TEACHERS SUPERANNUATION (SCOTLAND) BILL (Hansard, 30 January 1968)

§ LORD BOWLES
My Lords, I am sorry to inform your Lordships that my noble friend Lord Hughes, who I gather went to bed a bit too late, is now suffering from a worse dose of the 'flu than if he had gone to bed at an earlier moment. Therefore, on his behalf, I beg to move that this Bill be now read a second time.
In commending the Bill to your Lordships I can be reasonably brief. Although the Bill is not technically a consolidation measure its prime object is to restate in modern form the existing statutory provisions governing superannuation of teachers in Scotland. The present basis of the superannuation and family benefits schemes is not affected, and to that extent one can say that the Bill is a modest measure. Nevertheless it has been welcomed as a useful and timely piece of legislation by the local authority and teachers' associations. There is, at present what can at best be described as an untidy legislative position, as regards both the statutory prescription and the regulations. The object of the Bill, and the fresh regulations to be made after its enactment, is to reshape and modernise the whole superannuation code; and it is for this reason that the measure has been welcomed by the interests concerned.
764 Perhaps I might now turn to the Bill itself and explain its main provisions. The object has been to limit the statutory provisions to the essential features or the basic framework of the main superannuation and the family benefits schemes. The express intention is to leave as much as possible of the necessary detail of the schemes to be covered in regulations. This approach, as I am sure your Lordships will agree, is not unreasonable. If, as has happened in the past, too much of the detail is in statutory form, the need for amending legislation may inhibit the making of minor but nevertheless desirable adjustments of the superannuation arrangements. The right balance has, I suggest, now been struck with the key features of the superannuation and family benefits schemes retained in Parts I and II of the Bill.
Clause 1 requires the Secretary of State to pay superannuation benefits in accordance with conditions, to be prescribed in regulations. The various benefits are set out in subsection (3). Clause 2 continues the existing prescription whereby teachers receive annual pensions and lump sum payments, both related to length of service and average salary. The change in lump sum arrangements introduced by the Teachers (Superannuation) Act 1956—the fraction for calculating the lump sum was then changed from 1/30th to 3/80ths—has unavoidably led to a somewhat complicated clause.
Clause 3 deals with the important matter of how the main superannuation scheme is financed. While the teachers' contributions are statutorily fixed at the 765 rate of 6 per cent. of salary, and fresh legislation would be needed to alter this rate, the position is different so far as the employers are concerned. They too are obliged to pay 6 per cent. but, additionally, they can be required under subsection (4) of Clause 3 to pay supplementary contributions if these are needed to keep the superannuation account in balance. In point of fact, following the actuarial inquiry in respect of the period 1956 to 1961 when a valuation balance sheet deficiency was revealed, the employing authorities were required to pay, as from April 1, 1966, supplementary contributions at the rate of 2 per cent. This means that the employers are currently contributing to the superannuation scheme at a total rate of 8 per cent.
Clause 4 deals with the basis on which salary and average salary are calculated for the purpose of assessing superannuation contributions and benefits respectively. Clause 5, along with Schedule 1, deals with the superannuation account and provides for actuarial inquiries to be held every five years. The provision for greater flexibility in determining the rate of interest to be credited to the balance in the superannuation account, which was taken by the Government in the Superannuation (Miscellaneous Provisions) Act of last year, has been reproduced in Schedule 1; and I may add that my right honourable friend the Secretary of State will be availing himself of this new latitude to consult with the local authority and teachers' associations about the rate of interest to be adopted for the purposes of the valuation for the 1961–66 quinquennium.
My Lords, in the normal course my noble friend would have been tempted to pass without mention Clause 6 which, along with Schedule 2, simply provides for regulations to deal with the circumstances in which a teacher may cease to be liable to pay superannuation contributions or in which his superannuation benefits may be reduced or suspended. But the main discussion on the Bill in another place centred on the issue of full pay and pension, which is relevant to paragraph 4 of the Schedule. However much sympathy this proposition may attract, it will be readily understood by your Lordships that the concession of full pay and pension so keenly sought by the teachers would be even more difficult 766 to justify now in the light of the decisions recently taken by the Government to reduce public expenditure in the years immediately ahead.
I have dealt at some length with Part I of the Bill because it contains the essential framework of the main superannuation scheme. Part II of the Bill deals with the family benefits scheme, and as this is of recent origin—it was introduced on April 1, 1965—I can perhaps cover this ground more quickly. As in the case of the main scheme in Part I of the Bill, the object in Part II has been to limit the statutory provisions to the key features of the family benefits scheme. Clauses 7 and 8 broadly continue the present arrangements for the scheme which, unlike the main scheme, is financed entirely by the teachers themselves. Clause 9, on the other hand, is an entirely new provision, and it has been included to facilitate the preservation of family benefits entitlement in the case of transfers between teaching and other services carrying a similar entitlement. Part III of the Bill contains a number of miscellaneous and general provisions and I do not think that there is any need for me to elaborate on them.
I am sure your Lordships will agree that, while this Bill makes no change at all in the fundamental basis of the superannuation and family benefits schemes, it is none the less a most useful measure. This reshaping and modernising of the superannuation legislation, together with the fresh regulations which will follow, will secure an up-to-date restatement of the whole superannuation code. And this, my Lords, will be of undoubted help to all those concerned with Scottish teachers' superannuation. I beg to move.
Moved, That the Bill be now read 2^a.—(Lord Bowles.)

§ THE MARQUESS OF LOTHIAN
My Lords, I am grateful to the noble Lord, Lord Bowles, for explaining the provisions of this Bill so carefully and clearly to your Lordships. I should like to say in passing how sorry we are that the noble Lord, Lord Hughes, is indisposed, and to express the hope that it will not be long before he is back in his place. As the noble Lord has pointed out, this is to all intents and purposes a consolidation measure and does not 767 materially affect the basis of existing superannuation and family benefit schemes. I am glad that it brings up to date under one head, as it were, these various provisions, and it is, I am quite sure, to be welcomed. I do not, therefore, wish to take up much of your Lordships' time to-night.
I should, however, like to make one or two brief comments. In the first place, as the noble Lord, Lord Bowles, made clear, the Bill depends to a large extent on the making of regulations. I appreciate that this is to a large degree inevitable in this type of legislation, but I feel that too much Government by regulation is not to be commended. I should also like to say that I hope that in making these regulations the Government will take into account and consult frequently with the various teachers' organisations concerned; and when I say "consult", I mean proper consultation and not just telling them what is going to happen.
The Bill raises many small points which might be referred to, but I am going to forbear from raising them this evening. I should like to mention only one clause, Clause 4(5). It seems to me that the power given to the Secretary of State in this clause is a rather exceptional one. Your Lordships will notice that under the clause it appears that the Secretary of State has complete authority to decide on what basis the average salary of a teacher should be calculated. That is to say, if for some reason a teacher gets what is described as an unreasonable increase in salary, the Secretary of State is in a position, apparently from his own knowledge, to say what the salary should be calculated at. It seems to me that this is a rather excessive power for the Secretary of State to have, and I should like to know what is the thinking of the Government behind it. Normally an average is calculated on established facts and figures. I do not want to labour this point, but it would be helpful if the noble Lord could give us some idea of the thinking behind it.
The Government have recently postponed the raising of the school-leaving age, and, whatever one's views may be upon this, it will certainly have the effect of giving them an extra breathing space in which to recruit and train more 768 teachers and to establish increasingly better conditions for the teachers, and also, I hope, increasingly better relations between the teachers' organisations and the Government, which in the past have not always been particularly good. We all know that the teachers of Scotland are a most dedicated and hard-working body, and our debt to them is very great indeed. This Bill, as the noble Lord said, is a small Bill but it is a useful one, and I hope that it may be the forerunner of further legislation designed to give the teaching profession of Scotland the deal which it undoubtedly deserves and merits. I therefore have pleasure in welcoming the Bill.

§ LORD BALERNO
My Lords, I wish to draw attention to one point in the Bill on which I am somewhat uncertain. I am concerned with the fact that if a teacher who is superannuated or retired takes up further employment in Scottish education, with the same education authority or another education authority, something is docked from the pension in relation to the salary that is being given for the extra work that he or she is doing. This principle seems to me to be continued in the present Bill. I find it a little difficult to find out how explicit it is, but I should like an assurance that it is not the intention of the Government to continue this disincentive for a teacher on retirement to continue in the teaching profession. As things stand now, there is a strong incentive for a teacher on retirement to seek employment outside education. Can an assurance be given that it is the intention of the Bill to remove this present disincentive? I should be extremely grateful if the Government would take this opportunity of putting the matter right.

§ LORD BOWLES
My Lords, in the first place the noble Marquess wondered whether there was not too much government by regulation as opposed to permanent legislation. The point is, as I tried to explain in my speech, that it is much more difficult to get a new Bill to deal with many of the things that arise from time to time and are thought to be important. That is the reason why more matters are dealt with by regulation than by Bills. As regards the question of 769 proper consultation. I also said in my speech that there would be very serious consultation, not just telling the teachers and local authority associations what the Government are going to do. The Secretary of State will take into consideration in the proper way the views that are expressed, and consultations will be real consultations and not just dictates.
As regards the point raised by the noble Lord, Lord Balerno, I do know of this question, although I do not know it in very much detail because my noble friend was taken ill rather suddenly and it was only last night that I knew I should be taking his place. But it seems to me that teachers, when they retire and come back to teaching, cannot go on drawing their whole pension and expect full salary at the same time. So their pension is reduced—"docked", I think, was the noble Lord's word—while they are working. But as they therefore work two or three more years their pension presumably will go up, and the service they have given to the nation, and in particular to education in Scotland, will be rewarded by an increased pension when they ultimately retire. As regards giving an assurance, I am not quite certain that I can give one, but perhaps the noble Lord will allow me to write to him on this matter and, in the circumstances, will excuse me from giving a definite answer now, 770 because, as I say, I had to deal with this matter at short notice.