and 20,000 teachers began, continued completed their training for the work. These people all feel that Bill 113 would violate that faith. Then I put in the facts with regard to the Geddes Committee. Not till the 4th February did anybody ever say to any of us that there would be any change with regard to the pension system. On the 4th February the Prime Minister told me so. Again and again since then there have been references to public faith. Mr. Fisher said, on the 25th February last, at Birmingham: "The Government will preserve its engagements with the teachers, for that is a matter of public faith."

82. What do you understand him to mean by that?-I point out that it is in the plural there "engagements,' and that one engagement was with regard to salaries, and the other was with regard to pensions.

83. With regard to salaries, do you suggest that he meant that the Board of Education would not diminish the proportion in the contribution towards salaries paid by the local authorities?I should argue that way if it were not for the fact that at Kingston, soon after that time, Mr. Fisher said they had no contract with the teachers in this matter; they had a contract with the local authorities. If " engagements with the teachers" does not include the existing Pension Act, I do not know what it does include.

84. We can ask Mr. Fisher, of course, but, at any rate, the context gives you " he reno clue to what " engagements

ferred to? That is so.

85. He states that it included the pension, and you assume that he must have meant for a period, at any rate, the Board of Education would not diminish their scale of contribution and their grants? In respect of salaries, certainly, I include that. Then I put in a leaflet issued by the London Municipal Society and National Union of Ratepayers' by Associations, quoting words Mr. Chamberlain: "There are certain questions of public faith which I think have not been present in the minds of the Geddes Committee; and of that public faith the Government is bound to be the guardian. . . . The Geddes Committee have made recommendations in respect of certain matters with regard to education which this House cannot carry without one of those breaches of public faith of which I have spoken." Sir, what are the due dimensions of public faith?

[Continued

86. This interests me, for this reason. I can conceive the argument being that although no definite pledge was given that the pension scheme would not be made contributory, or that some contribution from salary towards it would not be required, yet as it was never in the minds of anybody until the Geddes Committee reported, that a contribution could be required, a pledge of that nature was, at any rate, implied: that a pension scheme once set up, is supposed to be, and in other cases has been, inviolable and has gone on, and that, therefore, if this matter were a matter between private persons it would have been a breach of an implied understanding, at any rate, an implied pledge, if you like, when you had had careful negotiation about salaries and had come to an agreement about salaries, thereupon to make a cut in what is very material to salaries, into pensions, by requiring a contribution from salaries. just as it would be, I suggest to you, between private persons considered as a breach of pledge if a person had been paid by his employer on a basis of salary and expenses, or salary and commission, and the person had suggested that the time had come to reconsider his salary, and, therefore, it had been reconsidered and increased, for the employer to turn round at the end of it and to take advantage of the fact that no mention had been made of the expenses or of the commission, because it was assumed that they would remain the same, and cut into them so as to get a little bit back out of the arrangement made about salary? -That seems to be the position.

87. But I have said carefully, I can imagine that view being taken-I am not sure that I should not take it myself—if it was a case purely of bargain between private individuals. But I can also imagine it being held very strongly that a bargain or arrangement between persons more or less in the nature of civil servants, and the State, cannot be regarded as a bargain of that kind, because any financial arrangement made by the Government must always be assumed to be subject to the exigencies of the national financial position; and that therefore, in fact, there can be no pledge really given or implied when the continuance of any national operation involving expenditure is in question; in fact, any arrangement by the Government with regard to expenditure of any kind can never be looked upon as a pledge, because it may always have to be reviewed by the

Government of the day, who are the only judges, in the light of public necessity. But the view that I have just expressed is not compatible with Mr. Fisher and Mr. Chamberlain saying, as they have apparently suggested in these extracts that you give, that certain matters are matters of public pledge?—That is so; that is our case before the Committee.

38. Then will you agree with me that the argument I have used is a correct one, namely, that no word of a Government with regard to finance can amount to a pledge, because of the always implied consideration and limitation and condition that the national interests may require its modification?-I should say that the argument that public necessity overrides everything, salus populi suprema. lex, must be examined in relation to each case. Let me put it like this. When the Government of a country like this has directly or indirectly, for certain periods, given a pledge to a class of people, that pledge that has been given must rule during the term of that engagement.

[Continued

argument, which I have stated only as an argument, namely, that public faith is never pledged in matters of finance, and that as they accept the public faith argument as pledging them in certain cases, the case you are arguing falls within that category?-That is so. It has long been the definite policy of the Government and of the nation that the Government shall be the best possible employer, in the first flight of employers, and we claim they should be on this occasion, too. Our contention is that the existent non-contributory pension system and the approved salary-scales were to be taken together as the agreed teachers' remuneration; that to tax salaries now is to reduce the value of that agreed remuneration. We say that the salaries and pension values should be taken together as the agreed remuneration of the teacher. We submit that Parliament has not yet decided to make the pension system contributory; that the Departmental Committee on the system, which has not yet met, may find that a contributory system is not advisable, and may recommend no change; and that until Parliament decides to change permanently the nature of the Act of 1918, you cannot, with due regard to public honour, approve even a temporary levy from a class of public servants already bearing their assessed shares of taxation as citizens. Nor can you do it reasonably on the ground that by an average salary of about £250 a year in addition to pension expectations they have been made "too well off."

91. Do you suggest that if Parliament decides to change permanently the nature of the Act of 1918 it will, having done so in that way, not be guilty of a breach of pledge? I accept the omnipotence of Parliament legislatively, and if Parliament should in its wisdom decide to make that change, from that time a contribution will become necessary. But the present proposal is an interim contribution pending such a possible decision by Parliament.

92. You accept the argument I have put to the extent that if Parliament by a fresh Act makes the scheme contributory, you could not charge against them a breach of pledge?-Not against Parliament.

93. And of course that is one of the questions in our Terms of Reference: whether any pledge was made by Parliament. You say that at any rate you could not accuse Parliament of having broken any pledge that Parliament had

B 4

given if they make this scheme contributory by legislation, but you do accuse them of breach of pledge as long as they are doing it by a special temporary Act, which does not make the scheme a contributory one?-What I beg to say with due respect very strongly indeed is that during the currency of these scales I do not think Parliament can honourably propose to pass legislation which would cause a contribution in respect of teachers' pensions.

94. You suggest, therefore, that if legislation is to be passed which would not be regarded by you as a breach of pledge, it would have to come after the expiry of the period of the present scales of salaries ? -I think so.

95. And that if it came after the expiry of that time-that is, at one period in London and at another period in the rest of the country-it could not be regarded as a breach of any pledge given or implied by Parliament? I think so.

96. I press you on this because I think some members of the Committee may regard it as rather a narrow line, that although in your opinion a certain thing would be legitimate, if national necessities require it, if carried out by an Act which definitely changes the basis of the scheme, yet the same thing is illegitimate if done by a special Act requiring a certain contribution from salaries towards the scheme, not amounting to a full-flown scheme on its own?-If Parliament, after having received a Report from the Departmental Committee before whom teachers shall be heard, come to the conclusion that the present pension system should be changed into a contributory system, and if Parliament should so act, then and from that date it seems to me that the position will have to be accepted; but prior to that date I do not think that Parliament can properly assent to Bill 113, or any Bill of the kind.

And may

I say this. It is a terrible thing, I know, to cast any implication upon what men of standing and goodwill propose to do, but I cannot see how members of the Government who assented to these scales can, during the currency of those scales, propose that Parliament shall in any way, by a temporary or by a permanent Act, take from the teachers a portion of the benefits promised them and assured to them in those scales.

97. I see that point quite clearly, but if at the conclusion of the guarantee of the scales this Government were still in

[Continued

power, as it may be, and if they were to propose to revive a contributory system of pensions by Act of Parliament, you would not argue that the passing of that Act of Parliament constituted a breach of public faith?-Not in its relation to the Burnham Committees and the scales.

98. Or in relation to pensions?-The Act of 1918 was placed upon the Statute Book to be permanent, and there was no intention of changing it; and in relation to the salary scales and as a matter of reducing the beneficial effect of those scales I contend you cannot make the change.

66

99. Are there any further points you would like to make in your evidence?— You will notice that this Bill 113 is to raise £2,300,000 of money as an appropriation-in-aid." It is not to fall into a teachers' contribution fund already in existence, or to be set up. It is an appropriation-in-aid from teachers, and from teachers only. It seems to us to amount to an expropriation; its avowed purpose is to draw from teachers' pay moneys which will relieve the Exchequer correspondingly; it is regarded by teachers, all teachers, and all their representatives on the three Burnham Committees, as proposing a departure from justice, a disregarding of implied contracts, and a breach of public faith. I submit that the answer to the question expressed in the Reference to this Committee should be in the affirmative. There was at least an implied undertaking; just as there was, and is, with civil servants. In 1918 Parliament enacted for teachers the pension system of deferred pay enacted in 1909 for civil servants. The implied undertaking exists with both, with one as much as with the other. But I submit that this statutory undertaking was more than implied. There was next a second undertaking in regard to scales. A non-contributory basis for pensions was a concurrent factor in the agreements of the Board of Education and the Local Authorites with the National Union of Teachers as to scales of salary. It was a concurrent factor in the agreements with the Associations of Secondary and of Technical School Teachers. Tax in respect of one factor after that agreement has been made, and you tax the whole; make teachers pay towards pensions, and you reduce, to that extent, their salary. The figures of the scales were proposed and agreed at a time when there was no idea of the Pension system not remaining non-contributory; when the Government

This

had not the least intention of even setting up a Departmental Committee on the system. Teachers do not agree to this special tax. Therefore, unless and until Parliament for good and permanent reasons alters the non-contributory basis of the Act of 1918, any such measure as Bill 113 is in the nature of those "forced benevolences" which the liberties of Parliament abolished centuries ago. I submit that the Scales were prepared, agreed, reduced, and then endorsed by the Government with all parties to them conscious of the Act of 1918 and its bearing on the whole matter. This second Government undertaking was tacit concerning that Act simply because nobody for a moment supposed that the Act would be changed in basis nor therefore required an assurance that it should not be; but, however tacit, the undertaking was indefeasibly implied. You have an Act which, after a date in 1919, teachers must come under. They must, whatever their income, give up earning in State-recognised schools at 60, if so required. was the consideration. This was their quid pro quo.t You have salary-scales and agreements the acceptance of which by teachers debars them from agitating for better pay during the agreed period. Again the quid pro quo. The teachers have kept and propose to keep their engagements in these matters. Are the Government, while still the Pension Act is law, unaltered, and post factum to their endorsement of the salary scales, to depart from their engagements? Let the House of Commons make any general levy for the Nation's financial needs, and teachers will pay their share. It is to a particular levy on themselves alone that they object. They object as teachers, and they object as free citizens. Sir, we are anxious to regard the Terms of Reference as wholly covering our case, and therefore the question whether Parliament or the Government notified that the scales could only be endorsed if the pension system was made contributory, or if during 1922-23 teachers were made to pay an appropriation-in-aid. If the Government did not so notify prior to Mr. Fisher's endorsing the scales on June 28th, 1921, can it in effect be done now, or could it be done on February 4th even, without narrowing the due dimensions of public faith in the matter? Parliament is legislatively omnipotent, but the greater the power the more careful should be its

+ See Q. 493.

[Continued

scruples, and the more stainless the engagements of its honour.

Mr. Holman Gregory.

100. I am personally much indebted to you for the very able way in which you put the case of the teachers before us, but I should like, if possible, to crystallise your evidence that I may the better understand it. Let me first of all take the submission to us. We have to consider and report whether in fixing the present scale of salaries for teachers in grant-aided schools any undertaking by the Government or Parliament was given or implied-" given I suppose means expressly given ". implied that the provisions of the Teachers Superannuation Act, 1918,

-or

should not be altered while those scales remain in force. Do you suggest there was an express undertaking?-I suggest that the Act of 1918 itself was an express undertaking.

101. An express undertaking to what effect? That the Teachers' Superannuation Act, 1918, would not be altered.

102. That is not quite the question I asked you, but let me deal with that for a moment. Do you suggest that there is anything exceptional in the Teachers' Superannuation Act of 1918 as an Act of Parliament?-No. I put it the other way. I say it is not exceptional. I say it is in a line with the civil servants' system.

103. Are you suggesting that when an Act of Parliament is passed it can never be modified or repealed?-Oh, no. 104. Then why are you suggesting there was any undertaking when the Teachers' Superannuation Act, 1918, was passed that it should be never modified or repealed?-I simply argue that 41 months ago Parliament had no intention whatever to modify it within 41 months.

undertaking, not what Parliament had in 105. What we are dealing with is the mind then. Are you really suggesting that there was anything when this particular Act was passed which made it unusual and rendered it impossible in honour for this Government to modify or repeal it? I have already said that until Parliament does alter the Act of 1918 we consider there was an express undertaking, and that now exists.

Parliament

106. Until when? Until shall or does alter the Act of 1918 there was an express undertaking.

107. That is quite right. The Act of 1918 remains in force until another Act

of Parliament is passed, but you are not suggesting there was any undertaking that another Act of Parliament should not be passed?-Oh, no!

Chairman.] Just to avoid any dispute later, I think you did suggest that there is an implied undertaking that the Act should not be modified while the Burnham scales are in force.

Mr. Holman Gregory.

108. That is a subsequent point. I was at the stage first of all, of the passing of the Act of Parliament. Sir James is quite right, of course. At the time of the passing of the Act of Parliament there was no undertaking that it should not be modified or repealed on any future occasion. That is quite clear. That is the Act of Parliament in 1918. Now we come down to the date fixed in the Terms of Reference. We have to consider and report whether in fixing the present scale of salaries-that was in 1920-21, I suppose?-1919-20-21.

109. We have to consider and report whether, in fixing the present scale of salaries in 1919-20-21, any express undertaking was given by the Government or Parliament that the Act of Parliament should not be altered. Are you suggesting there was an express undertaking ?No. I say the undertaking was implied.

110. There was no express undertaking. You say it was implied. Would you, in a few words, say when it was implied, and how ?-It was implied during the whole of the period of negotiations, because nowhere, at any date, by any person representing the Government or Parliament, was there any intimation to us that the Act of Parliament would be changed.

111. Supposing it was not in their minds at that time?-If it was not in their minds at the time of the endorsement of the agreement it could not come in later.

112. Not if public necessity demands it ?-No.

113. That is your view. Let me put another point to you. As I understand your suggestion it is this. There was an Act of Parliament in existence which provided for a non-contributory basis of pensions. That must have been in the minds of the parties at the time when the scales were assented to?-The existence of the Act was in the minds of the parties.

[Continued

114. We might accept that. It must have been. It was an Act of Parliament, and everybody is supposed to know the law. It must have been in the minds of the parties, because it is one of the outstanding elements; there is no doubt about that?-Yes.

115. Your suggestion is, if it is in the minds of the parties and nothing is said, that constitutes an undertaking that Parliament shall not alter it?-When one of the parties to negotiations is President of the Board of Education, who tells us that he speaks with the authority of the Chancellor of the Exchequer and gives his endorsement with the authority of the Chancellor of the Exchequer.

116. Let us see what Mr. Fisher's position was. As I understand it, the teachers are paid by the Local Authorities? Yes.

117. And the teachers in 1918 were, in their view-and in mine too if I may respectfully say so-much underpaid, and they were agitating for a rise in their salaries? Yes.

118. Was not the position that the Board of Education said, if you can agree amongst yourselves as to what should be a fair salary for the teachers we will assent to it ?—Yes.

119. That was the position, was it not? -Yes.

120. As a matter of fact representatives of the school authorities and of the school teachers met together, agreed a scale of salaries, and Mr. Fisher, acting for the Education Department, assents to it? -Yes.

121. That was what passed, was it not? -Yes.

122. Throughout these negotiations at the time of the assent nothing was mentioned with regard to superannuation ?— Yes. May I say that along comes the Board of Education and says, because we have agreed to these scales and we have to pay so much in grants to the local authorities in respect of these scales we must really ask you to pay something to us in respect of your pensions.

123. Just as a matter of interest, at the time you were negotiating the Income Tax was 6s. in the £?-Yes.

124. I suppose that was a consideration in arriving at the amount of the salary of the teacher ?—Yes.

125. Supposing the necessities of the country demanded that the Income Tax should be raised to 10s. in the £, do you say because of what had taken place