STATE AND LOCAL GOVERNMENT PENSIONS

HC Deb 03 December 1943 vol 395 cc646-89

Mr. W. J. Brown (Rugby)

I beg to move, at the end of the Question, to add: But humbly regret that Your Majesty's Gracious Speech makes no proposal for raising the pensions of retired State servants, for example, civil servants (Home and Colonial), officers of the Armed Forces, teachers, local government officers, etc., to a level corresponding with the increased cost of living. In moving this Amendment, which stands in my name and the name of some 140 Parliamentary colleagues, I feel that the first words I should say to-day are words of appreciation that the opportunity should have been given to me to ventilate the case with which this Amendment deals. I have desired that opportunity ever since I returned to the House some 18 months ago, and it is a matter of great gratification that the opportunity is now afforded. The second thing I should like to do is to express my grateful thanks to the hon. and gallant gentleman the Member for Petersfield (Sir G. Jeffreys), who is to second this Amendment, and who brought to the aid of my somewhat tattered battalions the disciplined cohorts of his Committee's adherents. Finally. I should like to express my gratitude to the 140 colleagues who have associated themselves with me in this matter.

I wish to-day to plead the case of the forgotten men, the men and women of yesterday, who have served this country in one branch or another of the public services, but who now, as the result of old age or infirmity, have retired from active work, and are living upon such pension or allowance as the State may make to them. Among these are civil servants, who, during their official life, carried out the work of administering the legislation adopted by this House. There are ex-officers of the Armed Forces, and particularly of the Army and Navy, who, having fought our battles in different parts of the world, are now on retired pay. There are humble ex-policemen and prison officers who, during their lifetime, have safeguarded our persons and our property. There are teachers, who have discharged what I regard as one of the highest possible functions in the community, the task of rearing the next generation of men and women. There are our Colonial administrators, who have borne the burden of government in different parts of the Empire, and who have now returned to live in this country. All these, and possibly other, categories come within the scope of the Amendment.

It is not my purpose to attempt to cover in detail all those cases. We have arranged, subject to your approval, Sir, a division of labour on this Amendment. It is felt that all these cases are in principle the same, and that therefore a statement which covers all of them in principle should be made. But inasmuch as the impact of present conditions upon these various categories differs in its incidence, it is necessary that something should be said about each of the main categories. I shall limit myself to that section which I know best, namely, ex-civil servants, and my hon. and gallant ally the Member for Petersfield (Sir G. Jeffreys) will deal with the case of the retired officers—if ever his party and mine combine, the combination will be irresistible. My hon. Friend the Member for Aberavon (Mr. Cove), whose long connection with the teaching profession is known to all Members, will speak for the retired teachers. And other Members will deal with other categories covered by the Amendment. I think there is no direct representative of the police in this House, so I will take them under my own comprehensive wing.

I want, first, to state in a simple sentence the case which it is our desire to impress on the Government. Our case is that the rise in the cost of living in recent years has made deep inroads on the purchasing power of the pensions of retired State servants; that, as a result, thousands of them have been reduced to abject poverty; that on three grounds, of equity, humanity and precedent, we ought not to leave that situation untouched; and that what this House should do is to press upon the Government the necessity of adjusting those pensions in the light of the increase in the cost of living. All that I subsequently say will be directed to establishing that case and to answering some of the arguments which have been advanced against me, here and in other places, as justification for the Government's inaction on this matter.

I must begin by describing the impact on these pensions of the rise in the cost of living. Here I must distinguish between the cost-of-living index figure and the cost of living. If one assumes that the cost of living in July, 1914, was represented by a figure of 100, it had risen in 1920 to 276. There had been an increase of 176 per cent. in the cost of living. From 1920 onwards the cost of living fell fairly steadily, and in November, 1934, it had dropped to 144, compared with 100 in 1914. That date, 1934, represented the nadir of the curve in the cost of living. From 1934 onwards the cost of living has gone steadily up. In 1935 it was 147; in 1936 it was 151; in 1937 it was 161; in 1939 it was 169; in 1940 it was 192; in 1941 it was 200; in 1942 it was 200; and in October of this year, which is the last figure I can get, it was 199. To make the calculation simple, let us call it 200, and contrast that with 144 in 1934. That is an increase of 56 points. That is the Ministry of Labour computation of the rise in the cost of living since 1934.

I do not think any Member will disagree with me when I say that between that figure of the Ministry of Labour and the concrete experience of life there is a considerable gap. The reasons are manifold.

One great reason is that the index figure is based upon budgets comprising a typical working-class family's expenditure in 1904. Any current figure of cost of living which bases itself on budgets collected in 1904 must obviously ignore the whole change in the way of life and the distribution of expenditure which has marked our domestic life in Britain during the last 40 years. The index figure, I submit, is not a true criterion. What is a true criterion I do not know. My friend Lord Beaverbrook, with whom I discussed this subject recently, gave it as his own estimate that the cost of living was 100 per cent. higher, as against the 30 per cent. of the Ministry of Labour's figure. I do not know whether Lord Beaverbrook is right or not. He has an astonishing habit of being right from time to time.

Mr. Lipson (Cheltenham)

Does he mean an increase of 100 per cent. since the war began?

Mr. Brown

Yes. That is the estimate of one person who has many sources of information at his command. I am content to say that if the cost-of-living index figure had risen by per cent. it would much more closely correspond with our own experience of the rise in prices than the figure of 30 per cent. put forward by the Ministry of Labour. An inroad of 50 or 60 per cent. into the purchasing power of the State pensioners of various categories is an extraordinarily heavy and serious inroad. On three grounds, equity, humanity, and precedent, we must do something about that situation. I think it will be for the convenience of the House if, in illustrating how this thing has worked out on grounds of equity, I take the category of pensioners with whom I am most familiar—the ex-civil servants.

It is a common feature that all the pensions we are talking about now are governed by one thing, or a second thing, or a combination of both. One element which goes to determine pension is the rate of pay, or, in the Armed Services, the rank which the person was holding at the time he retired from the service of the Crown. Another element is the number of years of approved service that the servant had put in at the date of his retirement. In the case of the civil servant, what a man gets when he retires is one-eightieth of his retiring salary for each year of approved pensionable service.

Here I want to bring in a point on which this House is not well informed, and on which I think it should be better informed than it is. There is no necessary connection, in the case of the Civil Service, between the number of years a man puts in, and the number of years approved for pensions purposes. A man may put in 40 years' service, and not a single one of those years be regarded as pensionable. I have a case under discussion with the Chancellor at the moment, upon which justice shall be done, though the heavens fall. It is the case of a man with 53 years' service in the Ministry of Supply or its analogues. Let me put it more broadly and say 53 years in the public service. That man is going out shortly, unless the Chancellor changes his mind, without a penny of pension.

Mr. Cove (Aberavon)

Why?

Mr. Brown

Because his service has been unestablished. It is only established service that counts. A man may remain unestablished for 20, 30 or 40 years, or never even be established at all, though his beard is trailing down to his boots.

During the last war there was an increase in the cost of living from 100 points in July, 1914, to 276 in 1920 and as a result of that rise, there was a series of ad hoc increases in Civil Service wages, flat-rate increases. In 1920, a Committee upon which (I speak from recollection) I served as a very young junior with the present Chancellor of the Exchequer, considered a more scientific scheme for adjusting wages to prices. Under this scheme there was to be a cost-of-living bonus, which would rise or fall every six months according to a rise or fall in the cost-of-living figure. The Government then had to consider what was to be done about the pensions, and they provided increases for those who had already gone out of the Service.

The Government then came to this House with a proposal to regulate the pensions of men and women who were to retire after that date, and I invite the House to note carefully what happened. The Government recommended to the House that for purposes of computing pensions, they should take 75 per cent. of the bonus that the man was getting when he retired, and should add that to his substantive pay, and then base the pension upon the combination. The Government got a bad House on this proposal. The House of Commons would not have it. I would like to quote to the House an extract—only one of many which I might quote but one will establish the point—from a speech made in that Debate by Sir Donald Maclean. He said: I put this one specific case, of a person with, say, £1,200 a year,"— I may say that in the Civil Service that is an astronomical figure. The men of whom I am speaking usually get not more than £3 or £4 per week. However, this was the case as it was put: retiring within the next four or five months. He gets a war bonus of £750. He is allowed 75 per cent. of his war bonus, which amounts to £562 10s. That, added to his £1,200, makes a total of £1,762. He gets half that—£881—for the rest of his life, fixed and unalterable. It does not even vary with the sliding scale according to the rise and fall in the cost of living."—[OFFICIAL. REPORT, 18th March, 1921; col. 1986, Vol. 139.] He demanded, "what justification there was for that" and said that "it was an amazing position." Many other speeches were made on that line, and as a result the Government withdrew that proposal. They abandoned the idea of having pensions that were fixed, and they introduced, by Treasury minute, a new scheme, under which pensions in respect of basic rates would be fixed, but pensions appropriate to bonuses would vary up and down as the cost of living varied. Let me emphasise this point. This House, in 1921, insisted that if the cost of living fell, pensions should also fall. I submit to this House of Commons that it cannot refuse to support the claim that pensions should go up when the cost of living rises. Having done the one thing, it seems quite incredible that we should not now do the other.

I have already mentioned that the cost of living fell steadily between 1920 and 1934. During all those years, the size of the Civil Service bonus went down, and corresponding to the size of the bonus the bonus pension also went down. Then, in 1934, somebody at the Treasury had a bright idea. That is not an everyday occurrence, and so perhaps I may be forgiven for commenting on it. The bright idea was that from that point onwards the cost of living would probably rise. "And," said the Treasury, "if we consolidate bonus with basic rate now, and therefore bonus pension with basic pension, when the cost of living is at its nadir, what a lot of money it will save us when the cost of living begins to go up." So, jug at the very point when the cost of living was at its lowest, there was consolidation, against the protests of the Civil Service Unions. The cost of living has gone up ever since in the way I have described; and not a penny by way of relief has been given to these men. I argue, first on the ground of equity, that that is quite wrong. How are we to regard the pension? I maintain that the Civil Service pension is a form of deferred pay. It is part of the pay which is withheld from the civil servant's current remuneration in order to provide for that pension at a later stage of his life.

Mr. Cluse (Islington, South)

Would the hon. Member be kind enough to develop that argument about deferred pay?

Mr. Brown

Yes, I am going to, and I trust I may make the point as clear to hon. Members as it is to my own mind. Whenever there is an argument about Civil Service pensions and pay—and I myself have engaged in thousands of them in the last 30 years—and it does not reach an agreed conclusion, we go before an industrial court for an independent arbitration. The Treasury, in its counter-statement to the tribunal, never fails to point out that the court must not only look at the normal wages of the grade, but it must also have regard to the fact that the grade enjoys pension rights, which the Treasury assesses as being worth 12½ per cent. of the basic pay. In other words, the Treasury gives lower pay than it would do but for the existence of the pension right, and it points that out to the court when cases have to go there for arbitration. I submit that, morally, there can be no question in these circumstances, that pension represents deferred pay; and that it is a breach of equity to pay that portion of pay which is deferred, in pounds which have depreciated to the extent of one half, or even more, in their purchasing power.

On the ground, therefore, of plain equity it is monstrous that nothing should be done to increase the size of these pensions, which represent deferred pay.

Arguments about equity are sometimes inconclusive. I would like the House to realise, if it will, what are the consequences, in terms of hardship, which has been created by the refusal to do anything on this matter. I take these cases not because they are exceptional. I can produce hundreds and thousands more like them, and I believe that every Member of this House probably could produce cases that correspond. Here is a man who retired from the Civil Service at the age of 65. His pension is 12s. 6d. per week—50s. a month. He is one of those men who put in long service, but only a tiny part of it is counted as his pensionable service. He goes out with 12s. 6d. a week. The purchasing power of that 12s. 6d. has been reduced to-day to probably something less than 6s.! Here is a man from the Inland Revenue Department, who retired in 1935, just about the time when the cost of living was at its lowest; 65 years of age, 43 years service, pension £65 5s. 1d. per annum.

Mr. Bowles (Nuneaton)

What was the salary?

Mr. Brown

He does not give me that, but I can give cases where they do give it. It will be seen at once that that pension is of the meanest possible description, something just ever 21s. per week. Now to-day, as the result of the rise in the cost of living, it is worth probably only about 10s. or 10s. 6d. A civil servant invalided out of the service with 30s. a week pension writes to me, with some bitterness in his heart, that he understands that 30s. a week is the amount allowed by the authorities of the Zoological Gardens for the Great Ape.

Mr. Bartle Bull (Enfield)

There is only one of them.

Mr. Brown

I do not think that the qualitative merits of this case are in any way affected by the number of the people—or apes—involved. Here is a retired postman with 44 years' service, pension 18s. 6d. a week. I do not know whether the House is aware of it, but it costs vastly more to maintain men in prison or in public institutions than the pensions of thousands upon thousands of men who have rendered great service to this country. Next is the case of a man from an ordnance factory, 50 years' service, less three months. Pension on retirement £94 15s. 8d., which to-day is worth probably not a penny more than £45. A retired schoolmaster, after 40 years' service, is awarded a pension of £98 15s. This relates to a man who, during the last war, served as a lieutenant, then as a lieutenant-colonel, and was later created a C.B.E. He is now 71 years old, his wife is 68, and the purchasing power of his pension has been reduced from £98 to probably something under £50. I could go on for hour after hour quoting these cases, but Members must know, in their own experience, that this is the sort of thing which is happening in every division, and they must know about them. That is the second ground that I urge—the ground of humanity. We cannot dispossess ourselves of responsibility for the situation. In the last resort these men and women are not servants of the Crown; they are not servants of the Government; they are servants of this House. And this House is responsible for seeing that they get a reasonably fair deal.

I would now like to turn to some of the alleged justifications that have been given to me in various places for the Government's inactivity in this matter. I have heard four or five main arguments directed against this claim, and in case the Chancellor should use them to-day—which I hope he will not do—I would like to anticipate them. The first one is, that it is not part of a civil servant's contract of service that his pension should be related to the rise and fall in the cost of living. That is true, in the sense that there is nothing in the letter he gets from the Civil Service Commission, who appoint him to his job, and nothing in the superannuation Act which covers his pension, which specifically provides that there should be an adjustment in the light of rises or falls in the cost of living. But if there is no legal contract, there is a very strong moral contract. There is a moral obligation on the State not to pay pensions in pounds which have no relation, as far as the purchasing power is concerned, to the pounds taken into account as wages.

A second argument has been that it is unnecessary to increase these pensions, because many pensioners have emerged from their retirement, and are back doing work in Government offices. The first answer to that is, that there are two categories which have not returned to employment. The first category is that of the very old, and the second is that of the men who went out on medical grounds and remain unfit. It will be plain to the House that no argument the Chancellor may use about men who have returned to work can possibly apply to the two categories I have just mentioned. But what happens to the man who goes back to work from retirement? He resumes work at the rate of pay be was getting when he left, but from that the Government deduct his pension. Suppose this House insisted that pensions should be increased by 50 per cent. As far as these men are concerned, it would not cost the State a single penny. The pension would be increased, and so would the size of the deduction from their pay. And, therefore, this argument just fails to connect with the concrete situation with which we are dealing.

The next argument is that it is undesirable to relate pensions to the cost of living. I hope I may be forgiven for a digression. I have noticed about the Treasury, for the last 30 years, that whenever a rule which it has established begins to operate to its disadvantage, it invariably changes the rule. They remind me of nothing so much as an incident which occurred when I was a lad at school. In those days schools were not provided so well with facilities for sport as they are now. And I remember the headmaster trying to get up a cricket team. He said, in the class, "Has anybody any wickets?" and somebody had. He said, "Has anybody a bat?" and somebody had. Then he said, "Has anyone got a ball?" and somebody had. So, by one means or another, he obtained the necessary material and got the game going on the sports field. Having started it off he left the boys, and went to talk to a passer-by at the edge of the field. After a time he became aware of a row going on on the field, and then a little boy ran up to him, panting, and said, "Please, Sir, Bill Smith is out." The teacher said, "Oh, what about it?" and the little boy replied, "Bill Smith won't come out." "Why?" asked the teacher, and the little boy replied, "Sir he says it is his bat!" You can knock down the Treasury's middle wicket, you can knock down their offside stump, and their onside stump, and you can send their bails flying. But it is their bat! That is what actually happens in these matters. The Front Bench that opposes me to-day—I hope it will not—is not the same Front Bench in terms of personnel as it used to be, but it is the same in terms of continuity and outlook. It is the same Front Bench that in 1922 decided that pensions must come down with the cost of living. Now pensions must go up with the increased cost of living.

In almost every other sphere of life we have been compelled to do something about this cost-of-living problem. During the life of this Parliament, we have increased the allowances of wives and dependants of serving men—not as much as I should like to see, but, nevertheless, we have increased them. We have increased supplementary allowances to old age pensioners. And last night we heard on the wireless that there are to be further increases in that area. All to the good! We have increased the size of Assistance Board grants, and unemployment and disability pensions, and at no distant date we increased the salaries of Members of Parliament. It is true that none of the increases to which I have referred was specifically and in terms related to the rise in the cost of living. But they were, in fact, given because of the increase in the cost of living. That is to say, they were given because the old amounts, unadjusted, would not have enabled the allowances to do what they were supposed to do, namely, meet the increased cost of living. Still more striking, during this war there have been six increases of pay to serving civil servants, the last one two days ago. Why? Because of the increased cost of living. Again, they were not specifically related to the cost of living, but the increases became necessary because of the rise in the cost of living. And to say that we cannot do for retired civil servants what we recognise we must do for civil servants who go on serving is utterly wrong.

The last argument I want to refer to is the one that there are many others in Britain, living on fixed incomes, who have had no relief because of the increased cost of living. That same argument was used in the Debate in 1921, in this House. And that argument, by the then Financial Secretary, now Lord Baldwin, was met with a withering rebuke. He said it was true that a lot of people in Britain had not received any relief for the increased cost of living, but that they were people to whom the State had no responsibility. He said we could not shirk from our duty to those to whom we had responsibility, by referring to the condition of those to whom we had no responsibilities. I submit that the State has a clear responsibility, as an employer to employed, in relation to the people I am taking about to-day.

What I have said about civil servants applies to the police, teachers, Army officers and the rest. The incidence is different, but substantially the case I have made applies to all the people covered by this Amendment. I can assure the House with sincerity that there is grave, unjustifiable and abominable hardship existing which the House ought to put right.

I would like to appeal to the Chancellor of the Exchequer. I have dealt with the right hon. Gentleman in the Civil Service field for something like 25 years. We have sat together on a good many committees and have taken part in a good many negotiations together. I have always found him a hard man, but a just man. He has never given away a penny unnecessarily. That would have conflicted violently with the inherited characteristics of the centuries, and would not have agreed with his Scotch origin. But I found him a just man, and when convinced by argument he acted upon it. Some time ago I found myself at odds with him. When he was Minister for Home Security I thought his policy about tube shelters was wrong. In a conversation I had with Lord Beaver-brook I said so, and criticised the right hon. Gentleman. Lord Beaverbrook's reply was, "You may be right about policy, Bill, but you are wrong about Anderson. Anderson is a very able and big man, and one day you will be glad you have him in the public service of this country." I hope very much that that day will be to-day.

I have been for 30 years dealing with the right hon. Gentleman's predecessors, on Civil Service pay, and I have noticed one deplorable thing. In all these years I have never known the Treasury adjust a rate of pay without being pressed to it. It cannot be because all the rates of pay were right, because I have taken scores of cases to the Board of Arbitration, and obtained verdicts for improved rates. The Treasury never give anything unless they are compelled to do so. It is said that I have extracted more millions of pounds in the Civil Service field from the Treasury than any civil servant, past or present. I want to tell the right hon. Gentleman that by an expenditure of half the money I have extracted unwillingly from the Treasury, they might have built up and accumulated a fund of good will and good relations.

I hope we shall not have to make this Amendment a matter of pressure. I hope the Chancellor will decide on it on its merits. We are divided here by political lines. But I am sometimes inclined to think that we make bogies out of each other and then attack the bogies we have created. It is thought on this side that those on the other side are hard-faced capitalists, and it is thought on the other side that all the fellows on this side are wanton incendiaries. On both sides I think they are bogies. What surprises me is not the political perversity of men; it is the personal goodness and honesty of men. It is to that personal goodness that I would appeal, in Members on all sides. Here is an area for which we are responsible. I beg that the House will see to it that justice is done.

I want to make it plain that there is no desire on this side of the House to force this Amendment to a Division. I want to make it plain that this is not a political vendetta against the Government. To-day I am out for duty, and not for recreation. I am anxious to secure justice to a body of men for whom I have a responsibility. He gives twice who gives quickly; and I hope the Chancellor will give us the case straight away. If he cannot do that, and if he will agree to an inquiry by a Select Committee of the House, or by a Special Committee, or some other form, no one would be more delighted than I should be to withdraw the Amendment. In any case I am glad to have had the opportunity of stating the case for these men, and I hope very much that their hearts will be made lighter tonight than they are at this moment.

General Sir George Jeffreys (Petersfield)

I beg to second the Amendment.

I and some of my friends who are specially interested in the case of retired officers of the Armed Forces have at the same time been studying the case of retired civil servants because it appeared that between the two cases there were various points of close resemblance. I myself asked a series of Questions of the late lamented Chancellor of the Exchequer regarding Civil Service pensions with a view to obtaining particulars on which to base comparisons between the two sets of cases. As a result of the information given me in answer to those Questions, I came to the conclusion that, while the two cases were not comparable as regards details and the method of the calculation of pension rates, yet in principle they were comparable, because in each case reductions were effected on account of the fall in the cost of living, and the rates were stabilised when the cost of living was almost at its lowest point, so that when subsequently it rose very steeply there was no corresponding rise in the rates of pension. Having said so much and having, I hope, made it clear that I and my hon. Friends support the case of the civil servants, I think it would be right that I should state that my own retired pay, which was granted under an Army Order of 1938, which was not retrospective, is not subject to the conditions of the Royal Warrant of 1919. I am therefore not personally affected, and my plea to-day is on behalf of my less fortunately situated brother officers.

The special points that I want to make are as follow: The basic rates of pension of 1919 were reduced in conformity with the fall in the index figure of the cost of living. When the cost of living rose there was no corresponding rise in the rates. They were in fact stabilised at 9½ per cent. below the basic rates of 1919, and we are not asking in the ordinary sense for a rise in pension rates but for the restoration of the 1919 rates and the fulfilment of the terms of the Royal Warrant of that year. In 1919 revised and increased rates of retired pay were laid down for all three Services, and in each case it was provided that these rates would be subject after five years to revision either upwards or downwards to an extent not exceeding 20 per cent. according as the cost of living should rise or fall, and thereafter there was to be a revision every three years. These conditions were observed so long as the cost-of-living index figure fell, and actually between 1930 and 1934 the rates of pension were reduced by as much as 11 per cent. But when in 1934 it showed signs of rising, and did in fact rise to a small extent, the Government considered that these fluctuations were, no doubt, highly inconvenient, and decided to stabilise the rates of pension at a low figure. They did in fact in 1935 stabilise Service pensions at a rate corresponding to the cost-of-living figure of 55, that is to say, a reduction of 9½ per cent. below the basic rates of 1919. These new consolidated rates came into force on 1st July, 1935. That is a brief history of the Services' retired pay between 1919 and 1935.

As we have heard from the hon. Member, this decision to stabilise applied also to civil servants. It was in each case a one-sided bargain imposed by one party to it, and that was the Treasury, and the other party, the pensioners, had no say whatever. Retired officers relied on the Royal Warrant of 1919, which laid down the following in paragraph 1: The rate will be subject after five years to revision, either upwards or downwards; to an extent not exceeding 20 per cent. according as the cost of living rises or falls. After 1st July, 1924, a further revision may take place every three years. The official cost-of-living figure at that time was 115. Those terms were identical for all three Services. In the case of the Army the Warrant bore the signature of the then Secretary of State for War. It was a signature which was then, as now, a guarantee of good faith, and in which there was the utmost confidence. It was "Winston S. Churchill." Can there be any doubt as to either the provisions or the intentions of that Royal Warrant, is it to be wondered at, in view of the terms of the Warrant, that the Government's action in stabilising retired pay at 9½ per cent. below the basic rate was regarded by retired officers as definitely a breach of faith and that much discontent and a good deal of hardship were caused thereby? Serving officers too are wondering, if that is the way the Government can treat retired officers, what guarantee they have of receiving any better treatment when their time comes.

After the stabilisation in July, 1935, as has been pointed out by my hon. Friend, the cost of living steadily increased, and on 4th August this year the Chancellor of the Exchequer, in answer to a Question which I put to him, replied that the index cost-of-living figure in July, 1935, was 143 and that the corresponding figure in July, 1943, was 200. Actually the new rates of July, 1935, were based on a figure of 55, that is to say, 45 points lower than the figure of to-day. I have stated that this 9½ per cent. deduction on the 1919 basic rates of pension constitutes a real hardship on many retired officers, especially those drawing the lower rates of retired pay, and particularly those who joined the Services in the last war somewhat late in life as compared with the ordinary age of joining. It particularly again includes those promoted from the ranks or the lower deck who mostly were commissioned when several years past the normal age, and who, in the greatly reduced Army and Fleet of the 1930's, often found themselves in middle age with no prospects and obliged to retire on a junior officer's exiguous pension. Moreover, the cost-of-living figures are calculated on presumed items of working-class expenditure. They make no allowances for many necessary items in the cost of living of retired officers and civil servants, such as, for instance, to mention only a few, rents, education, medical fees, repairs and insurance, all of which have risen to a considerable extent. Last, but not least, Income Tax is now double what it was in 1935, and whatever other omissions the Treasury may make it does not omit to collect Income Tax at the due date. It is a bleak prospect for the old soldier or sailor retired at an age when he is too old to earn much, too old to make a fresh start in life, who often has children to educate and is always striving to keep up appearances.

The retired officer's case is in some respects even more deserving than that of the civil servant, for, unlike the civil servant, he can seldom serve up to the full age of retirement or serve long enough to qualify for the maximum pension. There are, as in the case of the civil servant, two elements in the pension; one rank and the other length of service. It is seldom in the Army that an officer can go to the full age for retirement of the highest ranks. Moreover, during an officer's service he seldom knows what it is to have a settled home. He has had to serve in all probability all over the world, regardless of the expense of moving his family or of separation from his family, and his health is not infrequently impaired by wounds or disease or as the result of climate or exposure. There is no Employer's Liability Act or anything equivalent to it in the Army. As in the case of the civil servant, the officer's pay while serving is never on a generous scale, and he regards the retired pay to which he can look forward as a form of deferred pay. While I am not able to quote the occasion, I think I am right in saying that it was referred to in this House some years ago by the late Mr. Chamberlain when Chancellor of the Exchequer as deferred pay.

As regards the cost per annum of restoring the 1919 rate of retired pay of the Services, the late Chancellor stated on 20th July, in answer to a Question which I put to him, that it would be about £500,000 per annum at present, increasing to £850,000 after the war; that is to say, when some officers now serving under that Warrant come back and when some of the re-employed officers whose pay is treated similarly to the manner mentioned by my hon. Friend also come back. Assuming that we are spending £13,000,000 per day on the war, £500,000 per annum would be about a twenty-sixth part of that amount. If the basic rates were restored the Treasury would not omit to collect Income Tax on the amount restored, so that the net cost to the country would be much less than the sum I have quoted. The Treasury attitude hitherto has been exemplified by another answer of the late Chancellor given to me on 4th August, 1942. I will quote the words of the Question and answer: Sir G. JEFFREYS asked the Chancellor of the Exchequer whether, when considering the question of the pay of officers and men of the Services, he will, at the same time, consider the desirability of restoring the full rate of retired pay to those retired officers whose pensions have been stabilised at nine and a half per cent. below the basic rates? Sir K. WOOD: Service retired pay was stabilised in 1935 at the level then ruling in pursuance of the Government decision that the pay and pensions of Crown servants in general should no longer be subject to cost of living adjustments. In view of the losses which war has inevitably brought to many other sections of the community I do not consider that State pensioners as a whole, or retired members of the Forces in particular, should be selected for exceptional treatment."—[OFFICIAL REPORT, 4th August, 1942; column 873, Vol. 382.] Since then various hon. Members who have asked Questions have been referred to this answer. On one occasion when I asked a Question myself, I was referred to it. It had apparently become a classic. For instance, the hon. and gallant Member for Ayr Burghs (Sir T. Moore), the hon. Member for Abingdon (Sir R. Glyn) and the hon. Member for Kidderminster (Sir J. Wardlaw-Milne) asked Questions on the subject and were referred to this answer. We are not asking for what the late Chancellor called "exceptional treatment." We ask that the undertaking given in 1919 should be honoured, that at least the basic rates of 1919 should be reverted to, and that the rates should rise as well as fall with the cost of living. If stabilisation was desirable, and there is no doubt a great deal to be said for it, it should not have been effected at almost the lowest point to which the cost of living fell but at the basic rate of 1919. What would we in this House, what would the world in general say if there had been an agreement on the part of the comparatively small body of ex-officers with one or more of the great insurance companies in which there was a definite bargain, a definite undertaking that the rate, shall we say of annuities, should be on a certain scale and should rise or fall in certain circumstances, and if the insurance company or companies were to say "It is very inconvenient to have these fluctuations. We regret that we cannot preserve the provision of the original agreement and we are going to stabilise the rates at a figure which suits our convenience and that not a high one"? What would this House have said about that? What would the courts have said about it, in the actions which must inevitably have followed any such decision?

Moreover, the late Chancellor of the Exchequer in his answer to me spoke of the losses which the war had brought to many other sections of the community. No doubt that is perfectly true, but those are, I venture to say, a small minority of our whole population now. To the great majority, the war has brought increased earnings in terms, at any rate, of pounds. I do not think there is any doubt about that. I would also join with my hon. Friend the Mover in pointing out that the State has direct obligations to its own retired servants, moral obligations and I think actual obligations as well. However unfortunate may be the lot of those who are subsisting on fixed incomes, it has no similar obligations to them. I am encouraged to think that my right hon. Friend the Chancellor of the Exchequer will look favourably on this appeal, not only because of his essential fair-mindedness but also because of his sympathetic attitude in the Debate on disability pensions on 20th July last. I will, with the permission of the House, quote from Hansard what my right hon. Friend said on that occasion: I confess that I did not know, until I came to look into this matter, that the rates of pension under the existing Warrant are, in certain respects, less favourable than the rates in the last war. It came just as a little bit of a shock, as I daresay it did too to a number of people. I looked into it and found there was nothing seriously wrong. The rates at present granted are related to a lower cost of living than the rates which were stabilised after the last war, and that is the explanation of the difference, but the difference is small and not worth retaining. If it is a source of dissatisfaction, then let us get rid of it. There is no difficulty about that."—[OFFICIAL REPORT, 20th July, 1943; col. 723, Vol. 391.] If that was my hon. Friend's attitude as regards disability pension rates, surely, he can hardly adopt a different attitude as regards these service pension rates. If disability pensions are based on the 1919 rates, should not service retired pay also be at the 1919 rates? Actually the war-disabled Regular officer now draws retired pay at 9½ per cent. below the 1919 rates, but under the new Warrant, which was the result of the Debate from which I have just quoted the remarks of my right hon. Friend, he can draw a disability addition to his retired pay at the 1919 rate. It seems to me that that is an obvious anomaly.

I hope I have said sufficient to show how strong is the claim of these old officers in this matter. I cannot believe that my right hon. Friend can fail to see the justice of their claim. I hope that he will be able to give a favourable answer to-day, but failing that, I hope that he may agree to appoint an impartial committee—I hope it will not be a Departmental Committee—to go into the matter, as was suggested I think indirectly by my hon. Friend, in which case I, for one, should have no doubt of the result. At the same time such a committee could go into various pension grievances, which I refrain from going into to-day though many of them have been brought to my notice—such things, for instance, as the miserable pittance allowed to the widows of officers killed in action; the terms for the commutation of pensions which, in many cases, are very unfavourable to the officers who commute and the terms under which pensioned officers are re-employed, by which they get only 25 per cent. of their retired pay in addition to the pay of their rank. That is very good business for the Government, because retired pay is, as I say, deferred pay. Even pre-1914 pensions might, I think, be sympathetically reviewed. There are very few of these pensioners left. They are a small body and they are all old men now, those who joined, shall we say, in the 90's of the last century and who retired just before the last war and are drawing pensions on the terms of the Warrant under which they joined. Their pensions vary according to service and rank. A lieutenant-colonel of those days retired on £420 a year but in Edwardian days that was, at any rate, £420 and represented 420 golden sovereigns' worth. Now, £420 is a very different thing. If I may quote an old proverb: Pounds upon paper and pounds in the pocket are very different things. These are real grievances, but I will confine myself on this occasion to what I regard as the essential matter of the disregard and throwing over of the terms of the Royal Warrant of 1919, and the stabilisation of retired pay at 9½ per cent. below the 1919 basic rate. I hope that we may have a word of encouragement from the Chancellor as to this matter. It is a very distinct grievance, and we ask for the rectification of a wrong that was done to retired officers when the terms of the 1919 Warrant were, in effect, thrown over.

Mr. Cove (Aberavon)

I rise to support the Amendment which has been so ably moved and seconded by the two previous speakers. On the general case I feel that probably I could not add very much to what has already been said. It is perfectly clear that there is much suffering in the ranks of those pensioners whose case has been put forward by the two previous speakers, and most certainly there is among those for whom I particularly speak. I do not want to worry the House with a great deal of detail, but there are probably hundreds of teachers getting pensions of only 25s. or 30s. a week, and there is undoubtedly serious hardship throughout the ranks of retired teachers, just as there is throughout the ranks of retired officers and civil servants. Therefore we have among what one might call the salaried class a united demand upon the Government to meet these hardships and remove these grievances. I should imagine that if the Chancellor responds to the undoubted feeling of this House he will readily agree to what we are asking. There is no doubt that hon. Members from all parts of the country are aware of the very serious situation in which these people find themselves.

I should like the Chancellor to answer this question, which seems to me to go right to the heart of the matter as far as the Treasury is concerned. How can the Chancellor justify a bonus upon salaries to met the cost of living and deny a bonus to pensioners? Take the teaching profession. There you have stable salaries, which have been agreed upon. As a matter of fact, the tendency in the professions has been more and more to stabilise salaries and so to keep them more remote from fluctuations in the cost of living. Long-term agreements have been made in order to give those in employment a sense of security. The tendency for some years has been to remove the fluctuating factors in salaries and to get them on to a more stable basis. It is exactly the same with pensions. What has happened during this war? I speak for the teachers. What has happened is not that the basic salary has been touched but that the Government have agreed—because I take it the Treasury will have agreed to any bonus that has been given to teachers or to civil servants—An the present abnormal circumstances, with the increase in the cost of living, to sanction a bonus on teacher's salaries. For the life of me I cannot understand how the Treasury can justify a bonus on stable salaries and deny a bonus on stable pensions. The Treasury has to answer that point if it is to meet the wishes of the House and meet the grievously, hard conditions of these pensioners.

It has been said over and over again that pensions are deferred pay. When we were in Committee upstairs on the Teachers Superannuation Bill in 1925 I remember that Lord Eustace Percy, who was then President of the Board of Education, laid it down quite clearly that pensions, for teachers anyhow, were deferred pay. I speak subject to correction, but I think there is one difference, and that is that the teacher's pension is a contributory pension. The teachers pay 5 per cent. of their salaries and the local authorities find 2½, per cent. and the Government 2½, per cent. What is being done under the contributory scheme? You are taking a certain amount of money from the teachers in a given year when, for instance, the cost of living may have been much lower than it is now and when Income Tax was certainly much lower than now. You were taking, say, £10 a year ten years ago when Income Tax was lower and when the cost of living was lower, and you were storing it up. The teacher does not voluntarily store it up; he is compelled to store it up. Retirement has been made compulsory by the State which says "You must go at 65," and a number of local authorities have said "You must go at 60."

Then along comes the period for which these people have saved up this money, this part of their pay—the period of retirement. What happens now? Income Tax is much higher and the cost of living has gone up, but what about the pension? I agree with the answer of the Treasury that the pension is fixed, it is immovable, but the value of the pension is not fixed. The value of the pension is fluctuating, in the main on account of the increase in taxation and the rise in the cost of living. I do not know how the Chancellor can justify a refusal to meet such a situation. I remember when the Widows and Orphans Pension Act was before the House the question arose as to whether teachers could have a double pension. First it was ruled that they could not and then that they could—that they could have the old age pension and the teachers' pension. Pensions for officers, pensions for civil servants and pensions for teachers are essentially service pay. They are in a different category altogether, because being pensions for service they are directly related to the principle of their being deferred pay.

While joining my hon. Friends with these few remarks, I do not want to prevent the House from hearing the Chancellor. I am anxious to hear him. I believe his heart is softening, and I hope he will meet these cases. The grievances among pensioned officers, among civil servants and teachers affect not only those who are already retired but those who are at present working. There is a reflex action which causes disgruntlement and dissatisfaction, creates the feeling "When we get old we shall be thrown on the dustheap." The State ought to be not only the model employer but the model pensioner, and I hope the Chancellor will meet the wishes of the House either by giving us some hope of an immediate increase or by promising some Committee to go into the matter and come speedily to a decision.

The Chancellor of the Exchequer (Sir John Anderson)

It may be for the convenience of the House to have at this stage of the Debate some indication of the attitude taken up by His Majesty's Government in this matter. I certainly have no reason to complain of the tone of the three speeches to which we have listened, and I will endeavour to attune my own remarks to the tone of those of previous speakers. In looking at the terms of the Amendment which has been moved, there is one point of detail of which I should like to dispose at the outset. The Amendment is in very wide terms. It includes a reference, in addition to civil servants, officers of the Armed Forces, teachers and local government officers, to officers of the Colonial Services. Colonial pensions are granted by Colonial Legislatures and paid out of Colonial funds, and while it might be that the attitude taken by His Majesty's Government in regard to the various classes whose pensions are provided, in whole or in part, by the moneys provided by Parliament may influence action in regard to Colonial pensions, I do not think it would be proper to deal with such pensions in this present connection.

In the course of his very interesting and at times amusing speech, my hon. Friend the Member for Rugby (Mr. W. Brown) gave the House a summary, not at all an unfair summary, of the arguments for and against what he is now asking the House to agree to, which had come to his notice in the course of his recent experience. If I may, I would like to summarise those arguments for myself. As the House is aware, the matter was considered by my predecessor. Various representations have been made from time to time by associations and by individual Members of Parliament, and my predecessor, I think it was in June last, after receiving representations from a deputation from the Trades Union Congress, the National Union of Teachers and the Educational Institute of Scotland, gave a decision adverse to the proposal that pensions should be increased in the light of the increased cost of living. He took the view, as the records show, that at that time the arguments for and against were fairly nicely balanced. In favour of an increase, it could be said that there was precedent in the Acts of 1920 and 1924. It could be said also that the principle of assistance to meet the higher cost of living is recognised by war bonuses awarded to serving officers in, the Civil Service, in the local government service and in teaching. Indeed, pensioners of the Crown Services are, I suppose, almost the only class receiving assistance from State or quasi-State funds who have not had some increase, in recognition of the higher cost of living. For example, the scales of disability pensions, and supplementary pensions to which my hon. Friend referred, as well as allowances paid in connection with other social services, where increases have also been given.

There may be room for some little difference of opinion as to the extent to which the cost of living has increased. My hon. Friend cast some doubt on the validity of the index figures commonly used and said that they were based on budgets that had been extracted in 1904; but actually, as he perhaps is aware, there was a very comprehensive and searching and close inquiry in 1936, with a view to seeing whether some better basis could be found. The result of that inquiry was to confirm the validity of the index figures as they have, for a long period, always been calculated; to confirm them, that is, in so far as the items which are included in that calculation are concerned. My hon. Friend gave detailed figures showing how, according to the generally accepted index numbers, the cost of living has varied over a long period from 1914 to October of this year, and the figures he gave were I believe perfectly accurate. There has in fact been, as compared with the cost of living just before the war, an increase of approximately 30 per cent. That is, one must recognise, a substantial increase. Then it has often been argued, in the course of representations received by the Treasury, that as existing pensions schemes result, in many individual instances, in the award of pensions of quite small amounts, the increase in prices that have taken place must inevitably result, if there is no increase in the pension, in a considerable degree of hardship. That I think is not an unfair summary of the arguments for doing something. Those are the arguments, I know, which appealed to my right hon. Friend the late Chancellor of the Exchequer.

Against those arguments, on the other hand, there were other considerations which he also was bound to take into account. There is of course at once the very striking fact, to which the hon. Members who have spoken referred as a precedent, that in the case of the last war the first Pensions (Increase) Act was not passed until 1920, when the cost-of-living figure was 155 per cent. above that of 1914. The second Act was passed in 1924, when the cost of living was between 75 and 80 per cent. above that of 1914. Then it was argued with considerable force that many of the increases which had been given in other cases, for example in current rates of remuneration, were given for reasons which are not at any rate fully valid in the case of pensions. In regard to what the hon. Member for Aberavon (Mr. Cove) said, I would like to comment in passing that there is a considerable difference in the approach that one makes between current remuneration and a pension which is paid as the result of a contract or quasi-contract which has come to an end.

Mr. Cove

Pension is part of current remuneration.

Sir J. Anderson

The hon. Gentleman is entitled to his opinion. That is how it appears to me. Current remuneration has not only the cost of living to take into account but general wage tendencies within and outside State employment. There is the final argument, to which my hon. Friend also alluded, only to brush it on one side, that hardship is by no means confined to State pensioners but to other sections of the community, people living on small incomes derived from investments or whatever it may be and who have no opportunity of improving their position as persons who are in active employment, who can get the advantage of the state of the labour market and can supplement their incomes. It was on a balance of those arguments that the Government last July decided against taking any action at that time.

Within the last few weeks, His Majesty's Government have given further consideration to the whole matter, and while it seems to them that the arguments are still fairly evenly and nicely balanced, they have come to the conclusion that there is on the whole a case for doing something now. The exact form of the legislation which the Government will introduce, I hope in the fairly near future, as soon as is practicable, is still, in certain respects, under consideration. The position is not free from complexity. Many different cases have to be considered, as the speeches to which we have already listened indeed showed. There is the civil servant in ordinary circumstances, there is the teacher, who has a contributory pensions scheme, there is the policeman, who contributes under yet another scheme, and there is the whole range of Service pensions to which my hon. and gallant Friend the Member for Petersfield (Sir G. Jeffreys) referred.

Before I indicate, not in detail but in somewhat general terms, the approach which the Government propose to make to a solution of this problem, there are two arguments which have been advanced by previous speakers to which I must make some reference. It would be wasting the time of the House if I attempted to deal with every point of detail that has been raised because, as I have said, legislation will be introduced, and hon. Members will realise that there will be the appropriate opportunity of going into all matters of detail at a later date, but I think I must first refer to the question of deferred pay. My hon. Friend the Member for Rugby, and certainly the hon. Member for Aberavon, laid considerable stress on that supposed character of Civil Service and other persons as deferred pay. I do not know whether it is the case or not that Mr. Neville Chamberlain in this House on one occasion definitely accepted the view that pensions are deferred pay. I want to say straight away that I do not accept that view as applicable to the whole range of pensions. Pensions are obviously a deferred benefit, but some pensions partake much more of the character of deferred pay than others. The Federated Universities' Pensions Scheme, under which a contribution is made based on salary for each year of service and these aggregated contributions mount up arithmetically to provide a pension, is a case of deferred pay; but the ordinary Civil Service pension under which pension is paid, which is based on length of service and rate of retiring pay, irrespective of the course of pay during the period of service, cannot properly be described, in my opinion, as deferred pay. However that may be, I was a little surprised that my hon. Friends should have sought to rely on that argument in this particular case, because I think it does in fact tell against them. If pensions are deferred pay, then surely the measure of the pension would be the amount of the deferment. More particularly when the pension is contributory, I think it is very difficult to argue that there is an inherent claim on the part of the pensioner to be given an addition when the cost of living goes up.

That is the first point to which I wished to refer. The second point I must refer to in the interests of accuracy. My hon. Friend the Member for Rugby described to the House the course of events in regard to bonuses on pay after the last war. He told us that, I think he said in 1920, the House bad taken an unfavourable view of certain proposals that had been submitted, and that the Government withdrew their proposals and substituted others. The fact is that the Government and Parliament dealt quite differently after the last war with the two cases of bonuses on pay and the making of these bonuses pensionable, on the one hand, and additions in respect of the increased cost of living to existing pensions on the other hand.

Mr. W. J. Brown

I made that clear.

Sir J. Anderson

I beg my hon. Friend's pardon. I am afraid that escaped me. I think I ought to remind the House quite briefly of the course of the legislation passed after the last war dealing with the second of these matters, additions to pensions already granted. The first Bill to be introduced was introduced in 1920 and was actually passed in August of that year, when, as I have already said, the cost of living was approximately 155 per cent. over 1914. The effect of that Bill was that where the pension did not exceed £50 a year the pension was increased by 50 per cent. Where the pension exceeded £50 a year but did not exceed £100 in the case of an unmarried pensioner, or £130 in the case of a married pensioner, the pension was increased by 40 per cent. Where the pension exceeded £100 but did not exceed £150 a year in the case of an unmarried pensioner or exceeded £130 but did not exceed £200 a year in the case of a married pensioner, the pension was increased by 30 per cent.

In 1924, when the cost of living was approximately 75 per cent. above 1914 as compared with 155 per cent. when the first Act was passed, a fresh Act was passed, the effect of which was as I am about to indicate. Where the pension did not exceed £25 a year, the increase was 70 per cent.; where the pension exceeded £25 but did not exceed £50, the increase was 65 per cent.; and where the pension exceeded £50 but did not exceed £100 the pension was increased by 50 per cent. By that Act the rates of increase for which provision was made were made compulsory in the case of all classes of pensions covered by the legislation. In the earlier Act there were pensions not payable directly from the Exchequer, such as the provincial police pensions and, I think, teachers' pensions, where the increase was left to the option of the local authorities. Those are the precedents. I have indicated the attitude which Parliament took up after the last war.

I want to say, as regards the action we propose to take now, that in the view of the Government attention must be concentrated on cases of real, grave hardship. That will be essentially the approach which the Government propose to make, that is, to take account, as in the legislation following the last war, of the position of the pensioner and to provide increases for the lower ranges of pensions in order so far as may be practicable to mitigate really severe hardship. We will frame our proposals with the utmost expedition and bring them before the House in the form of a Bill, and of course it will be discussed on its merits. I hope that in view of that assurance my hon. Friends will be content not to press the matter further to-day. We shall have, as I have said, an opportunity later on of going into the whole matter in detail. I do not wish by what I have said to convey the impression that I think the Debate on this Motion should necessarily conclude now, but I gathered from my hon. Friend that there was no desire to press this particular Amendment if the Government adopted what might be considered to be a sympathetic attitude, and it is with that in mind I have made the statement I have just made.

Mr. W. J. Brown

Before the Chancellor sits down will he answer one question? There is this point about the Colonial civil servants. The Amendment also refers to the Royal Irish Constabulary. Will they be covered?

Sir J. Anderson

As my hon. Friend might suppose, that has not been out of my mind. I do not in fact contemplate excluding the R.I.C. from consideration, though I made it clear that the Government have not decided on every detail.

Mr. Pethick-Lawrence (Edinburgh, East)

I am quite certain that I am only giving voice to the opinion I have sensed in the House since this Debate began when I express my gratification at the operative part of the speech of the Chancellor. Before the Debate opened I had formed the view that this Amendment could only with great difficulty and only with scant attention to equity be resisted. The very able speeches to which we have listened to-day have strengthened my view and have strengthened, I am sure, the views of others who have listened to them. I therefore welcome most heartily the concession of this Coalition Government which the Chancellor no doubt took an active part in deciding and which he has given us to-day.

The Chancellor of the Exchequer has given only a rather skeleton outline, hardly even that, because he has not signified the amount or anything which is in his mind as to the limits of the concession he is proposing. Therefore, I do not propose to attempt to fill in the flesh and blood which he himself has withheld from the picture, nor can the House be in a position to judge, until these details have been given, whether the concession to be made is a substantial one or whether It is only slight. My own feeling is, knowing the Chancellor of the Exchequer and what he has done previously, that the House has reason to suppose that he will give effect to the concession to which he has referred to-day not only in the letter but in the spirit, and that we shall get a substantial part at any rate of the proposals which have been put forward on this matter. We shall of course have opportunities when the legislation is introduced to go into these matters in detail, but there is, as the Chancellor has said, no reason why other speakers in this Debate should not, in view of what the Chancellor has said, set out in detail what in their opinion would be the right minimum requirement and not leave it entirely to the Government, so that the Government will have the views of the House before their legislation is framed.

There is only one other matter on which I wish to say a word. I am very glad there was one word the Chancellor did not bring into the picture to-day. The Treasury are very fond of using their famous word "repercussions". I was happy to notice that the right hon. Gentleman did not, I think, use the word "repercussions" once. I think for that the House and those who are to benefit by the concession are deeply grateful.

Lieut.-Colonel Sir William Allen (Armagh)

I do not think a Debate of this character would be complete without the ventilation of an Irish grievance, and that grievance has been emphasised by the last few words of the right hon. Gentleman that the Royal Irish Constabulary was out of his mind.

Sir J. Anderson

May I say that my observation was that the Royal Irish Constabulary had not been out of my mind?

Sir W. Allen

I am very glad I said what I did, because now we have it emphasised that the Royal Irish Constabulary will be included. We have waited for years for a Debate of this kind, just because of the treatment of the Royal Irish Constabulary, and I have felt grateful to the hon. Member for Rugby (Mr. W. Brown) for giving us this opportunity, as really it has been through him that we have the opportunity of ventilating this grievance. Now that the right hon. Gentleman has acquiesced that the Royal Irish Constabulary should be in his mind, I must admit he has spiked my guns. At the same time, I think it only right that I should impress upon him the absolute necessity of doing something for these old men. A magnificent body of men they were—men of brawn, men of brain, but men with sympathetic hearts for the weaknesses of the people among whom they moved. I do not think I could better put the claim of these men than as it was put by the late Lord Carson. He said: There has never been in the history of any country a force that has found itself in such a position as those loyal men. God knows, I ought to understand what they have gone through. They followed me day and night, in and out of season, when you were enforcing the law, as they have followed every Chief Secretary and every officer we have employed over there. … I hope that when the case of these men comes up it will be treated not on a precedent, but as an isolated case for which there is no precedent, and on which all our resources ought to be strained in doing simple justice. Up to the present what is the position that has been taken up by various Home Secretarys and Chancellors of the Exchequer? In answer to a Question which I put to the Home Secretary in 1941, I was told: The pensions payable as a result of service in the Royal Irish Constabulary were increased in 1920 and 1924, and it has been stated by successive Governments that they cannot contemplate legislation to amend the Pensions (Increase) Acts, and that Royal Irish Constabulary pensioners cannot be treated differently from other pensioners who are within the scope of the Acts"—[OFFICIAL REPORT, 2nd October, 1941; col. 720, Vol. 374.] Similar answers were given on several other occasions. Now that it has been decided by the Government that the other pensioners, under different headings, shall be kept in mind, and that it will be done now, instead of waiting for a Commission or a Committee, I am very glad that the Royal Irish Constabulary men will be included. In 1930 a Motion to a similar effect was proposed by the right hon. Gentleman the Member for Devonport (Mr. Hore-Belisha), and the attitude of the House on that occasion was generally that something should be done. But the then Financial Secretary to the Treasury put a spoke into the wheel of the old pensioners. He said: The Government are not going to ask this House to divide against the Motion, but I should not be dealing fairly with these prewar pensioners. … if I did not make it clear that what I said about the Motion should not be regarded in any sense as a pledge to make provision in next year's Estimates to make the changes suggested."—[OFFICIAL REPORT, 12th November, 1930; col. 1744, Vol. 244.] So the old Royal Irish Constabulary pensioners were put to one side, for the time being. Various Committees have been appointed from time to time to consider the matter. We do not want generosity: we want justice. We do not beg the Government to do something out of a big heart; it is simply common justice that we want. Various Home Secretarys and Chancellors of the Exchequer have answered questions about these men, whose pensions were increased in 1920 and 1924. I will give the House the effect of those increases. Take a constable, whose maximum pre-war pension before the additions was £42 a year. These magnificent additions, which were boasted of by various Ministers, increased the amount to £69 a year. I should like to compare that with the scale of pension given to constables who retired on the disbandment of the Force. A constable who left on the disbandment, having been in uniform until then, received a pension of £164. A sergeant, receiving £53 before the increases, had his pension increased after 1920 and 1924 to £80, but a sergeant who left on the disbandment received £195. A head constable, whose original pension was £69, received increases in 1920 and 1924 which brought the figure to £103, but on the disbandment in 1922 a head constable received the magnificent pension of £235. I would like to point out what Lord Carson said about these men. They were not in sheltered positions, they were not like the teachers—we do not grudge the teachers anything that may come to them—they were not in sheltered positions, like civil servants. They went out morning, noon and night, with their lives in their hands, enforcing the laws of the country in a way that no other servant of the Government was expected to do. The Motion proposed by the right hon. Gentleman the Member for Devonport in 1930 proposed: further, that pre-war pensioners should be freed from the restrictions in regard to age and private means, which do not operate in the case of post-war pensioners and which have the effect of depriving them of the benefit of their past service and thrift."—[OFFICIAL REPORT, 12th November, 1930; col. 1695, Vol. 244.] While the pensioned officers who were disbanded have no means test, and receive the sums I have mentioned, the men who receive the lesser sums are subject to an intolerable imposition. I will only say about that imposition that every year these old men have to sign a statement that their means have not increased. On one occasion one of the old pensioners omitted to include his wife's income. The Department which was responsible for deductions made on account of additional emoluments sent a letter, saying that the Lords Commissioners of His Majesty's Treasury had decided that his pension of £42 per annum was to be suspended until the whole amount of the repayment had been made—and that whole amount was £154 5s. For some years that man was deprived of his little pension because of the means test. That means test is not applied to the men who were disbanded in 1922. That is another reason why we insist that something very special should be done for these men. Let me say a word about the widows. I could quote letter after letter from these old men and these old women. Here is a letter from one of the widows: I am the mother of ten children. I am left with a pension of 12s. 6d. a week. My house rent is 10s. per week. I have five children going to school, four of them girls and one a boy. My eldest son is somewhere about Cairo. … The little that my elder children can afford to send me barely pays for the milk for their little sisters and brothers. I have one girl crippled with rheumatism. Here is another letter: I beg to state that I am the widow of a Royal Irish Constabulary policeman. I have a small annual pension of £30. He is dead for the last 16 years, and it leaves me in terrible hardship, with a rent of £21 per annum, and four children to do for with the very high cost of living at the present time. I trust you will do the best you can. That is a sample of the letters I have received. Why have not these men been listened to since 1924? There is one very simple reason. They have no trade union, they have no shop stewards. I take up to-day's paper, and see that 17,000 nurses are to have an increase. I would just like to say, in passing, that those nurses ought to go on their knees and thank the right hon. Gentleman the Member for Leith (Mr. E. Brown) for those increases. Perhaps he has not got his reward, but he will get it some day. I see also that the teachers' salaries are to be increased. The people whom my hon. Friend the Member for Rugby (Mr. W. Brown) principally represents are doing well. They are getting bonuses. Surely the time has come for these old men to be treated with British justice—that is all we want. When the right hon. Gentleman comes to look into that question, I hope he will receive evidence on what is absolutely necessary in order to put these old people into a position of comfort during the last few years of their lives. They were a wonderful body of men in the prosecution of justice in my country and in carrying out the laws that this country has given to us.

I am glad of this opportunity to speak these words for these old people, and I thank the hon. Member for Rugby for what he has said. It is not the first time that the hon. Member has referred to the case of these old members of the Royal Irish Constabulary. He was a Member of this House in 1930, and in a short speech he made at that time he referred not only to the old pensioners connected to this country but specifically to those of the Royal Irish Constabulary, and he did not forget them to-day, and we are grateful to him. There was just one thing I did not like about the speech. He hoped that the right hon. Gentleman would appoint a Committee, but that would have meant that probably all these old men would have died before action could have been taken. The right hon. Gentleman went one better. He said that he would "do it now." One of the finest things that the holder of any office can do is to "do it now."

I had intended to refer to the claim of the pensioned teachers of Northern Ireland. We have a Department of Education in Northern Ireland which is at present in touch with the Treasury and with the right hon. Gentleman and that prevents me from taking any part with regard to their grievances. I believe their claim is sympathetically being looked into and I prefer, therefore, not to say anything more on that particular subject. We have had many communications from the pensioned teachers of Northern Ireland on the subject of the differences between the teachers in this country and the teachers in Northern Ireland. It is really a shocking state of affairs, but I will not say more, because I believe the question will be sympathetically considered between the two Governments and that the teachers will get that to which they are justly entitled. I thank the House for having listened to the few words I have said about the Royal Irish Constabulary. We are living in hopes that the result of to-day's Debate will free these old people from want and misery and the destitution from which they have suffered up to the present time.

Captain Marsden (Chertsey)

We have listened to a most moving speech from Northern Ireland, and there certainly is no part of the British Empire which wants our help and sympathy, and which has our appreciation, more than the Northern part of Ireland. I wish we could say the same of the Southern part as well, but we cannot. I had prepared a very moving and finely organised speech if only I had come on before the Chancellor, but as he has now to a certain extent granted what has been asked there is little to say except to thank him. What we are going to thank him for, we do not know yet. I do not know that there is so much to that "doing it now" to which my hon. and gallant Friend referred. I recognise the importance of the Chancellor's own utterance, but I hope that it is a question of "Do it now." I speak with some confidence when I say that, if a Bill is introduced into this House for the purpose set forth in the Amendment, there will be no opposition at all, and it will go straight through without any loss of time whatever.

Mr. Lipson (Cheltenham)

Provided it is good enough.

Captain Marsden

Provided it is good enough. I would like to comment upon one or two things that were said. The Chancellor said that when a pension in most circumstances was given the contract between the individual and the State was terminated, and then came the pension. But not in the case of naval officers, oh, no. The naval officer—and I speak for the Navy—and, of course, the Army officer, too, provided he is within the years of the age limit, can be called up for duty at any time by Royal Proclamation. This is not even referred to as a pension but as retired pay, and as such he receives it. I would like from the naval point of view to put my hon. and gallant and very distinguished Friend who seconded the Amendment, right on a few small points. A retired officer who is called up gets his full pay, plus 25 per cent. of his full pay, not 25 per cent. of his retired pay. Naval officers are not complaining about this sort of thing. You rarely hear the word "grievance" as far as the Navy is concerned. It is really not in the naval officer's vocabulary at all. There is no grievance, but that makes it all the more incumbent upon this House and those of us who represent the Navy in this House to see that they get a rightful deal in the matter. Most of my comments on this Amendment were chiefly framed, as I think were those of my hon. and gallant Friend, on the 1935 stabilisation of retired pay. That was really a bet between the officers concerned and the Government. I would very much like to know what the Treasury figures are and what has been the result of these eight years. How much have they made out of it? It was a fair bet or a more or less fair bet at the time, but my experience of making bets is that the bank always wins, and I think the Government have won on this occasion.

There is one more point I would like to mention. The officers who commuted their pensions were mentioned. They have a very bad time. Why on earth the Government, the Treasury and the Admiralty allowed so many of these officers to commute their pensions, goodness only knows. Certainly, in the vast majority of cases all that money has gone down the sink, and they are left with a reduced pension. My right hon. Friend the Chancellor of the Duchy of Lancaster, who is at present representing the Government on the Treasury Bench, has a large sheet of paper, with pencil, on which he has written nothing yet, and I would ask him to note that the general terms of the commutation really in effect amount to this. The Government borrow money from me, among others, at 1½ per cent. and charge these officers who commute their pensions 5 per cent. for the same accommodation. That must be altered. I only ask that it might be noted down now that on an appropriate occasion there will be a strong demand for the revision of that old Act which makes that sort of thing possible.

I chiefly got up to air my views in this palatial Chamber. I have not spoken here before. I have usually been tucked away in the Gallery, but I am very glad to have this opportunity to speak for such a good cause. My constituents want to know why I did not speak on die Mosley case, and I said, "I am reserving myself for a far better occasion," and that is the chief reason, among others, that I have got up to-day. I can only say, on behalf of the Navy and naval officers—if I may say that I represent them—that I thank the Chancellor and hope that the Bill, when it comes, will be satisfactory and will do full justice to the retired officers of the British Navy.

Mr. Burden (Sheffield, Park)

The case for the Amendment has been admirably and forcibly put, but the Chancellor's sympathetic reply has changed the whole course of this Debate, and therefore I rise only to make a point or two in regard to a class of superannuated people directly covered and a class indirectly covered by the Amendment. I appreciate that we cannot expect the Chancellor to-day to anticipate further than he has done the proposed legislation which, he has indicated, will soon be forthcoming, but it is necessary to refer to retired local government officers, who are definitely covered in the Amendment, and another class who are at present, owing to State control, indirectly under the control of the Government, I refer to the superannuated railway salaried staff. I appreciate the difficulty with regard to local government officers. There are different employing authorities, but I would like to make the point that the National Association of Local Government Officers is taking a very keen interest in this problem. It has received many representations from its members in connection with it, and I hope that the scope of the legislation will be such as to make permissive or possible some increases as far as retired local government servants are concerned.

The Government control of the railways is a pretty good thing for the Treasury. It is making a handsome profit out of it, and I do not think that it is asking too much to ask the Chancellor that his proposals shall be wide enough to cover the case of retired railway salaried staffs. I am aware, having had some experience of the industry for a number of years, that the four big groups, as well as some subsidiaries, like the Railway Clearing House, now have fairly satisfactory superannuation funds, and I can say with a measure of pride that my old company, the L.M.S., led the way as far as a new consolidated superannuation fund is concerned. I want to pay tribute, incidentally, to the officers of the various companies for the way in which they have contributed to that very desirable end, but while there are these consolidated funds quite a number of people who retired before the new funds came into operation are still living, if it can be called living, on very small sums indeed The figures mentioned by the hon. Gentleman just now would be princely so far as some of the retired railway staffs are concerned, and we hope that at least some portion of the amount now flowing into the Treasury will find its way into the superannuation funds, if that is the way, to meet these cases. I assure the Chancellor that there is very real hardship.

It is not right to build up a general case from the particular. I could quote many cases, but I will mention only one instance because it is very near to my own personal experience. For many years I worked alongside a man whose one ideal was to see a consolidated superannuation fund established for his company. Unfortunately, through the passing of time, he was compelled to retire just six months before the new superannuation fund came into operation. He is still living, and if he has one vice—if it is a vice—it is that he is dearly fond of his pipe.

Mr. Mathers (Linlithgow)

His pint?

Mr. Burden

No, his pipe. He was often bantered about his love of My Lady Nicotine. We had a letter from him the other day. He is still active in social life and, referring to that banter, said he had been compelled to limit himself to one pipe of tobacco a day. Well, that is a substantial reduction and a serious hardship for a man in his 70's who has always loved his tobacco. In conclusion, I want to thank the Chancellor for his sympathetic approach to the problem. I remember that the last time I spoke I had the pleasure of congratulating him on another matter. It seems that it is becoming a habit. We shall look forward with pleasure to the promised legislation, which should do something to meet what is a very serious hardship at the present time.

Mr. G. A. Morrison (Scottish Universities)

In view of what the Chancellor has said, I do not propose to speak for more than a few minutes. I wish to thank him for the announcement he has made of the change of heart at the Treasury, and to assure him that it will be hailed with relief and joy in many homes in the country. If, like previous speakers, I give illustrations from the profession I know best, I hope it will not be thought that teachers are indifferent to the lot of other classes mentioned in the Amendment or of other classes in the community. It cannot be made too clear that whereas teachers still in service have been receiving war bonuses since the early days of the war—and these have been improved on more than one occasion—nothing whatever has been done for those in retirement and on fixed pensions. The Mover of the Amendment, in one of the clearest expositions I have ever listened to in this House, made it clear that there has been a considerable rise in the cost of living, and the Chancellor accepted and confirmed his figures. Let me make it clear, too, that teachers who have retired over the last 20 years—and even those whose are retiring now—are the men and women who for a large part of their working lives had enjoyed only very small salaries and had little opportunity for saving. It may not be generally known that under the superannuation scheme for teachers it is not possible for any teacher to have a larger pension than half the average of his or her last five years' salary. Many do not reach that, for various reasons. I can assure the Chancellor that when he comes to investigate cases he will find poverty in many homes and actual hardship in some. I am also glad for another reason that he made the announcement he has made to the House. The President of the Board of Education has told us that he is hopeful of recruiting 100,000 new teachers to the teaching profession. Surely nothing should be done, and no injustice should be allowed to remain, which might have the effect of deterring suitable applicants.

Commander Sir Archibald Southby (Epsom)

I want to detain the House for only a brief time, and I certainly do not wish to say anything which may seem to strike a jarring note in this chorus of congratulation of the Government, but I am bound to say that I am sorry that there is no representative of the Treasury on the Front Bench, because he could have listened with profit to what speakers have said. It seems that the Chancellor of the Exchequer, like the Arab, has folded his tent and silently stolen away without even waiting to hear what anyone thought of his somewhat nebulous concessions. He has, however, left behind on the Front Bench one who, we know, has a very large and warm heart and who, I suppose, has been left there—I am sure the Chancellor of the Duchy of Lancaster will acquit me of any desire to be offensive—in his capacity of a sort of Government's maid-of-all-work.

There was one striking statement in the Chancellor's speech which not only Members of this House but pensioners throughout the country would do well to note, namely, his doubt as to whether a pension was, in fact, deferred pay. It has been an accepted fact for a great number of years that a pension is deferred pay, and it would be a very dangerous thing if it was now to be accepted without any question that a precedent had been established by what the Chancellor said to-day, namely, that a pension and deferred pay were not the same thing. I would like to reinforce something which was said by my hon. and gallant Friend the Member for Chertsey (Captain Marsden), whom we are all glad to see back with us once more, and nobody more so than I, who have been trying to help in his constituency while he has been away. If I may say so, he made one slip of the tongue. He said he represented the Navy—

Captain Marsden

May I correct myself on that? I do not represent the Navy, but, with all due humility, say that I am a representative of the Navy.

Sir A. Southby

My hon. and gallant Friend represents the Chertsey division and speaks for the Navy, and the Navy never had, nor ever will have, a better champion of its affairs than he. He raised the question of commutation, and I hope the Chancellor of the Duchy will now make a note that when this Bill comes in something should be done regarding the power of a pensioner to commute. I would like to see the commutation of pensions done away with altogether and instead some system instituted by which a man who desired to raise a lump sum of money for a business, or for some other good purpose, would be enabled to do so by getting an interest-free loan from the Treasury, or obtaining one on special terms, or something on those lines.

Mr. E. P. Smith (Ashford)

On the security of his pension?

Sir A. Southby

Certainly not. If he was buying a business it would, no doubt, be secured on the business. All of us have come across cases of extreme hardship where officers and men have commuted their pensions and have then been met by the sharks which seem to abound in civil life and have lost everything they possessed. I welcome what the Chancellor said, but I am not so sanguine as the hon. and gallant Member who spoke for the grand body of men of the Royal Irish Constabulary. We do not yet know what we shall get. Another hon. Member on the other side of the House talked about the flow from the Treasury, but if the Treasury runs true to form it will be more of a trickle than a flow. Indeed, the Chancellor hinted at that. He is of course a past master at not going too far. He hinted that the Treasury would be concerned only with cases of extreme hardship. We are pleading not only for those cases but for pensioners as a whole. It no good saying that you are going to help one person, whose hardship is a disgrace to this country and to this House, unless you are prepared to put right what is, in fact, a wrong as regards all pensioner.

Another speaker referred to the effect of pension hardships upon those in the Services. This matter has indeed a great influence on officers and men who are serving and who see the fate of those who went before them and who are now no longer required with the Colours. It does not encourage them very much to wonder whether, when this time of stress is over, they will get the same treatment meted out to them as has been meted out to those who went before them. So I think this matter has to go a great deal further than cases of extreme hardship. I would like to ask my right hon. Friend to pay particular attention to this point: Many people think that the wife of a naval officer is entitled to a pension if her husband is killed in action. That is not so. I have heard hon. Members opposite complain about the operation of the means test. They are quite right. A means test, though logically an excellent thing, does not work out in human practice. Before the widow of a naval officer is given a pension she has to satisfy the requirements of a secret scale which is not published by the Admiralty. Nobody knows the amount of income above which a woman may not be granted a pension. I ask my right hon. Friend to make a particular note of that, because it is one of the things which will have to be considered when we get the Bill. I must say, too, that there was no indication as to how soon we were to get the Bill. I agree that, thank God, we are not to have a Select Committee or a Royal Commission. If we had we should never get a Bill at all. The Bill should be brought in as soon as possible because every hon. Member knows that his postbag furnishes him with the many bitter cases of grinding hardships which exist at the present time.

My hon. and gallant Friend the Member for Petersfield (Sir G. Jeffreys) who, if he will allow me to say so, made one of the best speeches I have ever heard him make in this House asked the Chancellor of the Exchequer about the 1919 Warrant. That question has never been answered. One grievance we have about pensions is that whereas in 1919 it was laid down in the Warrant that the cost of living should influence the amount of the pension and that pensions would be reviewed from time to time, in point of fact unilateral action was taken by the Government who arbitrarily abrogated that agreement by stabilising pensions. Therefore when the Bill comes in I hope it will deal with all these cases and not only the cases of civil servants. One of the causes of the troubles of officers and men now serving is the system which has grown up in this war whereby a man who is normally employed by the Civil Service and then joins the Forces, gets his Service pay made up to the amount he would have been drawing had he still been in the Civil Service. I have heard of a case although I cannot vouch for it of a man on sentry duty at a cookhouse who was drawing £800 a year and who was a private soldier. He was relieved by a man who was not so fortunate in his civil employment and who had only his ordinary Army pay. In my constituency I have numbers of cases of that sort, men who have been in business who have lost that business owing to the war and who have been called up. They, drawing ordinary Service rates of pay, are serving alongside men who have been employed by local authorities or in the Civil Service and who having therefore had their pay made up are enabled to keep their wives and families going in comfort whereas the wives of their less fortunate colleagues are hard put to it to live at all. These anomalies should not exist. The root of much of the industrial trouble at the present time lies in the disparity of reward which this war has caused. In the Services officers and men realise that while they are getting barely enough to live on, for those employed in industry outside the rewards are infinitely greater. We now have an opportunity of doing something to put these matters right. If the provisions of the Bill are sufficiently wide and generous it will do what ought to have been done a long time ago. The pensioners of this country who in all walks of life have given such wonderful service will at last be put into a position where they will not feel that grinding bitter want which has for too long been their lot.

Mr. Lipson (Cheltenham)

I do not know how far the Chancellor of the Exchequer will go in the legislation that we are to have, but I know that in the announcement that he has made to-day he has already gone further than any of his predecessors in this long-drawn-out battle for the rights of pensioners. I prefer, particularly in view of the very generous statement he has made of the case, to anticipate a Bill which will really deal with the hardships to which attention has been drawn. This matter is of special interest to me because my constituency has long been known as the Paradise of retired leisure. Retired civil servants and ex-officers have found in Cheltenham a home after their service. I know these people personally. I am familiar with the hardships they have to undergo and the circumstances of their lives, and I know that the service they have done for the country in all parts of the world has never received the recognition that it deserves. Their pay was inadequate. Their pension, too, has also proved inadequate, and during the war they have seen the men who are doing the jobs that they did receiving, quite properly and rightly, a much better standard of pay, and in almost every instance a bonus for the cost of living. These retired people have neither of these advantages and they naturally feel a sense of hardship and grievance. You will find them to-day doing unpaid voluntary service, in the Home Guard and in Civil Defence, and you will find their children and grand-children fighting the battle of freedom. Therefore I am glad that at long last we have been promised that legislation will be introduced to give them some measure of justice, because it is on the ground of justice that our plea is based. I know that every Chancellor of the Exchequer has to be a brute. Like Pharaoh of old he has again and again to harden his heart. But the present Chancellor has shown, at any rate, that he is prepared to be a just brute, and for that I am very glad to be able to thank him and to say that I look forward with hope and confidence to the Bill that he has promised.

Major Nield (Chester, City)

I came here hoping to have an opportunity of adding my regret that the Gracious Speech makes no proposal for raising the pensions of retired State servants to a level corresponding to the increased cost of living. Much that I had intended to say need not now be said by reason of the assurances which have been given by my right hon. Friend, and which I know will be most gratefully learnt of throughout the country, but there are certain observations I should like to make. Many sections of the community have suffered financially as the result of the war, but none so much as those who are dependent upon a fixed income, and in that category come those on whose behalf this Amendment was tabled, retired State servants, teachers, local government officers, Post Office officials, and retired officers of the Armed Forces, those men and women who are expected to live upon a pension in these days, whose savings, if they ever had any, have in so many cases disappeared. In the ordinary course of things surely a pension which follows long and loyal service is intended to provide a reasonable and adequate standard of life, and for this purpose it must be related to the cost of living. What is the present situation?

My right hon. Friend referred to index figures relating to the cost of living, and statisticians will provide these in decimal terms, supported by elaborate computations. I should prefer to act upon the evidence of that very great citizen, one whose efforts towards winning the war are beyond praise—the ordinary housewife. She knows what the prices are in the shops, and she knows how much less far the housekeeping money goes now than it did before. We have all had representations from retired State servants in our constituencies. I have had many, in particular from retired Army officers. I agree with every word that my hon. and gallant Friend the Member for Petersfield (Sir G. Jeffreys) said. The appeal that has been made by means of this Amendment is a very modest and reasonable one, based on the grounds of justice to those who have served the State so well. There was general satisfaction with the Chancellor's pronouncement, but I sincerely hope that, when the Government come to formulate the provisions which will deal with the matter, they will not confine themselves to increasing pensions only in cases of real hardship, which I think is the phrase my right hon. Friend used. My feeling about the matter is that all these pensioners are entitled to have their pensions revised in the light of existing prices and the increased cost of living.

Amendment, by leave, withdrawn.