HC Deb 30 June 1922 vol 155 cc2490-503

Order read for resuming Adjourned Debate on Question [23rd June], "That the Bill be now read the Third time. "— [Sir H. Nield.]

Question again proposed, "That the Bill be now read the Third time."


When the Third Reading of this Bill was taken this day week, by the Rules of the House I was interrupted in the few remarks which I had intended to make on that occasion. I should like now to make it quite clear that I have no objection whatever to the principle of superannuation. I think it is an extremely good principle, provided it is carried out in a moderate and sensible manner, but, on the other hand, one cannot conceal from oneself that many of the superannuation funds which are in existence at the present moment are more or less in a bankrupt condition. I do not say that without having some knowledge of the matter, and my hon. and learned Friend the Member for Ealing (Sir H. Nield) rather twitted me last Friday with not having any special knowledge of this particular matter.


I withdraw that unreservedly.


I am much obliged I have for many years been chairman of a superannuation fund, and therefore I have some knowledge of how that fund works. Of course, in all these cases there is—and I presume there has been in this case—a consultation with an actuary as to the effect of the scheme, and as far as I know in nearly every case at the commencement of the fund the actuary makes a calculation and comes to a conclusion which leads him to be able to say that, provided the provisions of the scheme are carefully carried out, that fund will be solvent. But circumstances have arisen in every case that I know of which have shown that the calculations of the actuary were unfounded and have bad to be entirely recast. When the actuary is confronted with that, he says that circumstances have arisen which he did not foresee and that consequently he is in no way to blame, and I think he is right. That state of affairs has arisen, not in one or two isolated cases, but probably in a great number of large schemes, where every precaution and every care has been taken to see that the fund not only was started in a manner which should ensure its solvency, but was managed in as good and as capable a way as it was possible to secure in this human world. Yet the result has invariably been that the whole basis of the scheme has had to he altered, or that the employers have had, out of their own pockets or out of the pockets of their shareholders, to find large sums of money in addition to the sums which they had originally agreed to find. In one or two cases the company has taken over the whole liability of the solvency of the fund, and though that was very nice for the servants and officials, I am not at all sure it was a wise proceeding for the shareholders. That brings me to the question of this particular scheme.

At the commencement of my remarks, I said I had no objection to superannuation schemes as such, provided they were properly managed, but it must be remembered that superannuation schemes for local authorities are met with this difficulty. The salaries of the officials and servants of a local authority which has not initiated under a special Act a scheme of its own are based upon the principle that there is no superannuation, and consequently what is going to be done is this, that the superannuation will he granted upon a salary which was given when it was supposed that the recipient of that salary would not be entitled to a pension. That must necessarily entail a very considerable burden on the ratepayers, and while I do not in any way wish to cause hardship to the officials and servants of local authorities, one must not forget that the person who is suffering from the greatest hardship at the present moment is the ratepayer. The ratepayer has had his burdens enormously increased. I think I might say, without exaggeration, that in many cases they have been doubled and trebled during the last seven or eight years, and now it cannot be denied that you are going to put a further burden on the ratepayer.

The pensions which have been granted to civil servants have always been looked upon as part of deferred pay; that is to say, if they had not had the pension, their salaries would have been larger. In this case the reverse is going to take place, because, as I have already said, the servants of local authorities were appointed and paid upon the supposition that they were not going to receive a pension, and, consequently, they had a larger salary than they would have had if they had thought or known that they were going to receive a pension. Therefore, to make this Bill work fairly, not only to the officials but to the rate[...]ayers, the salaries to begin with in the case of every authority adopting this scheme should be reduced to a point at which they would have been if, from the beginning, a superannuation scheme had been in existence. We know very well that that will not be done. The officials, of course, would object to their salaries being reduced, and the local authorities, probably, would not like to take an unpopular course. The pensions, therefore, will be given upon salaries which never ought to have carried pensions.

Coming to the Bill itself, and to the alterations made, I have only been able to get a copy of the Bill as it came down from the Standing Committee. I have not been able to get a copy of the Bill as it is now, after having been altered by this House; but I have a recollection of the more important Amendments, or rather I should say, perhaps, of the Amendments with which I disagree, and which, I think, were put in by mistake. Clause 2 of the Bill, as it came to this House last week, said: This Act shall not apply to a local authority unless and until— (a) it shall have been adopted by such local authority by a resolution passed by a. majority of the members of such local authority, at a meeting called for the purpose, of which a month's previous notice shall he given to each member of such local authority, and such notice shall be accompanied with a copy of this Act, together with an estimate certified by an actuary of the cost to the local authority of adopting this Act; and such resolution shall also have been confirmed by such local authority at their immediately succeeding regular meeting held not less than one month after the passing of such resolution. 12 N.

Instead of a resolution having to be passed by a majority of the members of such local authority, it was altered, so far as my recollection goes, to a majority of two-thirds of those present, which, of course, is a. very different Thing. I think the Labour party have always objected to provisions necessitating a majority of two-thirds of those present.


They object to a majority of Members still more.


Perhaps they do. I am very much afraid they always object to anybody having a control over his purse, and that they are always anxious to spend as much money as possible, especially if it belong to anybody else. That was the alteration made, and I think it was a very bad one, because it is a matter of common knowledge that the ratepayer is a very lethargic person, and, although when he finds that his demand note is £20 instead of £15, he is very angry, in many cases he will not take the trouble to attend meetings, or find out what is going on. In that matter he is not altogether to be blamed, because he has a good deal to do, and it is not always possible for him to attend meetings of the local authority. Of course, it may be said that if you become a member of a local authority, it is your duty to attend every meeting. It is equally the duty of every Member of this House to attend every Sitting of this House, and to know what is going on, but, as a matter of fact, neither of those two things occurs, and, certainly, during this Parliament, we rarely have 300 Members, or less than half, present, and of those 300 very few know what is going on.


How does the right hon. Gentleman connect his remarks with the Bill under discussion?


I certainly think I can show it. I pointed out that this alteration in the Bill would be bad for the ratepayers, because they could not depend upon a regular attendance of their members, and, therefore, a two-thirds majority of the members present might be two-thirds of a very small number, and I illustrated that by mentioning a very much superior body, with much more important duties imposed upon it, where it was difficult to get anything like a larger number of the members to attend. I merely used it by way of illustration. I believe there were some Amendments to that particular Clause, but I forget them at the moment.

Then we come to the question as to how these pensions are to be calculated. They are going to be calculated not, I think, on the salary which the officer or the civil servant receives, but upon his bonus, and the words are these: Provided that any part of a superannuation allowance which is calculated by reference to a war bonus or other similar allowance shall be calculated and liable to variation in accordance with the Rules for the time being In force with respect to superannuation allowances of members of His Majesty's Civil Service. I do not know what the Regulations are in respect to bonus allowances for members of His Majesty's Civil Service, but I do know this, that in all well-conducted superannuation schemes the bonus is not included. The word "bonus" means something which is given as an exceptional gift under exceptional circumstances. It is not a salary at all. I have tried to study this carefully, and my belief is that bonus cannot be included in the salary. I do not think you can say, because His Majesty's civil servants succeeded in getting their bonuses included in their salary, that that is an example to be followed. I do not for a moment enlarge, and must not, upon the methods which have been carried out by the civil servants in regard to bonuses on their salaries beyond saying it is a matter of common knowledge that during the past three or four years the way in which salaries have been increased of civil servants is one which has not been followed by any other body of persons in this country.


On a point of explanation, and in order to shorten the observations of the right hon. Baronet, may I point out that in this very Clause have been introduced words intended to bring about that on a reduction in the cost of living the bonus will fall too, and so the ratepayers pay less towards the cost of superannuation.


I know, but that is not my point. My point is that bonus should not be included at all. The hon. and learned Gentleman has entirely missed my point. My point was not that the bonus should rise or fall with the cost of living. I am perfectly well aware that that is so. My point was that it ought not be included at all. The word "bonus" does not mean the ordinary salary, but something which is given as an exceptional gift. Turn now to Clause 19. Here I see Parliamentary provision is made for what I spoke about at the beginning, and relates to a contingency that will probably occur, namely, a deficiency account—in other words, the thing becoming insolvent. The Clause says: Where on any such valuation the actuary certifies that a deficiency or a disposable surplus is disclosed the local authority"— I want to call the attention of the House to these words— shall submit to the Minister a scheme for making good the deficiency by means of payments by the local authority into the superannuation fund, or by means of an increase in the contributions as provided by this Act of the local authority. That means if a deficiency occurs the local authority, that is the ratepayers, shall make up the deficiency. I am quite well aware that there are other provisions which I propose to read to the House, but this particular Clause says that the local authority "shall" not "may," in the event of the fund being deficient, make up that deficiency by means of payments into the superannuation fund or by means of an increase in the contributions of the local authority. Then the Clause goes on: (3) Where on any such valuation the actuary certifies that in order to maintain an equality of value as respects persons becoming contributors after the date of the scheme between the amounts to be contributed by or in respect of such persons, and the amounts of benefit to which such persons will become entitled, it is expedient to increase or decrease the contribution as provided by this Act in respect of such persons, provision 'may' be made.… Here, in relation to officials, it says "may"; it does not say "shall." The effect of these two Sub-sections is that where there is a deficiency the local authorities "shall" make up the, deficiency out of their funds, or the ratepayers' funds, or they "may" not "shall" ask the persons who are going to benefit by the scheme to increase their contribution in equal amount. Why is it "shall" in one case and "may" in another? It is natural that the officials of a local authority should say at once: "Oh, but you have power, in fact you are ordered, to make up this deficiency out of the funds of the ratepayers. On the other hand it is only a permissive power that is given to ask us to contri- bute. We are sure you are not going to ask us. It would be very hard upon us because the cost of living has gone down a little, and we really cannot agree that it is fair that we should contribute." The result probably will be that again the ratepayers will have to contribute when they certainly ought not to do so, seeing they already are groaning under grievous burdens.

The only other thing to which I wish to call the attention of the House is that somewhere or other—I do not know quite exactly—in the Bill there is an Amendment, put in last Friday, which provided that part-time officials might have a pension. At that time we had the, privilege of the presence of the right hon. Gentleman the Member for the Scottish Universities (Sir H. Craik) who was himself a distinguished civil servant. The Bill said that certain things had to be done within the rules of the Civil Service with regard to bonus. I am sorry my right hon. Friend is not here now, but he was last Friday and was impelled to get up and say that it was an unheard of thing in the Civil Service that a part-time servant should receive a pension. Take the case of a doctor, he may be calling at a workhouse during the year, hut for the most of the day engaged in his private practice. Why on earth should he receive a pension at the expense of the ratepayers? It is an entirely novel procedure. I do not believe that there is another scheme in this country which provides that part-time officials shall receive pensions. I believe that this Bill has not yet been to the House of Lords, and I only hope that in another place they will ensure that the particular portion of the Bill which gives a pension to a part-time official will be amended by being struck out.


I am particularly anxious that the House should get on with the discussion of the Railway Fires Bill, but I do ask hon. Members to agree to the Third Reading of this Measure. Its general provisions meet with the approval and support of all those national associations which are entitled to speak on behalf of local government in this country, and it meets with the approval of the National Association of Local Government Officers. In addition the Bill has received the support of the Ministry of Health and from that point of view can be said to be an agreed Measure. I am sure that this Measure will be welcomed by the various local authorities of the country.

There are a few general considerations which will lead them in that direction. The provisions of the Measure will give greater security to local officials on retirement in regard to the advantages which their salaries bring, and by retiring at a reasonable age they will open further avenues of public employment for younger men, and thus maintain the virility of our local government. This Measure will also remove from the activities of local authorities a very unpleasant and undesirable proceeding which has operated in days gone by. Many local authorities in the past have had to resort to the doubtful expediency of giving a pension to an old official and calling it something else, and there are many examples of old public servants who have been put on the retired list and then have been given a sum which has been called salary for consultative purposes in order that they may be called in for consultation when required. I think that is an undesirable proceeding, especially after these men have lost touch with local administration in a particular area. From these two points of view I am sure that the provisions of this Bill will be acceptable to the local authorities in the country. I take it that the wider aspect of public advantage is all on the side of the acceptance of the provisions contained within the four corners of this Measure, and for these reasons I hope the House will give it the Third Reading.


I also am very anxious to see this Bill passed into law with the least possible delay. As I have had no previous opportunity of speaking during the early stages of this Bill, perhaps I may be allowed to say one or two words at this point. I have had representations from those living in my constituency, both from those who represent the employés and the employers, asking that this Bill should receive the sanction of Parliament at the earliest possible date. On the whole I desire to give it a very cordial support.

I do, however, feel that there is very great substance in the objections which have been raised to certain parts of the Bill by the right hon. Baronet the Mem- ber for the City of London (Sir F. Banbury), particularly in regard to reckoning superannuation allowance upon bonuses. Like my right hon. Friend, I have been for several months past engaged in examining very closely the question of salaries, bonuses, and pensions to members of the. Civil Service, and I think I speak for the great majority of the Committee on which I am serving when I say that the whole system of pensions, as reckoned on bonuses for members of the Civil Service, will not meet with their approbation. It is a wrong principle. A bonus is not part of the salary, and, like my right hon. Friend, I share the hope that when this Bill passes to another place, if it is within their competence to do so, they will amend the Clause to which I desire to draw the attention of the House. I wish to call attention to paragraph (c), Clause 7, which reads: Provided that any part of a superannuation allowance which is calculated by reference to a war bonus or other similar allowance shall be calculated and liable to variation in accordance with the rules for the time being in force in respect to superannuation allowances of members of His Majesty's Civil Service. That makes it all the more incumbent upon those Members of this House who wish to have regard to public economy, that the rule in force with regard to the war bonus of members of His Majesty's Civil Service should be as speedily as possible amended. There is another point which was very properly raised by my right hon. Friend, namely, the question of superannuation allowances to part-time officials. I listened to what my right hon. Friend said with his usual force on that subject, and I find myself in entire agreement with the sentiments which he expressed. Having said that, I wish to express in two or three words my cordial assent to the Bill which the House is now asked to read the Third time, I do so for three reasons. In the first place, I am very glad that this legislation is to be of a permissive character. I was not able to be present during the Debate raised by the hon. and learned Member for Ealing (Sir H. Nield), but I have read his remarks on this question as well as those of other Members of the House, and they gave reasons which appear to me to be overwhelming in favour of this Bill.

I believe it to be a very sound principle in regard to Measures of this kind relating to public authorities, that they should be of a permissive character, and not obligatory. It is that portion of the scheme which commends it to me. I would also like to say that, although the legislation is permissive in character, I hope and believe it will be adopted by a very large number of the local authorities concerned. Speaking for my own main local authority, I know that they are anxious to see this Bill passed into law.

The second feature of the Bill which commends itself to me is the fact that the scheme is to be upon a contributory basis. There again I believe my hon. and learned Friend opposite (Sir H. Nield) is proceeding as he did in the case of the Middlesex Bill, on the basis of a contributory scheme. Here is a scheme which is coming into operation long after the establishment of the service, and in which it seems to me the principle of contribution is sound and ought to be adopted and maintained. Finally, I would desire to support this Bill because it removes anomalies in regard to the public service which are absolutely indefensible.

You have in a municipality like that which I represent certain public officers who are pensionable and certain other officers doing precisely parallel work who are not pensionable. If it were merely for the purpose of removing anomalies which are creating, I will not say unrest, but a great deal of dissatisfaction among the servants of our municipalities and local authorities, I should give my hearty support to this Bill. It is exceedingly important—on this point, I speak with some personal knowledge—for a local authority, I will not say to get rid of public servants who may have done admirable service in their time, and who have reached a stage at which their service is no longer efficient, but to be able to pension them instead of being obliged to retain them in the service simply because they are not in a position to place them on superannuation. If the Bill contained no other provision, I should think on that account alone it would be well worth the attention and acceptance of this House. Therefore, I give it my cordial support on Third Reading.


While I cannot think that the House will be beguiled by the speech of the right hon. Baronet the Member for the City of London (Sir F. Banbury), he did make certain attacks on local authorities which call for a word or two in reply. He suggested that this House should constitute itself the defender of overburdened ratepayers owing to the lethargy of the local authorities. The industry of members of local authorities compares very favourably with the industry of Members of this House. The right hon. Gentleman himself went on to say that, whereas we had a membership of over 600, there were seldom 300 Members present. If he had had experience of municipalities and local government, he would know that the proportion who attend is infinitely greater than the proportion of Members who attend this House. Therefore, it is not necessary that the local authorities, or even individual ratepayers, should look to the right hon. Baronet to champion their interest. The interest taken in local elections compares more than favourably in many districts with the interest taken in Parliamentary elections, and there is much more apathy here than in local affairs. Therefore, this Bill, which is of a permissive character, may well be left in the hands of those who are vigilant in looking after the interests of the ratepayers, especially as it does not impose any charge on the Exchequer, but is mainly on a contributory baths, though possibly a slight charge may fall on the rates. It has the support of the Association of Municipal Corporations, who represent officially the views of the local authorities, and I have no doubt that the House this afternoon will, practically unanimously, give a Third Reading to a Bill which is to encourage thrift. Surely, the right hon. Baronet should support a Bill which is to encourage economy. It will make for more efficient administration in local affairs, owing to local authorities being able to pension officers who have overrun their time, but who now, owing to sympathetic consideration, are kept on because the authorities do not wish to throw them on the scrap heap. I think the right hon. Baronet should support a Bill which makes for thrift and economy and does not impose a charge on the Exchequer.


I did not say that I was not going to support the Bill. I was at considerable pains to show that, in my opinion, something of this sort is necessary, but I thought it my duty to point out the weak spots of the Bill.


I am sorry if I have misrepresented the right hon. Baronet. I am glad to hear that he is on the side of those who are supporting this Measure in the interests of the local authorities.




I am afraid the hon. Member addressed the House last Friday.


I beg to move, "That the Bill be now read the Third time."

I reserved myself to the end in order, in the fewest possible words—I do not desire to delay anything—to express my thanks to the House for the very cordial way in which they have accepted the Bill. In all its stages it has met with almost universal approval, and, from the observations of the right hon. Baronet, I am not sure that it does not have his approbation after all. At any rate, he has had the opportunity of exhibiting that wonderful scientific skill which can be operated in this House most effectively. I wish also to say how much I appreciated the observations of the hon. Member for Oxford (Mr. Marriott), who has carefully gone through the Measure. I can assure him that the local authorities can determine upon what basis superannuation shall be calculated. It will be in their hands to determine the basis upon which they will be prepared to consider a scheme between them and their officers.


Is it not the case, according to the Section which I read, that they are bound to accept the Civil Service scheme for the time being, and bound to follow the Civil Service rules?


They can, under the Bill, prescribe the basis under which superannuation will be contributed. The proviso to which the hon. Gentleman called attention is that if bonuses form part, then the bonuses will automatically drop in accordance with the rules of the Civil Service, and, if the rules of the Civil Service are amended, then, of course, the amended rules will apply. Part-time officials will receive only a corresponding amount in salary. A part-time officer, of course, is paid proportionately; he will contribute proportionately, and the superannuation allowance will be proportionate. With these few observations, I desire to thank the House very sincerely for the way in which they have received this Bill.


I do not desire to stand between the House and those other Bills which we are all so anxious to reach without the least possible delay, but I cannot help saying a word or two with regard to this Bill, because a great many years of my life have been spent in local government. I can assure the House that we have always felt the greatest difficulty in dealing with any of our officers who are getting on in years, and who are naturally anxious about their future, to know what is the proper course to take. Sometimes we have been obliged to follow the course of appointing them to the somewhat anomalous position of being in an advisory capacity. I think that has been an extremely undignified position for a public body or county council to be obliged under the circumstances to take up. I am glad to think that for the future, thanks to my hon. and learned Friend's pertinacity and knowledge of this subject, we shall no longer be obliged to follow that extremely undignified course of appointing them in an advisory capacity. It is the duty of those of us who carry on local government to see that the positions we offer are such as will attract the very best material for our purpose, and it is unquestionably the fact that, unless you offer to those in your employment some inducement by which they can look forward without fear to the future when they reach the age of 60, you are not likely to attract to your service the best material for your purpose. In other works, and on our railways, we have had for many years superannuation funds, and it was indeed an anomaly that the local government of the country, being of the importance that it is, should not have been able to give superannuation allowances to its officials. We have frequently discussed the matter. I think we are indebted to the House for passing with absolute unanimity, as I think we shall do, a Bill which will be for the welfare of the officials, and which most undoubtedly will assist in the efficient carrying on of the local government of the country. Those who, like myself, occupy positions on county councils, can look forward, having regard to this Measure, to attracting the very best material for the important business with which we are entrusted.

Question, "That the Bill be now read the Third time," put, and agreed to.

Bill accordingly read the Third time, and passed.