§ Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Buchan-Hepburn.]
§ General Sir George Jeffreys (Petersfield)
I desire to draw attention to what appears to me to be the unsatisfactory conditions of retired officers, when they can be and are re-employed. The conditions are, approximately, the same in the three Services, and I would say that they ought to be, as far as possible, identical in the three Services. The conditions are as follow: First, a re-employed officer draws no retired pay, but receives 25 per cent., in lieu of retired pay, added to the pay of his appointment. Next, his further service after recall, no matter for how long that may be, does not count for any increase of retired pay or of gratuity on retirement. Thirdly, he cannot receive substantive promotion. I have addressed Questions in this House on all these conditions, and I have received no satisfactory replies, and I shall now deal with each of these points separately.
With regard to the first, that is, drawing no retired pay whilst re-employed but only 25 per cent. in lieu on the pay of the appointment, retired pay is granted in respect of service completed. It is supposed to be inalienable and it has been definitely earned by the officer. Is it fair arbitrarily to take it away? However that may be—and I know there is some difference of opinion on this subject—the circumstances of a retired officer are different from those of a serving officer. He will probably have some civil employment or business or occupation which he must give up. He will probably have a residence, far from the station to which he may be posted, and where, in all probability, he must leave his wife and family. Can 25 per cent, increase of pay be considered adequate to compensate for the loss of retired pay, the loss of civil occupation and displacement from his normal peace-time residence? I suggest that it is inadequate, and that it is undoubtedly a good bargain for the Government, but I also suggest that good bargains should not be made at the expense of Government servants.
I will give an instance of how it works out in the case of a retired officer on 1123 retired pay of £300 a year who is re-employed as a major at £520 per annum. The case of that re-employed officer is as follows:—Pay £520, plus 25 per cent. in view of his retired pay, £130, making a total of £650. H he were not reemployed and if the work were done by a serving officer—not a re-employed reserve officer—the retired officer would be drawing his retired pay of £300 a year, and, in addition, a serving officer doing the work of the appointment, would draw as pay, £520 a year. That would be a total cost to the Government of £820 a year. Thus the Government save £170 a year by re-employing a retired officer, and I think it will be agreed that that is a very good bargain for the Government. I know that some differ as to this, and hold that an officer should not draw the retired pay, as well as the pay of the appointment, and I am well aware that the Treasury, as ever, is out to drive a very hard bargain. But retired officers feel that their retired pay has been earned and that they ought to draw it in full. However that may be, retired officers have a Regular officer's liabilities but are without certain of his advantages.
That brings me to my next two points, on which I think there is no difference of opinion in the Service. The first is that re-employed service, however long it may be, does not count for any increase in retired pay and that re-employed officers are ineligible for substantive promotion. Why should this be? These are Regular officers serving in the same position as other Regular officers, but unlike serving officers they have had to give up their civilian homes and civilian occupation. Some have now served for nearly five years since mobilisation, and may have to serve for a long time yet. Surely, they should be allowed to count those years for increased retired pay and should be eligible for substantive promotion.
I will give an actual instance which is within my own knowledge of how this may work out. A quartermaster and captain retired in July, 1939, with 33 years' service, on retired pay of £271 10s. a year. He was recalled in August, 1939, after being away for six weeks, and he was re-employed as a quartermaster. If he had not retired, but had merely gone on leave for six weeks, which he might very well have done, he would have been eligible for substantive promotion to major 1124 by now, and he could have added approximately £115 to his retired pay. As it is, however long he serves, he cannot be substantively promoted, nor can he add anything to his retired pay. Meanwhile, the civilian job which he had just taken up may or not be open to him again, and the house he had acquired, and in which he had installed his wife and family, is not available for his own occupation.
I admit that that is an exceptional case of an officer who had gone on retired pay only just before the war broke out and who was immediately recalled. As I have said, he might perfectly well have been on six weeks' leave to which he would have been well entitled, but although it does not constitute perhaps quite such a hardship or absurdity in the case of other officers who have been away longer, say a couple of years or more, yet the principle is the same, that they have come back, they have given up everything to take up an appointment and, during the time they are re-employed, they cannot add one day for calculation of increased retired pay nor can they possibly be substantively promoted. After all, substantive promotion does mean a great deal in respect of possible increases to retired pay, because the rank and time elements are taken into consideration. I would add that, in the Army at any rate, the position as between officers and other ranks, does not seem to be equal in this matter. The soldier retained in the Army and allowed to go on serving after 21 years' service, has the option of either drawing his pension and back pay, or of adding additional years to his previous service for the purpose of the final assessment of his pension. Perhaps the cases are not exactly analogous, but it appears to be recognised that either pension already earned can be drawn in addition to pay, or additional service can count towards augmenting pension already earned.
The above constitutes the main case which I wish to put before the House. A further grievance, a much smaller and not a general one, is that of certain retired officers employed in the War Office on matters requiring military experience but who are classed as "temporary civil servants," and are consequently compelled to pay unemployment and health insurance from which they get no benefit. This grievance is two-fold; first, that though 1125 they hold the King's Commission and draw retired pay, and though military knowledge is required for the purpose of their duties, yet they are classed as "male civilians"; secondly, that although in nearly all cases their salary plus their retired pay brings them over the salary limit for compulsory insurance—that is £420 a year—yet they are compelled to pay these insurances. Most of them are elderly and there can be no question of their requiring unemployment benefit, nor do they require health insurance. In answer to a Question put by myself, the Secretary of State said the practice had been going on for a number of years and he saw no reason for upsetting it. Surely the fact that it has been going on for a number of years is no reason for continuing an injustice?
I suggest that this whole matter should be reviewed. If these payments were made optional instead of compulsory, I believe it might meet the case, but I do not think that the present state of affairs is satisfactory at all. Admittedly, this only affects a limited class of elderly officers who have, in nearly all cases, volunteered their services for the national emergency but, taken with the case of the main body of re-employed ex-officers, it does go to show that retired officers receive something less than justice from the Government which re-employs them and I hope their conditions of service may be reviewed.
Finally, I suggest that conditions as to retired pay and terms of re-employment have their effect on young men who are considering whether or not to make the Army their profession in life, that is young men who are now holding temporary commissions, or war substantive commissions, as the case may be, and when these young men see what seems to them to be the lack of generosity and even of justice with which old soldiers are treated, they are not encouraged to join permanently. I think I am right in saying that a certain amount of concern has been given to the War Office by the fact that there has been a rather disturbing lack of applications for permanent commissions, which lack, I suggest, has been largely caused by the fact that pay and pensions of permanent officers do not seem to them to be on a very good scale. I hope, therefore, that the conditions of service of these officers will be favourably reviewed, and that they 1126 will be materially improved for those who are serving now, and for those who hope to serve in the future.
§ Viscount Hinchingbrooke (Dorset, Southern)
I do not wish to detain the House, but I would like to make a few comments on the speech of my hon. and gallant Friend the Member for Petersfield (Sir G. Jeffreys). I agree with him that we must do everything we can to encourage the recruitment into the Armed Forces after the war of young men, and see that they are rapidly promoted and adequately paid. In order to achieve that object, it is obvious that there must be reasonable standards of retired pay. But that is quite a different question from the one which my hon. and gallant Friend has raised. He wants to see retired officers taken on again in posts in the Army and paid at higher rates.
§ Sir G. Jeffreys
I think my Noble Friend mistakes my object. I was not talking about wishing to see them reemployed; I was talking about the terms which should be given them when they are re-employed.
§ Viscount Hinchingbrooke
Let me deal with that point. I think there ought to be some economic sanction operating to retard the re-entry into the Army of men who have reached the retiring age. If you pay them the same rates as you pay to younger officers, they will want to remain on in the Service, and they will fill jobs which ought to be given to the younger men who are coming up for promotion. One of the chief difficulties we were up against before the war was that there were many officers in the Army of advanced age who were not very up-to-date in their ideas. Opportunities for promotion were very few.
Mr. Petheriek (Penryn and Falmouth)
Does my Noble Friend mean that the Army was bound up with a lot of elderly men, and that when the war broke out it was still bound up with elderly non-retired officers? I do not understand his point of view. Surely we were suffering at the beginning of the war, and for about three years, from an incredible shortage of officers.
§ Viscount Hinchingbrooke
I was talking about the period before the war when, in the Regular Army, opportunities for promotion were few. Now we have reached 1127 the stage when the Services are fully mobilised, and that means that opportunities for promotion of younger men will begin to disappear again. If you are going to encourage older men in the Services to remain and fill jobs which might be given to the younger generation——
§ Sir G. Jeffreys
My Noble Friend has got hold of the wrong end of the stick. It is not a case of encouraging them to stop in the Service; they are reserved officers who have been retained, or recalled to the Service compulsorily.
§ Viscount Hinchingbrooke
While they are in the Service you pay them high salaries for their job, which means that they will be encouraged to stay on and fill jobs which ought to go to younger men. If you pay them a smaller amount of money, they will have less encouragement to remain in the Service. By the ordinary laws of economics, you will have certain positions vacated, one way or the other, which can be filled by the junior officers coming on. I disagree with my hon. and gallant Friend's suggestion. Much as I admire him for taking up the cause of the older members of his profession, I think it would not be in the interests of the country if a suggestion of the kind he has made, were adopted.
§ Flight-Lieutenant Challen (Hampstead)
I should like to say a few words on the position of high ranking and distinguished retired officers who are re-employed in a civilian capacity. I have had a certain number of representations on the subject from eminent officers who are re-employed in a civilian capacity, and they resent being treated as if they were, as one of them has written to me, impecunious junior clerks in having to pay Unemployment and National Health Insurance. They all say, "When we were retired from the Army we were given adequate pensions. We were not treated as poor men but as men who were not required to subscribe contributions for National Health or Unemployment Insurance. Now we are re-employed in a civilian capacity and we are treated as if we were actually poorer, whereas we are richer. The Government are in fact paying us more than we had before, and yet they rank us as being of the same status as comparatively junior clerks." They are discriminated against in relation 1128 to officers doing the same duties as themselves, wearing the same uniform and possessing the same rank, but it happens that these other officers are actually reemployed in the Army. Thus you get two types of men working side by side both of the same status, both retired officers, but one happens to be in civilian clothes, and the other in uniform.
§ Mr. Hubert Beaumont (Batley and Morley)
Does the hon. and gallant Gentleman regard payment of insurance as a stigma?
§ Flight-Lieutenant Challen
I am glad of that interruption. I certainly do not. I am endeavouring to voice a very strong sense of grievance on the part of these men, who say that they will in no sense benefit from these contributions. When they return to civilian life they will not pay the contributions. Why should they be differentiated against merely because they are working in a civilian capacity?
§ Mr. W. J. Brown (Rugby)
The Noble Lord seems to have completely misconceived the purpose of my hon. and gallant Friend's speech. The sole point is not whether old men should stay on, or whether they should be recalled, but, granted that they do stay on or are recalled by the War Office, ought they to be properly treated? That point the Noble Lord completely missed. With regard to the point about unemployment and health contributions, the Minister of Labour can help. He has power under the Insurance Acts to certify, in respect of any category of people who are not likely to benefit, that they should be exempt, and the Minister of Labour can put right this particular difficulty by the issue of the necessary certificate. There are three categories here and not two. There is the recalled officer, there is the officer classified as a temporary civil servant, and there are the civil servants. Of these three categories the civil servants are treated even worse than the officers because while they are subjected to the same disability that their further service does not count for superannuation, and they are not allowed substantive promotion, they do not get the 25 per cent. addition to retiring pay. We are in the same difficulty as they. We like the Financial Secretary very much. He is not the villain of the piece. The villain of the piece is the Chancellor of the Exchequer. All we can do is to 1129 transfer the impact of our wrath from the War Office to the Treasury. This whole field ought to be examined and these three classes considered on the lines that have been indicated.
§ The Financial Secretary to the War Office (Mr. Arthur Henderson)
Whatever may be one's views upon the problem that has been raised by my hon. and gallant Friend the, Member for Petersfield (Sir G. Jeffreys), I should, in fairness to the Treasury, refute any suggestion that they have been out to drive a hard bargain. Perhaps I may be allowed to give the House the history of the basis upon which retired officers are paid when they are re-employed. In the war of 1914–18, retired Army officers kept their retired pay during re-employment, although they did not count their re-employed service to increase the pension award. Retired naval officers, on the other hand, dropped their retired pay, and drew the pay of their rank on the retired list, plus 25 per cent, of that pay; or, alternatively retired pay plus 25 per cent. of retired pay, if that were more advantageous to the officer. That system is in operation today. They did not count their reemployed service for increase or initial grants of retired pay. In 1916, the system in operation for Army officers, of allowing retired officers who were serving in the war to draw their pensions in full, in addition to the emoluments of their appointment, was condemned by the Public Accounts Committee of this House. The words which the Committee used in their Report were:The Committee regret the very large expenditure which has been entailed by the present Regulation and think that modification should be made as circumstances permit.In 1922, after all the storm and turmoil of the great war had to some extent, passed away, the question was discussed by the three Service Departments. It was decided that in future emergencies, on the re-employment of a retired officer in all three Services, retired pay should be suspended and pay, plus 25 per cent. of pay, should be issued; or alternatively, retired pay, plus 25 per cent. of retired pay, if more advantageous to the officer, with the ordinary allowances in each case. I am informed that the vast majority of retired officers who are serving to-day prefer to receive, and do in 1130 fact receive, the pay of their appointment, plus 25 per cent. For the officer who had originally retired with gratuity it was felt that matters should be left as they were; he should neither receive the 25 per cent. addition to pay, nor count his additional service for further gratuity or retired pay, but should be treated as a temporary officer. This is on the theory that if the gratuity were regarded as annuity, or income-producing, the officer did in fact continue to enjoy its proceeds while re-employed. My hon. and gallant Friend has made the suggestion that a retired officer who is re-employed should continue to receive both his retired pay and his pay, and also that retired pay officers should be able to count reemployed service for additional retired pay and gratuity. An officer, however, cannot both draw his retired pay while employed and count that re-employment service for additional retired pay. The present system, is therefore, in the nature of a compromise between the two, attempting to strike a balance between fairness to the officer, and fairness to the public purse.
My hon. and gallant Friend also referred to the position of other ranks. It is quite true that the soldier pensioner who re-enlists, or is commissioned for emergency service, continues to receive his pension but does not count his further service for increased pension. He does continue to receive his pension, plus the pay of his rank. His position thus differs from that of a retired-pay officer, but there are very different circumstances in other cases. For instance, a soldier enlists for a limited engagement only, and undertakes an entirely new engagement if he comes up again during an emergency, while service on a non-regular or emergency attestation does not normally reckon for soldiers' pension. The position is well-known to my hon. and gallant Friend. It is entirely different in the case of an officer. A retired officer has a liability, under his original terms of service, to recall, up to the age specified in his particular case. They are two entirely different contracts of service, one in the case of the other rank and the other in the case of the officer.
The other point raised, was with reference to the payment in regard to insurance, although it was not altogether relevant to this point. I said that in this 1131 case, because the complaint was in respect of health insurance contributions, which are payment from another——
§ It being half an hour after the conclusion of Business exempted from the provisions of the Standing Order (Sittings 1132 of the House), Mr. DEPUTY-SPEAKER adjourned the House, without Question put, pursuant to the Standing Order, as modified for this Session by the Order of the House of 25th November, till Tuesday next, pursuant to the Resolution of the House this day.