§
Order read for resuming Adjourned Debate on Amendment proposed [21st February] to Resolution
That a Supplementary sum, not exceeding £455,000, be granted to His Majesty, to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1922, for Superannuation, Compensation, Compassionate, and Additional Allowances, and Gratuities under sundry Statutes, for Compassionate Allowances, Gratuities, and Supplementary Pensions awarded by the Treasury, and for the Salaries of Medical Referees.
§ Which Amendment was to leave out "£455,000," and to insert instead thereof "£454,900."—[Sir Donald Maclean.]
§ Question again proposed, "That '£455,000,' stand part of the said Resolution."
§ Sir DONALD MACLEANOn a point of Order. In the discussion yesterday I think quite a number of us forfeited our right to speak, and therefore, when my hon. Friend makes, as I hope he is going to make, a statement on the position as he has considered it after the Debate last night, if he would move the Adjournment of the Debate at the conclusion of his remarks, would not that allow those of us who wish to make another statement, however brief, to do so?
§ Mr. SPEAKERNo. A Motion for the Adjournment of the Debate would not give that opportunity, but perhaps I can suggest a method which would be fair both to the right hon. Gentleman and to other Members of the House. If he were to withdraw his Amendment, and allow me to put the Question, "That this House doth agree with the Committee in the said Resolution," all Members except himself would then have a fresh right to speak. I think it might be the desire of the House to extend a special leave to the right hon. Gentleman in that event. Does he desire to take that course?
§ Sir D. MACLEANYes, Mr. Speaker. I ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
1944§ Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
§ The FINANCIAL SECRETARY to the TREASURY (Mr. Hilton Young)Towards the end of our discussion on the Report stage of this Vote yesterday I made a suggestion for the consideration of the House. These questions are undoubtedly questions of some elaboration and difficulty, and it was most reasonable, no doubt, that the House should require time for considering the bearings of that suggestion. I myself also found the time very useful in discovering how exactly that suggestion would bear upon the question. After investigation, I feel that I can clear the matter up perhaps for the benefit of the House in one or two minor particulars only. In the first place, I should say that yesterday I felt bound, until an opportunity of further consultation should afford itself, to make my suggestion in a somewhat tentative manner. I undertook to consider the possibility of introducing for the future a scheme for the assessment of all pensions to be assessed in the future which would bring the pension into relation with the cost of living. After such consideration as I have been able to give to this rather difficult question in the course of the hours that have elapsed, I now feel quite able to give that rather tentative undertaking in a much more definite form, and I can say definitely that such a scheme can be introduced and will be introduced. I have no further doubt about its possibility. I may say—and the House will not be surprised to learn after some of the arguments I addressed to it in the course of the Debate—that the point to which I was most particularly addressing my attention was as to the expense of such a new scheme, and I think I am prepared to take the optimistic view in order to carry this change out in accordance with what I recognise to be the strongly expressed opinion of the House.
As to what the actual nature of the scheme shall be, I think the House will quite recognise that I have not been able to work out and could not work out the details in the time available. This is one of the most difficult and intricate questions of financial administration, this question of the pension laws, and I should be, I think, failing in my duty to the House if, after such short notice 1945 and such inadequate time for consideration, I was to attempt to lay before it to-day any detailed scheme. I can only give now, what I think will content the House, the undertaking that for the future a scheme shall be introduced whereby every pension that shall be granted after the present time shall be granted on such a basis that it shall be brought by periodic re-assessments into relation with the cost of living.
§ Colonel WEDGWOODTo go up and down?
§ Mr. YOUNGIt appears to me that that would be reasonable, because the scheme of Civil Service bonuses went up and down. It did go up, as the House knows, and now it is going down, and in a scientific scheme it appears to me that we must allow for a bi-lateral movement, although, of course, we expect that prices and the cost of living will fall.
§ Mr. YOUNGI will ask the House not to require more details now. That is the wide principle which the Government have conceded as the result of this Debate—to adopt that alternative scheme instead of the former scheme. I can only amplify that by saying that undoubtedly any such scheme should be made as flexible as possible, subject to the practical limitations upon administration and the cost of periodical reassessment, so that the delay of bringing the rate of pension into relation with the cost of living shall be as little as possible. That is essential to practical administration.
§ 4.0 P.M.
§ Mr. INSKIPMay I ask the hon. Gentleman whether, when he says pensions will become variable as the cost of living rises and falls, that is to apply to the whole pension, or only that part which represents pensionable bonus?
§ Mr. YOUNGThat is just the sort of detail that does require such anxious consideration, but my preliminary impression must be, shortly, that the way in which it would work out would be that that part allocatable to the bonus would be the part which would rise and fall. I think at first sight that that would be so, but I confess that I approach the question 1946 with very great diffidence at short notice, and I trust the House will consider that on any questions of detail I make my statement at the present time subject to some reservation. There is only one other matter concerning what was said yesterday that I should like to elucidate. I feel that in some of my observations in asking the House to give us this Vote now I may have given the impression that in asking for the Vote this year I was suggesting that, having got this Vote for this year, we should consider ourselves franked for this year and free not to introduce this alteration until next year. That was not my intention at all. The principle upon which this must be administered—and I think some of the right hon. Gentlemen opposite will agree with me here—must be this, that we are free to make the change as soon as we have given notice to the parties affected. The parties affected receive notice by the proceedings in the House yesterday and to-day, and so this change will be introduced as from this time as affecting all pensions granted after this date. When I ask for the Vote for this year, I do not mean that we shall consider ourselves at liberty not to make this change until the end of the financial year. We shall make the change as regards all pensions granted from this time, and any savings to be effected by the change upon pensions falling due for payment in the course of this year—that is, between now and the end of the year—any savings upon pensions granted during that period will be reflected in savings on that Vote. Those are the one or two matters which occurred to me to require some further elucidation, and I trust that after the explanation and undertakings I have given, the House will now be able to see its way to give us this Vote.
§ Sir F. BANBURYMay I ask the hon. Gentleman a question in order that we may thoroughly understand what it is the Government proposes? As I understand it, what he proposes to do is to subject all pensions granted after to-day to these new conditions, but there have been a considerable number of pensions granted already, on the war bonus principle. Are those pensions to be left untouched?
§ Sir J. BUTCHERThis particular point was raised in yesterday's Debate. The question was raised as regards pensions which were granted last year, 1947 and the Noble Lord the Member for Aldershot (Viscount Wolmer), referring to an expression of the Financial Secretary to the Treasury as to "accrued rights," asked,
What does the hon. Member mean by 'accrued rights'? Does he mean that this is money actually received by members of the Civil Service who have taken their pensions?My hon. Friend said:Quite so.He went on to say:There is no real contention against the point that, in the case of the pensioners who have already got their money, that money must be voted for them for, at any rate, this year, on the ground that their rights have absolutely accrued for this year, and the House will scarcely refuse the money for this year."—[OFFICIAL REPORT, 21st February, 1922; col. 1798, Vol. 150.]I understood the meaning of that to be this, that as regards pensions granted last year, those pensions would, just like pensions to be granted in the future, be subject to periodic revision—so far, of course, as the pensions were derived from bonus, but subject to this condition, and this only, that the pensioners would not be asked to return any money they had already received. And as regards future instalments of their pension—that certainly was the opinion of most of us—those pensions would be subject to this periodic revision. I venture to think that that is quite right. Why should they have a permanent pension based on the fluctuating bonus, which may go down very largely, while the person who gets the pension to-day is pensioned subject to a revision? I hope my hon. Friend will make it quite clear that as regards pensions already granted, they will be subject to a revision.
§ Viscount WOLMERIs it not the fact that there was a super-cut in the bonus last September, and that those civil servants who retired last August have retired on a much higher pension than those who retired between August and the present date, and that, therefore, if nothing is done to meet the point made by the right hon. Gentleman the Member for the City of London (Sir F. Banbury), these ex-civil servants will go on enjoying in perpetuity a very much higher pension than those civil servants who now retire?
§ Mr. YOUNGI did not realise that there was any doubt about what were my own expressions yesterday. I attempted to make it quite clear, and thought I had clone so, that my suggestion could refer only to pension rights which were not accrued. Pension rights do accrue at the time of retirement. I do not think I can make it too clear to the House that this suggestion of an extension of the change which I propose is one that it is really impossible for the Government to concede without a breach of faith, an unpardonable breach of faith. [HON. MEMBERS: "No!"] Let me put it to the House this way. At the beginning of this financial year the House passed an Estimate voting money for pensions on the basis then laid down. I am quite aware that it will be said by some hon. Members opposite—[HON. MEMBERS: "Why opposite?"]—on either side—by my critics in this House—that that Estimate was passed under the Guillotine and without discussion. As a matter of fact, when the Estimate was passed the House had full cognisance of the fact that this was the basis upon which the pensions were to be granted during the year. It had cognisance of it in a Parliamentary answer to a question on 18th March. The answer was given to my predecessor in my present position, the present President of the Board of Trade, in reply to a question by the right hon. Gentleman the Member for Peebles (Sir D. Maclean). He said:
The scale of pension is payable on 75 per cent. of the amount of bonus payable at the date of retirement."—[OFFICIAL REPORT, 18th March, 1921; col. 1987, Vol. 139.]That is the general principle. Surely it must be clear to the House that that was the offer of a bargain and was held out to civil servants throughout the year, and that civil servants, by retiring during the currency of that Vote of the House, accepted that offer. It is carried out formally and in black and white at every step. When the civil servant comes to retire, the Treasury writes to his Department a formal letter and says:I am to acquaint you that their lordships have been pleased to award to—an official in your Department, a pension of—.Then the Department writes formally to the official who retires and says:I am directed by the Board (the Board of Inland Revenue) to inform you that they 1949 have received a letter from the Lord Commissioner of His Majesty's Treasury stating that their lordships have been pleased to place you on the retired list of the Department with a superannuation allowance of—.Public faith can be pledged no more directly, and I venture to say that we in this House have also pledged our faith to these arrangements. Let me add only this word. In order to take power to alter the pensions already granted by this formal process it would need an Act of this House. The Treasury have power only to alter a pension, once granted, for specific causes, such as the commission of a felony, and so on. I am indeed anxious, having given my undertaking to this House, to bring this new system into working promptly and smoothly, and I trust that such obstacles as would be raised by this proposal may not be raised now in the way of the Department.
§ Lord ROBERT CECILThere is only one aspect of this case which I should like the Government and the House to consider. I understand the proposal is that for the future pensions are to be variable in respect to the amount that is paid on bonus, according to the cost of living; that there is to be in the future a basic pension and a bonus pension, just as there is now a basic wage and a bonus wage; that the basic wage and the basic bonus will remain fixed, but that the bonus wage and the bonus pension will vary. That is what I understand to be the proposal.
§ Mr. YOUNG indicated assent.
§ Lord R. CECILThat is done on the ground that the bonus was given to meet the high cost of living, and that when the cost of living varies the bonus ought to vary. If it was worth so much in commodities at the time it was given, it ought not to be worth more in commodities at any subsequent time. If you keep up the bonus after the cost of commodities go down, you are automatically increasing the amount paid. It seems to me, if that the situation, you ought to apply it to all pensions, however limited, because otherwise what you are saying to the people who have got these pensions is that as the prices go down their bonus is to go up. Then you have two classes of pensioners, one class whose pension will vary according to the cost of living and the other class, in no 1950 respect different, whose pensions will not. That seems very difficult to defend, and likely to produce a good deal of ill-feeling. If the principle is right, it ought to apply all through. I feel as strongly as anybody the necessity for keeping public faith when it has been pledged, but what is the point? You promised those men a pension worth so much in commodities. All you are going to say is: You are not to be better off by reason of the fall in prices.
§ Viscount WOLMEROr worse off if the cost of living rises.
§ Lord R. CECILOr worse off by reason of the rise in prices, which, as my Noble Friend suggests, is an important point. This separate class, supposing commodities do go up, will have no increase at all. They will remain at their present figure, however high prices go. The Secretary to the Treasury says that we could not do this without an Act of Parliament. I do not know that that is a very serious matter one way or the other. I should have thought that by an Estimate confirmed in the Appropriation Act we could always do anything that we could do by Act of Parliament, because it is after all an act of the Legislature to have an Estimate confirmed in the Appropriation Act. I think that point is worthy of consideration before the final confirmation by the House of this proposal.
§ Mr. NEIL MACLEANOn a point of Order. The Debate this afternoon is along the same lines as that of yesterday, and on practically the same points. Every speaker so far has been a speaker who spoke yesterday. Others who did not take part yesterday have risen today, but have not yet been called upon.
§ Mr. SPEAKERWe have not gone very far yet. We have been debating the subject for only a quarter of an hour.
§ Sir H. CRAIKAs the House knows, I was obliged to take the view yesterday that the Government had made a mistake in regard to the past. It would not be straightforward if I did not say now that I perfectly understand the position taken up by the Financial Secretary to the Treasury and that I think it is a consistent and necessary position. I am rather astonished at the views expressed by the Noble Lord the Member for Hitchin (Lord R. Cecil). It may be said that this can be carried out by an Act of 1951 Parliament and that that is a small thing, but is it a small thing that under the terms of an Act you have pledged yourself to outgoing civil servants in the most formal and solemn terms? The terms upon which pensions are granted are very strict and legal in their elaboration. A retiring civil servant is informed that a certain sum has been assigned to him as a pension. There is no question about reducing that sum according to the price of commodities. That is quite impossible. Apart from that, is the Noble Lord aware that an injunction is passed to the Paymaster-General directing the Paymaster-General on certain terms to make a certain payment. Even if it is not claimed the payment remains in the hands of the Paymaster-General and is part of the estate of the civil servant when he dies. Except by an Act of Parliament there is no power to release the Paymaster-General from the definite orders that have been issued to him, under an Act of Parliament, to pay a certain sum. I agree with the Noble. Lord that too generous terms were made for a short time, but I cannot follow those who think that in regard to civil servants who have already got these unduly generous pensions there should be any receding from the absolute pledge given by the Government—a pledge which, as the Financial Secretary to the Treasury has said, can be withdrawn only by an Act of Parliament freeing both the Treasury and the Paymaster-General from the duty that rests upon them.
§ Mr. N. MACLEANI wish to point out to the Financial Secretary to the Treasury that the very principle to which exception was taken throughout the Debate yesterday he now proposes to continue with regard to one part of the pension, and he safeguards his position on the ground that it was stated to the House officially by the Government in an answer to a question. As has been said, the vote of this House was taken under the Guillotine. The House had then no opportunity to discuss the reply that was given or the principle that that reply established when the Vote was put before the House. Now, with regard to the pensions that are being paid on the bonuses, he proposes to divide the civil servants into two different sets. One set that already has the pension granted upon a high bonus is to receive that 1952 pension on the high bonus for all time, and the other set is to have the pension varied in accordance with the rise or fall in the cost of living. That is continuing the bad principle with regard to one section and placing them in a very much more favoured position than other pensioners now coming upon a particular salary scale.
Yesterday I tried to take part in this Debate. I wished to make my position clear as did other members of the party to which I belong. One hon. Member stated that he was in no doubt as to the manner in which he would vote, although the Labour party did not vote as a party on the last occasion. I also had no doubt as to the manner in which I should vote. I voted against the Government then, and had not the Financial Secretary to the Treasury agreed to take back this vote last night, in spite of the speeches from the Front Bench of the Labour party I should have gone into the Lobby against the Government again. The policy of the Government is wrong in principle. The result will be that when the cost of living comes back to its original pre-War figure, you will have these pensioners who retired last year in a much better position than those who are to retire when the cost of living has come down. It is not sufficient to say that this House has been pledged by a previous decision. This House was pledged by a decision when it was not allowed to take part in a Debate upon a financial transaction of the Government, at a time when votes were rushed through the House, representing hundreds of millions at a time, and we were not able to discuss the merits of a question. That policy has been carried out by the Government for the past three years, and now they come to the House and say that as Members had allowed the votes to go through in the past they have pledged their faith with civil servants, and cannot draw back.
I do not want to break faith with anyone, but the occupants of the Treasury Bench have placed Members in this awkward position. When the Financial Secretary to the Treasury talks about breaking faith, he should address those remarks to himself and his colleagues for not taking the House into full confidence when originally this money was voted. That process is going on, and we do not 1953 know where we shall land. It is a good thing that the House last night taught the Government a lesson. If hon. Members continue in this way we shall probably get what we want in the way of economy without having recourse to some of the "cuts" that are being recommended by the Geddes Committee. I trust that some way will be found by the Treasury to get us out of the unfortunate position in which the Government have placed Members of the House.
§ Mr. A. HOPKINSONThe Noble Lord the Member for Hitchen (Lord H. Cecil) pointed to one of the difficulties which must arise from this way of dealing with pensions. It would have been a good thing if he or someone of greater authority than myself went more deeply into the whole principle involved. Surely what the Noble Lord said is simply an example of what must inevitably happen if you endeavour to remunerate people either by wage, salary or pension upon a system which is based on the cost of living, upon the supposition that, certain favoured persons, no matter what happens to others, must preserve a certain definite standard of existence. In essence that means that the productive workers of this country, whose remuneration always depends upon the value of their products, are to be bled, as it were, by these pensioners and by all others who are remunerated on the basis of maintaining their particular standard of living. The productive workers must inevitably be remunerated upon the basis of the ultimate value of what they produce. If they are unable to produce so much as to provide themselves with a standard of living equal to what they have had hitherto, then that standard comes down, but these favoured individuals, who through some pressure upon the Government Departments or upon Members of this House have had their wages and pensions put upon this purely false basis, are to be parasites upon their fellow citizens as long as they live. I protest against this endeavour to found a policy upon such a bottomless morass.
§ Mr. G. BARNES rose—
Lieut.-Colonel J. WARDOn a point of Order. The right hon. Gentleman who has just risen addressed the House upon this subject last night. I should have 1954 thought that Members who had not previously spoken in the Debate would at least have been given a chance to-day.
§ Mr. SPEAKERIf the hon. and gallant Gentleman will have patience, he will be called.
§ Mr. BARNESI shall not detain the hon. and gallant Member or the House for more than a few minutes. I shall vote with the Government. We are faced with two evils, and I shall choose the lesser. On the one side there are evils in the anomalies that will be set up as between one pensioner and another. The man who retired last August will have a much larger pension than the man of equal status who retires now. That is unfair. On the other hand I do not agree with the argument of the Noble Lord the Member for Hitchin that the pensioner of last August or of any other time should have his pension based upon the variable cost of commodities. That would get us into never-ending trouble. Has the Noble Lord appreciated to what that would carry him? Some years ago the Government promised 5 per cent. interest on its loans. If you are 10 reduce a pension because the cost of living happens to have come down, the argument is equally valid that you should reduce the interest upon Government loans. It is rather a dangerous argument.
§ Lord R. CECILI do not know whether the right hon. Member is inviting me to repudiate the National Debt or any interest upon it. The interest on the National Debt was never calculated with any reference to the cost of living. The whole point here is that a principle is being introduced with regard to one set of men, and the question is, how far ought you to extend it? There is a good deal to be said in favour of the view of the Government.
§ Mr. BARNESI do not say that the Government ever promised interest upon loans according to the cost of living, but if you are not going to stick to a bargain in one case you are weakening the argument for the Government sticking to its bargain in another case. We are faced with two evils. On the one side there is the anomaly to be set up of the pensions of last year as against those of this year. On the other hand, I am going to do nothing to weaken the confidence in the Government to maintain its promises.
Lieut.-Colonel WARDThe point to which I wish particularly to refer is the statement made in the speech of the Secretary to the Treasury last night, which, I think, saved the Government from defeat. I feel certain last night that if we had pushed our case, as we ought to have done, we could easily have defeated the Government upon this Motion. It was the statement of the Financial Secretary which caused the cessation of hostilities. He said:
In the first place, there is, I believe—subject to the bigger point—no real contention against the point that, in the case of the pensioners who have already got their money, that money must he voted for them, at any rate this year. … In the second place, I put it quite generally that, for the future, we shall introduce a scheme for making pensions vary with the cost of living by periodical reassessment."—[OFFICIAL REPORT, 21st February, 1922; col. 1798, Vol. 150.]There is not the slightest doubt that the opposition last night, which was most determined on both sides of the House, except for just a few, would have placed the Government in a minority, had it not been that we understood that these pensions had been to a very great extent given without the authority of Parliament, and that it was intended to vary, so far as the cost of living was concerned, even those which had been granted under this arrangement. I am most positive about that. This is a most remarkable discussion to me, as a soldier. The pensions of soldiers and sailors are based on a level of 20 per cent. above pre-War, the 20 per cent. to be taken off the moment the cost of living comes down to the normal, or a sufficient proportion to justify any reduction. Therefore, we get this sliding scale applied by the Government to the men who saved the country, who went and fought for the country, but the men who stayed at home, and could work the oracle themselves while the others were fighting, are placed in an absolutely superior position. I say it is most outrageous that in times, when I was mot in the House or in the country, the influence of men who were carrying on the affairs of the State in its civil capacity at home, running none of the risks which the hon. Gentleman opposite himself ran in defence of the State, should be pensioned on a scale so much more favourable than that for the man who risked his life in defence of the 1956 State. For that reason, if there be a Division, I shall certainly vote against the Government.
§ Colonel Sir J. GREIGI am afraid my hon. and gallant Friend who has just sat down, and with whom I agree on very many occasions, has allowed his enthusiasm for the soldier and tin sailor, which I share with him, rather to run away with his judgment. I am going to put a point of view which may be unpopular in the House, but I think, in justice to the men concerned, that view ought to be put. Let me make one remark, however, about the suggestion of the Noble Lord opposite. I believe his suggestion would involve a breach of public honour, and I shall, therefore, vote against it, and I am glad the Government is going to vote against it. We may console ourselves, and lay this flattering unction to our souls, that we have paid a tribute at the shrine of economy—at the expense of whom? Of a body of men whose number, being infinitesimal in the vast electorate, is of no consequence to us. At their expense we are suggesting that we are devotees of economy, and the moment after we take this action and attack them, we shall each and all of us turn round, probably, when we come to discuss the Geddes Report, to advocate the claims—some of us have done it already—of a particular section of our constituents who have whips with which they can flagellate us—[An HON. MEMBER: "Speak for yourself!"]. I take the blame with everybody else. Who are these civil servants? There are, I suppose, a few hundreds. I happen to have come into contact with some of the higher ones, and also some of the lower ones, probably some of them men who have been pensioned under this arrangement. When the hon. and gallant Gentleman jeers at them for staying at home—
Lieut.-Colonel WARDThe hon. and gallant Gentleman is not entitled to say that I sneered or jeered at the civil servants. I only called attention to the peculiar treatment meted out to those who were in service at home, in comparison with those who risked their lives in the service of the country on the several fronts.
§ Sir J. GREIGLet me tell the House what is within my own knowledge. One man in the service of the country during recent years has practically lost his sight. Has he not done as well as the 1957 man who went to the Front? (An HON. MEMBER: "There ate more than one of them."] I have known men in the Civil Service—and there is no finer service in the world—who for three or four years during the War had not a day's holiday. They were sleeping in their offices in order to be ready to do their work at any moment—not only the higher men but the younger men. I have seen them breaking down because they got no Saturday afternoons for months and months. These men we are dealing with now are the wreckage of the Great War in your Civil Service Departments, and I say it is not fair to attack them as they have been attacked.
§ Lord R. CECILNobody has attacked them.
§ Sir J. GREIGThey have been attacked constantly during the Debate—[HON. MEMBERS: "No"]—and, in order to bring ourselves into consonance with the general public feeling, we have been sitting here and listening to the puerilities of the Anti-Waste party, and the pontifical platitudes of financial purists. I think we shall all feel better after we have paid this tribute at the shrine of economy. I think these men are worthy of what they have got, and it would be a breach of faith to go behind what we have promised them, and what they ought to get.
§ Lieut.-Colonel NALLI wish to say one word in support of the point of view put by the hon. and gallant Member for Stoke (Lieut.-Colonel J. Ward). The hon. Member on the Treasury Bench yesterday told us that these Civil Service pensioners had been informed in black and white what pension they were to have, and he assumed that that could not be in any sense amended; that the pension awarded was one which was legally made, and could not be altered. Here is the Treasury to-day tearing up the very ruling laid down yesterday. When we are told that particular servants of the State had been informed in writing that they were entitled to a pension of a certain amount, and that could not possibly be altered, the hon. Gentleman should have been consistent, because the House knows that time after time we are informed of disabled men who have been told in black and white that their pension would be so much, and they have in fact drawn that money for months, and 1958 then, long after the event, they have been called upon to refund the amount which had been wrongly paid to them. If, as appears to be the case, these civil servants, who were pensioned prior to this alteration in the Government policy, received a pension which was quite obviously wrongly and illegally awarded to them, then it is only fair to say, even if they are allowed to retain the amount already paid to them in respect of past years, that in future that error is to be rectified, and they can only draw according to the new scale.
The only other point I want to emphasise is this. The pensioners who are the cause of this Debate may be a considerable number, but the hon. Gentleman, I think I am right in saying, has not told the House how many are involved, or what is the actual cost involved, and it seems to me that if a number of them were induced to retire, and took advantage of this unduly high, and illegally high, pension, the House should be given the figures in order to consider whether it would be fair to say to some of these who retired long before the age limit: "You must either accept the reduced rate, or go hack to your job." We have no figures before us by which to judge which would cost the country more—to reinstate them in their former job until they can retire at the proper age limit on the lower scale of pension, or whether it would be better to let them off what they have got, and be rid of them. I submit that is a point to be considered; but, in the meantime, it is grossly unfair that these civil servants, splendid as their work may have been, should be allowed to walk off with a pension, which they might draw for 20, or even 30, years, assessed on a basis much higher than is awarded to their successors, and such as has never been admitted in respect of any of those who are entitled to a pension as a result of the War.
§ Mr. JAMES WILSONI should like to associate myself with the statement made by the Financial Secretary to the Treasury yesterday when he paid the very high tribute he did to those employed in the Civil Service. Despite what was said by hon. Gentlemen opposite I want to assure the House that the opinion of the Financial Secretary is shared by everyone on these benches. I do not think too 1959 high a tribute can be paid to those employed in the Civil Service in this country. I feel quite sure, too, that there is neither intention, nor would there be any justification in any part of the House, for taking any course or doing anything whatsoever that would be unfair to civil servants. But I feel that in respect to the proposal of the Government—possibly it may be because I am new in Parliamentary experience—that there is a different atmosphere in the House to-day than that which existed yesterday. I see no justification for that change, for the Government stand precisely on the same ground in relation to their proposals as they did yesterday afternoon. I believe that those proposals are fundamentally and absolutely wrong in their dealing with the Civil Service as a whole. I have no doubt that the experience of other hon. Members is similar to my own. In my short connection with the constituency I have had innumerable complaints from civil servants who were pensioned in September and October, 1914. They were then allowed to retire. Their complaint is that because of the high prices and the high cost of things in every way their pension, which under normal conditions would have enabled them to live the remainder of their lives under fairly reasonable conditions, is totally inadequate to meet the altered circumstances. No consideration has been extended to them in consequence of the high cost of living and the natural corollary of the decreased purchasing power of their pensions.
We come to another period, 1918. We understand that the Government acted on the recommendation of the Whitley Council which was composed of two sides of Government employés. They made a recommendation that the retiring pension should be continued in perpetuity so far as the recipients were concerned—that is, men retiring in 1918 to 1921. Then we come to another class of civil servants who will be retiring next year and a few years thereafter. By that period we all hope that the cost of living will have receded to something like pre-War conditions, and that bonuses for increased cost of living will have entirely disappeared. Those pensioners who are going to retire in the next five or six years are going to retire on what was normally the pre-War 1960 basis of pension for civil servants. We must bear this in mind, although it is suggested by the Financial Secretary that the pensions paid in 1918–20 are only going to last a few years. Does the hon. Gentleman expect that a pensioner at the age of 60 is automatically going to die because he is receiving a fairly high pension? I hope lots of these people will go on enjoying their pensions for, say, the next 20 years. So that we are not dealing with merely a transient state of things, but with a question which is going to be permanently with us during the next 20 years. During the next 20 years we will have pensions paid to civil servants for services rendered and equal loyalty to the country over the same number of years, and they will be receiving pensions at two or three different rates if the policy at present proposed by the Government is given effect to. You will have your pre-War pensioner who is quite entitled to the same consideration as any civil servant to-day. He will be receiving his pension upon the pre-1914 basis while not a penny piece nor a thought of consideration of the times is ever extended to him. He stands where he did in 1914 so far as the Government proposals are concerned. The period 1917–20 pensioner will be receiving a pension which will ultimately place him in an infinitely better economic position than he was when working in the Civil Service—if the cost of living goes down.
We come to the third class of men: to the man who has to be pensioned off hereafter and has not been lucky enough to be able to squeeze into this lot during the period that the Government are going to pursue this policy of theirs. He will be subjected to a graduated pension. Is it, I ask the House, fair or reasonable, to deal with classes of men who all render equal service to the country, and subject to the same conditions, to a varying method like this? Surely the right thing would be to affirm the general principle of dealing with all men alike and to give them an adequate pension for similar services rendered. I hope, therefore, until the Government are prepared to deal with what I may term the War pensioners on the same basis as they deal with the pre-War and post-War pensioners, we ought not to support the Government. It may be that the pensions of the civil servants, both pre-War and post-War, are far too low, but 1961 that is an entirely different thing. That is not a subject for consideration at the moment. The only point that emerges from this is that we are entitled to insist that all civil servants, for equal services rendered, are entitled to the same consideration at the hands of the nation; and until the Government can evolve a policy which will produce those results, I do not feel that the House will be justified in going into the Lobby in their support.
§ Mr. LANE-FOXI went against the Government yesterday, but it does seem to me there is a changed position to-day, and a very different view. The analogy drawn by the hon. and gallant Gentleman opposite between the soldiers and the civilians does not seem to me to hold good; though I would be the very last person to refuse to acknowledge or to decry the very inadequate pensions which many of our excellent soldiers receive. At any rate, these pensions were given on a different basis. The soldier gets a variable pension, but in this case under review a different bargain has been made. I quite agree with the hon. Gentleman opposite in my dislike to the different classes. Still I do not see how you can depart from the fact that a definite bargain has been made, and once a bargain has been made it is fatal to the credit of the State that it should be dishonoured. They were told this, and if they chose to accept we cannot possibly go back on it, whatever one may think of the policy of the Government in offering that bonus. The pension was founded on it, and whatever you may think now of the pension being altered, what was done was done and we cannot go back. I agree that in the future there will be an anomaly but one can only hope that the Government will be able to evolve some proposal by which this system of pension on salary and bonus will stop, and that we will find after a while that the arrangements made are temporary.
§ Mr. MOSLEYI must confess that I interpreted the attitude of the House last night in the same sense as the hon. and learned Gentleman the Member for York. I thought this concession would be retrospective as well as prospective. I imagined that when the hon. Gentleman referred to accrued rights he meant only the amounts under this pension scheme which were actually due at the moment 1962 to the men who were receiving pensions. The strongest point that I am aware of that the House in the course of this discussion has adduced against the contrary view to the Government is that first advanced by the right hon. Gentleman the Member for the Scottish Universities, and put again by the hon. Member who has immediately preceded me. Their point is that the State has entered into a bargain, into a solemn understanding, with these men whose pensions have already been assessed, and that it would be a breach of national honour and faith to revise those pensions. We have entered into more than one agreement and made more than one bargain which subsequent economic pressure has compelled the Government to reconsider. There was, for instance, the Agriculture Bill—
§ Lieut.-Colonel ROYDSThat was done by consent of the parties. [HON. MEMBERS: "No, no !"]
§ 5.0 P.M.
§ Mr. MOSLEYI have been in this House during a good many of these Debates and I have heard a considerable amount of dissent from the representatives of agriculture; but I am not going to pursue these matters except to say that on more than one occasion this Government has been compelled to revise bargains and understandings into which it has entered owing to the changed economic circumstances which were not contemplated at the time of entering into the bargain. Whatever we may say to that, a yet stronger argument remains if this matter is to be considered a question of honour. Was there no bargain, was there no understanding with the men in the Civil Service in regard to their pension rights, the men in respect to whom the hon. Gentleman made such a striking concession? It was said yesterday that these men had a statutory right to have their pensions assessed on a War bonus basis. The hon. Gentleman told us that they were all given to understand, on innumerable occasions, that their emoluments definitely carried a pension calculated to include war bonus. They were supported in that view by the Whitley Council recommendation which was adopted by the Government. All this time there was being ruled out the possibility of the Government ever revising any understanding into which they had entered with those servants on that basis. If so, the Government has been retaining 1963 the services of these men on false pretences. It has kept them in the service on the understanding that their pensions would be assessed according to the war bonus. Now the hon. Gentleman is revising his intention and breaking his bargain. If the argument prevails in one case, the case of the men who have retired already, then it prevails also in the case of the men who remain. The hon. Member has emphasised over and over again, in the course of these Debates, that the obligation upon the Government and the country was binding and stead-fast in regard to the pensionary rights of the men who are now in the Service. If we are never to revise our obligations we have no more right to revise them in regard to the future than in regard to the past! Does the hon. Gentleman suppose that if those men in regard to whom he is now making a concession had known that that concession was going to be made, they would have stayed on and would not have retired two or three years ago when the bonus was high, and when their pension would have been far higher than at the present time, and higher than the pensions will be under the scheme which he has just put before the House? I cannot think that the hon. Gentleman who has just repudiated his bargain with existing civil servants can argue that there is any greater reason for his not repudiating his bargain with the civil servants of the past. The anomaly which is constituted under this concession is even greater than has been commonly grasped in the course of this Debate. It is not even a question of an anomaly being constituted between the men who are retiring to-day and those who will retire in the future. A far greater anomaly is set up with regard to the men who have retired in the past. The man who retired in November, 1920, received his pension when the War bonus was assessed upon an index figure which stood at 170 above the pre-War cost of living, while the man who retires to-day has his pension assessed when the index figure stands at only 88, and the War bonus is assessed upon an index figure just about half what it was in 1920. Already we have this amazing anomaly under this remarkable scheme that the men who retired a little over a year ago have nearly double the pension in respect of that amount of their 1964 pension calculated in regard to bonus as compared with those who may retire to-day. The reason is obvious, because the index figure was twice as high at that time as it is at the present moment. That anomaly exists now, and the hon. Gentleman proposes to aggravate and accentuate that inequality by revising pensions which are assessed in the future, and leaving intact and inviolate the pensions assessed upon this very high index figure a year or more ago.
What is the result? The men who retired a year or two ago when the cost of living was at its highest derived an immense advantage over the men who have gone on in the Service for several years more, who have served their country faithfully in the interval and now retire under the revised scheme proposed by the hon. Gentleman. The reward these men are to get for hanging on during the reconstruction period and serving their country well and faithfully is that they are to be put at a great disadvantage as compared with the men who retired in the comparatively early days. By this plan the hon. Gentleman is putting a premium on scuttling out of the Civil Service. He is rewarding those who retired earlier in the fray and penalising those who stayed longer and served their country well and faithfully. That is the effect of his concession. If any case does rest at all on grounds of honour, then the hon. Gentleman is just as much bound to the present civil servant whose pension rights he proposes to reduce as he is bound to those whose pensions have been assessed in the past. Personally I think he is not so bound in either case and should revise the whole position. He is now constituting an anomaly which traverses every elementary principle of justice and fairness, and he is constituting an inequality which is unfair to the nation and will long be the subject of animosity and recrimination within the Civil Service. If the hon. Member undertakes to revise this gross blunder of administration, I hope his revision will be equal in its incidence and that he will apply it to all who have derived advantage from this mistake of the Government in allowing the War bonus to be calculated in respect of pensionary rights.
§ Sir COURTENAY WARNERThe last speaker has emphasised the difference between the man who retired a little more than a year ago and the man who will 1965 retire in the future. In another part of his speech he also looked back upon the man who retired before the bonus was given.
§ Mr. MOSLEYI did not.
§ Sir C. WARNERWell, I do, at any rate. On the previous occasion what we urged was that the principle in future must be stopped. I think the hon. Gentleman opposite is quite wrong in saying that there is no difference, because there was an absolute contract with the men who have retired. It was said by the Government, "If you retire now you will get such and such a pension." They did retire, and that closed the contract. It is quite true that the men who retire in the future will not get the same terms that they were offered then, but they never closed with those terms, and that makes all the difference. They did not take the offer when it was made, and I think it is only fair when an offer has been made and accepted that it should obtain, and when an offer has been made and has not been accepted then there is a very great difference.
§ Mr. MOSLEYWe retained the services of those men on the ground that their pension would be assessed on a certain basis. [HON. MEMBERS: "No!"] The hon. Gentleman in giving this concession has violated that principle. These men understood their pensions would be assessed in the same way as those immediately preceding, because the right hon. Gentleman interpreted the word "emolument" as covering war bonus, and he told the whole Civil Service that he so interpreted it.
§ Sir C. WARNERThe hon. Gentleman is now arguing in favour of what he and all of us argued against on the last occasion. We said that this was not part of the emolument. It is not fair to use that argument in favour of your case now. I am quite willing to accept the principle, but, independent of anything else, we have now got the principle that we fought for accepted by the Government. We have an undertaking that in the future they are not going to pursue this principle.
§ Mr. JAMES WILSONThat is not what you were fighting for yesterday.
§ Sir C. WARNERAt any rate I am satisfied with that, and it is all the Government can do. They cannot go back on 1966 the contracts they have made with the Civil Service, but they can and they are going to change the system in the future, and if there is a division on this question I shall support the Government on the understanding that the principle in the future has been conceded.
§ Mr. BRIANTI cannot be accused of any want of sympathy for the Civil Service because I was a member of that service myself for many years, although I am not in the happy position of having a pension. So far as I know the Civil Service the scheme is that a man receives one-sixtieth of each year's service. That is to say the maximum is forty-sixtieths of his salary. The actual effect will be that a man is getting and can receive two-thirds of his salary as a pension. I believe many of those who retired recently had served their 40 years. What will be the effect of this proposal? If the price of commodities goes down many of those men will be actually receiving a larger pension than any salary they ever received. It will be considerably larger Can anything be more unjust to the vast bulk of the community, most of whom will have no pension when they retire, than that they should actually have to pay in taxes to give a man a considerable amount more in pension that he actually received when he was in full work. No amount of logic or special pleading can possibly recommend that sort of thing to this House and certainly not to the country. I am glad to see that the Government has shown a certain activity of its conscience in this matter.
§ Mr. YOUNGI am not sure to what possible circumstances the hon. Member is referring. I know of no circumstances under which a pension will be more than the retiring salary.
§ Mr. BRIANTI think I am correct. It is calculated on the amount of bonus now given.
§ Mr. YOUNGThis wrong impression may have arisen through a little miscalculation by the right hon. Gentleman the Member for Peebles (Sir D. Maclean) during the Debate on the first day of this discussion, but it has since been corrected by the right hon. Gentleman in the course of our discussion yesterday. As a matter of fact under no possible circumstances can that arise.
§ Mr. BRIANTAt any rate whether that is so or not, a man must be getting considerably more under this arrangement than any pension he could have acquired in any other way or in any other service. He can have 25 per cent. owing to his luck in being among the small strata of pensioners who have retired during this particular period. An enormous number of people with small pensions have the greatest difficulty to live on their pension. They have been receiving these pensions for the last 10 or 15 years. We realise that we are all paying taxes, whether directly or indirectly, and to ask these small pensioners to pay more in taxes on tea and tobacco and other articles, in order to provide £1,000, £500, or £600 a year as a pension, which is more than they could possibly have got under the old scheme, is creating a state of things under which these people have not only a right to grumble but to protest very loudly. I understand the Government now to mean that although we do not wish to recover one penny of the money actually given, this House should not be bound to vote a pension in perpetuity which would place anyone in a favoured position. The Government is bringing forward schemes which will put on the back of the community for the next 20 or 30 years a burden which cannot be admitted by anyone to be sound or just or economical. I hope that even now the Government will see its way to withdraw that part of its suggestion, and that the House will prove by its vote, if necessary, the reality of the protestations made outside.
§ Commander BELLAIRSI think there is a tendency for the discussion to range over more topics than it did yesterday, and it is hardly fair to the Government, in view of the extension of time which it gave to the House. The position of the Financial Secretary would have been easier had he answered my question yesterday. I have taken no part in these Debates beyond asking a simple question as to what would be the position of those civil servants who have gone on pension during the current financial year. Had that been answered, there could have been no misinterpretation. I feel that the Government, having given their pledge to these civil servants, is bound by that pledge, and I wanted that to be made clear. One of my hon. and gallant 1968 Friends has spoken of civil servants as having been attacked. There has, however, been no attack upon them. What has been done has been to suggest that they have had an undue and undesirable influence—whether through the Whitley Council or some other method—on the Government of the day. We also contend that this House was never really pledged at all. The Financial Secretary informed us that, in answer to a question by the right hon. Member for Peebles (Sir D. Maclean), we were told that civil servants would get 75 per cent. of the war bonus added to their pension. As hundreds of questions are put in this House for every Member to consider, it is difficult to hold that that is pledging the House, especially as we were not able to debate the matter later on, because the Vote fell under the Guillotine. From that point of view I suggest the House never was pledged. The Government, however, having pledged itself, I think I, for one, must support them in the Lobby. The Financial Secretary suggested that it would require an Act of Parliament to annul the pensions already granted. That may be or may not be the case. I do not know how that may be, but I do know that the Treasury have power to take away pensions on convictions for felony, and that that power obtains with regard to the Army and Navy, and is exercised by means of Orders in Council. I think it undesirable that such powers should be exercised by Orders in Council. In such a case, they ought to be confirmed by this House. It should require an Act of Parliament to take away a pension that has been already granted. Even in a case of felony, I hold there is a breach of faith in taking away a pension by means of an Order in Council.
§ Sir F. BANBURYI should like to ask the Financial Secretary a question. As I understand it, his argument is that you cannot make this arrangement retrospective because last July, or August, certain Votes were passed by this House, and that the House knew what it was doing because a question had been asked upon the subject. I agree with the hon. and gallant Member who last spoke that the fact that a question has been asked in the House cannot bind the House. We cannot discuss matters by means of question and answer, and therefore I put aside altogether that reason for not making this 1969 arrangement retrospective. The Vote was passed under the Guillotine, and nobody knew what was in it. The House has, however, assented to its own Rules, and it therefore would not be a good argument that, because the Vote was passed, and the House did not know anything about it, therefore arrangements made under it can now be revoked. There is considerable force in what the Financial Secretary said, that the Vote having been passed, no matter how, we are bound by it, even although, according to the Rules of the House, it was an ineffective vote. On the whole, we cannot get out of this. What I want to ask is this: There are a considerable number of pensions which will be affected by this Supplementary Vote. Will they be subject to the new arrangement? If the hon. Gentleman says they will be, I have nothing further to say, but if he states they will not be, then I shall feel it my duty to vote against the Government.
§ Mr. YOUNGI tried to make clear when I was speaking what was the intention of the Government. It was that all pensions granted after yesterday, when the decision was come to, should come under the new system. We shall not be able to get the system actually working for some time, and therefore such pensions as are granted will have to be granted provisionally and be subject to the new rules when they come out. So far as this Supplementary Estimate takes money which will be spent on pensions granted between now and the end of the financial year, those pensions will be subject to the new system.
§ Mr. MACQUISTENI have no sympathy with any civil servant who took his pension on the war bonus. I think it was a very dirty thing to do towards the State in respect of which he occupied a fiduciary position. The civil servant knew perfectly well that the war bonus was temporary, and was given him to meet the stress of war conditions, and it is a shocking thing to think, while so many people are suffering severe hardships, that these gentlemen should continue to draw a pension until the end of their unnatural lives, on a war bonus granted to them under such conditions. They constitute the only class who have made a big profit out of the War. I wish them joy of their pensions and hope that their lives may be long in the land, 1970 but I repeat it is a shocking state of affairs. I am inclined to agree with the right hon. Baronet the Member for the City of London (Sir F. Banbury), however, that they have got away with the swag. We have now to consider the inviolability of contracts, even although those contracts may have been achieved by something in the nature of treachery. Perhaps, however, it is a cheap price to get rid of the type of man who will take his pension on a war bonus which was granted as a temporary measure. It is undesirable to have such persons in the Civil Service. They knew perfectly well that the war bonus was temporary and it was not fair on their part to exact a pension on it from the State at the expense of the community. Their precious Whitley Council is, after all, only a gathering of themselves against the taxpayers. It is not a proper Whitley Council in the ordinary and accepted sense of the term, but as they have got away with the money, I think the Secretary of the Treasury is right when he says that we must begin afresh now. All this House can do is to tell the Government never to let this sort of thing occur again. I hope the day will come when they will take into consideration the whole question of pensions in this country. I do not see why any particular class of the community should be pensioned at the public expense. Why should they not take their chance in life the same as other people?
§ Mr. NAYLORI should not have risen but for the speech to which we have just listened. Evidently the hon. Member has overlooked the striking fact that prices having risen, every civil servant is just as much entitled to expect consideration at the hands of the Treasury in these circumstances as any other body of workers in the country claimed from them employers, and I am surprised any hon. Member of this House should describe the action of civil servants in seeking an equalisation of their salaries by means of a bonus to meet the increased cost of living in the terms the hon. Member has used. As a comparatively new Member of this House, I find myself in a difficult position. It seems to me that the House itself is mainly responsible for the difficult position in which Members on both sides are placed. We want to do the right thing at all times, whether one is called upon to vote for or against the Govern- 1971 ment. The position is this: The Government have pledged themselves to allow a body of men a scale of pensions based on the cost of living at the time the pensions were granted; that is to say, they are to have all the advantages in their pension of the bonus that was granted to them on account of the increased cost of living. I am of opinion it would have been better if the Government had considered at the time some means whereby the principle of applying the bonus to the pension should be made proportionate. The bonus should have been applied to each and every class of civil servant right through the period, so that there should be no complaint on the part of the civil servant that he will suffer by this change of policy on the part of the Government, and at the same time there should be no unfair difference as between one class of civil servant and another.
All civil servants are not on the higher scale of salary. There are other classes of civil servants which, even if they were paid on the proportion of the highest bonus, who would still be receiving pensions by no means above the amount necessary to keep then in decent circumstances of life. Postmen are a class who have been mentioned by the Financial Secretary, and these men, even although they come under this unfair system, get a pension which is by no means high in any sense of the term. On the other hand, we have to ask ourselves whether we are going to support the Government when they tell us they are not able to break a pledge which they have given. I am not in a position to say that I object to that attitude. I cannot give a vote which implies that I am prepared to break a pledge given on behalf of this House to any class of civil servants, and for that reason I feel I ought to be left free in order that the Government pledge, bad though it be, may be kept. I hope that as a result of this discussion, the Secretary of the Treasury will be able to let us have some assurance that there shall be a general reconsideration of the payments that are made by the Vote we are now asked to pass, and that there will be an effort to secure that the pensions paid out of it will be on an equitable basis, and that every class of civil servant in the future shall be paid on exactly the same level.
§ Mr. YOUNGMay I appeal to the House to come to a decision on this matter? It has been very fully discussed, in the first place in Committee, and, secondly, an opportunity for discussing it was given yesterday on Report, and I think it will be within the recollection of the House that there was something of the nature of an understanding, or shall I say an assumption, that, if the Debate were adjourned yesterday until to-day, in order to give an opportunity for considering what had been said, the House would be able to arrive at a rather more prompt conclusion to-day.
§ Mr. HAYDAYWould the hon. Gentleman, before we vote, in view of what was said by the hon. Member opposite (Mr. A. Hopkinson), state what is the composition of the Whitley Council? It has been alleged that it is composed entirely of civil servants, who decide for themselves what their own conditions shall be.
§ Mr. YOUNGThe composition of the Whitley Council, as at present constituted, is surely very well known. It is published in many documents. It consists of representatives of the staff side and representatives of the official side, and the hon. Member will have heard the announcement made to-day by my right hon. Friend the Chancellor of the Exchequer as to certain changes which are in contemplation.
§ Major M. WOODI do not want to repeat what has been already said, but only to ask one question. It seems to me that the solution of this question must be unsatisfactory whatever we do, and that in the case of some people pledges made to them are going to be broken. At any rate, it seems to me that pledges are going to be broken in the case of those who might have retired last year and did not. They did not retire, and they are going to be penalised for it. Is it not the fact that there are quite a number of civil servants who might have retired last year, and postponed their retirement, at the request of the Government, in order to accommodate them and to accommodate the public service; and are they going to be penalised by the fact that they thus consented to accommodate the Government? I think that that is a substantial point to which we might be given an answer.
§ Mr. YOUNGThere may be, and no doubt are, civil servants who, from asense of duty and devotion, continued their service at the request of the Government after they had reached the age of 60. There can be no penalisation, however, owing to anything that is now suggested. I think there is a little misconception. Until a civil servant retires there is no understanding or contract with him as to what sort of pension he will get.
§ Colonel WEDGWOODI should like to put our position quite clearly. We are perfectly satisfied with the change that the Government propose to make. We think it desirable that, in future, the pension should be on a sliding scale, and that that part of the pension which is due to bonus should vary with the cost of living at the time. That is better than having the pension for all time based on the cost of living at the date of retirement. I must say that I do not think the alteration breaks any pledge or any recommendation of the Whitley Council. It is a toss-up whether that change is going to be better or worse for the civil servant. Whether he be a postman or a highly salaried official, it is an even chance whether this change is going to be better or worse for him. We have certainly no guarantee that the cost of living will not go up again; indeed, if the Government carry on their finance on the lines laid down in the newspapers, and borrow £100,000,000 in order to pay pensions this year, that alone will inevitably depreciate the value of the £ and increase the cost of living in this country. In view of the risk of an increase in the cost of living—
§ Sir F. BANBURYWhen the Labour party come in?
§ Colonel WEDGWOODIf the Labour party come in, they will, conduct their finance on sound lines, and not live on borrowed money, or with the aid of the printing press.
§ Mr. SPEAKERThe hon. and gallant Member is now getting a long way from the Vote.
§ Colonel WEDGWOODThat is due to the interruption of the right hon. Baronet. He knows perfectly well that the subject we were approaching is a most important one which ought to be discussed at some time in this House. 1974 The change proposed does not really break any pledge, and, in view of the possibilities, it may be as advantageous for a civil servant who retires as the original scheme. When it comes to asking the Government to break the settlement they have already made with people who have retired under certain conditions to which the Government have been a party, then I personally should support the Government in the conclusion at which they have arrived. The Labour party, of course, not having had the opportunity of discussing this question in detail, will vote as they think fit on the matter. For myself, I shall certainly vote with the Government and for the maintenance of the pledge given by the settlement of the Whitley Council.
§ Lieut.-Colonel ARCHER-SHEEIn the case of those men who have already retired, I do not suppose that any Member of this House will want to break the pledges that have been made to them, but I think, first of all, that the whole Debate has shown the extent to which the House lacks financial control, because the original Vote was passed under the Guillotine and there was no opportunity of discussing it. Secondly, the pensioners of the Army and Navy and other forces do not have their pensions based on the cost of living. If that is to be the rule, why should not their pensions also be altered? Surely, sonic more satisfactory method of arranging the pensions of civil servants ought to be found. I do not wish to cut down their pensions or object to them in any way, but I think the method we are going to adopt now is twist cumbrous and not at all satisfactory, and the pensioners themselves will be unable to know what sort of pension they are going to receive.
Mr. G. MURRAYI should like to ask a question on a point which, I think, has not been touched upon during the Debate, namely, what is going to happen with regard to the lump sum which is paid in addition to the annual pension under the usual pension scheme? As I understand it, part of the pension is paid by an annual allowance and the other portion is paid, when the official retires, in a lump sum; and I understand that that principle has been applied to the bonus system as well as to the ordinary pension system. Would the hon. Gentleman tell us how he proposes to deal with the 1975 lump sum as applied to the bonus system in the case of those officials who have already retired, and of those who will be dealt with under the scheme which he has outlined?
§ Mr. YOUNGAs I have already pointed out, in the case of those who have already retired we cannot make any change. As to the principle to be adopted in calculating the lump sum part for the future, that is a very elaborate question of actuarial estimation, upon which I am not yet ready to put any definite proposal before the House. I can only say that, with regard to both the pension and the lump sum, my purpose will be so to apply this new alternative scheme that the total non-effective charge for the retiring civil servant shall bear a relation to the cost of living.
Mr. MURRAYMy reason for raising this question is that I am of opinion that, in the case of pensions granted under the bonus system, the lump sum ought to be done away with altogether.
§ Sir D. MACLEANWith your permission, Mr. Speaker, and that of the House, I think that I ought in fairness to remind the House of what I said yesterday and to state what I propose to do to-day. I said yesterday that I assumed, with regard to money already paid and pensons to which the Government was already committed, that this House would probably do nothing, but that with regard to pensions not yet assessed or awarded, having regard to the Debate which took place yesterday and on a previous occasion, they would be, in legal phraseology, affected by notice, and, therefore, any change of policy adopted by the Government could give no ground of complaint. That point, I am bound to say, has been made by the Financial Secretary to the Treasury, and that was my main position in the House yesterday. Therefore, as far as I am concerned at any rate—and I speak only for myself—the point which I put having been made, and a saving already on this year's Estimates having, as I hope and believe, been effected, as well as a future saving of a very large sum, I do not feel that I should be justified in opposing the Vote which is asked to-day.
§ Question, "That this House doth agree with the Committee in the said Resolution," put, and agreed to.