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Printed for the Cabinet. December 1955

CONFIDENTIAL

C.P. (55) 203

16th December, 1955

CABINET

Copy No. 64

REPORT OF THE ROYAL COMMISSION ON THE CIVIL SERVICE

MEMORANDUM BY THE CHANCELLOR OF THE EXCHEQUER

This is an important Report, detailed and complex, and also, save on one trivial point, unanimous. I should like to seek my colleagues' agreement to the broad lines on which it should be handled.

2. In my view the Report is a good one, its recommendations are fair and sensible, and the efficiency and well-being of the Civil Service and the wider public interest would both benefit if we were to decide to bring the recommendations into early operation as nearly as possible as they stand. In reaching this view, I have taken account of the preliminary discussions which the Treasury have held at the official level with the principal Departments.

3. The Report starts by laying down the principles which should govern Civil Service pay. The primary principle is to be a fair comparison with comparable outside employees. On this basis the Commission recommend changes in hours, leave and pay. Everything they propose is carefully reasoned and difficult to fault. At present virtually the whole Service is on regular overtime, and the Commission recommend that this should cease. They propose working hours which are same as pre-war in the provinces and slightly longer than pre-war in London: and a working fortnight of 10 days instead of 11, with a 5-day week as the aim as soon as practicable. They recommend reductions in annual leave and increases in pay scales throughout the Service. For the lower grades these increases do not always suffice to offset the loss of overtime earnings-i.e., in many cases take-home pay is reduced-but this feature disappears as one goes up the Service, and for the higher grades (who are not, of course, paid for overtime) considerable increases are proposed. This is what is called pulling out the concertina."

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4. There are also recommendations on certain minor superannuation points, with which I need not trouble my colleagues, at any rate at this stage.

5. In the Appendix to this Paper I deal with the various proposals in greater detail.

6. The proposals fall naturally into three parts: first, the general principles on which it is suggested Civil Service pay should be fixed; second, the considerable increases in pay proposed for the higher grades; and third, the proposals for increased basic pay, reduced working hours, and reduced annual leave, which are suggested as a single "package" for the middle and lower grades. But all these three hang together: that is, if the general principle of "fair comparisons" is accepted, there is no reason to doubt that the Commission's detailed proposals for pay, hours and leave represent a fair application of that principle. It must be observed that the Commission's proposals are based on outside comparisons as they actually existed in the middle of 1955. Their acceptance therefore would mean that the Civil Service was being brought into line, not setting the pace. understand that the Ministry of Labour advise that acceptance of the proposals would have no noticeable effect on wage claims in industry.

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