(by Private Notice) asked the Prime Minister whether he has any statement to make about the grant of compensation to members of the Indian Services on account of the decision to transfer power in India by a date not later than June, 1948.

Yes, Sir. A decision has now been reached on the compensation of members of the Indian Services whose careers will be affected by the transfer of power. This decision needs to be viewed against its historical background and I will, with the permission of the House, explain the circumstances which have led up to it.

The Act of 1919 placed officers appointed by the Secretary of State in subordination for the first time to Indian Ministers under the system of dyarchy established in the Provinces. This was considered to make a radical change in the conditions under which they had been appointed to serve and Section 96B of the Act was enacted to provide compensation in the case of persons appointed before the commencement of the Act. But the altered conditions of service created doubts in the minds of possible candidates as to future security of tenure and, in order to dispel these doubts and to ensure the necessary flow of recruits, authoritative explanations which carried assurance of a permanent career in India were given at the universities and elsewhere. The principle of assured service or, in default, compensation was enunciated in 1934 by the joint Select Committee of Parliament without limitation to those appointed before any particular date. In this form statutory effect was given to it by the detailed provisions contained in Part X of the Government of India Act, 1935.

It was thus the intention of Parliament that officers whose careers and prospects were prejudiced by constitutional changes should receive such compensation as the Secretary of State might consider just and equitable.

When in 1945 recruitment for the I.C.S. and the Indian Police was resumed, with provision for compensation if for constitutional reasons service was terminated prematurely, the then Secretary of State undertook, at the request of the Government of India, that officers already serving would, if their services were similarly terminated, be granted terms not less favourable considered as a whole than those applicable to the new recruits. His Majesty's Government have, therefore, considered what arrangements should be made to compensate these and other officers appointed by the Secretary of State for loss of career and prospects.

There is also a further important factor to be considered. The Government of India inform His Majesty's Government that they are most anxious to avoid the loss of experienced officers. They have stated that they are prepared to give to those members of the Secretary of State's Services who continue to serve under government in India the same terms as to scales of pay, leave, pension rights and safeguards in matters of discipline as hitherto. Provincial Governments are being asked to give a similar assurance to officers continuing to serve in their Provinces. In the case of Indian officers they feel that sentiments of patriotism will impel them to continue to serve their country and that they can look for a positive improvement in their prospects. They agree, however, that compensation should be payable to Indian officers who—

(1) are not invited to continue to serve under Government in India after the transfer of power, or

(2) can satisfy the Governor-General that their actions in the course of duty during service prior to the transfer of power have damaged their prospects or that the appointments offered to them are such as cannot be regarded as satisfactory in the altered circumstances, or

(3) can show to the satisfaction of the Governor-General that they have legitimate cause for anxiety about their future in the Province where they are now serving and that no suitable transfer can be arranged.

They do not feel that compensation should be admissible to Indian officers in other cases.

His Majesty's Government have now considered the position created by the undertaking given in 1945, the views expressed by the Government of India about the future, and all other relevant circumstances. While reserving the right to reconsider the position if any Provincial Government is unwilling to give the assurance that I have mentioned, they feel that there is a radical difference in the effect which the transfer of power will have upon the position of European and Indian officers respectively. The former will no longer be serving under the ultimate control of the Parliament of their own country and it cannot be maintained that their prospects will be the same as in the past. On the other hand, Indian officers will continue to serve their own country on the same terms as before. These will be guaranteed by the Government of India or by the Provincial Governments as the case may be, while their prospects will be improved. The same case for compensation, therefore, does not arise, though there may be ex- ceptions within the three classes referred to. His Majesty's, Government have accordingly authorised the Viceroy to announce that they accept the obligation to see that European officers and those Indian officers in the three special categories should receive compensation for the loss of their careers and prospects consequent on the transfer of power. They undertake also that the members of the Secretary of State's Services in India who retire will be secured in their rights to the leave then due to them.

Opportunities will exist for further government service for many of those who will become entitled to compensation. It is the earnest hope of His Majesty's Government that officers will freely avail themselves of these opportunities. The terms of such further employment will be a matter for consideration; but where British officers of the Civil Services accept appointment to another Civil Service under His Majesty's Government on a permanent, pensionable basis, they will receive no compensation but will be eligible for a re-settlement grant of £500.

The development of the policy of His Majesty's Government for constitutional advance in India has affected European. officers and other ranks of the Royal Indian Navy, Indian Army and Indian Medical Service in a similar way to the members of the Civil Services The same principles of compensation will, therefore, be applied and the scales are being published forthwith.

His Majesty's Government are anxious to do all in their power to assist the Indian Administration over the difficulties entailed by the transfer of power and, in order to minimise the loss of experienced officers and to encourage those British officers who are invited to do so to continue in service under Government in India, they undertake that these will receive the compensation to which they are entitled should they desire at any time after the transfer of power to exercise their right to retire. The amount of such compensation will be determined in accordance with the tables by the date on which active service ceases and service rendered both before and after June, 1948, will be taken into account. Compensation will be payable in addition to such retiring or proportionate pension as is admissible under rules.

The sources from which the monies involved will ultimately come must be a matter to be dealt with hereafter but, so far as the individuals affected are concerned, they have the assurance of His Majesty's Government that they will receive the monies to which they will become entitled.

The Government of India accept liability for pension and proportionate pension earned by service under the Secretary of State, whether by civilians or by members of the Defence Services.

His Majesty's Government have accordingly authorised the Viceroy to make the announcement which is published in a White Paper laid today. The White Paper also contains tables setting out the scales of compensation for the various Services affected.

I hope to make a very early announcement regarding compensation for the services in Burma where the position is similar to that in India and discussions are now in progress with the Government of Burma as to the terms and scope of the arrangements to be made.

May I ask the Prime Minister, first, whether an equivalent statement is likely to be made dealing with uncovenanted services and the smaller services serving Provincial Governments; and, secondly, whether he realises that it will be necessary for us to consider in detail the implications of his important statement, the tables to which he has referred, and so forth, and whether we may have time to consider them so that we can give a considered view on this matter?

In answer to the second question, I quite realise that this is a difficult matter, and that hon. Members will also want to study the scales before they ask further questions. On the actual point that has been raised, the provisions of the White Paper cover all members of the Civil Service in India appointed by the Secretary of State, including the members of the old Indian Agricultural, Educational, Forestry and Veterinary Services; they do not cover officers appointed by authorities other than the Secretary of State.

Will this require legislation?

Yes, I think this will require legislation in due course.

Will that be during this Session?

I cannot say at the moment.

Could my right hon. Friend say whether members of the Indian Ecclesiastical Establishment are covered?

Yes, Sir.

Could my right hon. Friend say whether any active steps are being taken to encourage British officers in India to remain in India after June, 1948, instead of taking compensation?

Yes, I indicated that in my statement.

There is one other very important matter. The Prime Minister referred to the Government of India accepting liability for retiring pensions and proportionate pensions. We are very glad to know that. In the event of the present Government of India not being the Government to which power is transferred, can the right hon. Gentleman give any undertaking that the successive Government, or Governments, will accept similar liabilities?

That is a matter which, of course, will have to be dealt with in making the general arrangements for the transfer, but the point of making the statement now is that we have this assurance made on behalf of the present Government of India, in so far as they can speak for affairs in India. It is quite essential that His Majesty's Government here should make quite plain the obligation we accept towards our subjects.