CLAUSE 2.—(Special provisions as to increase of pensions payable under the Superannuation Acts.) (Hansard, 18 April 1944)

§ Sir J. Anderson
I beg to move, in page 2, line 40, to leave out "five", and to insert "seven and one half."
When the proceedings on the Bill were interrupted I was dealing with an interruption on the pert of the hon. Member for Rugby (Mr. Brown). I should like to have an opportunity, though we seem to have passed to a later stage, of continuing the remarks that I was making.

§ The Deputy-Chairman
As the right hon. Gentleman says, we have passed that. I daresay he might have an opportunity on the Question "That the Clause stand part," but he must not begin a different point on another Amendment.

§ Sir J. Anderson
With regard to the general structure of the Clause. I should like first to give an answer to my hon. and gallant Friend the Member for Peters-field (Sir G. Jeffreys), who asked whether it was worth while to allow a sense of grievance to remain unallayed. My whole purpose in including in the Bill the provisions of Clause 2, which do not fit conformably with the other provisions of the Bill, is to go as far as I possibly can, without giving away what I regard as a vital matter of principle, to meet a sense of grievance which I know to exist and, as the Committee may be interested to know to what extent any sense of grievance has been met by what is now proposed by this Clause, let me give these particulars. The number of officers drawing retired pay the rates of which have been affected by the stabilisation of 1935 is estimated at 16,000. The number whose pensions are less. than £400 a year, and who will therefore get the full 10 per cent. addition, is estimated at 10,000. The number of officers between £400 and £600 a year retired pay who will get not the full 10 per cent., but 7½ per cent., is estimated at 2,800. Therefore, the total number of officers whose grievance, such as it is, will be wholly or substantially removed by the provisions of this Bill is 12,800 out of the total of 16,000.
125 That is the measure of the extent to which by this provision we have been able to meet the grievance. The purpose of the Amendment that my hon. and gallant Friend sought to make was not to do away with the ceiling of £600 altogether, because that would not have been consistent with the Financial Resolution, but he proposed to raise it to the level of £1,200, thus bringing in, I think he would agree, practically all the retired officers in whose case he is interested. My position on that was that to introduce at this time of day a mathematical formula for the purpose of adding automatically to pensions guaranteed before this war under conditions measured by a change in the cost of living, would involve me in very unfortunate consequences. I should certainly not know, if I did that, how to answer any claims from serving civil servant or officers that they should be given an increase in their pay corresponding to the increase in the cost of living. We have not followed that practice. We have tapered sharply the additions given in respect of the changed circumstance due to the war to serving civil servants. We give proportionately much more to the lower ranks than to those high up, and we stop altogether at the level of £1,000 a year. A civil servant on £1, 000 a year gets under present arrangements a war bonus of 19s. a week, which is something like 2½ per cent. of his salary. My hon. and gallant Friend the Member for Lonsdale (Sir I. Fraser), while not supporting my hon. and gallant Friend the Member for Petersfield to the full extent, asked, Why not draw the line at £1,000 'because that is the figure adopted in the Civil Service? I do not know whether he has in mind a tapering scale ending at £1,000, corresponding to what is in the Bill ending at £600, but I would like to make the point that we have now arranged—and I am sure it was a welcome decision—that war bonus to serving civil servants should be included with salary in the computation of pension.
I do not think it would be practicable or in any way desirable to deal with persons who have retired—in some cases who have retired long ago—in a more favourable way than we deal with those who are at present serving the State. The position of a serving officer at £1,000 a year is that when he retires his pension will be computed on his £I,000 plus his bonus, and the maximum pension he can draw 126 under existing arrangements under the Superannuation Acts, apart from very special cases, is £500 a year. Beyond that £500 a year the serving man will not be eligible for any addition to his pension. Logically, I ought to have taken that figure of £500 a year and made that the ceiling and not £600, but I was anxious to go as far as I felt I reasonably could and took £600 as the figure. That is my justification for what is proposed, and while I am as anxious as anyone can be to remove any sense of grievance, although it may not be wholly well-founded, I ask the Committee to accept my view that this is a generous Bill, that the maxima which I have proposed in Clause 2 are substantial, that they substantially increase the benefits that will accrue to those retired officers in whom hon. Members who have spoken are specially interested, and that I have, in fact, gone as far as I could reasonably be expected to go.

§ Mr. W. J. Brown
I do not think we could have had a better revelation of the complete mental confusion which prevails in the minds of the Treasury and the Chancellor than the speech to which we have just listened. I want to take one sentence from it and test it by reference to actual fact. The right hon. Gentleman said, "I do not think it practicable to deal differently with existing civil servants and civil servants of the past who are now pensioners."

§ Sir J. Anderson
I think I said "more favourably."

§ Mr. Brown
"More favourably" means the same as "differently." The Chancellor tells us that he does not think it practicable to deal differently or more favourably with one category as compared with another. But that it precisely the effect of this Bill! Let me compare two cases. Take first a civil servant now drawing £150 a year, and then a pensioned civil servant whose pension is of the same amount. The serving civil servant, as things are, will receive a war bonus of 19s. a week. 'The pensioned civil servant under this Bill will get nothing like that figure. The truth is that the Chancellor does not understand the Bill. The fellow who drafted it does understand it, and he ought to be crucified for drafting it. There is no consistency about the Bill. It is a contemptuous, mean and ungenerous hotch-potch. The speech of the Chancellor shows plainly 127 that it is an unconsidered Bill, which he does not understand any more than the Financial Secretary does.

§ Mr. Mathers (Linlithgow)
I rise to put a point to the Chancellor which will take us out of this atmosphere. To enable the right hon. Gentleman to comprehend my point I must take him back to the favourable answer, as I considered it, which was given on Second Reading to my hon. Friend the Member for the Park Division of Sheffield (Mr. Burden) in relation to railway superannuitants. The opening words of this Clause, "Pensions payable under the Superannuation Acts, 1894–1943," have been interpreted or rather misinterpreted by a number of people who have retired on superannuation from the railway service to include Railway Superannuation Acts which were passed between 1834 and 1943. I do not take that view, but I would like the Chancellor to make the position clear to those people who have to some extent pinned their hopes upon this Clause. I would like to ask him whether, following on the indication given on Second Reading that he would be willing to hear from the railway companies in relation to their super-annuitants, any developments have taken place 'and if any approaches have been made to him with a view to dealing with the position of the railway companies vis-à-vis this Bill. So far as I can learn, none of these developments has taken place and I am disappointed. After the passing of the Bill will the right hon. Gentleman still be willing to have consultations with the railway companies and those representing railway superannuitants with a view to coming to some arrangement with regard to the superannuation allowances that are paid to railway servants?

§ Sir J. Anderson
It is the fact—and it is important that any doubts should be cleared up—that the reference in Clause 2 to the Superannuation Acts, 1834–1943, does not include any of the Acts under which the pensions of railway servants are granted. What my right hon. Friend the Financial Secretary said on Second Reading was: The hon. Member for the Park Division of Sheffield (Mr. Burden)) made an inquiry with regard to railway servants, and asked whether the Chancellor would make it possible for railway servants to receive these or similar benefits. All I can say is that, at the present 128 time the railways are subject to Government control, and if the railways come to the Government and make representations on that point, my right hon. Friend the Chancellor will give them very careful attention." [OFFICIAL REPORT, 3rd March, 1944; col. 1835, Vol. 397.] That is still the position. I do not think that representations have been made by the railways, but if they are they will certainly receive careful consideration as promised.

§ Mr. Mathers
Do I understand that no referencesto any arrangements of that kind require to be made in this Bill?

§ Sir J. Anderson
They could not he made in the Bill as they would be entirely outside its scope.
May I make one observation in reply to my hon. Friend the Member for Rugby? He accused me of not understanding the effect of the Bill. I think he will find, if he goes into the matter a little more carefully, that the misunderstanding is on his side. If I understood his point correctly, he made a comparison between the treatment of a serving officer at a comparatively low rate of salary and the treatment given by this Bill to a pensioner. It is perfectly clear that the treatment given to a pensioner is relatively generous, certainly for those on the lower rates. What my hon. Friend has, I think, overlooked is that the Bill applies to future pensioners as well as to past pensioners. A person on a low rate of pay who now retires and receives a pension computed on his pay and bonus will still be entitled to the benefits of Clause r, although, in applying Clause 1, that element in his pension which relates to bonus will be taken into account.

§ Mr. W. J. Brown
The Chancellor has completely misunderstood my point. He said that he found it impracticable to make a distinction between the serving man and the pensioner. I showed that, as between the civil servant and the pensioner receiving the same amount of money, the Chancellor provided different compensation for one as compared with the other. His only reply to that is to tell me that when a civil servant retires in future he will have two systems of treatment, one more generous than the other. That is no answer to my point. My point is that although the Chancellor said he found it impossible to distinguish in treatment between two persons, the one serving and the other not 129 serving, he has in fact treated them differently under the Bill.