HC Deb 18 April 1944 vol 399 cc82-97
Mr. Assheton

I beg to move, in page 2, line 34, to leave out "two", and to insert "four."

The effect of this Amendment and the following one is to make a substantial improvement in the rates of increase contemplated for certain civil servants under the special scheme embodied in this Clause. The improvement in question will also be reflected in the corresponding increases to be granted to officers on retired pay. Under the Bill as it was originally drafted the rates of increase were: to per cent. up to £200; 7½ per cent. between £200 and £1,00 and 5 per cent. between £400 and £600. Under this Amendment these rates of increase are altered as follows: Not exceeding £400, 10 per cent.; between£400 and £600, per cent., and over £600 and up to £645, such increase as is required to bring the pensions up to that amount. I hope the Committee appreciate that my right hon. Friend has gone a very long way to meet the claims which were put forward on the Second Reading and that they will be satisfied with what has been done in this regard.

Mr. W. J. Brown

I want to ask your guidance, Mr. Williams, on a point of Order. I notice that you have passed over the Amendment which stands in my name, and the name of other hon. Members, which proposed to delete 10 per cent., 7½ per cent. and 5 per cent from Clause 2 (1) and to substitute a flat rate sum of £50. I would like to know whether you propose to call that Amendment after we have disposed of the one now before the Committee, or what other steps you propose to take to enable the Committee to debate what I regard as the general inadequacy of the increases proposed to be given under Clause 2.

The Deputy-Chairman

I have not selected the hon. Member's Amendment, but I propose to call later an Amendment in his name, which he has handed in as a manuscript Amendment, to page 2, line 35, to omit "ten," and to insert "thirty." That would mean that the hon. Member's point can then be discussed.

Captain Cobb (Preston)

I would like to express my thanks to the Chancellor of the Exchequer for the concession he has made in answer to the representations which have been made to him from many sources. My own feeling is that this concession will go a very long way towards removing the grievances which were genuinely felt by a great number of pensioners who thought, rightly or wrongly— I understand wrongly—that their contract had been broken when pensions were stabilised in 1935 at a figure of 9½ per cent. below the 1919 figure. The effect of those concessions which my right hon. Friend has made will mean that pensioners receiving up to £400 a year will, in fact, be a half per cent. better off, whereas those receiving from £400 to£600 a year will only be 2 per cent. worse off than they were. Roughly speaking, that means that there will be general benefits granted to everyone from the rank of battalion commander downward, that is to say the hardest cases of all will receive very genuine benefits from the concession. I feel that, in view of the reasonable and generous spirit in which the Chancellor has met many of us who have made representations on this subject, he deserves to have this tribute paid to him.

Amendment agreed to.

Mr. W. J. Brown

I beg to move, in page 2, line 35, to leave out "ten", and to insert "thirty".

The object of the Amendment is to alter the percentage increases given in the first Sub-section of this Clause: Those increases now are to per cent. up to £400, and 7½ per cent. from £400 to something just over £600. If we are to consider the adequacy of these proposed increases, we have to set them against the actual increase in the cost of living, which gave rise to this problem in the first place. The Ministry of Labour index figure indicates that there has been a rise, between 1935 and to-day, of something like one-third in the cost of living. It has gone up from approximately 150 to approximately 200 during those years. But it is the common experience of eyery man and woman in Britain that the relationship between the index figure of the Ministry of Labour and the actual cost of living is very dim and distant. The index figure was compiled on the basis of budgets collected in 1904. Even if there had been no great wars in the meantime, there would almost certainly have been, in a period of 40 years, a very considerable alteration in the spending habits of our people. And the odds are that the index figure by now would have become quite inapplicable to actual present-day budgets on which our people spend their income. But, on top of that alteration in the distribution and the scale of expenditure, we have had the effect of two wars, and to-day the real rise in the cost of living has no relation whatever to the index figure.

I wish the Government would themselves give us a real estimate of the rise in the cost of living, as distinct from this quite inapplicable Ministry of Labour index figure. They do not do so, but there are other people who do. There is the Oxford Institute of Statistics, which estimates that the real rise in the cost of living is not the 30 per cent. of the Ministry of Labour but nearer 50 per cent. There is the Gazette published by a department of the Labour Party, which again puts the figure in the neighbourhood of 50 per cent. My friend Lord Beaverbrook, who is pretty well informed on these matters, expresses the view that the real increase in the cost of living is nearer too per cent., and certainly that is our experience in laying out our incomes to-day. In those circumstances. it seems to me that to offer figures of to and 732 per cent. as compensation for a rise in the cost of living of 50 per cent. is not merely inadequate. It is grotesquely inadequate.

The Financial Secretary is a little uneasy about that himself because, in an earlier stage in our discussions on the Bill, he tried to minimise the effect of the increase in the cost of living by saying that in the case of the Civil Service consolidation took place in 1935 at a figure ten points higher than the actual cost of living, and that, therefore, in the years between 1935 and 1939, although the cost of living went up, the civil servant was not damnified thereby. He only became damnified by reference to the increase that took place between the beginning of the war and now. There are two answers to that point which ought to figure in the records. The first is that this Bill does not only deal with civil servants, but with a wide variety of different types. And, even if the argument as applied to the Civil Service were sound, it does not apply to the other categories covered by the Bill. The second answer is that it does not apply to the Civil Service.

I think the Financial Secretary took a somewhat shameful advantage of the lack of knowledge in the House of various aspects of Civil Service administration in using the argument that he used. I want the Committee to be informed of what actually took place. In 1929 there was appointed a Royal Commission on the Civil Service, which recommended some years later—Royal Commissions are leisurely and stately things which do not proceed with undue precipitation—that we should get rid of the old system, and that the bonus should be consolidated with the' basic pay to make an inclusive figure of remuneration. They said they were satisfied that, in the lower areas of the service, there was very widespread and serious underpayment, and, as a means of minimising that underpayment, they proposed that consolidation of bonus and basic pay should take place, not on the actual cost of living figure at that time, which was 145, but on a higher figure of 155, the idea being to use this particular method to put right to a certain extent the chronic underpayment in the rate of the basic pay itself. What the Chancellor and the Financial Secretary have done is to take something which the Royal Commission recommended as a means of remedying underpayment, and to use that as a set-off against subsequent increases in the cost of living.

The only analogy that I can find for that is the ancient and honourable game much practised at racecourse meetings, of trying to find the pea. This particular pea is translated from the thimble of basic pay to the thimble of the cost of living, according as the Chancellor's mood of reckless gambling 'affects him from time to time. The one argument we have had first of all does not apply to any of the categories covered by the Bill and, secondly, is a wrong argument to be used even in the case of the Civil Service. So we are still left with the proposal to give increases of between 7½ and 10 per cent. in respect of a rise in the cost of living of at least 50 per cent. since 1935. Even as an act of uncovenanted benefit that is a singularly ungenerous contribution to make. But this matter ought never to have been treated as a matter of "grace and favour," or uncovenanted benefit, I apologise for repeating what I have said three time to-day—

The Deputy-Chairman

Then there is no need to say it again.

Mr. Brown

I mentioned it previously on another Clause, but it has a special application now. It is not as if we were dealing with the situation as it existed in 1920. At that time pensions had not been disturbed for many years. Then there comes a rise in the cost of living and the Government, as an act of grace and favour, gives certain increases by way of partial compensation. But the situation that we are dealing with to-day is one in which for 13 years, from 1922 to 1935, pensions in the public service were reduced automatically year after year as the cost of living fell. There was no argument about whether it caused hardship, about a means test, about dependants or about age. There was an automatic mathematical reduction year by year from 1922 to 1935. From 1935 to 1944 the cost of living has gone up. When we reduced pensions in the public service, we did it in the first year when the cost of living began to fall. The cost of living reached its apex after the last war in September, 1920, and by the end of 1921 this House decided that pensions should begin to come down. It has taken us nine years to get even a discussion of the question of increasing pensions. Every Member of the House of Commons ought to be thoroughly ashamed of himself for having allowed nine years to elapse before proposing any increase, after having imposed reductions in the first year when the cost of living began to fall after the last war. That is a shameful and sorry record. To propose at the end of nine years a 7½ per cent. increase as compensation for a rise in the cost of living of 50, is an insult.

Mr. Muff (Kingston-upon-Hull, East)

It is lousy.

Mr. Brown

I regard that as a triumph of understatement. If the Chancellor were concerned with justice, as he ought to be in this Clause, he should make provision for back pay from 1935.

The Deputy-Chairman

The Amendment deals with a percentage increase, and we cannot deal with the question of back pay.

Mr. Brown

I bow to your Ruling, Mr. Williams, but am I not entitled to point out, as one of my arguments for a substantial increase in these percentages, that nine years have elapsed during which the pensioners have suffered without a penny of compensation?

The Deputy-Chairman

As an illustration, but the hon. Member cannot develop it too far.

Mr. Brown

I will not develop it further. I trust that the Committee seizes the point. I am proposing that the 10 per cent. should be increased to 30, which is much less than the full rise in the cost of living. I am also proposing that we should increase the 7½ per cent. to 15. That, again, is infinitely less than the rise in the cost of living. The only thing I can find to say in favour of my own proposal is that it is less offensive and less mean and ungenerous than the proposal in the Bill. I propose to divide the Committee on this issue. The Committee have no conception of the cynical bitterness which is felt throughout the whole public service at the way in which the Treasury has handled this matter. We ought to takes a clear decision here, because I would again remind the Committee that it was not only the Government who said in 1921–22 that all pensions should come down, it was this House, and I submit that the least the Committee can do is now to give some measure of compensation to pensioners which is utterly ludicrous in comparison with the rise in the cost of living.

Mr. Manningham-Buller (Daventry)

I have listened with great care to what the hon. Member for Rugby (Mr. W. J. Brown) has said. Part of it was a repetition of what he has already said in earlier discussions to-day, and the other part, as far as I could see, was largely a repetition of what he said on the Second Reading of the Bill. I do not propose to follow him into a discussion of whether the index figure of the cost of living is correct or not. When he talks of the cynical bitterness which he says is felt, and about a sense of justice, it is advisable to take more matters into account than solely the position of the people now in receipt of pensions. We have, as the Chancellor has said, to consider our duty towards the lower orders of taxpayers, who will have to bear some part of the 'burden of such increases as there may be. I have no doubt that if an undue burden is cast upon their shoulders through having to pay increased pensions to one section of the community only, there will not be an absence of a feeling of cynical bitterness on their part. I have been concerned about the position of the retired Service men, and I welcome the Chancellor's decision to meet their real sense of grievance by restoring to a large degree what they lost in 1934. I think that that goes far enough to meet the case of the great majority of those pensioners.

Mr. R. Morgan (Stourbridge)

I support the Amendment, because I think the case for an extra remuneration to these pensioners has been fully demonstrated on both sides of the Committee. If the State is to regard itself as a model employer, the appeal of the hon. Member for Rugby (Mr. W. J. Brown) will not fall on deaf ears. Whatever the hon. Member said about the Civil Service applies with double force to the teaching profession. While members of the profession have received extra remuneration to meet the increase in the cost of living, the superannuated teachers have received nothing. They have to bear the extra cost of living, plus Income Tax demands. I hope that the Committee will be prepared to act in a generous way. It may not be possible, as the hon. Member for Rugby suggested, to date back this increase, but let us at any rate make a real and effective improvement in the, position of pensioners. I could keep the Committee a long time giving details of the pensions received by different classes of superannuated teachers, who find it difficult to meet even the demands of their daily existence, but the Committee must know of these cases. The percentages proposed in the Clause are not worthy of Parliament, but I hope that the hon. Member for Rugby will not take his Amendment to a Divisibn. I have an unfortunate recollection of what happened a few days ago, when a Division on a private matter like this was taken as a major issue, and I should be afraid to go into the Lobby for this Amendment because it might be misunderstood. If, however, the Chancellor gives us an assurance that it will not be misunderstood, I shall have no hesitation in going into the Lobby with the hon. Member for Rugby.

Sir G. Jeffreys

I regret that on this occasion I am unable to go all the way with my hon. Friend the Member for Rugby (Mr. W. J. Brown). I agree with him that 7½ per cent. increase is too little, and I think he agrees with me that the ceiling ought not to be there at all but that the proper course is to give back what has been taken away. What I and others who think like me have been urging all along is that the equivalent of what has been taken away on account of the fall in the cost of living ought to be given back. Ten per cent. gives back that equivalent, but 7½ per cent. emphatically does not. For that reason I regret that I cannot go all the way with my hon. Friend the Member for Rugby in his advocacy of the considerable increase, whether deserved or not, to 30 per cent. and 15 per cent. If I did so, it would make my previous actions in this matter appear inconsistent. I sympathise with him in trying to get all he can for pensioners. I want to get all I can, but there must he some limit, and I cannot help thinking that he has gone a little too far beyond that limit. If he had put the increase a little lower I should have been glad to support him.

Mr. Assheton

The Committee will not expect me to accept the Amendment. There are two parts of this Bill. There is Clause r, the hardship part, and there is Clause 2, which deals with special categories to which our attention was directed by my hon. and gallant Friend the Member for Petersfield (Sir G. Jeffreys) and my hon. Friend the Member for Rugby (Mr. W. J. Brown). The proposal which the hon. Member for Rugby brings forward is related entirely to Clause 2. It does not deal with Clause 1, which we have disposed of.

Division No. 16. AYES.
Acland-Troyte, Lt.-Col. G. J. Beech, Major F. W. Brocklebank, Sir C. E. R.
Albery, Sir Irving Beechman, N. A. Brooke, H. (Lewisham)
Allen, Lt.-Col. Sir W. J. (Armagh) Benson, G. Brown, Brig.-Gen. H. C. (Newbury)
Anderson, Rt. Hon. Sir J. (S'ch Univ.) Berry, Hon. G. L. (Buckingham) Brown, T. J. (Ince)
Apsley, Lady Bevin, Rt. Hon. E. (Wandsworth, C.) Burden, T. W.
Assheton, Rt. Han. R. Blair, Sir R. Cadogan, Major Sir E.
Attlee, Rt. Hon. G. R. Boles, Lt.-Col. D. C. Campbell, Dermot (Antrim)
Barnes, A. J. Boothby, R. J. G. Campbell, Sir E. T. (Bromley)
Beamish, Rear-Admiral T. P. Bower, Norman (Harrow) Cary, R. A.
Mr. W. J. Brown

We may have disposed of Clause 1, but we have not disposed of the Second Schedule. Clause 1 says that increases shall be given on hardship grounds as provided by the terms of the Second Schedule, which we have not reached. If the Financial Secretary is entertaining the happy illusion that there are to be no Amendments to that Schedule, I am sorry to disappoint him.

Mr. Assheton

I was not entertaining that illusion, because my right hon. Friend the Chancellor has a string of Amendments to the Second Schedule. The point I am making is that the proposal of the hon. Member for Rugby is that in the case of those Civil Service and ex-officer pensioners with which we are dealing under a special Clause, there shall be an increase of 30 per cent. instead of 10. When my hon. and gallant Friend the Member for Petersfield put forward his case on the Second Reading, he made it clear that he was asking for 9½ per cent., which was the amount of deduction suffered by these pensioners. A similar, though rather more complicated position exists with regard to civil servants. It is clear that if we were to accept the Amendment of the hon. Member for Rugby we should be giving to the friends of my hon. and gallant Friend the Member for Petersfield three times as much as they are asking for.

Mr. Brown

In terms of money, but not in purchasing power.

. Mr. Assheton

My hon. Friend the Member for Rugby has forgotten that only 20 per cent, of ex-officer pensions and a varying but small percentage of Civil Service pensions were subject to fluctuation. It is as clear as daylight that if we increase the pensions now by 30 per cent., we will not only be making up for what they lost through stabilisation, but giving a great deal in addition. I have therefore, no difficulty in asking the Committee to reject the Amendment.

Question put, "That the word 'ten' stand part of the Clause."

The Committee divided: Ayes, 213; Noes, 3.

Chailen, Flight-Lieut. C. James, Admiral Sir W. (Ports'th, N.) Procter, Major H. A.
Chapman, A. (Rutherglen) Jarvis, Sir J. J. Pym, L. R.
Chapman, Sir S. (Edinburgh, S.) Jeffreys, General Sir G. D. Rankin, Sir R.
Coob, Captain E. C. Jenkins, A. (Pontypool) Raid, W. Allan (Derby)
Colegate, W. A. John, W. Ritson, J.
Conant, Major R. J. E. Johnston, Rt. Hn. T. (St'l'g&C'km'n) Ross, Sir R. D. (Londonderry)
Cook, Lt.-Col. Sir T.R.A. M.(N'flk, N.) Jones, Sir G. W. H. (S'k N'w'gt'n) Ross Taylor, W.
Cooke, J. D. (Hammersmith, S.) Jowitt, Rt. Hon. Sir W. A. Rowlands, G.
Courthope, Col. Rt. Hon. Sir G. L. Joynson-Hicks, Lt.-Comdr. Hn. L. W. Salt, E. W.
Crooke, Sir J. Smedley Keir, Mrs. Cazalet Sanderson, Sir F. B.
Crowder, Capt. J. F. E. Kerr, H. W. (Oldham) Savory, Professor D. L.
Culverwell, C. T. Kerr, Sir John Graham (Scottish U's.) Schuster, Sir G. E.
Daggar, G. King-Hall, Commander W. S. R. Scott, Donald (Wansbeek)
Davies, Major Sir G. F. (Yeovil) Lamb, Sir J. Q. Scott, Lord William (Ro'b'h & Selk'k)
Davison, Sir W. H. Law, Rt. Hon. R. K. Selley, Sir H. R.
De Chair, Capt. S. S. Lawson, J. J. (Chester-le-Street) Shephard, S.
Denman, Hon. R. D. Leach, W. Smiles, Lt.-Col. Sir W. D.
Denville, Alfred Levy, T. Smith, E. (Stoke)
Debbie, W. Lewis, O. Smith, E. P. (Ashford)
Donner, Squadron-Loader P. W. Liddall, W. S. Smith, Sir R. W. (Aberdeen)
Douglas, F. C. R. Lipson, D. L. Snadden, W. McN.
Drewe, C. Lloyd, Rt. Hon. G. W. (Ladywood) Southby, Comdr. Sir A. R. J.
Duckworth, Arthur (Shrewsbury) Longhurst, Captain H. C. Spearman, A. C. M.
Duckworth, W. R. (Moss Side) Lucas, Major Sir J. M. Storey, S.
Dunn, E. MacAndrew, Colonel Sir C. G. Stuart, Rt. Hon, J. (Moray & Nairn)
Eccles, D. M. McCorquodale, Malcolm S. Sueter, Rear-Admiral Sir M. F.
Ede, J. C. Macdonald, Captain Peter (I. of W.) Suirdale, Viscount
Edmondson, Major Sir J. Mack, J. D. Sutcliffe, H.
Emmott, C. E. G. C. Mainwaring, W. H. Tasker, Sir R. I.
Fleming, Squadron-Leader E. L. Maitland, Sir A. Tate, Mrs. Mavis C.
Fraser, Lt.-Col. Sir Ian (Lonsdale) Makins, Brig.-Gen. Sir E. Taylor, Major C. S. (Eastbourne)
Furness, S. N. Manningham-Buller, R. E. Teeling, Flight-Lieut. W.
Galbraith, Comdr. T. D. Marlowe, Lt.-Col A. Thomas, I. (Keighley)
Gammans, Capt. L. D. Mathers, G. Thorneycroft, H. (Clayton)
Gates, Major E. E. Mayhew, Lt.-Col. J. Tinker, J. J.
George, Maj. Rt. Hn. G. Lloyd (P'broke) Mills, Sir F. (Leyton, E.) Touche, G. C.
Gibson, Sir C. G. Mills, Major J. D. (New Forest) Wakefield, W. W.
Gledhill, G. Molson, A. H. E. Walkden, E. (Doncaster)
Goldie, N. B. Montague, F. Ward, Col. Sir A. L. (Hull)
Grant-Ferris, Wing-Comdr. R. Moore, Lieut.-Col. Sir T. C. R. Ward, Irene M. B. (Wallsend)
Green, W. H. (Deptford) Morris-Jones, Sir Henry Wardlaw-Milne, Sir J. S.
Greenwell, Colonel T. G. Morrison, G. A. (Scottish Univ's) Watt, F. C. (Edinburgh, Cen.)
Grenfell, D. R. Morrison, Major J. G. (Salisbury) Watt, Brig. G. S. Harvie (Richmond)
Gretton, J. F. Morrison, Rt. Hon. W. S. (Cirencester) Wayland, Sir W. A.
Gridley, Sir A. B. Mort, D. L. Webbe, Sir W. Harold
Griffiths, J. (Llanelly) Muff, G. Wells, Sir S. Richard
Groves, T. E. Murray, Sir D. K. (Midlothian, N.) Weston, W. Garfield
Gunston, Major Sir D. W. Naylor, T. E. Westwood, Rt. Hon. J.
Guy, W. H. Nicholson, Captain G. (Farnham) White, Sir Dymoke (Fareham)
Hall, W. G. (Colne Valley) Nield, Major B. E. White, H. (Derby, N.E.)
Harris, Rt. Hon. Sir P. A. Nunn, W. White, H. Graham (Birkenhead, E.)
Helmore, Air Commodore W. Oliver, G. H. Whiteley, Rt. Hon. W. (Blaydon)
Henderson, A. (Kingswinford) O'Neill, Rt. Hon. Sir H. Williams, Sir H. G. (Croydon, S.)
Henderson, J. (Ardwick) Owen, Major Sir G. Williams, Rt. Hon. T. (Don Valley)
Henderson, J. J. Craik (Leeds, N. E.) Pearson, A. Windsor-Clive, Lt.-Col. G.
Henderson, T. (Tradeston) Peters, Dr. S. J. Womersley, Rt. Hon. Sir W.
Heneage, Lt.-Col. A. P. Petherick, M. Wootton-Davies, J. H.
Hollins, J. H. (Silvertown) Pethick-Lawrence, Rt. Hon. F. W. Wright, Mrs. Beatrice F. (Bodmin)
Hopkinson, A. Pickthorn, K. W. M. York, Major C
Howitt, Dr. A. B. Pilkington, Captain R. A. Young, A. S. L. (Partick)
Hume, Sir G. H. Pownall, Lt.-Col. Sir Assheton
Hurd, Sir P. A. Prescott, Capt. W. R. S. TELLERS FOR THE AYES:—
Hutchison, Lt.-Com. G. I. C. (E'burgh) Price, M. P. Captain McEwen and
Mr. Adamson.
Kendall, W. D. White, C. F. (Derbyshire, W.) TELLERS FOR THE NOES:—
Salter, Dr. A. (Bermondsey, W.) Mr. Reakes and Mr. W. J. Brown.

Amendment made: In page 2, line 36, leave out paragraph (b).—[Sir J. Anderson.]

Sir G. Jeffreys

I beg to move, in page 2, line 40, to leave out "six", and to insert "twelve."

I understand that this Amendment and the next which stands in my name, and which proposes to insert, in line 2, in place of "by five per cent.": and where the rate thereof was reduced on account of the fall in the index figure of the cost of living between the years nineteen hundred and twenty-four and nineteen hundred and thirty-four, it shall be increased by not less than the amount of any such reduction can be discussed together. The first Amendment proposes to increase the ceiling from £600 to £1,200, and the second to restore to those who had their pensions reduced between 1924 and 1934 that which was taken away from them. They apply equally to retired officers and to civil servants, for, in each case, the pensions were reduced, although the methods of reduction were not identical.

The pensions were reduced on account of the fall in the cost of living, but now that cost of living has risen and is approximately equivalent, on paper, to that of 1919. Actually, working-class figures such as are used in calculating the cost-of-living index figure are not wholly appropriate to these ex-officers and ex-civil servants, whose cost of living has definitely risen. Many factors are not taken into account in the calculation of the nowadays rather artificial figure of the cost of living. Among them are education, insurance and medical fees, as well as the general standing of living of those who have been officers or civil servants of a certain grade.

I will not argue the question of whether or not there is an obligation on the Government to raise the rates. I must accept the Chancellor's judgment in the matter—he is judge and jury in this case—but though the Government may be carrying out the letter of the 1919 Warrant, that is as far as officers of the Services are concerned, I submit they are certainly not carrying out the spirit of it. And it is a fact, as has already been mentioned in this Debate, that there is deep resentment among those whose pensions were cut on account of a fall in the cost of living at receiving no corresponding increase on account of the rise in the cost of living.

I venture to ask whether it is worth the while of the Government to allow this sense of grievance to continue unremedied and unallayed. There is a sense of grievance. I believe the Chancellor of the Exchequer realises it, although he does not think, and possibly he is quite right, that it is reasonable that there should be, right throughout those of His Majesty's Services for which I can personally vouch, wrongly or otherwise, that sense of grievance. I believe the hon. Member for Rugby (Mr. W. J. Brown) will say that there is a similar feeling of grievance among the civil servants who are pensioned. I would ask whether it is worth while for the Government, for a comparatively small sum to allow that sense of grievance to remain completely unallayed? As ceilings are the fashions nowadays I have put the ceiling at £1,200. I might have put it higher. There are some higher pensions, only a few I admit, which were cut. Even £1,200, after the deduction of £600 Income Tax, is not a very high pension in these days, considering the present-day cost of living and what are reasonable standards of living for ex-senior officers and officials. Anyhow these pensions were reduced on account of a fall in the cost of living. Surely, it is only reasonable that they should be correspondingly increased.

The Chancellor of the Exchequer has said that he will have nothing whatever to do with the cost-of-living fluctuations, and he has spoken somewhat darkly of inflation. That might be a reasonable attitude if the rate had never been reduced, but the rates were reduced over a number of years and had only risen very slightly when stabilisation was decided upon. If it had been decided to stabilise at par that might have been quite reasonable — another matter altogether. But to cut pensions on account of a fall in the cost of living and stabilise without restoring the full amount of those cuts was very much less than fair and just, in my respectful submission. It sometimes seems as though the Treasury aim to give only what they must give under pressure and no more, I am well aware that they cannot be expected to be generous, that is not their business, but they might be absolutely fair and just.

The cost of restoring the amount of the cuts to all officers of the Services from whom they were taken was estimated by the late Chancellor of the Exchequer to be £500,000 a year now, and £850,000 after the war. That £500,000 annually included many of those who under this Bill will get restoration in full or to some extent, so that so far as officers are concerned the extra cost over and above what is proposed in this Bill is very much less than £500,000. I hope that the Chancellor will soften his heart and realise that what was taken away, no more and no less, ought to be restored. It is not as if we were living at a cheap time, or as though the cost of living had fallen for all these officers and officials who are affected. I suggest that it would be not unreasonable, and certainly would not cost a large sum of money, as sums of money go in these days, to restore in full to every officer who lost money in the cuts made between 1924 and 1934, the exact equivalent of what he lost.

Lieut.-Colonel Sir Ian Fraser (Lonsdale)

It does not seem to me that any argument in principle is required to justify this Amendment. The principle is accepted when you fix a limit of£600, or indeed any limit up to what the Government think that by and large it is time they gave some increase to pensioners on account of changes that have taken place since the original figures were fixed. There is no need to argue that there is a case for change. The Government admit that by bringing in the Bill. The only question is for whom the change is to be made. I see no particular magic in £1,200, but there is a very strong case for £1,000, which I ventured to bring to the notice of the Chancellor of the Exchequer on the Second Reading, which is, that that is the figure up to which the Treasury is itself allowing a war bonus to be paid. They have chosen that figure as an appropriate one up to which they will pay civil servants a war bonus. If that is so why should the ex-civil servant, and of course, when the Royal Warrant and other things come up to be considered in the case of military categories, officers and so on, be discriminated against? If there is a case for civil servants earning up to £1,000 receiving bonus there seems to me a case for the ex-civil servant receiving pension up to that amount being given an increase. Since I do not wish to move an Amendment to an Amendment, I suggest £1,000, but I am supporting my hon. and gallant Friend in his Amendment.

Mr. W. J. Brown

The hon. and gallant Gentleman who moved this Amendment was unable to go with me on the Amendment which I moved just before we reached this one. That shall not prevent me from remaining true to the alliance, and supporting his Amendment on this subject as heartily as I possibly can. My attitude to this Amendment derives from precisely the same position in principle as does my attitude on all the other Amendments to this Bill. The truth is that on this Amendment, as on every other, we are approaching the matter from one angle of principle, and the Chancellor is approaching it from another, and that fundamental difference in principle reflects itself in the Debate on every single Clause and every single Amendment as we reach it. I much regret that advantage was not taken of the last Amendment to make the Government understand where the Committee stands in principle on this mattes. It was to me a sorry and tragic thing, but if I were representing the Government on that Front Bench I should notice much more the mass abstentions from the Division Lobby on this side of the House than I would the small figure of three, the number of those who came into the Lobby with me. I would not be at all happy, if I were the Chancellor, about that last vote.

The Division on each Amendment reflects the division in principle. Is not that division in principle that we say that the Government must be logical? If they say that pensions must come down when the cost of living falls, they must equally say that pensions must go up when the cost of living rises. If they say there is to be no qualification about the reduction they must say equally that there must be no qualification about the increases. What the Government cannot do with any regard to logic and consistency is to say, "We will reduce pensions on a mathematical basis when the cost of living goes down, but when the cost of living goes up all we will give you is a handful of charity as an act of grace." When the pensions were reduced there was no question then of exempting pensions above or below a certain limit. All pensions were brought down. I see no earthly reason why we should put a limit of £600 to our charity when we put no limit to our lack of charity when the cost of living was falling. It is logical that all pensions should be increased in the same way as they were reduced when the cost of living came down. There is not a single member of my organisation who would derive any benefit from the change from £600 to £1,200 but that is not the point. Here there is the same issue in principle as there has been on every Clause of this Bill up to now. If my hon. and gallant Friend chooses to divide the Committee on this Amendment, as I hope he will if he does not get satisfaction, I shall be in the Lobby with him even though he was not in the Lobby with me on the last occasion.

Sir J. Anderson

I should like to dispose first of the point made by the hon. Member for Rugby (Mr. W. J. Brown). He put a simple point—he, always tries to be logical. He says, "If the Government say that pensions must come down when the cost of living goes down they ought to say that pensions should go up when the cost of living does up." I do not join issue with him on that. I say at once that the Government say nothing of the kind. I say that the position is that a former Government, after the last war, influenced by the financial policy followed for reasons then thought perfectly sound, adopted the principle of the sliding scale, of underwriting sterling and letting expenses go up with the cost of living and bringing them down when the cost of living came down. We have followed an entirely different course. I am not prepared to accept the principle as a matter of policy that we should in regard to any item of our expenditure adopt an arithmetical formula and allow our charges to vary up and down with changes in the cost of living. This is not the time or the opportunity, there will be other occasions more appropriate, for discussing that vital matter of principle in detail. I refer to it now merely for the purpose of disposing of that argument of my hon. Friend.

The position is that a former Government, after the last war, applied this principle of the sliding scale, in 1919, to a limited extent to certain classes of pensions, and in the application of that principle certain adjustments were made. When the cost of living went down the pensions in question went down. It is not quite accurate to say, as the hon. Member said in an earlier intervention, that there was no floor, because there was a floor. The pensions were stabilised on a cost-of-living basis of 155, which did not in fact represent the lowest point to which the cost of living had gone and that 155 remained the basis up to the outbreak of the present war. No pensioner suffered through that basis having been adopted for purposes of stabilisation. I only mention this incidentally. It is the fact that for stabilisation purposes 155 was taken as the figure and that did not represent the lowest point to which the cost of living and pensions had been reduced, nor was it the actual level of the cost of living at the moment stabilisation took place.

Mr. W. J. Brown

The consolidation of 155 as against the cost of living —

It being the hour appointed for the consideration of Opposed Private Business and there being Private Business set down by direction of the Chairman of Ways and Means under Standing Order No. 6, further Proceeding was postponed without Question put.

Mr. SPEAKER resumed the Chair.