§ Major BARNETT
I beg to move,That, in the opinion of this House, it is desirable that the statutory pensions of superannuated railway servants retired before or during the Government control of the railways should be increased to such an extent as will meet the increased cost of living.I think that I cannot do better in bringing this matter before the House than state exactly what the railway superannuation funds are. There are fifteen statutory railway funds altogether, to which there are 108,000 contributing members and 6,700 superannuated members. The accumulated funds amount in round figures to £12,000,000. The average pension is not a high one. For the whole of those funds the average pension is only £90 a year. In the case of some funds it is as little as £57 or £65 a year. Incidentally I must say that, while the great bulk of these superannuated men are exempt from Income Tax, that tax is assessed on the highest annuity, and no less than £115,000 has been paid in the last five years on these funds. I am only mentioning that as one of the things that reduce the amount at the disposal of the funds. It is almost impossible to exaggerate the benefit which the community as a whole has derived from the existence of these funds. Take 357 the National Insurance Act. I need not say that contributors are excepted from national insurance, and in the seven years since the Act came into force the Treasury has saved £455,000 through the superannuation funds, and it is saving now at the rate of £68,000 a year. Moreover, during the past; five years, while the railways have been under Government control, the employers contribution which would have come out of State moneys has also been saved. Then there is the old age pension. Most of these people, in point of fact, would have been able to obtain the old age pension. The average age of the members is over seventy, and it is only at sixty-five they begin to draw superannuation. It is estimated that £464,000 has been saved to the State through these superannuation funds, and it was calculated six months ago that that was increasing at the rate of £64,000 a year. But of course, with the recent necessary increase of the old age pension, that will be greater still. Of these fifteen funds, eleven are funds, the money of which is invested with the railway companies. I will give those companies.
They are the North Western, the Mid land, the Great Central, the Great Northern (partly), the South Western, the Brighton, the North Eastern, the Lancashire and Yorkshire, the Caledonian, the North British, and the Glasgow and South Western. In the case of these 11 companies the money has been left in the business. What does that mean? Before the War it meant a snug investment of 4 per cent. The railway companies wanted to treat their superannuated servants on the most-favoured-nation terms, and at the time when they were only giving 2½ per cent. to their debenture-holders they gave 4 per cent. to the Railway Superannuation Funds. Four per cent. from the Midland or the North Western Railway before the War was something to make one's mouth water. There came a change, the War intervened. The State took over the control of the railways. The value of money went up by leaps and bounds. The Government, with the finest security in the world, began to borrow at 4 per cent., 5 per cent., 5½ per cent., and 5¾ per cent. These funds only carried interest at the rate of 4 per cent. That applies to £8,000,000 out of the £12,000,000. So far as the other £4,000,000 are concerned, 358 with the. Great Western, the Great Eastern, the South Eastern and Chatham Railway Co. and the Railway Clearing House funds, there is no question about these, because they were invested in general securities. If these securities went down those concerned shared the fate of the rest of us. But there is a special point that I shall submit to the House as regards the £8,000,000 actually loaned to the railway companies, because that has been receiving through the War period a rate of interest not at all commensurate with the value of money, £600,000 having really been under-paid on that £8,000,000.
Who is it that participates in the benefits of these funds? I can summarise it by saying that for the most part it is the salaried staffs and the supervisory staffs. In other words, the great bulk of the annuitants are stationmasters, clerks, and inspectors. In the case of the companies a few other grades of the service contribute to the fund and participate in its benefits. In the case of the London, Brighton and South Coast, for example, drivers, guards, signalmen, and ticket-collectors all contribute to the fund and participate in its benefits. Apart, however, from exceptional instances like that of the Brighton Company, with the majority of the companies it is the salaried staffs, the stationmasters, clerks and supervisory-staffs who contribute to and benefit from the funds. Many of these men have begun on the lowest rung of the ladder. A man may have started as a railway porter, then have become a goods guard, then a passenger guard, then an inspector—when for the first time he becomes a contributor to the fund—eventually he reaches the summit of his ambition, a stationmastership. In some cases—and the facts are within the knowledge of many hon. Members of this House—the man had a little wayside station, a house and coal, and may be 30s. a week, and there was no large margin for saving. Indeed, there was no need for saving, because the man was assured of a happy and comfortable old age from his pension—not a big one, certainly, but something that he could live upon quietly in a country place in pre-war time, say, £90 a year.
It is for these veterans of the railway industry that I want to appeal to the House this evening. They are men to 359 whom the country, not only the railways, but the country, owe the greatest possible debt. They have risen through their own care, ability, and loyal attention to their duties to an honourable position, and have retired on something which they expected would give them subsistence in the evening of their days. They find, through no fault of their own, that they are beggared and dependent on the charity of their friends when they ought to be having an independent old age. Possibly I shall be asked from what fund do I suggest that these inadequate pensions shall be augmented? I am asking the House to declare that it is desirable that the pensions of these people should be increased to such an extent as will meet the increased cost of living. Some doubt may be raised as to the quarter from which that money should come. I myself have a very shrewd idea that the State which has controlled the railways since August 12th, 1914, and has, in the words of the Scottish proverb, had the opportunity "of making a kirk or a mill of it," and has perhaps made a mull of it, that the State, which has had the railways in its hands and prevented the companies from being master in their own house, should foot this Bill. Of one thing I feel certain that whether it is the State or the railway should foot the Bill, someone has got to foot it! I shall, I hope, be able to make out to the satisfaction of the House that this is a debt that has to be paid either by the State or by the railway companies, or by the two together, and the sooner the Minister of Transport and the railway companies put their heads together and decide exactly the proportions in which this necessary money shall be forthcoming, the better it will be for the credit of the House of Commons and the nation.
In the first years of the War—we know from the White Paper, Command Paper 147—and in fact right down to the Armistice very considerable profits were made by the railways companies. The White Paper shows that the War profits on the working of the railways from August, 1914, to December, 1918, were at least £17,000,000, plus an unascertainable sum which is estimated from £10,000,000 to £15,000,000 made from the steamboats, and so on. The total is something between £27,000,000 and £32,000,000. The Minister of Transport has come down 360 here since and has said he had a debit balance estimated at £100,000,000. That figure has been whittled down since. I never believed it. I do not believe it now. But if it were true it does not affect my argument one whit. If the State took the railways in hand to control them, and thought fit to raise the wages, as it did raise them, let the State pay for it manfully, and not the railway companies who had no part nor lot in much of what was done. What attitude do the present staffs of the railways take in regard to this question of superannuation? They take the most sympatheic attitude. In the case of three of the companies, the North Western, the Midland, and the North Eastern, the men have put up something out of their wages—3d. per week, a sort of levy—on condition that the company find a similar amount, and this goes to relieve the necessities of members of the superannuated staffs. That is very creditable indeed to the working staff, but it ought not to be necessary, although a gift like that from their friends or successors is something they receive more cheerfully than from outside. It is, however, putting a stigma on the men which they do not deserve. The Great Western Railway, the Great Central Railway, and the South Western Railway are making similar arrangements at the present time. The Railway Clearing House, a great institution with 60 railway companies included in its membership, has not waited for the Government to deal with this matter. It has taken its courage in both hands and made a grant to these necessitous people. I have received letters from many of these old people of a most heart-rending description, and some of them are reduced to the greatest penury and almost to despair. I am aware that we shall probably be accused of making a raid on the Treasury. I can well remember my first days in Parliament, when I was a very young, and I hope a very innocent M.P. At that time I went on a deputation to the then Financial Secretary to the Treasury (Mr. MacKinnon Wood) to ask that the old age pensions, which were then only 5s., should be increased. There were Members of all parties on that deputation. Mr. MacKinnon Wood received us very courteously, heard all our arguments, and then said to us:I am glad nobody has alluded to the fact that we are spending £6,000,000 or £7,000,000 a day on the War.361 Of course it is the spendthrift's argument that because you are spending much in one direction you can afford to spend more in another, but the fact that we could spend £7,000,000 a day on a just war gives us some sort of criterion as to what we could do with a perfectly just claim such as this. We were told by the Chancellor of the Exchequer the other day that a sum of £50,000,000 would be required to deal with all these questions of pensions. He said:I have taken the trouble to see what would be the immediate result of our action in regard to this Resolution. It would add to our liabilities the capital sum of certainly not less than £50,000,000. It would add an immediate annual charge and if you calculate the capital it would not be less than I have stated, and this includes nothing for the railways.Those figures may be open to criticism, but I accept them as they were accepted by the Home Secretary. No doubt the Chancellor of the Exchequer will assume an adamantine attitude towards any proposals which will tax the public purse. I have no doubt the right hon. Gentleman regards those who bring forward proposals of this kind as light-hearted revellers, who are indulging in the rollicking chorusAnother little million wont do us any harm.I can assure the House that those who are bringing forward this Motion to-night do not approach this problem in any frivolous spirit of that kind. We realise the necessity for economy, but admitting that we must be just before we are generous, let us at any rate make sure that we are just. 1s it just to concede, as we have done, every demand of the actual working staff of the railways, and then refuse to make any concession to the superannuated men? I say fearlessly, that it is a very cynical argument in favour of the right to strike that the men who have the power to strike get every penny of their demand, and the men who have not are left to starve. I cannot believe that that is justice, or that it is anything that this nation has a right to be proud of.
I have said already that this money, which is absolutely needed to augment the small pensions, must come either from the State or the railways or from the two together, and this Debate may show us which is the proper quarter. I understand it will be urged from the Treasury 362 Bench that the State has no part or lot in these matters, that the railway servants are not public servants, and that this House need not interest itself in their superannuation. It is perfectly true that the man who comes into the vineyard at the last hour generally demands his penny, and my experience leads me to believe that he generally wants the vine-yard as well. It is perfectly true that the men I am pleading for have got what they bargained for originally. They bargained for such and such a contribution, and an annual sum which allowed them comfort and a subsistence in a quiet way, but I think it is up to us to see that these men at the end of their days are not allowed to starve.
§ Sir WATSON RUTHERFORD
I beg to second the Motion. After the eloquent and convincing manner in which this Motion has been proposed, I shall detain the House for a very few moments. The House is aware that at the present time the superannuated staffs of the railways number about 6,700 men. Of these 2,300 receive less than £l a week and 5,200 out of the 6,700 receive less than £2 a week. There are only 4 per cent. of the whole superannuated staff who receive over £200 a year pension, and therefore the Motion we are making to-night may be taken to refer to 96 per cent. of the superannuated men, of whom about one-half are receiving a pension of less than £l a week. The question naturally arises how can these people manage to subsist at all upon such an amount? I know the case of one man. I give it as an illustration, but I do not wish to harrow the feelings of the House. That man is 72 years of age. He has a wife who is an invalid, his pension is 16s. 2d. a week, and he does not happen to be fortunate enough to have served in one of those companies where the staffs have come forward and made a weekly whip as they are so generously doing in the case of several railways. That man would have to go into the workhouse with his wife were it not for the fact that there is a small penny collection made in a hat every Saturday afternoon along the railway platform in order to enable him to buy a bit of bread. The facts have been well laid before the House. We have here a case that ought to be inquired into. Something ought to be done. This is a class of man which cannot strike, and therefore at the present 363 moment they are left high and dry. They are left to starve.
But I venture to suggest that if it is at any time a right and proper thing to increase the wages of the working staff, it surely is only just and fair that some small proportion of that increase should be given to the superannuated veterans who have done their life's work in the interests not merely of the railway companies, but of the general public who are represented by the Members of this House. I will not go over the same ground as the mover of the Resolution. But may I remind the House that there are four very large sums of money which have gone in some direction, and either the State or the railway companies have had the benefit of them in connection with these superannuation funds. These four different categories are, first, £400,000, the difference in the rate of interest that ought to have been paid by somebody to the benefit of these funds. The railway companies during the whole time have had the control of, and been responsible for the receipts and payments and for the dividends arising from £8,000,000 at 4 per cent. Four hundred thousand pounds, therefore, would be a proper rate of increase owing to the Superannuation Fund by someone. In the next place, £115,000 Income Tax has been charged against these funds during the last six years—
§ Sir W. RUTHERFORD
It is perfectly ridiculous to charge Income Tax in that way. According to the figures I have here, £115,000 has been so charged in six years. Some has been refunded, but nothing like a half of it. In the next place, £900,000 has been saved by the National Health Insurance by the very fact that that fund has been relieved of providing for all these superannuated men who contracted out, and it has had the effect of saving £900,000. In connection with Old Age Pensions also a sum of £464,000 has been saved to the State. These sums of money, excluding the amount recovered from Income Tax, come to very nearly £2,000,000, and either the State or the railway companies have had the advantage of that money. It would be 364 perfectly futile for anyone on the Treasury Bench to deny that something ought now to be done for these unfortunate people who have been left in the lurch. What is the position? This difficulty arose exactly at the time when the Government was in control and possession of the railways, and my contention is that it ought at that time to have been fairly faced. It was perfectly clear that this difficulty did exist, and it was the duty of those who took over charge of the railways to see that something was done to meet it. An association was formed amongst these superannuated men, and it went individually and collectively to the railway companies. The companies almost unanimously expressed deep sympathy with the men, but pointed out that, as the Government was in control, they could do nothing. Then the Federation went to the Railway Executive, which also received them with deep sympathy, and referred them to the Board of Trade. At the Board of Trade, they got more sympathy, but they were told that there were frequent changes at the head of the Department, and, as the present head of the Department had only been in office three weeks, and his predecessor had not dealt with the question, he would go into the matter when he had time. Then they were referred to the Treasury, where still more sympathy was forthcoming. Each of these people referred the representatives of these unfortunate men from one Department to another—heaps of sympathy on every occasion, and nothing done. That is the position, and this matter is going on now, and while we are debating this Motion a number of these unfortunate people are absolutely on the verge of starvation, and I claim that something should be done at once. They eventually got to the Prime Minister, and they got a letter from his private secretary with more sympathy, but the Prime Minister was, of course, too busy dealing with Turks and Jugo-Slavs and other people of that description, and in the meantime these people are starving.
With this unlimited sympathy there is no redress, and we have been driven to bring forward this Motion in the hope that it will receive something more than sympathy from the the Ministry of Transport. It is time this subject ceased to be dealt with as a football tossed from the Board 365 of Trade to the Ministry of Transport, from the Ministry of Transport to the Railway Executive, and so on. We want it settled in some shape or another, and I suggest that the hon. Gentleman (Mr. Neal), if he is in a position to deal with the matter at all, should tell us what the Government are prepared to do as a Government, and I think he might say the Government is now prepared to leave the railway companies to deal with the matter in their own way, because I am authorised to say that these men believe that the different railway companies would treat them in a fair and generous manner if they were only allowed by the Government to do so. That question of what the Government does or does not allow the railway companies to do is an exceedingly difficult one. We do not know the terms of the agreement between the Government and the railway companies. What is it? We understood they were allowed to spend all their ordinary working expenses. One of the railway companies the other day gave a gentleman £50,000. Was that a working expense? I do not know whether the Government assented to that. I do not wish to make any observation about it. I daresay it was right and proper to pay it, but if a railway company can pay that without it being reasonably objected to, surely the Government ought not to raise a finger of objection to the railway companies giving a few pounds to the necessitous cases amongst the veterans of the staff to whom they and the public owe so much.
§ Mr. TURTON
I am the Chairman of the Railway Clearing House. We have not only a Superannuation Fund for our own staff, but in addition we have, as parties to that fund, no fewer than seventy-two other railways and joint committees of railways. We have therefore a very large number of annuitants and we pay away something like £60,000 a year in annuities. Therefore, I can claim that on the Clearing House Superannuation Committee we have not to learn a great deal about this matter that we are debating. There was brought to our notice some two years ago the very terrible plight to which many of these annuitants were reduced, through no fault of their own, by reason of the very small annuities they were in receipt of. We felt we were bound to take action. We accordingly asked the delegates who 366 represent the Railway Clearing House to place a considerable sum of money at our disposal in order that we might make compassionate grants in all these cases of necessity. The state of a large number of the annuitants was piteous. I was thankful that we were able to grant them some alleviation and to permit them to obtain the necessaries of life. That compassionate grant continued for two years. I am extremely sorry, when dealing with men who have done such splendid service in the railway world, to use such an expression as "compassionate grant," but that is the only term which, under the circumstances, we are permitted. We hope and trust that we shall have thrown sufficient light on this matter, that there will be no question of a compassionate grant, but that the Government will consider the matter and recognise the justice of these men's claims and give us authority on the different railways to deal with it in a just, fair and reasonable manner. East week the House was considering the question of pensions to the police. We have a far stronger case that we are debating to-night than that of the police pensioners. A policeman after twenty-six years of service, in the prime of life, in the forties—I only wish I could be in the same position—is able to take up practically any other employment, and other kinds of life are open to him. I have recommended policemen for various posts in Yorkshire. One is a county court bailiff, another is a keeper in a good position, another looks after a factory. Their life is not finished. Their work is not done. They have their own opportunities of continuing to earn money. That is not the case with the railway men. You have practically worked them to death, because the men who are in receipt of these pensions did not work under present-day conditions. There was no question of overtime; there was no discussion as to short hours. They served the different railway companies loyally and well, and that is why we feel it is such a hardship that they should be left in the lurch in the way we suggest they are being left by the Government to-day.
We had, on the occasion of the police question, a soulless lawyer in the person of the Home Secretary to deal with this matter, and what did we get from him in regard to that? That he had explored 367 every avenue of economy. I suppose the Home Secretary in his voyage of exploration had been using the policeman's dark lantern, and the shutter got jammed and he has not been able to show any light upon what he was exploring. It is absurd for him to tell us that every avenue of economy must be explored. Let them go to the War Office. Let them go and see the numberless cases of officers going about with petrol, officers using our trains and filling them up. Only the other day as I was going North there was an officer in the train from York and he boasted that he was able to spend every week-end in the South at what he called His Majesty's expense. His Majesty's expense meant the taxpayers of this country, who have to make up the railway deficit. This question of economy in the mouth of the Home Secretary is nothing less than idle eye-wash. I trust that the Minister who gives the reply to-night will not use any such futile arguments as those which the Home Secretary used last week. There may be a necessity for economy in the Ministry of Transport. I noticed only yesterday that a journal to which we pay much attention is taking up the question of the staffing in the Ministry of Transport offices, and has suggested that when the Minister of Transport returns they would tackle him on the question of the staff in his office, which they suggest should be 718. The Ministry of Transport not only use the staff in their own office, but they come to us in the Railway Clearing House and we have to provide them with numberless staff. We have to call back clerks from other vocations in order to obtain the statistics which the Minister of Transport declares are necessary for him. I hope that in the Minister who is about to reply we shall have one who is, at any rate, sympathetic towards our proposals. It was not very long ago that the hon. Member for the Hillsborough Division of Sheffield (Mr. Neal), who is now Parliamentary Secretary to the Ministry of Transport, was good enough to come to the Caxton Hall, where we had a large meeting to discuss this question, and amongst the sympathetic speeches from that platform there was no speech more sympathetic in every detail than that addressed by the hon. Gentleman to that large audience of pensioners. This is 368 what he said at that meeting on the 4th November:They had had up to the present nothing but excuses, and that was not what they wanted.I tell my hon. Friend to-night, when he speaks on behalf of the Government, that we do not want excuses. It will not come very well from him if he attempts to give us any excuses. He went on to say:The Government should set an example of high rectitude in such matters.We want the Government to set an example of high rectitude in the matter. He finished up with the great peroration:The superannuated staff should have justice done to them in their old age.That is exactly what we are asking the House to agree to to-night. He also said something about pensions being in the nature of deferred pay. Throughout the whole of that evening my hon. Friend's speech thrilled us. "No excuses, high moral rectitude, and justice to be done to the old age pensioners." Will my hon. Friend endorse to-night from that box what he told us in the Caxton Hall on the 4th November? I regret very much that the Minister of Transport cannot be with us to-night, because if he had been here we should have claimed him as an advocate on our side. In my connection with the right hon. Gentleman on the North-Eastern Railway, I always noticed that he said that everybody who worked with him or under him, including himself, should be fairly and justly remunerated. My hon. Friend (Sir Watson Rutherford) must not take it that I agree with him on another matter to which he referred, which has passed over and is done with. The Minister of Transport during the War was practically in the same position as a superannuated railwayman, because he was lent by the railway to the Government. During the time that he was at the Admiralty he could have been in receipt of a salary of £4,500 a year and an official residence; but my right hon. Friend would have none of the pittance which you offer to the First Lord of the Admiralty. We continued to pay him £8,000 a year, £2,000 a year pocket money, free of income tax, and £1,000 a year to pay for a house. If it was right—and it was right under the circumstances—that my right hon. Friend the Minister for Transport, when he was a superannuated 369 member of the North-Eastern Railway staff, should have been in receipt of £11,000 a year, £3,000 of which was fret from income tax and super-tax, surely we can claim that he will give a measure of justice to these poor annuitants who are so sadly in want at the present time. Therefore, I hope that the Parliamentary Secretary will represent to his Chief that the time has come when these annuitants should be treated liberally.
The right hon. Baronet, the Member for the City of London (Sir F. Banbury), in the Debate last week followed a course with which we used to be familiar in the days of Labouchere and went to the Bible for a quotation, which was not quite correct. Last Sunday morning, when I was reading the lessons in Church, I read this verse:Whatsoever ye would that men should do unto you do ye also unto them.That is what we recommend the Minister to do, and that when he is dealing with these people who are so sadly in want of assistance he should do to them as he would they should do to himself. We are not going to suggest what the Minister should do, but we do want a sympathetic reply, and we want no more put-offs. There has been a very splendid movement on a part of the salaried staffs in many of the railways and in the railway clearing house. Members of the salaried staffs have denied themselves in order that they might assist their suffering brothers who have been in the service, and we on the North Eastern Railway and in the clearing house agreed to give pound for pound for every sovereign subscribed by the men in this way. I commend that to the Parliamentary Secretary. Many railways have adopted this scheme, but there are, unfortunately, other railways that are laggards. Under the Ministry of Transport Act the Minister can give orders to the directors of railways to carry out certain things, and I suggest that the right thing would be to issue directions to the chairman of the Great Northern Railway Company, that his railway should give pound for pound for pound for every single sovereign subscribed amongst the men for helping the annuitants. We hope for more assistance. We want a statement from the Minister and an assurance that whatever we give by way of additions to these 370 pensioners shall be allowed below the line and not put above the line. If it is to be taken as working expenses, then you may take it that the railway companies can be trusted to do justice to those whose cases are indeed hard, and who, I think, we shall decide practically with unanimity are bound to be helped under their present circumstances.
§ Sir F. BANBURY
My hon. Friend who has just sat down has told us how very generous the North-Eastern Railway has been. I am sorry that I did not have the honour of serving with the North-Eastern Railway and of receiving £11,000 per year—£3,000 free of Income Tax—not for doing any work for the North-Eastern Railway, but for doing work for somebody else. I do not know what the Minister of Transport will say when he comes to read this Debate, but that is a matter which concerns my hon. Friend and the Minister of Transport. My hon. Friend also made a great attack upon the Home Secretary. I was present during the whole of that Debate, and I must say that I think the Home Secretary showed a great amount of courage under very difficult circumstances. My hon. Friend referred to him as a soulless lawyer; I should have said that he was a statesman guided by honest motives. My hon. Friend the Member for one of the Divisions of Liverpool (Sir W. Rutherford) has made some very wild statements. I endeavoured to put him right in order to save a little time, but he was so impetuous that he would not listen to me. He went on to talk all sorts of fables about various sums and about various supposititious incomes in circumstances which have never existed. He said that the railway companies were taking the money of the Superannuation Funds at 4 per cent. and deducting the Income Tax from it.
§ Sir F. BANBURY
He afterwards qualified it by saying that some part of the Income Tax had been returned. What are the facts with regard to the railway of which I have the honour to be chairman? My own railway up to the year 1917 paid on a certain portion of the Superannuation Fund 4 per cent., and it paid the Income Tax during the whole of that time out of its own pocket. 371 Therefore, there was no question of any appropriation of any Income Tax. The Superannuation Fund had 4 per cent. free of Income Tax. Then in 1917 our accountant found that the Income Tax Commissioners would be willing not to make any charge for Income Tax on the income of the Superannuation Fund, because it was more or less in the nature of a charity. As soon as I knew that I went to the Superannuation Committee and said that the position was changed, that there was now no necessity to pay the Income Tax, and that I should propose at once that We should give 5 per cent. on the money of the Superannuation Fund. That was in 1917. Naturally, the members of the Superannuation Fund at once acceded to my request, and we have since then given 5 per cent. on the Superannuation Fund.
§ Sir F. BANBURY
It was a mere act of justice. There is an idea that there are companies which have not given more than 4 per cent. I may say that I happened to be speaking to the chairman of another company, one of the largest, and he told me that he has given 4½ per cent. for some considerable time. There is, however, an idea that the money might have been invested at a higher rate of interest. Any sum that could have been obtained in that way would not belong to the people who have been superannuated, but would belong to the Fund. Perhaps it is news to my hon. Friend, and possibly to the House, that all the superannuation funds of the railway companies are at the present time insolvent.
§ Sir F. BANBURY
Yes, actuarily. Therefore, that money could not have been spent on giving increased benefits to the members, but must have gone towards making the funds more or less solvent. When, in 1917, I proposed to give 5 per cent. from the Superannuation Fund of the Great Northern Railway, I said that I did not see that the Company could use more than £500,000, and that we must limit the money we could take to that sum. That left a considerable sum to be invested, and £500,000 was invested in War Loan. It was purchased at just under 95, and to-day the Loan stands at 87¼. If you take 87¼ from 95, you will find that 372 there has been a loss of 7¾ per cent. in two years, which, on £500,000, is very nearly £40,000. In my case they got no more interest, but even where they were not getting 5 per cent. and where they would have got a little more interest it would have been more than swallowed up by the depreciation which would have resulted from any such investment. It must not be supposed that railway companies are either soulless beings or people who have no business instincts. In the case of the Great Northern Railway, 4 per cent. was allowed from 1875 to 1917, when I rose it to 5 per cent. What was the rate of interest during the nineties? The rate of interest on investments varied from 2½ to 3 per cent. Therefore, the annuitants were benefiting by something like 1 per cent. That is not all. Their funds remained intact. Had they been invested at 2½ and 3 per cent. at that time, they would have lost half the money by now. Where a million pounds would have been invested, at the present time it would not be worth more than £500,000. Therefore, the system which has been attacked by the superannuated servants, instead of acting harshly upon the Superannuation Fund, has acted extremely well.
§ Sir F. BANBURY
I do not know whether the House understands what are these Superannuation Funds, or how they have arisen. I believe it is the same in every company. The servants contribute so much, and the railway companies contribute an equal amount. In January, 1906, we found that the Superannuation Fund of the Great Northern Railway was insolvent. At that time I was not Chairman of the Company, but I was Chairman of the Superannuation Fund, and I took very considerable interest in it. I said: "We have not actually compelled oar employés to join the fund, but to all intents and purposes we have done so, and we have the management of the fund in our own hands. Therefore, they have a right to expect that the benefits which they understood that they were going to get when they joined the fund shall be assured them. The Fund is insolvent, and we cannot go on paying these benefits. Those people who were members of the Fund before 1906, must have their benefits secured to them and they must come out of the pockets of the shareholders." There was a considerable discussion but 373 eventually it was put to the shareholders and they agreed, and we paid a sum—in these days when we spend millions a few thousand pounds do not seem to matter, but in 1906 they were of some importance, as they are now—of £15,000 in 1907 out of the profits of the shareholders in order to secure to those people who had joined the Fund before 1906 those benefits which they thought they were going to get.
In 1906 we reduced benefits slightly in order to make the Fund solvent for the new entrants. In 1909 the Fund was again found to be actuarially insolvent, and the Company paid another £5,000 so as to preserve to the second class the benefits which they thought they were going to get. In 1914 the same thing Occurred again, and the Company paid another £5,000, and at the present moment the Company are paying £31,566. One-half per cent. on the deferred stock is £40,000, so that we are paying very nearly one-half per cent. in addition to the additional amount we agreed to pay, namely, the same contributions as those of the service. In the year 1919 the contributions of the employés were £28,030, and the Company contributed £60,000 instead of the £28,000, which is all that they were bound to contribute. We have endeavoured to do our duty impartially, because we had a duty to the shareholders as well as to the employés. In 1903 the actuarial deficiency was £560,920. In 1908 it was £164,791. That includes the Company's subsidy of £15,000. In 1913 it was £160,302, including the Company's contribution of £31,000. I am only talking about my own Company, because it is the only company of which I can give full figures which I know to be accurate. Roughly speaking, there are rather over 30,000 shareholders and rather over 30,000 employés. The employés have had a very large rise in wages and salary. I do not know whether the House quite realises what that amount has been. In this year we estimate that we shall pay in wages and salaries alone a sum of £7,000,000. That is more than the total gross income received from all sources by the Company in 1914. In that year the total gross income of the Company was about £6,000,000. The shareholders are receiving a less dividend than they did in 1914.
§ Sir F. BANBURY
I am not talking about wages, but shareholders. I rather agree with the hon. Member that it was a starvation dividend, and I hope that he will put his hand in his pocket when he travels on a railway and pay rather a higher fare and will support higher rates in this House when the question of rates arises. Let him show his generosity out of his own pocket. The shareholders, who are as large a number as the employees and are receiving less than they did in 1914, are not rich people. I do not know what the average is, but my belief is that the average holding is only about £600 or £700, and I note that a large number of the shareholders have nothing else or very little else to depend upon for their living. That is the position as regards the Great Northern Railway Company, but I believe that it is more or less, the position as regards other railway companies. I quite agree that it is desirable that all people should be better off than they are, and that it would be well if they would increase the fees paid to the Chairman of the Great Northern Railway Company, though I have not found anybody who is prepared to do that. It is most desirable to increase everybody's income. I daresay that a good many people in this House would like to get more than £400 a year, but you cannot always do what you like. You cannot always make this a perfect world. Notwithstanding what the Prime Minister has said about making a new world I myself do not see the new world coming. But consider the position. These people pay a certain sum of money down in order to get another sum. The Company out of their own pockets have paid far more than there was any obligation on them to pay in order that the particular sums which the employees thought they were going to get should be given to them. How can anyone come forward and say that these people have the right to receive more than they paid for without paying any more themselves because of certain things that have occurred?
I will take a further instance. Who can tell what the cost of living really is? The calculations vary very much. Have these funds to be re-valued every time the Board of Trade sends out a different figure? Then, I ask, who is going to pay? I am certain it cannot come out of the pockets of the shareholders. Has it to come out of the public, out of the 375 Treasury—the State? We are all the State. Everybody, here and outside, constitutes the State, and it would have to come out of our pockets. As I said in the case of the police pensions, all this may be very good, but you must draw the line. Personally, in this case I have no objection to the Government coming forward, but I am not so sure about the view of the taxpayer. Is the Government to come forward and break this bargain? It is not an ordinary bargain in which a certain sum has been paid, but they come to us and say, "You have to pay this out of your pocket." We cannot go on with that. The pocket of the taxpayers will be empty some day, and then you can get nothing. That is really what hon. Members have to think about. I am quite certain it is impossible for the railway companies to do anything more than they have done. I have endeavoured to put the case as I know it. I believe my statement is correct. I have taken considerable trouble to get the figures. I have given the case of one individual company because I happen to have the means of ascertaining the facts, and I believe also that I am correct in saying that, although there are variations in the administration of the funds of the different companies, speaking generally, the illustration I have given is applicable to all.
I am sure the sympathy of the House will go forth to this deserving class of people, who have worked for so many years on low salaries in the expectation held out to them. The inducement offered to them at that time to continue work at low salaries was that they would get superannuation allowance in their old age. This is a contributory scheme, as stated by the right hon. Baronet (Sir F. Banbury). The men contributed a portion and the railway companies also contributed. There is no charge being made against the conduct of the railway companies with respect to these superannuation funds. They have dealt very generously with the staffs, and it remains now for the Government to step in. The period of service of these men is between 40 and 50 years, and the mode of calculation is not the same as that of the Treasury. In the last year of service they would have considerable salaries at the Treasury. It is calculated for the whole 376 period of their service in this case, and consequently their superannuation allowance is a very small one. The effect of this will be seen by the fact that 23 per cent. of the members are receiving from £30 to £50 a year; 29 per cent. £50 to £75; 19 per cent. £75 to £100; 10 per cent. £100 to £150; 3 per cent. £150 to £200; and 4 per cent. above £200. The other 12 per cent. have under £30 per annum. This will show to the House the state that these men must be in who have to depend upon the small grants. The contribution of the railway funds has been raised to something like £12,000,000, and of this £8,000,000 are in the hands of the railway companies since August, 1914, and have been available for railway purposes. Taking the present rate of interest at 5¾ per cent., that represents £140,000 per year. During the War, with all respect to what the right hon. Baronet has said, £115,000 has been charged for Income Tax, although I believe Parliament decided years ago that such funds should be exempted.
Then take the saving to the State. In the case of National Insurance the members of the funds were exempted. That is a saving to the Treasury during the seven years of some £455,000, and now the annual rate of £68,000 accrues under that head. As certain benefits have increased it will be seen that in the future a very considerable saving will be accruing to the Government under this head. Take Old Age Pensions. These funds have kept members from qualifying for Old Age Pensions which would otherwise have cost the State a considerable amount of money. Since the passing of the Act £464,000, at least, has been saved by the Treasury on Old Age Pensions, and with the present increase in the pension it will amount to something like £85,000 a year. Therefore, taking Income Tax at £115,000, the saving on National Insurance at £910,000, and the saving on Old Age Pensions at £464,000, we get a total of £1,489,000 which has been saved to the Treasury in the last few years owing to the existence of those funds. The average retiring age of these people is 65 years; the average age of those at present receiving superannuation allowance is 70 years, and the average life of men receiving superannuation is 7 years. I want to point out the unfairness of the present position. Members pensioned since 1915 who were receiving War bonus 377 granted by the Government did not on their retirement receive one penny in respect of that War bonus. That is an entirely different principle from that adopted by the Civil Service. I suggest this should be taken into consideration. The Government should allow two-thirds of the War bonus, or in some cases it might even be one-half, to relieve these people from the anxiety they are in at the present time. I um sure that this House would not grudge that to men who have done so well for their country, men to whom the Prime Minister referred with gratitude for their services during the War.
§ Sir J. BUTCHER
Let me recite what appear to be the undisputed facts of the case. So far no one has got up to suggest that there are not amongst these railway pensioners many absolutely pitiful cases of people who are on the verge of starvation and who really have not money enough to keep body and soul together. That is a fact. I do not think it has been suggested to the House that such cases ought not to be dealt with by someone. It has been suggested that on the one hand the State, and on the other hand that the railway companies, ought to deal with them. That they ought to be dealt with in common humanity and decency, I believe every hon. Member is prepared to affirm. If that be so, the only question is, where is the money to come from? I admit that it is a serious question. I say that, at any rate in necessitous cases, which I believe comprises the great majority, money must be found. I do not know what the representative of the Treasury is going to say. I hope he is not going to say that it is no business of the State; that the State can see men dying by the wayside, and pass them by like the person described in the Scriptures, and can say, "This is no affair of mine." I do not think he will adopt quite that attitude. If he does, I am confident it will not commend itself to the vast majority of the Members of the House. If I am asked, "How is the State to pay; is there any reason why the State should pay, or any funds out of which they could pay?" I will answer by asking, first, about the Income Tax.
It has been asserted by more than one speaker that the Chancellor of the Exchequer exacts income tax at the rate of 6s. in the £l from the income of these 378 investments. Is that so? If the State does take that income tax it ought to return it. What conceivable reason is there why it should take 6s. in the £l out of the income, the whole of which should go to poor men? You have a fund, say, of £10,000, divided among a very large number of poor people who by law are free from income tax, and yet the State, it is alleged, takes 6s. in the £1. If that is what is done I respectfully suggest to the Government—I wish the Chancellor of the Exchequer were here—it should be altered at once. On the figures quoted that change would supply about £115,000 a year, and that amount would go some way towards meeting cases of dire distress. Then we have been told that there is a sum of £8,000,000 (which represents the accumulated contributions partly of the railway companies and partly of the railway servants) which before the War was in the hands of the railway companies and carrying 4 per cent. interest. Since the State took control I understand that that £8,000,000 is in the hands of the State, and the State has had the benefit of that £8,000,000. The State since it has had that money has been getting it at 4 per cent. Is there any conceivable reason why the State should pay no more than 4 per cent.? They have had to raise money at 5 per cent. and 5¾ per cent. and on Exchequer Bonds at 6 per cent. and 6½ per cent. The Member for the City of London (Sir F. Banbury) said there was a bargain that there should be only 4 per cent. paid on this £8,000,000. There certainly never was a bargain with the State.
§ Sir F. BANBURY
The State has never received a single shilling, nor, so far as I am concerned, has income tax ever been taken away from these people. If we had invested the money as my hon. and learned Friend suggests, the depreciation would be far greater than any benefit that would result.
§ Sir J. BUTCHER
Even if the State had not had the money actually to use, it has had the benefit of it. [HON. MEMBERS: "No!"]
§ Sir J. BUTCHER
I am not considering the amount of it, but in whose pocket it has been. It has been in the pockets of the railway companies beyond any doubt.
§ Sir F. BANBURY
There is no profit. When we paid these people 4 per cent. we often lent it at 3 per cent. or 3½ per cent., and made a loss.
§ Sir J. BUTCHER
What I am suggesting is that the railway companies have had this £8,000,000 of money in their coffers, and have been able to make good use of it—I hope good use. I have no doubt my right hon. Friend has made the best use of it he can. We agree they have had this money in their coffers available for any purpose they like. The interest paid has been 4 per cent. If they put forward the view that in pre-War days they paid 4 per cent., and that, although nowadays it is worth 5 per cent. or 6 per cent., and would have to be borrowed at that rate, they will not pay one farthing more than 4 per cent., I am sorry.
§ Sir F. BANBURY
My company has paid 5 per cent. for the last three years, and another company about which I asked a question this morning has paid 43/4 per cent. All this is fiction about 4 per cent.
§ Sir J. BUTCHER
I quite realise that the hon. Baronet's company has paid 5 per cent., but I am referring to companies which still pay 4 per cent. I give all credit to my right hon. Friend and his company for paying 5 per cent. I think he might have paid 5½ per cent. The companies I am complaining of for the moment are those which adhere to the bargain, and will not pay a farthing more than 4 per cent. I suggest that, having regard to the present value of money, they ought to pay at least 5 per cent., and possibly 5½ per cent. That would enable larger benefits to be paid. If I am told that the Government cannot force them to pay 5 per cent., instead of 4 per cent., there are means of exercising pressure. I do give the railway companies credit for this, that if the Government and the House of Commons express the opinion that the railway companies ought, generally speaking, to pay 5 or 5½ per cent. for this large sum of money, I feel certain that the companies will do it, And therefore, I hope that the House of Commons will express that opinion. If it is not possible by the means I have suggested to get more funds out of the State for these necessitous cases, the question arises, what is the other remedy? I believe that the shareholders would be 380 willing to forego a certain amount of their dividends, and I can tell them it would not be large, in order to meet these extreme necessitous cases. I venture to suggest to the directors of the railway companies that if they have got the power, and if they have not, Parliament can give it, that they should put this matter before their shareholders, and tell them what it would cost to help these old servants of the railways. If they did so, I am confident that the railway company shareholders would not object.
§ The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Mr. Neal)
The task which falls to my lot is one which I welcome, because it gives me the opportunity from this Bench of renewing without qualification or withdrawal the sentiments to which I ventured to give expression on the occasion which was referred to at the Caxton Hall a few months ago. It is apparent to everybody that this land is full of hard cases. There are many people who have made money out of this war, and there are many people who have been left stranded and in dire distress as a result of this war. There is one thing quite certain, and that is, that the State cannot with all its resources and with all its sympathy make good to all the individual cases of hardship the losses which they have incurred. What the State can do, and what I hope the State may find itself able to do, is to endeavour to deal with a generous hand with those who have just claims upon it. I hardly know whether I dare use the word sympathy. I was told by a number of the speakers that this word has been misused during the course of the discussion on this topic, and that this question of the unfortunate, superannuated railway servants has become a football and that it has been kicked about, and that going to one department they have been told to go to another, and that in the net result they were simply bruised and wounded for their pains. When I say I sympathise with them, I may be open to the reproach that sympathy is cold, and if I do not say I sympathise with them, then I suppose I must share the criticism which has been addressed to my right hon. Friend the Home Secretary that he is "a cold-hearted lawyer." There are very few things in this Debate which I regret, but I do regret that expression. It is not 381 pleasant for a Minister of the Crown to have to stand here and to say "no" to any request which appeals to the kindly-hearted feelings of his fellow men. I do not think the hon. Member who made use of that expression with regard to the Home Secretary will do otherwise than regret that he happened to let himself fall into the slip. May I say I regret, too, and I only mention it in passing, the references which have been made to the personal position of the Minister of Transport, who is prevented from being here by ill-health caused by the strain that has come upon him by devotion to the State during the whole period of the War and since, and having said that I say no more about it. The character, the work, the eminence and the zeal of the Minister of Transport need no advocate from the Parliamentary Secretary, and I regret that the matter has been introduced.
On behalf of the Government, I welcome this Motion most heartily, and I offer no objection to its terms. It gives me, on behalf of His Majesty's Government, an opportunity, which I will take, of endeavouring to put this House fully into possession of the facts, and not only the House, but that great body of men, the old railway servants, who have served in one of those great, I will not call it State Departments, but one of those great public services which tend to the comfort and convenience and prosperity and happiness of us all. I want them to understand exactly where this question stands. Incidentally, I am not sorry in this House to note the presence of some railway directors. I should like to be quite sure that they, too, quite fully understand the position. I am not sure that they do, or if they do, I am rather disposed to think that they think I do not. However, we will try to clear the ground. Let us consider what exactly is the constitution and nature of these superannuation funds. From the year 1853 to to the year 1906, Parliament passed a series of private Acts of Parliament at the instance of the railway companies to constitute superannuation funds. The kind of fund that has been dealt with in Debate to-night is the fund relating to the salaried staff, as distinguished from the wage-earning staff, of the railways, and it is that aspect to which I will address myself. What is the reason why Parliament passed those Acts? It was 382 to the interests of the railway companies and to their clear advantage that they should maintain an efficient staff, and should not have left upon their hands a staff which, through advancing years, would become unable effectively to discharge the delicate and onerous and very careful duties which fall to the lot of railway men. Therefore, the railway companies were minded to say, "We are prepared to pay out of our funds a contribution towards superannuation," and that was generally fixed in the old days at 2½ per cent. Parliament gave the railway companies a legal right to make that contribution, and, at the same time, gave them the legal right to deduct from the salaries of the workers 2½ per cent., which they could not otherwise deduct, because it would have been a violation of the Truck Acts to have done so, and those two sums, making 5 per cent. upon the general salary list, constituted the superannuation fund. It was no longer railway company money, it was money which became friendly society money, and the money was vested in trustees, and the management of the organisation was vested in committees, and the committees had to propound rules which got statutory sanction, and under those rules they had to say what benefit they could afford to give to the annuitants.
In the course of time those funds were found to be, without exception, I think, actuarially unsound, and I doubt if to-day there is a single fund which, judged from the actuarial basis, is competent to meet the sums which are a charge upon it in respect to the annuitants who come on the funds. How has that been dealt with in the past? Sometimes it has been dealt with by the railway committees increasing the percentage which they had paid into the fund, but a more satisfactory way, which got rid of all actuarial differences, was this, that the railway companies guaranteed in many cases that instead of paying their contribution, they would pay such a sum as was necessary year by year in order to secure to the annuitants the monies which they were promised according to the rules. When I say they were promised according to the rules, they were promised m the sense in which every annuitant is promised something in a friendly society; that means that it depends entirely upon the 383 financial stability of the fund to which he has contributed. That is exactly the nature of this undertaking, and the trustees invested some of their money, roughly £8,000,000, with the railway companies, with which they were associated, and the railway companies in those days, wishing to deal quite generously with this fund, gave a little more interest than the current rate of interest, and although I hold no brief for the railway companies, which perhaps they will realise before I sit down, we must be quite fair. I have had extracted for me figures to show what the effect has been of investment in these railway company funds as distinguished from investment in Consols, and if you deal with a superannuation fund which had £10,000 a year to invest for the last 25 years and which had invested it in Consols year by year at the current rate of Consols, and had taken the interest, the result would have been that that superannuation fund would be in funds to-day to the extent of £136,515, by having invested with the railway companies as distinguished from having put its money into Consols. That being so, let me see whether under any circumstances apart from railway control there could have been any payment for the State. Assume for the present purpose that the War had not come, that these funds had fallen into a state of insolvency actuarially, could any claim whatever have been established against the State? Could anybody have come and said there was either legal or moral or charitable claim against the State? I think the answer is perfectly obvious, that no such thing could have arisen.
Therefore one is driven to consider this matter. Has anything which the State has done, or which it intends to do, in any way hampered or interfered with these funds or with the right of the railway companies, if they are so minded—and it is a matter for them—to help these funds, or, preferably, to help the old annuitants who are at present entitled to receive their allowance from these funds. I say at once that there is nothing at all in the Railway Agreement with the State relating to finance that constitutes any charge upon the State in respect of these matters. One of my hon. Friends said that if the State had not intervened, justice would have been done by the railway companies, and my hon. and gallant 384 Friend who moved this resolution tonight, and the hon. Gentleman who seconded it—and may I say without impertinence that the railwaymen are very fortunate indeed in their advocates in this House to-night, and in the sympathetic, clear, and impressive way in which their case has been presented to the House to-night—they suggested that something the State had done had in some way interfered with these funds. On behalf of the Government, I challenge that. When the Government assumed control, in August, 1914, for war purposes, of the railways, it began to discuss the financial conditions under which the relationship between the companies and the State should exist, and there was a series of communications passed from time to time, as circumstances arose, never collated into one document which one could lay upon the Table of the House and say, "This is the financial agreement between the railway companies and the State," but it is not very difficult to extract from these documents exactly what it was. The main item was this, that the Government guaranteed to the railway companies their net revenue from working their railways on a standard year, taking for that purpose, speaking generally, the year 1913, and they allowed the companies to deduct, before arriving at that result, their working expenses, and amongst working expenses they allowed the companies to debit their percentage contribution, on the 1913 basis, to the Superannuation Fund. But the companies were left in charge of their own finances. Let me at once, if I may, relieve the mind of the hon. Baronet who represents the City of York (Sir J. Butcher) as to the benefit, if benefit it be, of this £8,000,000 at 4 per cent. All the railway companies profits on capital, their rent from their property, their dividends from investment—all these matters were left to the railway companies, and if it be an advantage—my right hon. Friend the Member for the City of London (Sir F. Banbury) says it has not, in fact, been an advantage—but if it be an advantage, I am in entire agreement with my right hon. Friend that it is not an advantage which has accrued to the State in any sense at all, nor could it have been.
§ Sir J. BUTCHER
I am really asking for information. Supposing 5 per cent. had been paid on this £8,000,000 instead of 385 4 per cent., would the burden of the additional 1 per cent. have fallen on the State or the railway companies?
§ Mr. NEAL
I am obliged to my hon. and learned Friend. It would have fallen upon the railway companies. The nature of the financial control is shown by this fact, that although you have State control, and they were only guaranteed the 1913 revenue, most of the companies have been able to contribute to their dividends a little from their other resources. Therefore, so far as this question of the £8,000,000 is concerned, I ask the House to leave it out of its consideration. Then it is said that the Chancellor of the Exchequer has taken certain moneys by way of Income Tax to which he was not entitled, either by law, or has taken them unjustly. I will deal with either point of view. Everyone knows, that is so far as we can understand Income Tax law at all, that if a person is in receipt of an income which has been charged at the source with income tax, it is open to the person, if he is below the Income Tax line, to claim a rebate in respect of it.
Representations have been made by some of the hon. Members who have taken part in this Debate that, by the mysterious operations of the Income Tax law, there has been deducted from some of these funds a sum which, I think, spread over a period of years, is said to be about £115,000, the absolute figure is not material for the argument. I will only say this; that it is not a question that in the least degree affects the problem we are considering. If it is illegally deducted in the sense of deduction without authority or the sanction of the Board, then that is a matter which can be adjusted by methods with which the hon. and learned Gentleman and I are both familiar. If it has been taken by a law which in its operation is considered unjust, then all I will say is this—and it would be presumptuous and improper if I said more—that if those who are interested in this matter will be good enough to give me their facts and figures in detail I will call the attention of the Chancellor of the Exchequer to them, for him to take such action as he may think right and proper under the circumstances.
It has been said that some of these veteran railway servants, men whom we all admire, and with whom we entrusted 386 our safety from time to time, might have become old-age pensioners, and consequently a charge upon the State. Surely that is an unsound argument. Everyone who by thrift and industry, and the qualities we all admire because of their comparative rarity to-day, has put himself in a position of having an income that relieves him from the old-age pension is within the same category precisely as the men about whom we are talking to-night. It is said they came into the exclusion scheme of the National Health Insurance. But that was always a matter not for the State. The State did not excuse them. It was a matter where the employer, with the consent of his men, came to the view that benefits could be offered within their own sphere of action equivalent to those of the National Health Insurance, and on that they were entitled to apply for exemption from the scheme. Many corporations, and many large employers, have taken precisely the same step. To come now and say that because exemption has been obtained from the scheme for purposes of our own that entitles us to an advantage in this matter, is surely stretching the argument beyond a fair limit. Therefore, I respectfully suggest to the House that no case whatever can be made out by the men themselves directly against the State. May I say, too, that if this financial argument were sound, and even if it were a fact that those sums, or any of them, could be recovered, I suggest to my hon. Friends who moved this Resolution that they would not get the benefits for the present annuitants; they would go to swell the benefits for future annuitants. Anything you do now towards increasing the benefits of these funds, and to put them in a solvent condition actuarily, ought to aim at securing what I would very much prefer to see: that the railway companies themselves should preserve the good-will out of the extra reserves still at their disposal, and do something in the sense of guaranteeing the payments which fall due upon these funds. This is, I think, a better plan rather than endeavouring to deal with it by other methods. Again, the funds are in the nature of a friendly society managed by a committee appointed by the companies and representatives of the staff, and it is a question to-day whether we can get from the rail- 387 Way companies sympathy and assistance in order to make that fund what it ought to be, that is perfectly solvent. In 1900 the Board of Trade appointed a Departmental Committee to consider this very question, and I would advise hon. Members who can find the time to read the Report of that Committee. Some very direct questions have been put to me to-night. My hon. Friend the Member for Liverpool (Sir W. Rutherford) asked whether there was a case for inquiry. I say there is a case for inquiry, but I do not want an inquiry from this point of view—that while the grass is growing the horse is starving. If I were to say to the House of Commons that the Minister of Transport will appoint a Committee of inquiry, your answer would be, "Yes, this is another method of delaying, and playing, and toying with this question at the expense of these poor people." I was asked if the Minister of Transport would leave the railway companies to deal with this matter in their own way. My answer is, "Yes, without qualification at all."
§ Major BARNETT
Will the Government allow the railway companies to charge that as a working expense?
§ Mr. NEAL
We have lost sight now of the annuitants. [HON. MEMBERS: "Oh, oh!" and "Special pleading."] I do not wish to occasion any heat, and I hope my hon. Friends will aquit me of any desire to suggest that we have lost sympathy for the annuitants. I want the case of these men dealt with now without interference by the Government, and I want them dealt with by the railway companies concerned. If the railway companies, having done that, come to the conclusion that they have within the terms of the financial arrangement between the railway companies and the Government a right to claim that, as a working expense, that question can be discussed, and settled as many other questions have been settled between the Government and the railway company.
But let there be no mistake. I decline to-night to say that having read these financial arrangements with the railway companies carefully, and having taken the best advice available, I decline to say that I can encourage the railway companies to believe that that is an expense within the arrangement or which the State ought to 388 bear. One other suggestion was that the Minister of Transport could give directions under the statute that this payment should be made, but that really is not so. I have in my hand the statute, and under Section 3 the Minister can direct as to the salaries, wages and remuneration and conditions of employment of persons employed on or in connection with the undertaking, but he has no power to direct the railway companies how to deal with annuitants upon the Superannuation Fund. I hope that no dispute, possible, actual or potential as to who ought to bear any charge that there is on this matter, will in the slightest degree interfere with the railway companies taking such action as they may think right in reference to these annuitants, and if the result of the discussion to-night should be to add some small modicum of comfort to men who served the railways well, I shall be only too glad.
I have only one other point I desire to raise and that is that these men have never been Civil Servants at any time. A comparison was drawn in their favour as against the police and other Civil Servants, and it was suggested that they were entitled to greater sympathy because their retiring age was late and they therefore had less chance of obtaining employment for themselves during their retiring years. On the other hand, I would call attention to the fact that the police pensions and the pensions of the civil servant are matters with the financing of which the annuitant has no concern whatever. He has a statutory guarantee for his position. The State has to honour that position, whether it be, as in the case of the civil servant, wholly, or, as in the case of the policeman, shared with the municipality. The right of these men, however, is strictly limited to the solvency of the fund and the benefits secured by it. But I hope it may be found possible to improve it. Any improvement of the fund as such would not meet the case. I think if the railway companies desire to deal with the case they can only do it by establishing a special fund earmarked for the purpose of supplementing the present annuities. If their powers are inadequate for that purpose, we would facilitate an extension and would be only too glad to do so.
§ Captain BOWYER
As representing a constituency in which are situated the 389 towns of Wolverton and Bletchley, may I intervene in this Debate in order to appeal to my hon. Friend who last spoke for rather more than the "small modicum of comfort" which he has held out to the House. A tremendous number of my constituents are vitally interested in the subject we have been discussing to-night, and I have received many letters on the question. The last two were from men who had served without blemish on the London and North Western Railway for a period of 50 years. The amount which these men have to live upon cannot possibly afford them the necessaries of life. My experience, indeed, with the hon. Gentleman himself has been that when I write to him I am referred to a company, and when I write to the company I am referred back, either to him or to the Treasury, and to-night, instead of an answer as to who is the proper authority for me, who have these cases at heart, and have them thrown at my head every day, I get the small modicum of comfort that as yet the game of battledore and shuttlecock is not finished. After listening to the interesting speech of the hon. Gentleman (Mr. Neal) and of the right hon. Baronet (Sir F. Banbury) the question of finance makes a mere outsider like myself tremble on entering into the Debate at all. But the Government took over the railways at the commencement of the War. At that time railway employees were disgracefully paid, and the disgrace of their pay was reflected in the pensions which they were awarded when their life's work was over. The hon. Gentleman (Mr. Neal) says, "Assuming that the War had not come, would there have been any claim against the State?" Possibly not. But he never went on to say, "The War came, and let us deal with the fact."
§ Captain BOWYER
If so, I apologise. My contention is that if the Government took over the control of the railways at the start of the War they also took on the moral obligations incidental to the management and the greatest moral obligations to deal honestly, not as a question of a charitable dole, but as a matter of justice with the men who, had it not been for the War, possibly might have lived on the very inadequate pensions which they had, but because of the War are now in a position, owing to the depreciated value of money of being 390 utterly unable to live; and if the hon. Gentleman thinks he has given me any answer at all or any guide to the future, as to either what I am to assume or to whom I am to apply in these difficult cases, all I have in very truth is a small modicum of comfort.
§ Major HILLS
The very close reasoned and lucid speech we have just heard from the hon. Gentleman and one we expected from him, but our admiration was a little tinged with regret in that it appeared to many of us to be a piece of special pleading. He seemed to me to put before him one object only, that of protecting the public purse and Treasury against the demands of the annuitants. All through the speech one heard very little about the annuitants themselves and nothing at all about the obligations of the State towards the annuitants. I will take the history of the superannuation funds in the same terms as the hon. Gentleman. He said, I thought a little unjustly, that they were started by the railway companies for their own benefit.
I do not accept that. They were started by them as wise employers for the benefit of the employé and the benefit of the concern. Trey were put under autonomous control, and were not run as part of the railway, but run by an elected committee independent of the railway. The effect of that was that the committees who were inexperienced and over generous over-spent their income and gave bigger benefits than their subscriptions entitled them to give. Consequently from time to time the companies had to go to their shareholders and get them to pay considerable sums in order to make these funds solvent. In the case of the company with which I am connected, when the War came our very large superannuation fund was practically solvent. I believe it was the only one in the whole kingdom that was practically solvent. That had been accomplished at the cost of extra contributions from shareholders over the contributions of the employés It was brought about by special voluntary contributions agreed to by the shareholders. Then the War came. My hon. Friend asked, "Has the War made any difference?" He said, quite rightly, that if the War had not come nobody would have thought of asking the State for a contribution, and that it would have been a matter for the employers and the 391 employed to settle between themselves. I agree. There can be no dispute about that. The hon. Gentleman spent a good deal of time in referring to health contributions and old age pensions, but he left out the one outstanding effect of the War—control. He never mentioned the effect of control. I hope to prove that control has changed the whole position. If the companies had been left alone through the War and up to now and had been allowed to charge the Government and the public the full commercial rates they would have been in a very different position. If he came to any meeting of shareholders he would find that the shareholders are blaming the directors rather bitterly for the bargain of 1914 and the standardising of the 1913 dividends.
§ Major HILLS
That is so, and the shareholders are complaining rather strongly about that bargain, and saying, with a great deal of justice, that if the companies had been left alone and had not made that bargain the shareholders would have been very much better oft. They throw at the head of the chairmen of the companies the case of shipping companies that are not controlled, and transport companies which have made enormous dividends. Control has changed the whole position. The shareholders of the companies, who are mostly small-people depending upon their dividends just as much as the annuitants are depending upon their annuities, ought not to bear the whole of this charge. When we talk of the railway companies paying, that is disguising the issue a bit, because a railway company is not a bottomless purse. It simply represents the collective subscriptions of the shareholders, and any charge which is put upon the railway companies is a charge upon the shareholders. We all agree that you have to do something. I think that you have to do something for this reason: These annuitants were allowed to retire on the certainty of a certain income, and, on the figures prevailing in those days, the income on which they could retire looked quite sufficient for the rest of their lives. Therefore, they had no reason to save. The War has changed all that, and the same income is not now sufficient. Therefore, you have to bring them up to the 392 pre-war level. After all, is it such a very different thing from war wages? War wages and war bonus are chargeable by the companies as part of working expenses, and, as the Government have granted those war wages and have allowed them to be charged as working expenses, I do not see how they can adopt a different rule for what is in effect deferred war wages for the veterans who have left active service. Unless you get it from them, where can you go? You cannot go to the fund for them. If you charge the fund the increased pensions, first of all you pay these special annuitants more than they are entitled to, and, next, you are going to have the fund bankrupt. My hon. Friend, in the course of his-speech, said that certain Members of the House, and I in particular, had lost sight of the annuitants. If he saw as much of the hardships through which they go as I do, he would not accuse me of losing sight of them. I think the boot is on the other leg. Throughout the whole of his speech, he seemed to lose sight of the annuitants. Cannot he do something? Let him look round the House. There is no division of opinion at all. I do not believe that even my right hon. Friend (Sir F. Banbury), the stern economist, who never minds how much odium he incurs in performing what he believes to be his duty, the stern guardian of the public purse, will stand in the way. I do not think that there is a Member of the House who will not back the Government up if they do this, and I appeal to my hon. Friend before it is too late to take a step which the whole House and the country will welcome.
§ Colonel YATE
I did not quite understand the Parliamentary Secretary to the Ministry of Transport when he said that we ought to leave entirely out of consideration the question of the £8,000,000, of which the companies get the use at 4 per cent. In India, the State railways and the various other services all have their Provident Funds, and, as the War went on, the subscribers to them agitated greatly that instead of the 4 per cent. that was paid by the Government who had charge of the funds, the proper 5½ per cent. should be paid. I raised the question here and the Secretary of State for India took the subject into consideration. He has now agreed to give a higher rate of interest. I do not know what is the agreement between the railways and the 393 State; but one or the other or both of them should take this question into consideration and should give the proper rate of interest on the £8,000,000 from the date when the general rate of interest increased. That is an example for the benefit of the hon. Member. I hope that he will bring it to the notice of the Government and of the railway companies and will make some offer by which a proper rate of interest can be given on the funds.
§ Mr. WATERSON
We have heard several railway directors speak from their point of view, and it was only just that we should hear what they have to say on this all-important question; but I wish to make a few remarks as an ex-railwayman who was engaged on railway work for more than twenty years, and to point out the hardship of the position in which many of these men now find themselves. We have heard from the representative of the Ministry of Transport. I take the opportunity of congratulating him on the excellent way in which he has put his case. But while, with his usual eloquence and exceptional ability, he endeavoured to defend the attitude of the Government and to ask the representatives of the railway companies to do something, he has, like many other Ministers, evaded the real issue and given us nothing in reply. Men have to pay out of their salaries towards the upkeep of this fund. They are not allowed to be voluntary members of that fund. The representatives of the railway companies will agree with me when I say that it is a sort of compulsion. It is a condition of service. They are not allowed to enter the service unless they agree on the salary staff to join the Superannuation Fund, or on the wages staff to join a particular benefit society which caters for the workers section of the service. So far as the Minister of Transport is concerned, it appears that this is not his matter, and it seems to be nobody's matter. So far as the House is concerned, it ought to go to a Division to force this matter. The hon. and gallant Member for Durham (Major Hills) said that control altered the position. I was not convinced by his speech that it had altered the position, because the position as it was in 1913 is still guaranteed to the railway companies of this country. That is the agreement which has been arrived at between the Minister of Transport for the Government and the railway companies. Ever since 394 1910 these men have been paying week after week into the funds of their Superannuation Society. If there has been any advantage, it has been in the interests of the companies, because during the War men have not been retiring at the age of 60 as they did before the War.
§ Major HILLS
That is not to the benefit of the companies. It is to the benefit of the funds, which have gained substantially.
§ Mr. WATERSON
I accept that. I should have said "the fund" instead of the company. One of the speakers described one depot where the men in the railway service had been levying themselves 3d. a week to eke out the funds of one who had been superannuated. That is characteristic of the railwaymen. I do not think there is any class which is more patriotic to their fellow men than the railway men are. I see the Home Secretary here, but I will say that they raise large sums by prize draws to try to bring about some benefit to comrades who have fallen into misfortune. There are many of these pensioned men who are in need. About 12 per cent. are getting less than £30 a year. That, at least, ought to be altered at the first opportunity. The figure about income tax has been challenged, but I know one out of the 13 funds which has paid £34,250 during the last six years for income tax. That would go a long way towards alleviating the present situation.
It was my joy and privilege to work among these men for many years. From the railway companies' point of view, there are no more loyal servants than those old worn-out toilers of theirs. From a trade union point of view, or even an anti-trade union point of view, the companies never had a more pliable set of men. The first men to take the wages departments' position are the men attached to the salaried staff. Surely the railway companies in gratitude to these men should give them the right and means not only to exist but to live at the end of their noble service. We have asked the question, who is responsible for them? A deputation went to the Board of Trade and was told it was not their business. The railway companies could not see any way out. The Treasury would not look at them. We have had some sort of 395 promise from the representative of the Government to-night, but this is not an age of charity; it is a time for justice, and we are bound to do justice to these old men and let them have some of the benefits of the new world and let them live that life that so many young men fought and died to win for them.
§ Viscount ELVEDEN
I would like to remind the House that the railway companies are suspended in mid-air, not knowing whether they are going to own their property and manage these funds, or whether the Government is going to acquire the property. In any case, I hope this House will have control over whoever manages the railways. This seems to me an opportunity that the House should not miss of passing a Resolution stating that the matter should be considered and dealt with by the Government. It is all very well for the representative of the Government to say that if we had been paying 5 per cent. on the money before the War it would have been the railway companies which would have borne the 1 per cent. above the 4 per cent. As I understand it, we were allowed to include in the working expenses of the railway companies the contributions we were making at that time. That being so, it seems to me that the answer of the Government's representative is not correct. I hope the House will divide and register its opinion that something should be done, so placing on record the fact that the matter should be considered, and considered properly.
§ Mr. DENNIS HERBERT
I wish to point out to the representative of the Ministry of Transport that if he has the sympathy which he has expressed with the cause of these men, he has a case to put before the Government for allowing this particular expenditure to be treated as an expense of the railway companies. As far as I understand the case a great amount of this money has been invested in a peculiar way, and certainly not in the way that the ordinary capitalist would choose, that is to say, in the form of a loan to the railway companies. If that is so, it is a question whether it is not a loan which is, or in justice ought to be, repayable at the present moment. If the loan is repayable now of course those who are the owners of the fund can get a higher rate of 396 interest. The companies which have to-repay that loan will have to obtain the money at a higher rate of interest elsewhere, and the result will be that, whether it is the Government who pays or the railway companies or anyone else, the working of the railway companies will cost so much more, as against the tax collector under expenses which are deductable for purposes of tax. I cannot see why there is this feeling on the part of the Government that a further contribution on the part of the railway companies cannot properly and honestly and effectively be treated as an expense deductable for the purpose of tax by the railway companies.
§ Major BARNETT
rose in his place, and claimed to move, "That the Question be now put;" but ME. SPEAKER withheld his assent, and declined then to put that Question. Debate continued.
§ Mr. A. WILLIAMS
Two suggestions have been made—one that the railway companies ought to provide more money, and the other that the State ought to do so. I shall not touch on the first point. On the second point I wish to touch upon an important point which, it seems to me, is being lost sight of altogether, and that is that this problem is only one part of a very much bigger problem. We are told that these men have done excellent service and are suffering hardship, and that the State ought to find money to help them. The other day we were told the same thing with regard to postmen and policemen, and from time to time with regard to sailors and soldiers and Civil servants, and I do not know what other classes. The same sort of argument might be used with regard to investors in friendly societies, many of which have unfortunately come to an end and left the members of them somewhat destitute. The same sort of argument might be used with regard to the wages of those who have retired on very small investments. If we go on dealing with this matter piecemeal it will simply be a question that those who come first and press hardest will get something, and then this House will pull in its horns and say "This has to stop, we cannot go on, it is costing too much." The Government ought to have an enquiry into this whole question to consider how many classes of people there are who have this kind of claim, and what the total cost of meet- 397 Ing all those cases would be, and whether the country can afford it. Then we can deal with this matter logically and not haphazard by doles to those who are lucky enough to press their claims first.
§ Mr. MARRIOTT
I very cordially agree with the remarks of the hon. Member who has just spoken. I do not believe there is a single Member in this House who has not heard the claim made on behalf of the railwaymen with the very deepest sympathy, but we have a question of duty to the State as well as duty to the railway-men, and that point has been put, I think, with admirable force by my hon. Friend (Mr. A. Williams). It seems to me that in the whole of this matter we are really embarking on a very dangerous gradient if we deal with this matter bit by bit and piecemeal. It is not only a question of railwaymen and policemen and postmen and civil servants here and there; it is a question of everyone who is living to-day on invested funds when the value of the pound has so absurdly decreased! Over and over again in the course of this Debate we heard references made to the railway companies. There are, I believe, between six and seven hundred thousand railwaymen in receipt of wages and there are eight hundred thousand shareholders ill the railway companies, and as a matter of fact those railway shareholders are in receipt of far smaller incomes than the annuitants on those funds. [HOST. MEMBERS: "No, no!"] Yes, I think that is so—
That, in the opinion of this House, it is desirable that the statutory pensions of superannuated railway servants retired before or during the Government control of the railways should be increased to such an extent as will meet the increased cost off living.
§ The remaining Orders were read and postponed.