23 February, 1926.]

[Continued.

accentuated by the fact that we are improving our methods of getting in these accounts. It is not by any means easy for us to have all our subAccountants, who are scattered, for instance in Canada, over enormous tracts of country, put in their Accounts in due time; and an arrangement which we have made, with the Local Auditors of the Dominion or Colony concerned, to do our accounts for us, is now beginning to have its effect. This effect was more marked for this year than we had anticipated.

Major Salmon.

13. How much of the excess expenditure is due to work done in the Colonies? -Almost the whole of it. I should think, except possibly in Paris, we have not any very extensive transactions of that kind in any foreign country.

Sir John Marriott.

14. Do you pay pensions in Paris?Yes, through the Foreign Office; if I am not mistaken the Consular Service does it for us; but it is a comparatively small matter.

Sir Henry Craik.

15. Do you limit your liability hereafter in Canada now; our liability does not depend upon any decision taken in Canada, does it?-We have an agreement with the Canadian Government whereby our pensioners there who were pre-war residents can exercise an option. to adopt the Canadian pensions scheme.

if,

for

16. Might that in any way increase our liabilities ?-It might, instance, any new concessions were made by the Canadian Government to their pensioners and we accepted that after due consideration and balancing it against the comparative advantages of our scheme.

17. You would not be bound, on a decision on the other side to extend the pensions, to implement that, without consideration?-No, I should not say we were bound.

18. You do not hand that over to them: you do not give over your control? As a matter of fact we have lately made a new arrangement whereby We shall ourselves do our work in Canada; but that is only just on the very point of being accomplished. One of our agents is actually on the sea at the present moment to take over our work in Canada. We are going to set up a

56645

central office there because there we have specially large interests.

19. You will set up a special office and that will be under your control?—Yes.

20. And not subject to any changes that may be made by the Dominion Government?-Absolutely not; it is a direct branch of our Ministry.

Colonel Assheton Pownall.

21. Will this impending change alter the pensions paid in Canada ?-No, the work will be administered under our direct control, that is to say, the office at Ottawa; we shall still use the Canadian Doctors and so on

Sir Fredric Wise.

22. What about the cost of this office in Canada?-It is about £30,000 a year, and we estimate that that is a rather more economical arrangement than the present agency.

23. What does it cost at the present time?-About £35,000, I understand, but we are not doing it chiefly on that ground. We thought that as we had these large interests there it was better for us to have direct control, and as a matter of fact that direct control will be a little cheaper.

Sir John Marriott.

24. Did I understand you to say that you had made an arrangement with our pensioners in Canada that you would modify their pensions according to the Canadian Scale, or not?-We made arrangements with the Canadian Government that that option would be exercisable by them.

25. By the Government or by the the pensioners?-By the pensioners; pensioners can choose to be dealt with under the Canadian Scale.

26. That might, as Sir Henry Craik suggested, involve you in considerably increased expenditure, might not it?-If we say before hand that we are going to take over any change; but we have not said so.

27. What is the use of the agreement if you have not said so?--The agreement referred to a given point of time and to the scheme that then prevailed. The agreement was at a definite point of time in respect of circumstances then obtaining.

28. But not for the future?-No.

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34. You are dealing with this Statement of Excess: Navy, 1924-25, Sir Charles; in which about six questions are involved. Would you like to say anything to us, Sir Malcolm, on the note of explanation, because I think you have no paragraph in your Report on this Vote?(Sir Malcolm Ramsay.) No Sir, I have not yet reported on the Navy. They had a Supplementary Estimate not very long before the end of the year, and they recast their expenditure, but they did not take enough to cover the sum of some £45,000 by which, as a matter of fact, the expenditure at the end of the year exceeded the Estimate. There are surplus receipts to cover that, so only a nominal sum of £100 needs to be granted by Parliament.

35. Would you like to add anything to the White Paper, Sir Charles ?-(Sir Charles Walker.) That gives the general reasons for the excess of gross expenditure. It was an attempt on our part to get as closely as we possibly could to what would ultimately happen, and, although we very nearly did, we just made a bad shot on the wrong side. Of course, taking the Vote as a whole, the net deficit is only 076 of the whole thing. It is a small item, although, of course, the variations on the particular Votes in some cases are rather large. As the Committee remembers this was the first year in which a super-cut was made on the Votes.

Sir Henry Craik.

36. You were extraordinarily close to it? I think it is only just to point out that we had a Supplementary Estimate

in February of that year, in which we adjusted several of the Votes. We did not make such a good shot over the 12 months.

Mr. Gillett.

37. On No. 12, Admiralty Office, there is a saving, as I understand, on the estimated expenditure of £111,000. Does this mean on the building, or the upkeep of the office, or the staff?-That is due to what is known as the Sutton Judgment; at the very end of the financial year we were told by the Treasury that after Parliamentary authority had been given for paying we were to pay out all the back pay, several years' back pay, to those affected by that Judgment. took the sum of £220,000 in our Supplementary Estimate for that, but it was physically impossible by the time Parliament had given authority for us to get rid of the money in time. That sum really represents a carry-over from that £220,000.

We

38. To be spent this year?—As a matter of fact, it will not all be necessary. The amount to be paid will not be quite so large as we expected.

39. In the first column of Item 8 there is an amount of £236,000; does that mean largely stores? That is all stores, coal and oil.

Sir Fredric Wise.

40. In paragraph 2 on page 2 it says: "The surplus receipts arose mainly in connection with repayment services, including issues to the Dominions." Could you explain that? We supply the Dominion Governments with a good deal of stuff of various sorts, and we charge

23 February, 1926.]

[Continued.

tract Votes having matured for payment earlier than you expected, how much earlier was it? Did wages mature any earlier? No, it is not a question of wages, but somewhat large items which have been under dispute for a good many years, and when we made our last estimate, in January of 1925, we did not anticipate those claims would be settled by the end of March, but they were settled and paid for.

44. It is not an excess of current stores, but a question of arrears ?-It is a question of paying one's bills?

45. Yes, what had been owing for a considerable time.-We paid them up to March to a very considerable extent instead of them running over into the next financial year.

Chairman.

46. I think the first point of importance in your Report, Sir Malcolm, is in paragraph 4, where the attention of members is directed to certain increases which were paid in error under the War Pensions (Increase) Act. Would you like to add anything on that point?-(Sır Malcolm Ramsay.) No, Sir, I think the paragraph explains itself. I have not a figure showing what the exact amount of money overpaid is. (Sir Henry Bunbury.) I can give you a rough approximation. The number of cases is about 140; the amount involved is about £500 a year, and the amount to be written off in respect of the period already expired is thought to be about £2,000. (Mr. Phillips.) I might perhaps add that I have the figure for the Customs Department, where the same question arose; their overpayment amounted to £87 in all, spread over a period of five years; so in that Department it was quite trifling.

47. That in fact is a reply to the third part of the paragraph; it does refer to the fact that this matter is under the consideration of the Treasury. We might clear that up now. The Post Office is one 56645

case; a reference has been made to the Customs and Excise; is there any other Department concerned?-I think in every other Department the pensions were awarded accurately, with the exception of a few scattered cases, perhaps a dozen in all, spread over the whole Service. I think the substance of the matter is the overpayment by the Post Office; there is no other outstanding instance.

48. To put a general question: what view do the Treasury take with regard to the waiving of claims to repayment of the various excesses? If we have overpaid a pension under a mistaken interpretation of the law we have no remedy, we cannot recover the money. Of course we put it right for the future, but there is no hope of getting that overpaid money back, I am afraid.

34. You are dealing with this Statement of Excess: Navy, 1924-25, Sir Charles; in which about six questions are involved. Would you like to say anything to us, Sir Malcolm, on the note of explanation, because I think you have no paragraph in your Report on this Vote?— (Sir Malcolm Ramsay.) No Sir, I have not yet reported on the Navy. They had a Supplementary Estimate not very long before the end of the year, and they recast their expenditure, but they did not take enough to cover the sum of some £45,000 by which, as a matter of fact, the expenditure at the end of the year exceeded the Estimate. There are surplus receipts to cover that, so only a nominal sum of £100 needs to be granted by Parliament.

35. Would you like to add anything to the White Paper, Sir Charles? (Sir Charles Walker.) That gives the general reasons for the excess of gross expenditure. It was an attempt on our part to get as closely as we possibly could to what would ultimately happen, and, although we very nearly did, we just made a bad shot on the wrong side. Of course, taking the Vote as a whole, the net deficit is only 076 of the whole thing. It is a small item, although, of course, the variations on the particular Votes in some cases are rather large. As the Committee remembers this was the first year in which a super-cut was made on the Votes.

Sir Henry Craik.

36. You were extraordinarily close to it? I think it is only just to point out that we had a Supplementary Estimate

in February of that year, in which we adjusted several of the Votes. We did not make such a good shot over the 12 months.

Mr. Gillett.

37. On No. 12, Admiralty Office, there is a saving, as I understand, on the estimated expenditure of £111,000. Does this mean on the building, or the upkeep of the office, or the staff?-That is due to what is known as the Sutton Judgment; at the very end of the financial year we were told by the Treasury that after Parliamentary authority had been given for paying we were to pay out all the back pay, several years' back pay, to those affected by that Judgment. took the sum of £220,000 in our Supplementary Estimate for that, but it was physically impossible by the time Parliament had given authority for us to get rid of the money in time. That sum really represents a carry-over from that £220,000.

We

38. To be spent this year?-As a matter of fact, it will not all be necessary. The amount to be paid will not be quite so large as we expected.

39. In the first column of Item 8 there is an amount of £236,000; does that mean largely stores? That is all stores, coal and oil.

Sir Fredric Wise.

40. In paragraph 2 on page 2 it says: "The surplus receipts arose mainly in connection with repayment services, including issues to the Dominions." Could you explain that? We supply the Dominion Governments with a good deal of stuff of various sorts, and we charge

that to the sub-heads of the Vote, and when they repay us it comes back as an Appropriation in Aid.

41. Are they large sums ?-Yes, they are pretty considerable sums.

42. What sort of amount approximately? I have not got it here. (Sir Malcolm Ramsay.) They are set out in detail in the Account. (Sir Charles Walker.) It will be much easier to deal with that when the Account comes along, because all the details will be there.

Major Salmon.

43. With reference to the excess expenditure, when you say it is mainly due "to liabilities under the store and con

[Continued.

tract Votes having matured for payment earlier than you expected, how much earlier was it? Did wages mature any earlier?—No, it is not a question of wages, but somewhat large items which have been under dispute for a good many years, and when we made our last estimate, in January of 1925, we did not anticipate those claims would be settled by the end of March, but they were settled and paid for.

44. It is not an excess of current stores, but a question of arrears ?-It is a question of paying one's bills?

45. Yes, what had been owing for a considerable time.-We paid them up to March to a very considerable extent instead of them running over into the next financial year.

Chairman.

46. I think the first point of importance in your Report, Sir Malcolm, is in paragraph 4, where the attention of members is directed to certain increases which were paid in error under the War Pensions (Increase) Act. Would you like to add anything on that point?-(Sır Malcolm Ramsay.) No, Sir, I think the paragraph explains itself. I have not a figure showing what the exact amount of money overpaid is. (Sir Henry Bunbury.) I can give you a rough approximation. The number of cases is about 140; the amount involved is about £500 a year, and the amount to be written off in respect of the period already expired is thought to be about £2,000. (Mr. Phillips.) I might perhaps add that I have the figure for the Customs Department, where the same question arose ; their overpayment amounted to £87 in all, spread over a period of five years; so in that Department it was quite trifling.

47. That in fact is a reply to the third part of the paragraph; it does refer to the fact that this matter is under the consideration of the Treasury. We might clear that up now. The Post Office is one 56645

case; a reference has been made to the Customs and Excise; is there any other Department concerned?-I think in every other Department the pensions were awarded accurately, with the exception of a few scattered cases, perhaps a dozen in all, spread over the whole Service. I think the substance of the matter is the overpayment by the Post Office; there is no other outstanding instance.

48. To put a general question: what view do the Treasury take with regard to the waiving of claims to repayment of the various excesses?-If we have overpaid a pension under a mistaken interpretation of the law we have no remedy, we cannot recover the money. Of course we put it right for the future, but there is no hope of getting that overpaid money back, I am afraid.

49. By "putting it right for the future," you mean that you adjust the pension to what it should be, but you do not recover anything of what you have paid? You do not recover anything; I am afraid you cannot.

50. Have you anything to add on the paragraph, Sir Malcolm?-(Sir Malcolm Ramsay.) No; I understand the Pensions are to be recalculated and paid at

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