U. I have not yet caused to be prepared a detailed analysis of the new salary scales which the Commissioners propose. To do so with sufficient care and accuracy to ensure that all possible inequalities and anomalies were brought to light would take a very long time. If, as I conceive it may be possible, you decide on examination of the report that you cannot accept the Commissioners' conclusion that a revision of salaries as drastic as that which they propose is justifiable, a detailed analysis of their proposals will be unnecessary. I also apprehend that the postponement of
any action or pronouncement on the report for the length of time necessary for a detailed examina- tion would cause acute dissatisfaction in the State Council and among the public, knowing as I do the keen interest with which the activities of the Commission have been watched. I have therefore had prepared for examination by you only a few tables showing the present and proposed salaries of the Civil Service, General Clerical Service, the Engineering Scale," and certain heads of departments not on the Civil Service scales. These I hope will be a sufficient assistance to enable you to decide on the general questions I have raised in paragraph 4 above. I shall return to them later.
7. I do not propose to deal at great length with the introductory chapter of the report, the first portion of which contains a brief description of the present financial situation and explains the grounds on which the Commissioners conclude that no remedy is open to the Government except a reduction of salaries. With the Commissioners' view that the financial situation is serious am bound to agree. But I cannot agree either with their conclusion that reduction of salaries the only possible remedy or with the process of reasoning by which they arrive at that con- clusion. In limiting themselves to two possible remedies, further taxation or a reduction of salaries (paragraph 8) the Commissioners, curiously enough, leave entirely out of account the possibility of retrenchment by such means as the ten- porary curtailment of medical, educational, and other social services, the postpone- ment of new works, economy generally in expenditure other than personal emolu- ments, the adoption of more economical methods of work, the suppression of posts on the occurrence of vacancies, and the reduction of redundant non-pensionable staff These are avenues of retrenchment which this Government is already exploring and can and will explore further. I also consider that the Commissioners have dismissed
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far too cursorily the possibility of further taxation. Though I agree that the burden of taxation, judged by local standards, is already heavy, I am not prepared to agree that it has reached the limit beyond which no further increase can reasonably be imposed. The Commissioners themselves provide me with an example. Their expression of opinion that he would indeed be a bold statesman who would advocate a tax on any widely consumed commodity at the present juncture" is un- mistakably an intimation to the Government that any proposal to increase the import duty on rice will be very unfavourably received. Yet the Principal Collector of Customs has recently reported that during the past 30 years rice has never been as cheap as it is to-day, and that the trade are very much surprised that the duty has not been increased. An additional duty of cents 50 per cwt. estimated to yield Rs. 4,000,000 additional revenue would increase the retail price of rice by one cent per measure. I may add that the present retail price is 2 cents a measure less than the price last January. While I should regret any increase in the cost of the prin- cipal food of the great majority of the people of this country, this particular increase would be so slight that it would not in my opinion, based on reports received through the responsible Minister from various parts of the Island, cause serious hard- ship to any section of the population, though I am bound to say that the Ministers take the opposite view, influenced, I think, purely by political considerations.
8. In the second part of their introductory chapter the Commissioners seek partly to justify, by reference to the fall in the cost of living, the new reduced scales of salary which they recommend. I shall return to this question when I deal with the salary scales themselves. The intention of paragraph 10 of this chapter, 1 gather, is to justify the general proposition, namely, that salaries ought to be reduced, by reference to the high percentage of the cost of personal emoluments to the Government's total expenditure. I do not propose in this despatch to dwell on this point or to examine the figures which the Commissioners have given. It is obvious that a high percentage of personal emoluments need not necessarily be due to excessively high salaries, but may be due wholly or partly to the Government's departments being over-staffed in proportion to the reduced services which, as a result of retrenchment, they are called upon to render. It may even be largely fictitious, dependling for its existence on the method by which the Government relates expenditure to personal emoluments or to other charges. The proper remedy for an unduly high percentage of personal emoluments, if it exists in fact, will depend on whether its cause is over-staffing or excessive salaries; and as, the Commissioners have made no attempt to demonstrate to which of these causes the high percentage in Ceylon is due, they are not in my opinion justified in concluding that the proper remedy must necessarily be a reduction of salaries
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9. In dealing with the Commissioners' actual recommendations, it will be con- venient to take first those which I have described as
emergency measures." These are the recommendations that rent allowances should be abolished, that the payment of commuted gratuities should be suspended, that a limit should be placed on the period within which officers may retire under the special regulations framed under Article 88 of the Order in Council, that the issue of free holiday warrants to Ceylonese officers should be curtailed, and that the operation of the time scales should be suspended. These recommendations appear in Chapter II of the report. They all, of course, affect officers now in the service of the Government.
10. The Commissioners recommend that rent allowances be immediately sus- pended, and that all officers entitled to free Government quarters should henceforth be charged rent at 6 per cent. of their salaries. It may be noted that the only argument the Commissioners adduce in support of this recommendation is that
we now pay
Rs. 2,880,000 in rent allowances." Of the equity or otherwise of the Government's system of rents and rent allowances they say nothing. I presume it is by inadvertence that the Commissioners have omitted to propose any increase in the rent of Govern- ment quarters occupied by officers not entitled to free quarters and paying rent. The number of officers entitled to free quarters is comparatively small, the great majority of officers in occupation of Government quarters paying rent under Financial Regu- lation 960 (i). (As explained in my despatch No. 300 of the 30th May, 1932,* the 10 per cent. rent of Government quarters in Colombo, Kandy, and Nuwara Eliya has heen temporarily reduced to 6 per cent.) Taking the Commissioners' recommendation as it stands, its effect would be that while officers not in possession of Government quarters would lose their rent allowances and officers entitled to free quarters would be the poorer by 6 per cent. of their salaries, officers already paying rent for Government
* C. 93089/32 [No. 1]: not printed.