Commons Sitting of 3 March 1944

Preamble
[Mr. SPEAKER in the Chair]
NEW MEMBER SWORN
Major Edgar Mayne Keatinge, for the County of West Suffolk (Bury St. Edmunds Division).
ORDERS OF THE DAY

  PENSIONS (INCREASE) BILL
  Order for Second Reading read.
  The Chancellor of the Exchequer (Sir John Anderson): I beg to move, That the Bill be now read a Second time."
  The Measure which I have to submit to the House carries out a promise made by me on 3rd December last, in the course of the Debate on the Address. The Amendment which was then under discussion proposed that State and local government pensions should be increased to a level corresponding with the increased cost of living. I said, in the course of the statement which I made on that occasion, that, in the view of the Government, the arguments for and against doing something were still fairly evenly and nicely balanced, but, on the whole, the Government considered that there was a case for some action. I made it perfectly clear that the Government would concentrate attention on cases of what I described as "real, grave hardship." I added:
  "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."—[OFFICIAL REPORT, 3rd Dec. 1943; col. 673, Vol. 395.]
  I made that perfectly clear; and the House will see, from the terms of the Bill, that the view of the Government in that respect remains the same. During this war Government action has been effective in restraining the most harmful economic effects of war conditions: by rationing, by price control, by the Government's stabilisation policy. Moreover, war conditions have created the need, and have provided the opportunity, for work for every able-bodied person. That being the background, it is, in the view of the Government, right and proper that we should approach this problem from the standpoint of hardship. Whatever anyone might think about the structure of the various superannuation schemes which we have to review in this connection, this is clearly not the time for proposing, if anyone were so minded, far-reaching, fundamental changes. Nor, I suggest, is this a time for departing in
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  such a matter from the basic principle that financial assistance, given ex gratia, not as a right, must be concentrated on cases of real and proved need.
  The approach of the Bill, subject to something which I shall say presently about one particular aspect of it, is broadly similar to that taken in the Pensions (Increase) Acts, 1920 and 1924, but I want to call attention to certain significant respects in which the position to-day differs from that of the period following the last war. The original Act, the Act of 1920, was passed at a time when the cost of living was 155 per cent. higher than in 1914. Let there be no misunderstanding. It was 155 per cent. higher; that is to say, the index figure was 255. The cost of living now is according to the accepted standard of measurement, less than 30 per cent, over 1939. That is why the maximum rate of increase provided in the present Bill is 25 per cent. In 1920, as against an increase of 155 per cent. in the cost of living, the maximum increase granted was 50 per cent., and that 50 per cent. was valid only for pensions up to the low limit of £50. In 1924, the cost of living had fallen, but it was still 75 per cent. over the pre-war level of 1914. As a result of the review made in that year, the maximum increase was raised from 50 per cent. to 70 per cent., as compared with the increase in the cost of living of 75 per cent., but the maximum increase was applied only to pensions up to £25 a year. For pensions over £100 in the case of an unmarried person, and £130 in the case of a married pensioner, the maximum increase remained 30 per cent. These rates of increase, in face of a cost-of-living rise of 155 per cent., or even 75 per cent., compare unfavourably with the present proposals of 25 per cent. and 20 per cent. against the cost-of-living increase of just under 30 per cent.
  There is another significant difference between the present Bill and the earlier Acts. The Act of 1920 covered only those in receipt of pensions before the passing of the Act. The reason for that was that the Act was not passed until after the war, and after improvements in both pay and pension of most classes of State and local government servants concerned, had been granted. Therefore, the case that arose was a case for granting improvements to those not deriving benefit from

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  current improvements in remuneration. The present Bill is produced under war conditions. It is not possible to make a sharp distinction between those pensioned before the date of 1939, those who have retired since, and those who may retire in the immediate future. All those are within the scope of the present Bill, and the Bill treats them all alike, subject to this—that provision is made, as it obviously must be made, in respect of those receiving pensions on current war bonus. Since I last addressed the House on this subject, as most hon. Members are aware, the decision has been taken that current bonus shall be reckoned with salary in the computation of Civil Service pensions. The element of pension which represents pension on bonus will, naturally, have to be set against any increase for which a pensioner may be eligible under the present Bill. It follows, I think, from what I have said, that the Bill should be limited in duration—as it is by its terms—so that it may be reviewed from time to time in the light of changing circumstances. Clause 10 (2) of the Bill limits its duration to the end of 1945, and we have made that provision in the expectation that, before that time, the whole position will again have been reviewed and the Government will have announced their decision in the light of the then ascertained facts. Hon. Members, therefore, are right in regarding this Bill as of a short-term, emergency character.
  As will be seen, the Bill falls into two main parts. There is, in the first place, following the analogy of legislation after the last war, a general hardship scheme, which is applicable to all classes of pensioners covered by the Bill. I wish to assure my hon. and gallant Friend the Member for Petersfield (Sir G. Jeffreys) that it is the intention of the Government that a scheme, broadly on the same lines, should be applied, by Royal Warrant, or Order in Council, whichever may be appropriate, to those pensioners who are necessarily, for technical reasons, left outside the Bill—that is, pensioners from the Armed Forces.
  Mr. W. J. Brown: Does this apply to the Colonial Service?
  Sir J. Anderson: I am obliged to my hon. Friend, but I did make it clear on the last occasion that it would not be proper
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  for us here to deal with Colonial and Indian pensions, which are governed by Acts of other Legislatures. I am dealing merely with those pensions under the control of this House, and those which, though not directly under control of this House, are payable from moneys provided by Parliament and governed either by Royal Warrant or Order in Council. There is also, included in the Bill a scheme of a special character which is supplementary to the hardship scheme, for pensions payable in respect of death or retirement after 20th February, 1922, of certain classes of civil servants. From that date, the pensions of those civil servants were liable to variation in relation to the cost-of-living index. I am now referring to a matter raised in the first Debate on this subject by the hon. and gallant Member for Petersfield, who, although speaking primarily of Service pensioners, made it quite clear in his remarks that he had taken account also of the case of civil servants, with whom I must now deal, because, technically, the Service pensioners are outside the scheme of the Bill.
  As in the case of the hardship scheme, if the House accepts the part of the Bill with which I am now dealing, a similar scheme will be applied by Royal Warrant, or Order in Council, to those Service pensioners whose retired pay was subject to similar fluctuations with the cost of living, up to the date in 1935 when the retired pay of the officers in question, and the civil servants' pensions concerned, were consolidated on the basis of the cost-of living figure of 155. That figure of 155 must not be confused with the 155 of which I spoke earlier, because that was a cost-of-living figure representing an increase of 55 per cent., not 155 per cent, over pre-war figures. All the increases provided for in this Bill, and in the corresponding Royal Warrant or Order in Council, will take effect, it is the intention of the Government, from 1st of January of this year.
  Now, perhaps, it would be convenient if I passed on to explain, in some little detail, the two concurrent schemes to which I have just referred briefly. The main provisions of the hardship scheme will be found in Clause I and in the First and Second Schedules. As to the scope of this scheme, it applies to pensions in respect of civil servants, teachers, police and firemen, Royal Irish Constabulary,

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  local government officers and certain collectors of taxes who were granted pension allowances on the abolition of their employment. As I have said, it does not apply to Colonial or Indian employment. Power is sought under Clause 4 of the Bill to extend the scheme by Order in Council to certain classes of pensioners who are analogous to local government pensioners, such as probation officers or employees of Insurance Committees appointed under the National Health Insurance Act. Any Order in Council so extending the provisions of the Bill, will be laid in draft before Parliament, and is not to be submitted to His Majesty until an affirmative Resolution in the form of an Address has been passed by both Houses.
  As regards the scale of increases for which provision is made in the Bill, married pensioners—and these provisions extend to any pensioners with dependants under the age of 16—will receive an increase of 25 per cent. in the case of pensions up to £150 per annum, and an increase of 20 per cent. in the case of pensions over £150 but not over £250. For other pensioners, the corresponding limits are £100 to qualify for an increase of 25 per cent., and £175 for an increase of 20 per cent. As the House will see, this scheme represents a considerable simplification as compared with the plan of the earlier Acts.
  I have to point out that there are a number of general conditions, which have to be satisfied in order to qualify for those increases. In the first place, the total means of the pensioner, including any increase under the Bill, must not exceed £250 in the case of a married pensioner, or one with a dependant under 16, and £175 in other cases. The House will note, in passing, that under the old Acts the corresponding limits were lower. They were £200 for the married man and £150 for an unmarried pensioner. The Bill, however, contains a new provision, for which there is no analogy to be found under the earlier Acts, providing that, in the calculation of means, the first £52 of income other than the pension should be disergarded. That follows the addition which recently made its way into the Warrant governing disability pensions for the Services and will be welcomed by the House. The result, therefore, is that a pensioner with a pension of £200, and £52
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  of other means, will be treated as if his total means were limited to £200, and will be eligible for an increase of £40 in his pension, giving him a total income of £292 per annum. That is the most favourable case under the hardship provisions of the Bill and represents the limit of hardship additions under the Bill.
  The other main conditions follow the precedent of the earlier Acts. In general, to qualify, a pensioner must have reached the age of 60, or have been retired on account of infirmity, or be able to show present infirmity, or, if a woman, she must show that she has a dependant under 16.
  Mr. W. J. Brown: It is obvious that the age of 60 to which the right hon. Gentleman has referred, is related to the normal retiring age in the Civil Service. There are categories of people covered by the Bill in which the normal age is other than 60, for example, prison officers. In the case of police officers, the retiring age is marked by the completion of 25 years' service from the date of recruitment, so that the retiring age might be as low as 45.
  Sir J. Anderson: I am glad that my hon. Friend has made that point, but the case of policemen and prison warders, which is the subject of special legislation, represents the case of a class of person allowed to retire with pension, before having really reached the limits of normal working capacity. The reason for it is obvious. It is because a specially high degree of physical fitness is supposed to be required, and in practice is no doubt required, in the case of these people. It is perfectly true that the limit in the Bill applies to those classes, notwithstanding that they may retire in the ordinary course at an earlier age. I suggest that it is right that that should be so, because there is a provision in the Bill for giving an increase, in the case of present infirmity, to people below the age of 60. Therefore, I think the retired policeman or prison warder has no grievance, if he is perfectly fit for other work, in not being given a right which is not given to the ordinary Civil servant or local government pensioner. A widow pensioned in respect of her husband's services is eligible if she has reached the age of 40, or has a dependant under 16, or if she can show infirmity. These conditions are, in a number of respects, definitely more favourable than the con-

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  ditions of the earlier Acts, notably, in including infirmity as an alternative to the age qualification, and it is very relevant to what I have just been saying about the retired policeman or prison warder.
  Provision is made under the Bill for the making of Regulations. Clause 3 (1) gives power to make Regulations as to the calculation of income. Such Regulations have to be laid before both Houses of Parliament and are subject to the usual form of negative Resolution. Sub-section (4) of the same Clause gives the Treasury the power to make Regulations for dealing largely with matters of machinery—for example, the manner of making claims, and the sort of evidence which is to be required—and in this case there is no provision for laying Regulations.
  The Bill applies not only to State pensions—that is to say, to pensions paid directly from the Exchequer. It applies also, as far as the hardship scheme is concerned, to pensioned servants of local authorities. Sub-section (6) of Clause 1 of the Bill proposes to make the scheme mandatory on local authorities and police authorities. That is a departure from the first pre-war Act, but it represents a provision which appeared in the second prewar Act.
  The House will expect a word from me on the subject of cost. As far as an estimate can be made—and it is not easy, since the financial circumstances of pensioners are not known—the charge upon the rates will probably be of the order of £1,300,000 a year. The charge on the Exchequer in respect of civil servants, Armed Forces—and here I am including those who will be covered outside the Bill—teachers—
  Mr. Cove: Has the right hon. Gentleman got these charges separately?
  Sir J. Anderson: Not at the moment—the Royal Irish Constabulary, and the Exchequer share for police and fire brigade pensioners, will amount probably to something of the order of £4,000,000 a year. This figure includes the cost of the special scheme which I shall be describing in a moment, and, as I have said, also the cost of measures which will be taken in the case of the Armed Forces outside the scope of the Bill.
  Mr. Lipson: Is this the gross cost to the Treasury, or has any allowance been made for what will come back to the Treasury by way of taxation paid by these people?
  Sir J. Anderson: It is certainly the gross cost, and it would be most unsafe, and wrong in principle, to start making allowances and adjustments for what may come back to the Exchequer. Who knows what will come back? It is not only a question of Income Tax. There are all sorts of expenditure, the Purchase Tax and so on. Hon. Members can make their own calculation and have a bit of fun. Coming to a legitimate point, there will, of course, be some set-off by reason of the provision in Clause 3 (2) of the Bill, to which I have already referred, that any increase of basic pension due to the reckoning of war bonus for pension, will be set-off against any increase given under the Bill.
  The hardship scheme which I have just described covers all that I had in mind when I made my announcement last December. Since then, special consideration has been given to the plea put forward on behalf of the two classes of civil servants and officers in the Forces whose pensions or retired pay were, after the last war, subject to cost-of-living variations until they were consolidated in 1935. I am very well aware that I should have simplified this Bill, and perhaps simplified my own task in explaining and justifying it, if I had decided to return a negative reply to the appeal to which I have just referred.
  Before I explain why my colleagues and I thought it appropriate to include some special provision to meet such cases in this Bill, I would like to explain, in a few words so that the House may be under no misapprehension, exactly what happened in the inter-war period as regards those classes. It is convenient to take the Armed Forces as an example, and I hope I shall not be out of order in doing so, because the claim had been put forward mainly on their behalf in relation to what is known as the 9½ per cent, cut. However, as I have said, substantially similar arrangements were in force for civil servants, and that is the reason for the inclusion of this special scheme in the present Bill.
  The pensions to the officers in question were laid down in the Royal Warrant of

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  1919. To keep my remarks in order, I must make it clear that similar provisions, though not identical, were applicable to civil servants who are dealt with in this Bill. In that Warrant, part of the pension was made variable with changes in the cost-of-living index—I think it was 20 per cent. of the pension which was subject to variation up and dawn in that way. The full Royal Warrant rates of 1919 were related to a cost of living figure of 207½. The cost of living had varied between 205 and 210 in the period of three months before the signing of that Warrant, and the average was taken at 207½. The effect of the variable elements in the pensions was that, when stabilisation took place in 1935 on a cost-of-living basis of 155—not 155 over pre-war but 55 over pre-war—the pensions were fixed at rates 9½ per cent. below the original rates. The claim which was made by my hon. and gallant Friend the Member for Petersfield and supported by the hon. Member for Rugby (Mr. Brown) and others, was based on the argument that the Government were not entitled to consolidate pensions at a figure below the 1919 level, and that in any event, as the cost-of-living figure is now 200, whereas consolidation took place at 155, the officers concerned are, in equity, entitled to a restoration of the so-called cut which they have suffered.
  Whatever may be felt about the broad merits of the claim, it is not fully justified arithmetically, since the cost-of-living figure at 200 is below the 1919 figure of 207½, and full restoration of the 9½ per cent. would give more favourable terms than those contemplated in 1919. One has to be accurate in these matters. But that particular arithmetical point apart, the claim is one which the Government cannot accept. It has been said that the Government deliberately chose a moment when the cost-of-living was at its lowest, and might be expected to rise, to impose a bad bargain, as a one-sided arrangement, on retired officers from the Services and civil servants. That just is not so. Consolidation took place at a higher rate than the actual cost-of-living figure of the day, and, as a matter of fact, all the officers affected gained more or less by that consolidation continuously until the outbreak of war. That is a matter of cold fact which can be demonstrated. There is no doubt about it. I have gone into it very carefully. I am bound to
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  go into it because I take to heart a charge made against the Treasury of having meanly seized an opportunity of getting something out of these officers and fixing a moment for a process of consolidation which, as things looked at that time, was bound to be to the advantage of the Treasury and to the disadvantage of the officers. That, as I say, is just not so. The principle of consolidation was perfectly sound.
  General Sir Georģe Jeffreys: Is it not a fact that the cost-of-living had changed to a small extent, and that in 1934 the rate of reduction was lowered from 11 per cent.—which was the lowest to which it ever sank—to 10 per cent.; and is it not a fact that 43—though not very different from I55—was the actual figure at the moment of consolidation?
  Sir J. Anderson: I do not want to be controversial about this, but it is a fact that the Treasury did not take a mean advantage of the people concerned. A study of the curve shows that it was reasonable to suppose that conditions, as in fact turned out to be the case, had become more or less stable, and the act of consolidation did not operate to the prejudice of any person, until the unexpected catastrophe at the outbreak of the second world war.
  Major C. S. Taylor: But it is still imposed on them.
  Mr. W. J. Brown: That was the precise point about which I wanted to ask the Chancellor of the Exchequer. I used the word "impose" deliberately, because it is an historical fact that the staff side of the National Whitley Council, representing 300,000 civil servants in this country, protested against the proposals to consolidate bonus with pension, and registered a decision against it. In spite of that it was imposed on them.
  Sir J. Anderson: I made it quite clear to the House that I did not want to be controversial, but my hon. Friend got up to argue and I cannot keep on giving way.
  Mr. Brown: I thought the right hon. Gentleman objected to the word "impose."
  Sir J. Anderson: No. It was done by the Government. Governments can take decisions sometimes and make them

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  operate, but I have no doubt that there was a fear at the time that the Government, by stabilising at the moment when a slight increase had taken place, were going to do something that would operate to the prejudice of the people concerned. I have no doubt that is why they protested. But they were wrong. It did not operate to their prejudice; it operated to their advantage. Any hon. Member who thinks I am wrong will, no doubt, have an opportunity of correcting me.
  Commander Galbraith: How long did it operate to their advantage?
  Sir J. Anderson: Right up to the outbreak of war, until something happened which was, admittedly, outside all calculation at the time when the stabilisation was made. The Government cannot agree that there is any obligation on them to re-open a fair settlement—if I call it a settlement I do not wish to suggest that it was not something decided by the Government in order to dispose of this matter of periodical fluctuation—which has been upset by the contingency of war against which it was impossible to provide and which, moreover, has hit almost every member of the community, in one way or another. The Government do not admit that there was any obligation on them to reopen what was a fair settlement. But I and my colleagues recognised that there was a certain sense of grievance, which we desired to meet so far as it could be met, consistently with the principles that have been applied generally in dealing with changes in the cost of living as a result of the war. What is proposed, is set out in Clause 2 of the Bill which, for reasons already explained, is applicable only to Civil Service pensioners who are, roughly, in a similar position to the officers with whose case I have been dealing.
  The scheme provides for an increase of 10 per cent. on pensions up to £200; for an increase of 7½ per cent. between £200 and £400 and 5 per cent. between £400 and £600 and there are suitable provisions to deal with marginal cases. Quite frankly, the scheme is a compromise. The claim which has been put forward is for a general increase at all levels. The Government view in this matter is that attention must be concentrated on the hardships of pensioners on the lower
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  levels. Therefore, the proposal in this respect is that the increase of 10 per cent., which is practically a full restoration of the 9½ per cent. cut, should be given on small pensions, that the full restoration should be limited to pensions within the ceiling of £200, that up to £400 there should be a modified increase and that there should be an upper limit of £630, beyond which no increase will be given. The scheme has been framed, in its details, mainly with an eye on the case of the retired Service officer, but it also applies to the ex-civil servants who are similarly placed.
  The Bill does not give to hon. Members who have spoken on this subject in the past all that they desire, but I would suggest to the House, in all seriousness, that the reasons for our inability to make the full concessions asked for, are very good reasons. However that may be, the proposal of my hon. and gallant Friend the Member for Petersfield, and those who think with him, would give, all along the line, an increase based on the increase in prices. It is true that that is put forward as being a restoration of the 1919 position. But I wish to say that we have learned a good deal since 1919 and that in this war, we have succeeded, by observing sound principles, in combating and avoiding the evils of inflation and in holding prices to a very much greater degree than we did in and after the last war. But, as a counterpart to our stabilisation policy, we must exercise restraint in other directions.
  In dealing with bonuses and similar increases in pay, we have concentrated—as we are proposing to do in this Bill—on the lower incomes; the pay increases granted are a lower proportion of pay as we go up the scale and they cease altogether at the higher levels. We have followed that principle throughout the Crown Services. For example, a civil servant's bonus falls as a proportion of pay as we go up the scale, and ceases altogether at the level of £1,000. Only a few days ago, that level was £850. And while pay increases have been given to the Forces during the war, no increase has been given to the more senior officers. This, in the view of the Government, is the conclusive argument against a uniform increase on pensions. We cannot treat the pensioner, in considering the effect upon him of the rise in prices, more favourably than we are treating those who

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  are still in active service and the provision made in the Bill may well be claimed to correspond fairly with the treatment that is being given to existing Crown servants.
  I have described the two schemes embodied in the Bill. Anyone eligible under both schemes will be treated under whichever is the more favourable. The Bill is an emergency Measure, to meet the position of the small pensioners. If it is urged—as it may be—that an increase should be given without regard either to the amount of the pension or the means of the pensioner, I would add one important observation to what I have said. The retired Crown servant has no claim that his pension should provide him with subsistence. The pension of a Crown servant, like most other superannuation pensions, is computed and granted by reference to services rendered and is measured, in general, by pay—or by rank—and by length of service. The pension given, in many cases falls far short of subsistence needs. Therefore, the pensioner cannot expect an automatic increase of the payment made to him—the quasi-contractual pension—in order to meet a rise in prices, any more than any other recipient of a fixed payment.
  For example, the recipient of interest on Government stock cannot claim an increase on similar grounds, although there may be hardship in both cases. But the Government rightly take a sympathetic view of the difficulties of their own pensioned servants. That is natural and proper, and in all the circumstances they feel they must approach the problem from the standpoint of hardship. That necessarily involves consideration of means. Beyond that, we are entitled to look at the underlying purpose of these pensions—and this is the final justification for what I am proposing—which is the object of avoiding the scandal of old public servants spending their declining years in penury. Where for the full term of service—because many pensions are granted for something less—the pension has provided a subsistence rate, then it is reasonable to look at that pension now, in the light of the increased cost of living, and see what increase would restore it to the subsistence level. That is our approach to the Bill and I believe the House is disposed to accept its main features.
  It is, no doubt, easy to criticise the Bill in detail. For instance, it may be said
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  that the ceilings are too low, that £630 or £250, under the two parts of the plan, are too low. But in my view those ceilings are justified, the ceiling of £630 in relation to the ceiling of £1,000 which applies to serving Civil Servants and the ceiling of £250 in relation to other schemes for alleviating hardship with which the House is familiar. Similarly, the percentage increase must be kept within the recorded increase in the cost of living. The 25 per cent. is, therefore, justified and, in order to conform to the scheme of the Bill, must be tapered off as one rises in the scale. On the whole, the Bill represents a fair and reasonable solution of our present difficulties. Undoubtedly, as I have shown, it is at every point substantially more favourable than the corresponding Measures which were passed in 1920 and 1924; that is, indeed, in my view, in accordance with the more liberal conception which we take nowadays of these matters. I commend the proposals of the Bill to the favourable consideration of the House.
  Mr. Pethick-Lawrence: I am very glad the right hon. Gentleman has decided to do something with regard to this question of the pensions of public employees. My friends in the trade union movement have for the past two years been knocking at the walls of the Treasury on behalf of those sections of pensioners for whom they were entitled to speak, and in May last they took a deputation to the right hon. Gentleman's predecessor to beg him to meet the claim. At that time their appeal produced no concession. The present Chancellor has shown that his heart is not as stony as the walls of the Treasury, and the result is this Bill. I welcome it as a step in the right direction and, though later on I shall have some criticism to offer of its inadequacy to meet in full what is required, I have no intention of asking my hon. Friends to go to the length of voting against the Second Reading. I should imagine that the hon. Member for Rugby (Mr. W. J. Brown), who has put down an Amendment for its rejection, regards that as more in the nature of what I might call a rhetorical Amendment, than as expressing a serious intention to destroy the Bill.
  Mr. W. J. Brown: The right hon. Gentleman is quite wrong.
  Mr. Pethick-Lawrence: The Measure is a step, even if a faltering one, and I hope the Chancellor, with his accustomed broadmindedness, will see his way, for good reasons which may be shown and accepted by the House, to make this step somewhat larger and more adequate to meet the situation. In this connection I should like to express my thanks to the right hon. Gentleman for the way in which the Money Resolution has been drawn. It enables the House, if it wishes, to discuss Amendments to the Bill which, if the Resolution had been drawn very tightly, would have been out of Order at later stages.
  Before developing my criticism I propose to make certain general observations. In the first place I must say that I found the precise intentions of the Bill not at all easy to understand. Though there is an explanatory memorandum, which has certainly been a help, and though the Chancellor has added a great deal to my understanding, I cannot pretend, even now, that I am fully seized of what the Bill proposes to do, and still less why it proposes to do it. Therefore, I will ask some questions, which will be for my enlightenment and I think that of others who may not have had the time and opportunity to give even as much attention as I have given to trying to understand the Measure. In the first place, what is the precise significance of the word "may," which constantly recurs? Does it, or does it not, really mean "shall"? Is there any person or body who can use discretion in regard to any section of pensioners as to whether the proposed increases shall take effect? In the second place, I note, in the introductory explanation, that the phrase "local government officers" is used, and in a part of his speech the Chancellor himself used the words "local government officers." Is the word "officers" to be interpreted in the narrow sense, so as to exclude local government servants, or is it the intention to cover all of these, as I gather it is from the second paragraph of Part II of the Schedule? That is a point that has been put to me by a number of people, who fear that the narrow interpretation will be put on it, though I think the words do not appear in the actual text of the Bill at all. In the third place, what is the precise significance of Clause 1 (6)? The Chancellor referred to that Sub-section
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  and I have now a hazy idea of what it does; but I shall be glad if we might have a little further explanation. As far as I can see, the one set of people who are included in Part I of the Schedule and not in Part II are the teachers. To what extent is their position, so far as Clause 1 is concerned, worse than that of other sections? Are they in any way really left out from the mandatory intentions of the Bill or is it owing to the particular character of the fund from which they receive their pensions? I would not put my own interpretation on it because, whether it is right or wrong, it is of no value to the House. The interpretation that is wanted is one from the Government, and it is much better for me to put the question and for the Government to answer it than for me to attempt to do so myself. Another point on Clause 1 (6) is put to me in this way: Does Clause 1 (6) mean that, as regards the person specified in Part II of the Schedule, the local authority has no option but must increase the pensions in accordance with the provisions of the Bill; or does it mean that only if a local authority elects to exercise its option regarding these persons the option must be so exercised as to provide increased pensions in accordance with the provisions of the Bill? That does not refer to the teachers but refers to those in Part II, and I want to know whether there is any option on the local authority or whether it is mandatory on the local authority to enter the scheme.
  The next point I would like to be clear about is this. It is to be noted that the first sentence in Part II of the First Schedule appears to exclude certain persons now receiving pensions under the 1937 Act. These are the persons who were not employed directly by local authorities but were employed for the purposes of local authority work by officials of local authorities who provided their own staffs. I have been asked to ascertain whether that apparent omission is intentional, and, if it is not, whether it will be remedied? In the next place, the Bill will not touch a number of persons now drawing statutory pensions under various public bodies, such as the Port of London Authority and the Thames Conservancy. I should like to be told whether they are definitely out of the Bill and, if so, what are the grounds for excluding them. The remaining question I want to ask is this. I confess I do not

  1777
  quite understand why Clause 4 has been drawn in the way that it has. Why has it been decided that these additional pensions are not to come in in the ordinary way under the Bill but are to wait for an Order in Council? The Chancellor of the Exchequer said something on the matter, but he did not entirely enlighten me on the reason for this procedure, and perhaps the Financial Secretary will explain the point a little further.
  I would like now to say a word on the broad facts. I am in agreement with the Chancellor of the Exchequer that legalistically interpreted, the public pensioner has no precise right to any increase in his pension. The strict law of his contract has been kept, but the fact is that underlying all contracts for payment at some future date there is an assumption, unwritten and unspecified, but nevertheless implied. That is the stability of the purchasing power of money. Unless this is substantially maintained all time-contracts are meaningless. Let us take the ordinary civil servant. When he enters the Civil Service at the age, say, of 18, or whatever it may be, the whole schedule of his salary and pension is set out before him. He makes what is virtually a contract with his employer, the State, expressed in terms of money extending over a period of 30, 40, and, it may be if he lives long enough, 50 or 60 years. That contract is made by the two parties on the assumption that the value of money will remain roughly unaltered. Up to about 30 years ago that assumption, though not strictly fulfilled, was broadly what was actually taking place. During the last 30 years the changes in the value of money have been catastrophic and nearly all contracts having this time element in them have in consequence become derisory. They have not reached the point that they reached in parts of the Continent, when you could pay off a mortgage by the sale of a single egg, but they have reached a point where they have become entirely inequitable, one person to the contract gaining and another person losing far more than had ever been contemplated when the contract was originally made.
  There is this further point when we are dealing with employees of the State. A private employer may argue that he had nothing to do with fixing the value of
  1778
  money, that it is an act of God so far as he is concerned, God being the State or possibly the Chancellor of the Exchequer. When the State makes a contract, however, it itself has the power of altering the value of money, and, therefore, the State cannot quite get away with that excuse. Therefore, I have come to the conclusion and I think it is the same conclusion to which the Chancellor has come, although he may not have put it quite so bluntly, that in equity the State must review its contracts to meet the situation. Let me begin by agreeing with much that the Government have done and agreeing, too, that it is worthy of the highest praise. They have given food subsidies, which have on a considerable scale prevented the cost of living rising and stopped inflation, and their action in this respect has won a high tribute of admiration. But in spite of that effort, the cost of living has risen by what the Chancellor himself admits is about 30 per cent. This Bill, even with the hardship case, does not propose to remedy more than 25 per cent. of the inflation in the case of the smaller, and 20 per cent. in the somewhat larger pensions. It is worth noting that not only had these people hitherto to bear this increase in prices but they will still have to pay Income Tax on any increase in pension that may be given to them. I am not complaining about that, but it is a point that ought not to be lost sight of.
  In defending his Bill the Chancellor said that its provisions were better than those of the Act of 1920. I agree that he has in several respects improved upon the pattern which was set by his predecessor of those days, but I feel the House may still consider that this Bill, even with that improvement, may still not be fully adequate to our modern attitude towards this question. I would say further that I would agree that the Chancellor has quite fulfilled the promise he made last autumn. He told us that he could not do very much and he has not done much, and I do not think we can in any sense charge him with a breach of faith. We have also to take into account that the cost of any such scheme falls upon tax-payers and ratepayers many of whom may be far from well-to-do and may be suffering many at the difficulties and facing the same handicaps as those we are seeking to relieve under this Measure. Finally, I should also like to congratulate the Chancellor

  1779
  upon the £52 disregard in the means test which he is proposing to impose by the proviso in Clause 1.
  But having said all that, I still venture to think that he might have gone a little further. In the first place I do not think the inequity has been fully redressed even so far as the lower class of pensioners are concerned. The cost-of-living figures show a rise of some 30 per cent. on prewar, but the Chancellor and the House must know, of course, that that is not quite the whole picture, one of the reasons being that although the price of rationed foods has not gone up beyond that figure a great many of the other things which are essential or almost essential for life, including fruit and vegetables, may be unobtainable except at increased prices. Therefore, although I am not going to quarrel with the official figures of the cost of living, I do not think it would be an overstatement to say that in order that people should maintain the standard of life they had before the war a greater outlay than 30 per cent. more would be required. The Chancellor may say that everybody has to suffer, and that is true, but, nevertheless, I think that 30 per cent. does not fully represent the additional cost of living which falls upon a section of the population. Therefore, I should have thought that the Chancellor, in increasing the pensions, would have started at least at 30 per cent. and not 25 per cent., and in that respect I think his proposals are deficient and inadequate. I suggest that even if he is not prepared to raise the 25 per cent. to 30 per cent. for the whole of the lower category, he should introduce a still lower category of persons to whom he would be prepared to make the increase 30 per cent. instead of 25.
  Another point is that although the Chancellor has raised the ceiling above that which is in the 1920 Act I think the wording of the present Bill, as of the Act of 1920, may give rise to an impression that the ceiling is raised a little higher than it really is. In his speech to-day, without in any respect incorrectly describing the Bill, he did use a phrase which might be misinterpreted by outside people. He spoke of persons being entitled to a rise of 20 per cent. and that in this category were pensions up to £175 in the case of unmarried persons and to £250 in the case of married persons. But that is
  1780
  not the case, and although I am not suggesting that the Chancellor misstated the point I say that his words might be misinterpreted. The highest salary of a single person who can get a 20 per cent. increase is not £175 but—145, because that is the highest pension which can, when. it is increased by 20 per cent., fall below £175. Above—145, or thereabouts, a person is entitled only to such increase as may raise the pension to £175 in the case of an unmarried person, and a similar argument applies to the case of a married person though the figures are different. Therefore I am inclined to think that the ceiling is too low and ought to be raised.
  I notice that Clause 2 introduces a special scheme for civil servants and that there is to be a similar proposal for members of the Forces. The Chancellor explained the reasons why he took this course, but to the ordinary public, who may not be so well informed, there would appear to be a distinction drawn between civil servants and other beneficiaries under the Bill which is unjustified. I should have thought it would have eased the position of other persons—teachers, local government officers and servants and others—if there could be a tapering off of the benefits to those above the rather low limits imposed in Clause 1, and that any single persons in receipt of pensions of £200 might have had benefits somewhat similar to those given in Clause 2. The Chancellor said there was a special reason for this, but I do not think it would be clear to anyone reading the Bill. Before I had heard the precise explanation of the Chancellor it appeared to me that these other persons were entitled to feel aggrieved that they did not get the benefit of Clause 2. Without going the full length in this matter the Chancellor may see his way to introduce some tapering above the limits which the Bill imposes, and I hope there will be opportunities of arguing this matter during the Committee Stage and that the Chancellor will listen with his usual sympathetic attention and consider whether he cannot do something to meet us on that point.
  There is a small point which he will perhaps consider before the Committee stage is reached. He has introduced a provision, which if I remember aright is not in the 1920 Act, in regard to a child under 16 years of age. That is a very welcome provision, but possibly the

  1781
  Chancellor could carry it a small degree further. There are a certain number of people with children or other dependants who are incapacitated owing to some infirmity. They have to continue looking after them long after the age of 16, in fact, all through their lives. I do not think there are a large number of these cases, and the Chancellor may see fit to look into the point. I think the Income Tax law has a provision to meet similar circumstances. It would be hard if a widow or a widower had a child who was quite incapable of earning his or her living and yet was outside the provisions of this new scheme.
  A final word on the expiry of this law. The expiry of the Bill is put down for the end of 1945, and the Chancellor has explained that it is intended that the position shall be reviewed before that date in the light of the facts with regard to the war and the prospects of the cost of living going up or down or having, changed in the interval. The Treasury have been tardy in having this Measure introduced—I say the Treasury advisedly, because the present Chancellor has occupied his present office for only a short time. A good deal of time has passed since the hardship began to be felt by the people concerned. The Chancellor has in some measure met the point by making the concessions under this Bill date back to 1st January this year, a period of two months, but in view of the fact that there has been a time lag in introducing the benefits of the Bill I hope that when we do come to the date for its expiry that fact will be taken into account and that there will be a somewhat similar time lag in reducing or withdrawing any benefits which the Bill gives, if it is so decided.
  With these remarks I would repeat that I welcome the decision of the Chancellor to introduce the Bill. I think he has fulfilled the promises he made. The Bill as it stands is a great improvement on the existing Measures, and will bring considerable benefit to very deserving people. At the same time I feel there are defects or limitations in it which many Members may wish to see removed. Therefore, I hope the Chancellor will not shut out from his mind the possibility of doing something more in certain directions than the Bill in its present form actually does.
  Mr. W. J. Brown: I beg to move, to leave out from "That" to the
  1782
  end of the Question, and to add instead thereof:
  "this House declines to give a Second Reading to a Bill which fails to restore, in the light of the increased cost of living, what was taken away from Pensioners on account of earlier decreases in the cost of living; and applies Means and other tests to classes of Pensioners to whom such tests are wholly inappropriate."
  My right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) said in the opening phases of his speech that the Amendment which stands in my name and the names of a number of other hon. Members was a "rhetorical Amendment." The use of those words implied a certain disparagement which I do not think is justified. Rhetoric has a very definite part in life, and one of its most valuable uses is that it tends to relieve, from utter tedium and boredom, speeches which would have been better had a little rhetoric been introduced. Therefore I am not going to apologise for this being a rhetorical Amendment, even if it were so. But I wish to make plain that, as far as I and my hon. Friends are concerned, this Amendment is intended to be taken with the utmost possible seriousness. We wish the House to decline to give this Bill a Second Reading on grounds which we think justified.
  When a Bill comes before the House for Second Reading, there are two courses which the House can take. If it takes the view that, broadly speaking, the Bill is a good one, by and large, but is defective in this, that or the other detail, then the House, quite properly, gives the Bill a Second Reading, and at the Committee stage tries to improve by Amendments the details which the Bill contains. But if the Bill be bad in conception, and wrong in principle, so bad and so wrong that it cannot be made good by a process of amendment, then the House properly declines to give the Bill a Second Reading. When the House takes that line it is liable to be misunderstood. There are few Bills so bad that they give no benefit to any one and, when the House says, as I trust it will say to-day, "No, we do not propose to give this Bill a Second Reading" it may be represented as having thrown away the opportunity of securing a certain amount of benefit to a certain number of people who badly need it. That is a risk of being misunderstood that we must run, for if we always accept bad

  1783
  Bills because in the badness there is a limited amount of good, we shall never get a good Bill at all!
  It is a melancholy circumstance, and one which weighs on me, that it falls to me to move that we decline to give this Bill a Second Reading. When I came into the House two years ago, almost the first thing I did was to put down a Question about the treatment of these old pensioners, and ever since then, by speaking on the Adjournment, by going on deputations to Ministers, by Motions in the House, by raising the matter on the King's Speech, I have, with the very valuable help of colleagues on all sides of the House, tried to secure a square deal for those people. It is, as I say, a melancholy circumstance that, having worked so hard, for so long, I have to assume the distasteful task of moving the rejection of the Bill which has emerged from the efforts put into this attempt to get proper treatment for these people. Nevertheless, I do so because, in my view, the Bill is so bad in conception and in principle, as well as in details, that it does not deserve a Second Reading.
  There are three aspects of the Bill which demand consideration. The first is the scale of the increases proposed, the second is the provision of means and other tests, which have to be satisfied before even the measure of relief proposed can be obtained, and the third is the whole approach to the problem of pensions on which this Bill has been constructed. First may I deal with the scale of relief proposed. On that matter, my first observation is that this Bill gives relief to a smaller extent than that by which the cost of living has risen, measured by the standards of the Minister of Labour. According to figures quoted in the Explanatory Memorandum to the Bill, the cost of living has risen from 155 in 1935, when the pensions were consolidated, to round about 100 to-day. That represents, roughly, an increase of 50 on 150, or one-third. What does the Bill propose? For the poorest class of pensioners, it proposes an increase of 25 per cent. and for the next poorest class, it proposes an increase of 20 per cent. The point to which I want to draw attention in this connection, is that by no means all those in the poorer classes of pensioners will get either the 25 per
  1784
  cent. or 20 per cent. increase, because in order to qualify for the full increase, certain conditions must be satisfied.
  To start with, the pensioner must be 60 years of age or more. That rules out probably every police officer and every prison warder between 45 and 60 now on pension, unless, indeed, he happens to be incapacitated physically. And if the definition of physical incapacity given in the Bill is followed, that means that unless he is down and out physically, however wrongly he has been treated in the past, he cannot get any benefit under the Bill until he reaches the age of 60 years, unless he retired on account of infirmity or has a dependant under the age of 16. In this matter of dependants, I should like to associate myself with the remarks made by my right hon. Friend. Dependancy is not limited to the age of 16. There is a type of dependant at the other end of the scale. We all know many old folks who are too ill to look after themselves and have to be looked after by others.
  Dr. Russell Thomas: That applies to everybody.
  Mr. Brown: The hon. Gentleman is not in that category. He strikes me as being, approximately, in the first flush of youth. There are old pensioners 70 to 75 years of age, so paralysed that they have to maintain somebody to maintain them, but under this Bill such persons are not regarded as dependants.
  Earl Winterton: This is not an unfriendly question, but a friendly one. Does the hon. Member seek to draw a distinction between the present pensioners from business, and any other member of the civilian population?
  Mr. Brown: I was going to deal with the argument about outside people later. Here the Treasury proposes that, if a person has a dependant under the age of 16, he is to be treated as married, and entitled to 25 per cent. If it is right to take into account a dependant under 16, surely it is also right to take into account a paid dependant required by the pensioner to look after him. There are other defects in the scheme. No increase of pension may be granted, not even the 25 per cent. or 20 per cent., if, added to the pensioners other income, it would result in a total income of more than £250 in

  1785
  the case of a married pensioner, or one with a dependant, or £175 in other cases. Not only will there be a category of poor pensioners who will not get anything, because they stumble up against some of the conditions I have mentioned, but there will be another category who will get only such part of the 25 per cent. or 20 per cent. increase as will bring them up to the figure of £250 or £175.
  It is true that the civil servant has the option of being treated under what is called the special scheme which gives him ten per cent. for pensions under £200, seven and a half per cent. between £200 and £400, five per cent. between £400 and £600, and for pensions over £600 a levelling up to £600. Those increases are in respect of a rise in the cost of living of 30 per cent. on the Ministry of Labour index figure. I want to say quite roundly that it is time the House of Commons realised what this Ministry of Labour index figure is. It is not a measurement of the rise in the cost of living in this country. The Ministry of Labour index figure was first compiled in 1904. It is based on budgets collected in 1904. It assumed, at that time, a certain distribution of the domestic expenditure of a working class family. It assumed that that family spent so much on rent, so much on food, so much on fuel and light, so much on sundries, and so forth.
  It will be obvious to the House that, in a period of 40 years, even if the position were not complicated by a war, considerable changes take place in the social habits of the people. The allocation of expenditure which was proper in 1904, may have become, and probably will have become, completely inapplicable to circumstances 40 years later. But we have had a war to complicate that process as well—two wars, but I am going to confine myself to the effects of the present war. During this war we have had "imposed" upon us as a people, if I may again use a phrase which the Chancellor of the Exchequer does not appear to like, radical alterations in our habits. There have followed from this radical alteration in our habits, radical alterations in the distribution of our expenditure within the domestic field. Shaw once started a play with the words "What, no eggs?" So I will start with eggs too. The Ministry of Labour budget estimates that each household in Britain consumes 11 eggs per week. So important
  1786
  has been the variation in the price of eggs that upon the index figure it accounts for 3·54 per cent. of the expenditure in the budget. The lamentable, deplorable, unhappy effect is that although we have no eggs, the index figure continues to be constructed on the basis that we have bacon and eggs every morning for breakfast. I put that as a humorous aspect, but it is also a serious one. There is, in Oxford, a body called the Institute of Statistics. The Acting Director of that institute is Professor A. L. Bowley, who is, I think, generally recognised as an authority on such matters as distribution of income and taxation. In July, 1942, his institute undertook an inquiry to find what the real increase was in the cost of living, as compared with the theoretical figure arrived at by the Ministry. This is what he says:
  "During the three years, from May, 1940 to June, 1943, the average expenditure on food in our comparative sample"—
  that is, the sample of budgets on which he worked—
  "has increased about 35 per cent., while the Ministry of Labour's food price index, which is confined mainly to rationed foods, bread and potatoes, increased by only about 6 per cent."
  In other words, the index tells us that the cost has gone up by 6 per cent., but practical experience tells us that it has gone up six times 6 per cent., so far as prices of food are concerned. The research department of the Labour party—but before I get to that, I will take a highly respectable source, the "Economist," whose respectability is generally recognised, and which is read with admiration by Members on all sides of the House. The "Economist" for April, 1943, calculates that the real increase in the cost of living is 45 per cent. The statistical research department of the Labour party have estimated that the real figure is between 45 per cent. and 50 per cent.
  I hope, therefore, that we shall not approach the problem of the Bill by assuming that all we have to compensate for is a 30 per cent. increase in price levels. It is more nearly double that figure. May I make a further observation, which is that the alteration in social habits which has produced the rise of 50 or 60 per cent., as compared with the 30 per cent. of the Ministry of Labour, has not been a voluntary change of habit. If I am not having 11 eggs a

  1787
  week, it is not because I do not want them. This change in the distribution of expenditure has been imposed by rationing, by the difficulties of food imports, and so on. None of us can escape from them. We are compelled to endure that situation. I hope we shall agree that we have to examine the Bill from an angle of price increase nearer to 60 per cent. than to 30 per cent. What the Government propose is to give from 5 per cent. to 25 per cent. and even then subject to all sorts of tests and regulations.
  The next point I would deal with is the importation into this scheme of an element of means test, divided into the age test, the incapacity test, and the dependancy test. They derive from the assumption that the benefits of the Bill represent what I might call "uncovenanted benefit," given, that is, not as a right but ex gratia. Later, I shall show that that view is completely wrong; but suppose the benefits of the Bill were uncovenanted benefits. I should have thought that the experience of this House would have shown, over the last 20 years, that the application of a means test in relation to the unemployed has been productive of far more bitterness and social harm in Britain than it did good in the money it saved. This side of the House certainly will require no conviction upon that point. We have learned that it is better to take the risk that one person out of 100 gets benefit to which he is not entitled, than that 99 should be made to feel that the benefit they get is accompanied by a stigma of charity, and that they are subjected to the humiliations of the means test.
  I deny, however, that these benefits ought to be regarded as uncovenanted benefits. That brings me to the third great issue between me and my hon. Friends on the one side, and the Chancellor of the Exchequer on the other, and that is in the approach to the problem, as represented by the Bill. I submit that there are only two lines which a Government can properly take in dealing with the pensions of State servants. I have been asked to say "Crown" servants. Let me therefore substitute that expression. One is to say: "We contract with you that when you retire you shall have a pension of, say, £100 a year; nobody knows what the course of the price level in subsequent years will be; it may be that the
  1788
  price level will go down, in which case, when you retire you will be lucky, because your £100 will buy more than we contemplated. The cost of living may go up, in which case you will be unlucky with your pension, as it will not buy as much as we expected would be the case. That, however, is the risk which you take in common with all members of the community. It is just pot-luck, whichever way it turns out. If it turns out well for you, we, the Crown, will not grumble, and if it turns out well for the Crown, you, the recipient, must not grumble."
  There is a second line to take. It was indicated by the Chancellor of the Exchequer, when he said that we could not have Crown servants dying in penury. Very few of them die in wealth, I might say. This second line would be to say: "This £100 is intended to represent a certain modest standard of life. It follows that if the cost of living goes down, we shall be giving you more than that standard of life, and therefore we shall reduce the pension in terms of money to ensure that it buys no more. Conversely, if the cost of living goes up, we must recognise that the pension, in terms of pounds, will not buy the modest standard of life which is part of the contract, and in those circumstances we shall increase the pension in terms of pounds, so that it is still able to buy the standard of life understood between us as part of the agreement." That again is a logical and defensible line, because the effect would be to keep the pension in its relative position at every stage, in relation to the cost of living But if both those lines are logical and definable, I submit that there can be no defence under Heaven for a situation in which the State regulates the pension by reference to the cost of living, while that cost is going down, but refuses to regulate it by the cost of living figure, when that cost is going up. For that, there can be no defence in logic, or in consistency, or common decency. That is the gravamen of my attack on the approach to the problem which the Bill represents.
  What has happened? I will speak first for the Civil Service, which I know best. My hon. and gallant Friend the Member for Petersfield (Sir G. Jeffreys) will deal with the case of the Army officer at a later stage. Before the war, there were roughly 300,000 civil servants. Of that number, four out of five were drawing

  1789
  less than £5 a week, and three out of four less than £4 a week. If these men had retired on full pension, they would have had to put in 40 years' established service. The House of Commons is beginning to understand that an awful lot of people in the public service may put in 40 years' service and never become established at all and therefore not be entitled to any benefit! The maximum pension for the established and retired civil servant would be of the order of up to, but not necessarily as much as or £1 10s., £2, or £2 10s. That means that four out of five would have less than 30s. a week.
  In the years from 1922 to 1935, whenever the cost of living came down by five points there was a corresponding reduction in what was then called the bonus pension, which was pension given in respect of cost of living bonus. It came down step by step in all those years. In 1935, the Government imposed consolidation of bonus with pay. They, therefore, imposed consolidation of the bonus pension to a basic pension. The Civil Service trade unions resisted it, and told the Government that they did not want it. They registered that view on the National Whitley Council of the Civil Service. They were over-ridden by the Government who said: "Whatever you think about it, we are imposing consolidation." Since 1935, the cost of living has gone the other way, up and up.
  Sir Alfred Beit: Since 1939.
  Mr. Brown: No, since 1935 it has been going up. [HON. MEMBERS: "No."] The trend of the cost of living since 1935 till to-day has been upwards.
  Mr. Maxton: The Chancellor of the Exchequer, referring to this point, impressed it on us that from 1935 to 1939 the cost of living did not go up, but dropped.
  Mr. Brown: Historically, it is not the case, and indeed, the Chancellor of the Exchequer did not say that. [HON. MEMBERS: "Yes, he did."]
  The Financial Secretary to the Treasury (Mr. Assheton): The point which the Chancellor of the Exchequer made, and which I should like the House of Commons to understand clearly, is that the figure upon which consolidation
  1790
  was based in 1935 was the figure of 155, and that, between 1935 and 1939, that figure was not exceeded at any material date. In fact, in September, 1939, when the war broke out, that was the exact figure at which it stood.
  Mr. Brown: I am much obliged to the Minister. However rapidly or however slowly, the figure has gone up. I may say that the Chancellor of the Exchequer did not tell us one thing to-day, and nor has the Financial Secretary to the Treasury. It answers the point raised by the hon. Member for Bridgeton (Mr. Maxton). The Chancellor is saying, in effect, to us: "When we consolidated, we did it at a higher figure than the actual cost of living in 1935 Therefore, there was a certain leeway which was worked off as it were, between 1935 and 1939, so that the civil servant was not damnified in this respect. I would point out that the recommendation that that consolidation should take place at a higher figure than the actual was derived from a recommendation of the Tomlin Commission of 1929–31, which condemned many civil servants' rates of pay as inadequate, and proposed this method as a means of improving the basic pay. What the Chancellor is doing is to take an improvement in basic pay, designed to remedy a condition of poverty, and given on the recommendation of a Royal Commission, to cover his own sins in the period which followed.
  From 1935 onwards there has been a very sharp increase in the cost of living, as we all know, and that increase, I affirm, has been of the order of 60 per cent. I argue that justice here would demand that we should put right the last nine years. The Chancellor of the Exchequer is not proposing to put right the past, nor is he proposing to put right the future. Having treated us, when it suited his purpose, on the lines that the pension was to be related to the cost of living, he then, when it does not suit him, drops it. I say he must do one thing or the other. In these nine years everyone who has retired has been getting a less pension than he ought to have had. He is still getting it to-day, and all the Chancellor now proposes is some ad hoc increase, unrelated to the increase in the cost of living at all, and certainly limited by all sorts of circumscribing tests of one sort and another.

  1791
  Why does the Chancellor do that? I think the real reason, apart from the normal difficulty of getting anything out of the Treasury at any time—the Treasury produces men who carry calculating machines where their hearts ought to be, and even under the best of conditions it is difficult to get money out of them—is this bogy of inflation, the fear that by what we do to-day on the grounds of merit and justice, we might land ourselves into inflation. What utter nonsense that is. We have inflation. The issue is not whether we will have inflation or not. The Chancellor may argue the issue of whether we are to have controlled or uncontrolled inflation. That is quite a different thing, and the answer does not depend on whether we treat our soldiers in this war properly, a point we were discussing yesterday, or whether we treat these State servants properly. It will depend on much wider considerations.
  This is not a rhetorical Amendment. It is dictated by the conviction that, in detail and in principle, this Bill is a bad Bill and ought to be withdrawn, and a better Bill substituted for it. This is not an occasion when I want to use a political stick to beat the Government. There are many occasions in the normal course of Business in this House, where the opportunity of being naughty arises, the opportunity of beating the Government, if one feels disposed to do it. This is not one of those occasions. The names associated with mine on the Order Paper will, I think, be sufficient guarantee that this is a serious Amendment, designed to do justice to a deserving body of men and not an instrument for inflicting a political castigation on the Government. I do not want, in the least, to divide the House, if the Government will do the right thing, but if their attitude is that this is all they have got to say then I would point out that my own union has considered this, and their view is that we must make our position plain to the country, if necessary, by voting against the Government on this issue. We do not want to do that. What I want is not votes against the Government, but fair play for those covered by this Bill.
  Mr. Molson: Is the hon. Member's attitude in this House dictated to him by his union?
  Mr. Brown: I think in that respect I am the happiest and freest man in Britain because when I was elected to this place, my union not only gave me complete political freedom but, I rejoice to say, continued my salary as well—a happy conjunction of circumstances which I sometimes wish other unions would follow.
  Dr. Russell Thomas: May I interrupt for one moment to clear up the point in regard to the rise in the cost of living? The hon. Member said it had increased by 60 per cent. I know that he does not wish to give a wrong impression but I do not think it has risen by anything like 60 per cent. I suggest it has risen by something around 31 per cent. or 32 per cent., taking the standard applied to all.
  Mr. Brown: I think the hon Member could hardly have been present at an earlier stage of my speech when I took the official figures, which showed an increase of 30 per cent. or thereabouts, and demonstrated that the actual increase was nearer double that figure. Much as I enjoyed that part of my own speech, I ought not to repeat it.
  We come to the point of decision on this Bill. If the Government will indicate that they recognise that their approach is unjust and ungenerous and unfair, if they will take the matter back and look at it again and come forward with another and better Bill, no one will be more pleased than I, in being relieved of the necessity of voting against the Government. But if, after what has been said to-day, and will be said, the attitude of the Government at the end of the day is, "There you are, take it or leave it," this House, in my submission, in justice to its own servants, who are entitled to look to us for protection and fair dealing, must register its view of this Bill in the Division Lobby.
  General Sir Georģe Jeffreys: I beg to second the Amendment.
  In seconding the Amendment which has been so ably and so eloquently, if not rhetorically, moved by my hon. Friend the Member for Rugby (Mr. W. J. Brown), I regret what I can only describe as the uncompromising attitude of my right hon. Friend the Chancellor of the Exchequer in introducing this Bill to-day. He repeated what he said on a previous occasion, that the arguments for and

  1793
  against any increase in pensions were nicely balanced. I do not believe that any of his supporters, if he has any, repeated anything of the kind. I beg to submit that the arguments are all on one side—and that is not the side of the Chancellor of the Exchequer. He also said that this matter must be approached from the standpoint of hardship. I would rather it had been approached, so far as the officers of His Majesty's Services are concerned, from the standpoint of justice. The Chancellor said this was no time for far-reaching changes. Nobody, as far as I know, has been asking for far-reaching changes or suggesting them. As the Chancellor said, the case of the retired officers will be dealt with by what he called in the Bill the appropriate instrument, which is a Royal Warrant, or an Order in Council, as the case may be, and it is with the case of the retired officers that I particularly wish to deal to-day.
  My hon. Friend the mover of the Amendment has dealt so ably with the case of the civil servants that I feel there is nothing more I can say on that subject except that I am in agreement with his claim for the civil servants. My hon. Friends who are, like myself, particularly interested in the case of the pensions of retired officers of His Majesty's Service, also support the comparable case of the civil servant. I have little to say as regards the benefits proposed under the main scheme because they are not entirely ungenerous on the face of it, and they will benefit the poorer classes of pensioners both in the Services and out of them. What I do regret is that the Government appear to whittle down the benefits which they offer, and by means of these tests—tests of disability, tests of means, tests of dependence and so forth—they introduce what is, again, as far at any rate as His Majesty's Services are concerned, an entirely new element in pensions or a nearly new element at any rate. You do not impose these tests upon non-commissioned officers and private soldiers and seamen, and you impose them only to a very limited degree on officers.
  Like my hon. Friend the Member for Rugby, it is the further scheme, as it is described in the Bill, with which I am chiefly concerned. He has spoken of Civil Service pensions and the pensioners whose pensions were reduced on the
  1794
  ground of the fall in the cost of living. That fall and reduction is not absolutely on all fours with the reduction effected in the pensions of certain retired officers, but it is comparable in principle, and to that extent I support the retired civil servants. The case I wish specially to plead is the case of those retired officers—and this is what I want to emphasise—who retired under the provisions of the Royal Warrant, and the corresponding instruments of 1919, and whose retired pay, after being continuously reduced, on account of the fall in the cost of living, until the year 1934, has never been correspondingly increased on account of the rise in the cost of living.
  May I give a brief outline of what occurred? After the last war, provision was made for new rates of retired pay. They were embodied in the appropriate instruments, which were practically identical in the different Services, but which I will refer to, if I may, for convenience as the Royal Warrant of September, 1919—the Royal Warrant being the instrument for the Army. That Royal Warrant laid down the new rates. I would refer, if I may, to these rates as the basic rates of 1919. Further, paragraph 1 of that Royal Warrant provided as follows, and I invite the particular attention of the House to it:
  "The rates … will be subject, after five years, to revision either upwards or downwards—"
  I ask the House to note those words, "upwards or downwards—
  "to an extent not exceeding 20 per cent., according as the cost of living rises or falls. After July 1st, 1924, a further revision may take place every three years."
  Incidentally, that Warrant was signed by our present Prime Minister, whose signature the Services, at any rate, regard as being as good as any signature in the world for the keeping of faith. Can there be any doubt as to either the provisions or the intentions of that Royal Warrant? I shall be very interested to know whether any doubt could be thrown upon it by the Chancellor or by the Financial Secretary. What actually happened? After a brief rise between 1919 and 1922—a rise which could not have been, and was not, taken into account in fixing the scale of pensions, because the five-year limit provided for had not been reached—the cost of living fell steadily, and, at the prescribed intervals, several reductions took

  1795
  place, so that retired pay was reduced in accordance with the fall in the cost of living. By 1933 it had been reduced to 11 per cent. below the basic rate. In 1934 a slight rise took place in the cost-of-living figure, and the reduction became Io per cent. That rise of one per cent. is the only benefit which the pensioners ever enjoyed under that Warrant. It was then that the Government decided to consolidate and stabilise the rates of retired pay. They did so in 1935, at 9½ per cent. below the basic 1919 rate. That rate corresponded—and the Chancellor made great play with this—with the cost-of-living figure of 155, although the actual rate in July, 1935, was 143. I am glad to make a present to the Treasury representatives of the fact that the 9½ per cent. reduction involved a generous concession on their part of one-half per cent., which lasted, roughly speaking, until the outbreak of war.
  The Chancellor made a comparison between the 1919 figure of 207½, which was the prevailing figure at the time of the Royal Warrant, and the 1944 figure, which is said to be 200, at which figure it has been stabilised. Stabilisation is a very convenient process, and in that particular case it has undoubtedly been of benefit to the consumers of the nation. But does anybody contend that the figure of 200 was a real figure, or that it has any sort of relation to the cost of living? My hon. Friend gave various amusing figures to show how the cost of living actually does apply. He quoted the case of eggs. There are many other cases. The whole of the cost-of-living figure is based on what are now at best out-of-date facts and prices, and what are actually completely fictitious ones. The one thing on which we can agree is that the cost of living is extremely high. I do not think anyone would say that there is any appreciable difference between the figures of 200 and 207½, and I do not think anyone would say that the cost of living is now lower than it was in 1919. When all is said and done, what does the difference of 7½ points actually represent on the rates of retired pay? Is it as much as one-quarter per cent? Again, I will gladly make the Treasury a present of that argument—it is one-quarter per cent., or somewhere about that. But it is not unreasonable to expect that the Treasury should assume that the
  1796
  cost of living is about the same as in 1919. Actually, I believe that the cost of living is higher now than it was in 1919, especially for ex-officers, who have many expenses which the working classes do not have—and these cost-of-living figures are based on the expenses of working-class households.
  Now we come to a point to which the Chancellor referred—I was almost going to say, with a little asperity—the fact that the decision to stabilise was unilateral. It was entirely unilateral. It was imposed on a most unwilling class of pensioners by the Treasury. My hon. Friend the Member for Rugby has the great advantage of having his large and well-organised union behind him. Officers have no union or organisation behind them. Perhaps that is why very little consideration is given to claims they may have—
  Notice taken, that 40 Members were not present.
  Mr. Deputy-Speaker (Mr. Charles Williams): As no count can take place at this hour, perhaps the hon. and gallant Member will proceed with his speech.
  Mr. Clement Davies: On a point of Order. Can it be recorded who called the count?
  Mr. Deputy-Speaker: Presumably there will be the usual OFFICIAL REPORT.
  Sir G. Jeffreys: Perhaps I might now be allowed to continue my remarks. I was pointing out that the cost of living now is at least as high as it was in 1919, and the cost of living is very much higher than it was when stabilisation was effected in 1935. But, owing to the stabilisation policy, there has been no corresponding rise in retired pay. Actually, the figure on which the stabilisation was based was 155; the rate prevailing at that time was 143, and the rate now is said to be 200. Can it be wondered that, in view of the terms of the Royal Warrant, which I have read to the House, the Treasury's action is regarded in the Services as a breach of faith? My hon. Friend made a strong case for the civil servants, who have had their pensions reduced without any corresponding increases, but in the case of the Services we have an even stronger grievance. We were definitely promised, in writing, in a Royal Warrant—which is always regarded as almost sacrosanct—

  1797
  that pensions should rise, as well as fall, with the cost of living. That promise has not been kept.
  The Treasury might possibly argue, "These old soldiers and sailors are a grumbling lot; we have no use for them; they command no votes, and it does not matter what they think." But it does matter what the serving officers think, and I can assure my right hon. Friends that the serving officers are watching this matter. They are saying, "If this is the way they treat the people who have been in the Army and Navy in the past, what is our chance when our time comes to leave the Services? Are we to be treated in this way?" I wonder what is the answer to that question. I have actually seen an official letter, which went round the various commands in the Army expressing regret that more candidates were not putting their names down for permanent commissions after the war. I think that the fact that very few young temporary officers are putting their names down at present is because they are by no means sure what their treatment is going to be, either in the Service or out of the Service.
  The claim on behalf of retired officers of the Services is not for additional retired pay; it is for the restoration of reductions made in the retired pay. That restoration was definitely promised in the Royal Warrant of 1919. They ask for the fulfilment of the terms of that Royal Warrant. It promised a rise to correspond with the rise in the cost of living, as well as a fall to correspond with the fall. As regards the cost, in reply to a Question which I asked in the House, I think it was last summer, the late Chancellor of the Exchequer put the cost of the restoration of the rates of retired pay at £500,000 a year. That is the restoration, simply, of the amount that was taken away—the restoration of the 1919 basic rate. We have heard something about inflation and the danger of inflation. Does anybody pretend that £500,000 a year, when we are spending £13,000,000 or £14,000,000 a day, is going to make any difference, one way or the other, to inflation, or will make any difference at all in the national account?
  I will mention one further point. The Chancellor said, at the same time, that, after the war, when officers passed to retired pay, and when a certain number of re-employed officers, not now drawing
  1798
  retired pay, came bank to retired pay, that cost of £500,000 would rise to £850,000. The Chancellor of the Exchequer puts the estimated cost of his proposals now, at £850,000 a year, and that includes, of course, the increases given under the main scheme and also certain increases which will accrue to pensioners—officers and other ranks—who do not come under the 1919 Warrant, who were, in fact, in most cases pre-1919. I think we may take it that, as far as the main point which I am trying to make is concerned—the restoration of the 1919 rate—the amount will be what indeed the right hon. Gentleman says—the paltry sum of £500,000 a year.
  I want to consider for one moment the hardships that this inflicts upon ex-officers. The cost-of-living figures do not include many expenses which are falling, and must fall, upon ex-officers, and which do not fall, to the same extent, at any rate, on working class families, and it must not be forgotten that Income Tax at 10s. in the £ is deducted at the source. Take an officer who will not benefit at all from the first proposals—an officer on a pension of £700 a year. Actually, his pay is £700 a year less 10s. in the £ which means £350 a year, which is not a large amount for any establishment, on however modest a scale. I ventured, in the previous Debate, to make a comparison with the position of a person or body of persons who made an arrangement with a great insurance company or companies for the payment of annuities on certain terms. I expressed some doubt about what might be said in this House, and no doubt of what would be said in the courts, if such an agreement were departed from—if certain terms were promised and allowed, and that agreement was flagrantly departed from by the insurance company simply on the ground that it was convenient to them to make some other arrangement. In this case the premium has been paid by many years of faithful service, on a low rate of pay, which is definitely calculated, because it was expected that something adequate in the way of retired pay would be given. The retired officer's case, with all respect to my hon. Friend the Member for Rugby, is, I think, even more deserving than the civil servant's case. The officer can very seldom serve to the full age. The majority of officers do not serve to the full age or rank to draw the full rate of pension, and they have, for the greater part of their lives, or service, no settled home. They

  1799
  have to serve all over the world and frequently have to pay the expenses of moving a home, wife, and family, towards which they get, if any, the most inadequate assistance from the Government. The officer, I think, is, at no time, highly paid.
  The late Chancellor of the Exchequer, in answering a question from me as to the case of the ex-officers, also said:
  "I do not consider that State pensioners as a whole, or retired members of the Forces in particular, can be selected for exceptional treatment.''—[OFFICIAL REPORT, 4th August, 1942; col. 873, Vol. 382.]
  Nobody has ever asked for exceptional treatment. All we have asked for is the fulfilment of the terms promised in 1919, and I venture to think that it is a very modest request to make. We are all agreed that times are hard on those with small fixed incomes, but, like my hon. Friend, I confidently submit that the State has special responsibilities towards its own retired servants and I think these responsibilities are even more pronounced in the case of the fighting forces than in the case of other servants of the Crown. Moreover, the vast majority of the population are earning far more than they ever earned before, and increases are constantly being made at the instance, very often, of powerful trade unions. As I have said, the officers have no trade union. They have nothing to represent them, but they are affected, as everybody is affected, by the rates of pay that exist outside the Services, and I cannot resist, in that connection, reading an extract from "The Times." This appeared a short time ago. It quotes an advertisement which appeared in the "Middlesex Gazette":
  "Three active, reliable men required for sweeping duties at Government camps. If otherwise suitable, inexperienced men will be trained. Commencing salary £6 5s. weekly, rising to £8 weekly within three months if satisfactory. All fares and expenses paid."
  I can only assume that this is a genuine advertisement, and I think it is a very remarkable one, in view of comparisons between the pay and retired pay of the Fighting Forces, and the pensions of State servants generally. In fact, everybody is getting increases except State pensioners, and I do not know how that works in with the argument on avoiding inflation. I must not fail to say that the small additions to retired pay
  1800
  granted to officers who retired prior to the 1919 Royal Warrant are welcome. I do welcome them; they are far better than nothing. They are not very large increases, but I welcome such increases, as there are for non-commissioned officers and men, and for the older officers who retired before the 1919 Warrant. Some of these old officers are pretty old now. A man who retired on a lieutenant-colonel's retired pay under the old Warrant, would have got £420 a year. With 10s. in the £ deducted at source, he gets £210 a year, which is not a very great deal, and he will now get the modest increase proposed under this Bill. These are definite increases and do not come under the terms of the restoration for which I have asked. I am also very glad to know that those other ranks of the Army will receive some improvement in their pensions.
  Lastly, I must refer to the fact that disability pensions have been put on the 1919 rates. The present Chancellor, in the Debate on disability pensions in July, 1943, was good enough to say that he entirely accepted the argument that the disability pensions were not on the 1919 rate. The right hon. Gentleman said:
  "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 dare say it did, too, to a number of people. I looked into it and found there was nothing seriously wrong … 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, 24th July, 1943; col. 723, Vol. 391.]
  If that is his attitude towards the 1919 rates of disability pension, surely, logically, it ought to be his attitude to the restoration of the 1919 rates under the 1919 Royal Warrant. I have detained a not very large House for too long already in endeavouring to present this case, and I can only say that, like my hon. Friend, I am, indeed, deeply disappointed that the Chancellor should have received so unsympathetically, and, if I may say so, so uncompromisingly, the points which we have endeavoured to make. I beg to second my hon. Friend's Amendment.
  Mr. Burden: I rise to express my thanks to the Chancellor for the Bill. There are, of course, certain limitations in the Bill, and, as the Chan-

  1801
  cellor will be aware, the National Association of Local Government Officers has already made representations to the Chancellor in regard to certain of these limitations. I hope that these will be put right at a later stage, and therefore I do not propose to deal with them in detail now. I was very pleased indeed to hear the assurance of the Chancellor that the increases, as provided by the Bill, will be mandatory on local authorities. The Chancellor and this House would not desire that these increases should be dependent upon a majority vote of a local authority. We do not desire any instances similar to the Bingley case, but fair and equal treatment for all retired local government officers.
  May I ask the Financial Secretary for some information on another point? The House will be aware that to an employee with less than 10 years' contributory service, a local authority may grant a sum not exceeding two years' wages or salary. Some of the authorities have adopted the practice of paying that amount in small sums of £1 or 30s. a week until it is exhausted. Would this amount be regarded as pension within the meaning of the Bill and subject to the provided increases? May I now refer to Clause 2? I really fail to see why this Clause should apply only to civil servants. The claim of retired and pensioned local government officers, teachers and police is equally deserving of every consideration. I pay my tribute to the work of the Civil Service, but, speaking with some little knowledge and experience of the extremely valuable work of the local government service, there is no case for unequal treatment. May I now mention another point? The Pensions (Increase) Acts of 1920 and 1924 authorised an increase in the pensions of retired employees of public authorities. For some reason, not at all clear, the present Bill does not follow that precedent and there is no similar provision. This means that superannuated employees of such public authorities as the Port of London Authority, the Metropolitan Water Board, the Catchment Boards, all authorities created by Acts of Parliament, will be denied any increase or the increase provided in the Bill. The irony of it is that, while there is a precedent in these previous Acts, the increases, if conceded, Would not fall on the Exchequer. There is no reason at all for this differential treatment. The needs
  1802
  of the pensioners are the same and they can only receive consideration by the expressed will of this House, and I do ask the Chancellor, in the interests of justice and fair play, to consider their inclusion within the scheme.
  I would also like to refer to the position of the railway superannuated staff in relation to this Bill. I need hardly mention that the railways are now, in the public interest, under Government control. Early this year the official trade union of the railway salaried staff—the Railway Clerks' Association—approached the railway companies and asked whether something could be done to help the pensioners. The agreement governing the financial arrangements between the Government and the companies will be well-known to the House, and incidentally, it is an extremely good agreement from the point of view of the Treasury. I think that I am correct in saying that last year some £47,000,000 was netted by the Chancellor. I want to put this point to the Chancellor. Will he agree that increases to the superannuated staff of the railways comparable with those provided in the Bill can be given, and that they shall rank as legitimate working expenses during the period of Government control? After that it would be a matter for negotiation between the appropriate authorities. I do not want to pot the point unfairly, but it would be passing strange if the Treasury obtained some £40,000,000 from the earnings of railway companies, gave increases to civil servants and then said that the railway companies should not give increases to their own retired servants. I have no authority to speak for the railway companies, but if that were the course adopted by the Chancellor, I believe the companies would join with the Railway Clerks' Association in making a most vigorous protest to the Chancellor. In some quarters the promises of politicians are regarded, in the words of Lewis Carroll, as
  "Jam to-morrow and jam yesterday—but never jam to-day."
  The Chancellor is giving us a little jam to-day. If I have asked that the jam should be slightly increased or more widely distributed, that does not mean that there is any lack of appreciation of what the Chancellor is conceding to us in the Bill. I believe that it can be amended and the limitations to which I have referred

  1803
  dealt with at a later stage. Therefore, should the Amendment be pressed to a Division, I can assure the Chancellor that I shall support him in the Division Lobby.
  Mr. G. A. Morrison: I wish to say a few words with special reference to the case of retired teachers. I think that I can say, on their behalf and on my own behalf, that the Bill is a great disappointment. I am not prepared to vote against the Second Reading, because I hope that it may still be possible to amend the Bill in more than one direction. Members who heard the statement of the Chancellor of the Exchequer in the Debate in December have been looking forward hopefully to his detailed proposals. To do him justice, he said that the approach of the Government would be by way of cases of extreme hardship. Nevertheless, people outside this House have been hoping for something better. The spirit shown in the Bill seems to be something of the bad old spirit which, in 1919, when it became necessary to attract and to keep teachers, did make improvements in salaries and pensions of teachers in service and of future teachers, but left the veterans of the profession, the retired teachers, struggling to maintain themselves on miserably inadequate pensions.
  Here is an actual case of a lady teacher who retired in 1914, after 40 years' service, and who is still living. She is 93 years of age. Her original pension was £32 19s. 3d. which, by reason of the increases in 1920 and 1925, is now £91 9s. She has had no increase since 1925. The present Bill will increase that pension of £91 to £113. Some previous speakers have referred to the fact that these old people require a considerable amount of help. How could one maintain a housekeeper on a pension of £113? The most necessitous cases—those people with pensions under £100—should have had special treatment, a uniform increase, say of £50, £60 or £70, with adjustments at the borderline. There also must be cases of hardship above the £250 or £175 limit. Retired teachers have written to me—I am still receiving letters—to say that, with the commitments which they had taken on before or at the time of retirement, they are finding things very difficult. These elderly people see around them younger and more active men and women enjoying
  1804
  war bonuses. There have been no bonuses for the retired teachers as yet.
  The retired teachers learn from this Bill—if they did not know it before—that certain classes of civil servants with pensions up to £600 may receive additions to these pensions. It is very difficult for a pensioner to see why there should be no ceiling in the case of working teachers and of some civil servants, but a rigid limit on his own pension. This treatment of the veterans of the profession is going to have a calamitous effect on the prospects of recruiting for the post-war teaching profession. These people are embittered. One said in a letter to me the other day:
  "We must see to it that our sons do not go in for teaching and that our daughters do not marry teachers."
  In the White Paper Debate and the Debate on the Second Reading of the Education Bill speaker after speaker referred to the need of raising the status of the teaching profession. The McNair Committee has not yet reported, but the Advisory Council in Scotland has promptly recommended a considerable increase in remuneration. The headmaster of Rugby, in a speech the other day, spoke of the need for the immediate doubling of teachers' salaries. I have heard that efforts at recruiting among Service men and women for the teaching profession have not resulted in any great rush to enter that profession, nor is this Bill likely to help very much. Those who are being appealed to may all too easily conclude that they could do much better for themselves in other walks of life, and that all talk of raising the status and public estimation of the teaching profession is just so many words. If the effect on possible recruits is such as I fear it will be, then we may have to wait a very long time before the Education Act comes into force. The necessary teachers will not be available—
  Mr. Deputy-Speaker (Mr. Charles Williams): We must not go too far into the question of education and teachers.
  Mr. Morrison: I am particularly anxious that the Chancellor should consider that danger but I shall say no more about it.
  Mr. Norman Bower: I shall not detain the House for more than a very few minutes but I wish to make one or two comments on the Bill. I am afraid

  1805
  that I cannot regard the Bill as being, in any way, satisfactory, but I do not feel disposed to tear it to pieces in quite the same uncompromising manner as some hon. Members who have spoken. It seems to me to be rather like the unfinished West London tube extension—it is all right so far as it goes, but it does not go far enough. I welcome it in so far as it certainly does something to alleviate the hardship which these unfortunate people are suffering, but I am afraid that my welcome can only be a somewhat frigid one because I regard it as quite inadequate. It is not, apparently, based on any sort of logic or principle and, so far as those people who come under the second scheme are concerned, it does less than justice.
  At the same time the Amendment which has been put down for the rejection of the Bill does not seem to me to be satisfactory either. It is based on two entirely separate counts. The first is that it fails to restore to the pensioners—that is those who come under the second scheme—what, in the light of the increased cost of living, they had previously lost by reductions, when their pensions were on a sliding scale, and when the cost of living was going down. The second count is that the Bill applies a means test to classes of pensioners to whom the application of such a test is inappropriate. Personally, I am in agreement with the first count, but I find it very difficult to agree with the second. It would appear that there is definitely a confusion of thought on this subject. The hon. Member for Rugby (Mr. W. J. Brown) said there were two consistent methods of approaching this question. The first was to approach it from the point of view that pensions were to be stabilised in the beginning, whether the cost of living went up or down. The second was to place them on a sliding scale, and to allow them to move up or down as the cost of living rose or fell. It is perfectly clear that as regards those pensioners who come under the first scheme, the first method—which the hon. Member for Rugby admits to be a perfectly consistent approach to this problem—was applied to them. Their pensions were stabilised from the beginning. Therefore, there was never anything in the nature of a contractual obligation on the part of the authority paying the pension, to the effect that these pensions would always purchase
  1806
  the same amount in goods and services. Therefore, these increases which are now being given are really in the nature of purely ex gratia payments, as the Chancellor said, to relieve hardship.
  Further, if it is appropriate—and I am not giving any judgment on this matter—to apply a means test to old age pensioners, for example, who apply for supplementary pensions, or to any other classes of people who are drawing or applying for any form of uncovenanted benefit, then there is nothing inappropriate in applying a means test—and also other tests such as age and infirmity tests—to these classes of pensioners. I cannot understand why the Amendment for the rejection of the Bill should have been drawn in these terms, but I am bound to say that I consider the income limits which the Bill lays down are really far too low. I am quite certain that a great deal of hardship is being experienced to-day by people whose incomes are considerably above those limits, and I consider that the percentage increases proposed are also inadequate. Some of these pensions are very small indeed—for example those of police widows—and I cannot believe that this Bill will really achieve its object of alleviating to any substantial degree the hardship suffered by some of these people, particularly those in receipt of the lowest pensions, unless these percentages are raised. It has already been pointed out, and I think ought to be emphasised that there are many things which do not enter into the cost-of-living index at all but which are virtual necessities to almost every home and the prices of which have risen, since the war, by far more than the 20 or 25 per cent.—the increases proposed in this Bill. If the Bill is to be brought into relation with reality, and achieve its object of alleviating the hardship at present inflicted on these people, the Government ought to look into that point again.
  With regard to the people who come under the second scheme, there was, in their case, a definite contractual obligation on the part of the Government, at any rate for the period from 1922 to 1925, while those pensions were on a sliding scale, that the pensions should always purchase, approximately, the same amount in goods and services. Therefore, quite rightly, in this case no means test is

  1807
  imposed. It seems to me that the fact that there was a contractual obligation is recognised, in that no means test is imposed, and I have no complaint to make there. Here again, however, the increases proposed are niggardly; they are not proportionate to the losses which were previously suffered. In fact, no attempt is made to restore the amount which was previously lost, and therefore, to that extent, they do not fulfil the contractual obligation which is recognised to have existed. In other words, the increases are purely arbitrary, they are not based on any sort of principle, and from that point of view, I regard them as very unsatisfactory.
  For these reasons I hope that the Government will try to do something to meet the arguments which have been advanced. I am not prepared to support the Amendment for the rejection of the Bill, but it is impossible to regard it with any real satisfaction or to accept it, if it must be accepted, with anything other than a rather bad grace.
  Lieut.-Colonel Sir Ian Fraser: I intend to detain the House only for three or four minutes because the speakers who have preceded me have covered the ground most adequately and have formulated all the arguments which I would have tried to put forward. I rise, therefore, not so much to make arguments, as to affirm my agreement with the case that has been put forward by the hon. Member for Rugby (Mr. W. J. Brown) and the hon. and gallant Member for Petersfield (Sir G. Jeffreys). I think that the Measure under consideration is inadequate financially. I think that in the lowest scales there should be greater generosity, and that the scale should not stop at £1,000 a year. It should go up to £1,000, which is the figure up to which Civil Service and other similar pensions are now subject to a bonus. The argument for scales, which give less as the income goes up, is, of course, a powerful one, but two factors operate to make the present proposal so steeply graded as to be almost inequitable, for the higher the salary, the smaller the percentage and, simultaneously, the higher the taxation. The Chancellor might well be asked to assimilate his highest figure to that now current in the Service.
  1808
  So far as it is in order to do so, I want to complain that the Bill does not include, technically, within its terms, Clauses which will give similar benefits to officers and other ranks. I am aware that there is a parallel scheme for dealing with them, but it is difficult to debate that on the Bill, and there are cases among those officers and men, which may well be met in this Measure. For example, there is the soldier of long service in other ranks, or the officer of long service who has his long-service pension, or retired pay, and may be under 60 years of age. Even if we could put them into this Bill, practically all those classes of men would not receive anything, and I am bound to doubt whether any Royal Warrant which maintains this age of 60, below which no pension is paid save on certain conditions, will not deprive almost all the long-service men in the other ranks and among the officers of any increase whatever.
  It may be stated that they are in employment. Perhaps, at this moment, they are because employment is fairly easy to find. Not very recently however I was looking for a bursar for an educational establishment for which I have some responsibility, and a great many officers in the 50's applied for the job. Not many of them were very suitable. Why? Because they had spent the whole of their career in the Army, all the active years of their lives—and this applies to the sergeant-major as well as the commissioned officer. The case of the civil servant is more favourable because he is in continuous employment up to the age of 60 and, indeed, the age of 60 is only relevant because that is the retiring age of the civil servants. So, I ask that when we come to consider the position of officers and other ranks, we should make an exception in the matter of age, on similar lines to the plea made by the hon. Member for Rugby, who pointed out that policemen and prison officials were particularly hit by this limit of 60 years. I only add that, quite recently, I was asked by the Officers' Association and by the British Legion to express the view that it is a matter of regret with them that better provision is not being made for officers and for other ranks.
  Mr. Cove: I do not intend to take up the time of the House for more than a few minutes, because I have

  1809
  argued the general theory of the case of superannuated teachers before. I will confine myself to teachers, because other Members have covered other phases of this subject. I want to say, on their behalf, that they adopt somewhat the same attitude as most Members have adopted towards this Bill. They do not want me or anybody associated with them to walk into the Lobby and kill the Bill. But, on the other hand, they are not satisfied or enthusiastic about its proposals. It must be remembered that in the teaching profession there are many—for instance, uncertificated teachers—on a low rate of pay and that their superannuation is based upon that low rate of pay. The pensions they receive are really miserable. In hundreds, if not thousands, of cases there is hardship owing to the meagre amount of pension which is provided. My hon. Friend the Member for Rugby (Mr. W. J. Brown) went into a rather detailed analysis of the cost of living. I do not believe that anybody who knows me would say that I was a middle-class snob, or that I was prejudiced on behalf of those in the higher ranges of income. I am concerned with those at the poor end of the scale, but I must say that when you get to a certain social status or class the incidence of the cost of living, in regard to items which are necessary, does change. When I went into this question I was impressed by the fact that what one might call the overhead charges paid by those with salaries of £300, £400 or £500 a year were higher than those who received a wage of £4 or £5 a week. Charges for rent, insurance and so on go on into the period of a teacher's retirement and to a large degree add to the difficulties of those who are plunged into the lower range of incomes by means of pension rather than by salary. When we come to the Committee stage of the Bill I hope the enlightened opinions which have been expressed will be acted upon and that with the full backing of hon. Members opposite we shall be able to improve considerably this Measure and make it well worth while.
  Lieut.-Colonel Sir William Allen: I am delighted to have this opportunity of saying a few words on this Bill. I am sorry if I have stood in the way of English Members who want to get in, but, after all, they have plenty of
  1810
  opportunities on other occasions such as those who come from Ireland seldom have. Every Member who has spoken has deprecated the terms of the Bill and if English Members do this they cannot expect a mere Irishman to do other than to follow their example. Of course, I know that in the opinion of most Members of the House Irishmen are never satisfied with anything. Who are the people who are affected by the terms of this Bill? I have had letters from many people. The Chancellor has, quite rightly, ruled out any Colonial reference in the Bill, but I want to ask him whether that extends to the Dominions? My right hon. Friend said it was impossible to include Colonial Governments, but how far does that refer to a Dominion? We all know that Southern Ireland is a Dominion and we want to know whether this Bill extends to Southern Ireland. Where do the Royal Irish Constabulary come in? They and teachers and others live in Southern Ireland. Surely they might come in under the terms of the Bill, as the Royal Irish Constabulary are specifically mentioned. I have been asked by quarter sessions' clerks and by officers of the Irish Land Commission whether they come into the terms of the Bill. I am delighted that the present Chancellor is in charge of this Measure, because there is no one in this House, or outside, who has greater knowledge of Irish matters, and particularly of the Royal Irish Constabulary, than my right hon. Friend. I am quite certain that his sympathies lie in that direction. We also want to know whether this Bill extends to all pensioned elementary school teachers.
  Mr. R. Morģan: I think there is such a thing as a reciprocity agreement on these matters between Northern Ireland and any of the Dominions. It does not affect Southern Ireland at all.
  Sir W. Allen: I do not want to go home to-day and tell the Royal Irish Constabulary in Southern Ireland that they are not included in this Bill.
  Sir J. Anderson: I am very anxious that there should be no misapprehension. This Bill applies to pensioners whose pensions are payable out of moneys voted by Parliament, irrespective of where they live. The Royal Irish Constabulary was a United Kingdom force which was disbanded when certain constitutional changes took place. This country assumed

  1811
  responsibility for their pensions and for that reason their pensions are covered by this Bill. The place of residence is irrelevant.
  Sir W. Allen: I am obliged to my right hon. Friend for that explanation. The next point I want to raise is very important. By what means does my right hon. Friend intend to convey to all those who are entitled to these increments how they can get them? Let me give an example of what I mean. At the end of the last war, when houses for soldiers were being built, a time limit was given to them in which they might acquire a house. But the notice of that time limit did not get into the Press in Ireland and the result was that a great many were too late in applying. Therefore, I want the Chancellor to ensure in some way or other that all those who are entitled to these pension increases will have an opportunity of participating. I know widows of Royal Irish Constabulary men who died many years ago who have not been able to get a pension. I suppose it is because they have no trade union to look after them. How will my right hon. Friend get at these people, how will he make this public? Will there be a form of application for those who believe they are entitled to a pension? If not, the same thing will happen in connection with this Bill as happened in the case of the houses I have referred to.
  I have said nothing about teachers, because other Members have referred to their pensions and their inadequacy, but we have the same trouble in my country. I really came here to speak on behalf of the Royal Irish Constabulary pensioners. For 25 years I have tried to make my voice heard in this House on their behalf, but Chancellor after Chancellor has refused to do anything. Now, at last, I appreciate the fact that my right hon. Friend has given the matter his serious consideration. As to the cost, the then Chancellor of the Exchequer, in 1940, gave me some information with regard to the increases of pensions in 1920 and 1924, He informed me then that there were 1,488 Royal Irish Constabulary pensioners who benefited by the Acts of 1920 and 1924, and that the total amount paid to them was £38,785. If the same number of pensioners were alive to-day this Bill would increase that sum to £48,481. That is a very trifling amount compared with
  1812
  the total cost, which, it has been stated, will be £4,500,000. Yet all that the Bill does for these Royal Irish Constabulary pensioners is to increase the amount from £37,000 to £48,000. I know it is very difficult to put a special case to the House on behalf of the Royal Irish Constabulary. It may be said, "If you increase their emoluments and pensions why not increase all others?" I have always held that the Royal Irish Constabulary ought to get very special treatment. They bore the brunt and burden of the day in times of distress. May I quote from a letter from a pensioner's widow:
  "My late husband, through all he suffered during the 1916 rising, his nerves got broken down and I had to send him to a mental home. From the time of an ambush that he was in, where he had to load his dead comrades on lorries, his health and nerves never was the same."
  That is only one case out of thousands. That woman is in receipt of a magnificent pension of £30 a year, and she has children. The Bill is going to relieve her from what the right hon. Gentleman called penury by giving her £37 10s. If there ever was a case for special treatment it is the case of old pensioners of the Royal Irish Constabulary. The means test is a very serious matter for them. Here is a case of one who served for 25 years, then enlisted in the Great War and was disabled in 1918. In consequence of being awarded a military pension, although he was entitled to £52 a year Royal Irish Constabulary pension, he gets the magnificent sum of £1 7s. 2d. Surely no one can justify such a means test as that. There is another case of a pensioner who had been overpaid £158 4s. 5d. He was told by the paymaster that we would have to wait for several years until that was paid off, and during that time he got no pension at all.
  I want the Chancellor to look into this means test. The idea of a man, because he has a disablement pension, or because he has saved a little money, being deprived of his pension is entirely wrong. Then there is the question of men who have retired with a gratuity. Here is a case of a man who retired, after 11 years' service, with a gratuity of £57. He thinks he is entitled to come within this scheme. I think the Chancellor was not present when I asked that means should be adopted of informing people who will be entitled to these increases that they are entitled to them. There are pensioners

  1813
  who live in sight perhaps of the hills of Donegal, or the mountains of Mourne that roll down to the sea, or in the wilds of Connemara or by the banks of the Shannon. They are scattered all over Ireland. How are they to get to know that they are entitled to pensions? There are others, of course, who believe they will be entitled who will not be so entitled. They also would like to know. I hope the right hon. Gentleman will issue some kind of White Paper stating definitely who is entitled and who is not. What is the good of my going home and telling these people, "Look at the first Schedule to the Bill for pensions payable under the Superannuation Acts, 1934–1942," or telling teachers to see the Elementary Teachers Superannuation Acts, 1898 to 1912? These things will have to be elucidated. I should like to thank the Chancellor for having introduced a Measure of this kind in the midst of war's alarms, but the pensions are completely inadequate, and, above all things, he should do away with this Star Chamber inquiry into the means of poor pensioners who are trying to eke out an existence in penury. If a man has a few acres of land his pension is reduced. If the right hon. Gentleman hopes to benefit these people at all the means test must be done away with. I am glad of the opportunity of saying these few words and I wish the Bill every success in going through.
  Mr. Reakes: The Bill has not excited a great deal of interest amongst Members of the House. The attendance never exceeded 70 during the first hour and later there were never more than 35 or 40 present. I do not know whether that is a comment on the farce of Friday Sittings, but I should not like to believe that it indicates the measure of interest taken in such an important Bill. This is not a party political Measure because, of the 13 Members who have put their names to the Amendment, 11 are Conservatives and two are Independents with Conservative tendencies. [Interruption.] I speak for myself and not for the hon. Member for Rugby (Mr. W. J. Brown). I hope the Chancellor will make due note of the criticisms of previous speakers and make concessions which will render it unnecessary for us to go into the Lobby against the Bill. I should very much like to see it improved and given its Third Reading, with an opportunity to get our point of view more
  1814
  ably expressed on the Committee stage. I regard the Bill in its present form as a half-hearted attempt to rescue the perishing. That may seem a strong way of putting it, but, to those of us who know something of the plight of the forgotten fraternity, it is not an exaggeration to put it as strongly as that. It does not do justice to the pensioners. I am not pleading the case of any particular pensioner. They are all the same to me. They are human beings who have done a job of good work and are entitled to a pension, and therefore entitled to justice from all parties.
  I think the means test is a most pernicious thing. It is entirely wrong in principle. It has been demonstrated on many occasions that it is a penalty on thrift, and there is nothing to be said in favour of it. It is unjust that anyone entitled to a pension of right should have an inquisition into his private means. It is sometimes said that, if these people find their pensions inadequate, they can take another jab. That is entirely wrong. Pensioners are coming to our rescue in the war effort, but, when the war is over, we do not want to see a return of the days when, in order to eke out an existence, pensioners had to invade the labour market, to the detriment of others who had no income and no jobs at all. I believe there is a great volume of public opinion in favour of justice to State pensioners and old age pensioners, and also to those who were the subject of yesterday's Debate. I appeal to the Government to tune in to public opinion on this and other matters. It is not much to ask. If I were taking a political view I should say that it indicates a major revolt in the Government ranks that you can get Members of the Conservative Party to put their names to such an Amendment as this, but I am not going to say that. I will take a more generous view and say that it indicates, as did the Division last night, that Members want to treat these subjects as nonpolitical questions, I support the Amendment rather sadly, but still with an open mind, because we shall be only too pleased if the Government are prepared to meet us in some way, and I hope the hon. Member for Rugby will find it possible to avoid a Division.
  Mr. Lipson: I cannot agree with my hon. Friend the Member for Wallasey (Mr. Reakes) that the comparatively

  1815
  poor attendance during the Debate is to be taken as a measure of the interest in this Bill. The Bill really arises out of a Motion put down some time ago and signed by 280 Members. The fact that so many Members put down their names to that Motion shows they were convinced that there was great need for some help being given to Crown servants. It shows also that the feeling was widespread all over the country. The Bill has had a very poor reception. Some Members would go so far as my hon. Friend the Member for Rugby (Mr. W. J. Brown) and his friends and would reject it altogether. The best that has been said was to damn it with faint praise. If it were thought that by rejecting the Bill we could get something better, there would be an almost unanimous vote against it. On the other hand, there is the view that half a loaf is better than no bread, and in view of the urgency of the need of many of these Crown pensioners some of us would feel a grave responsibility in saying that we would go so far as to vote against the Second Reading. That applies particularly to me, because I doubt whether there is a constituency in the country which has more retired Crown servants living in it than the one I have the honour to represent in this House.
  I feel that the Chancellor's approach to the problem has been a wrong one. What we asked for was justice, but what we feel we are getting in this Bill is something that might be more adequately described as a charitable dole. There was some inconsistency in what the Chancellor said. On the one hand, he said that the purpose of a pension was not to provide a subsistence level for the pensioner. On the other hand, he said that the purpose of the pension was that the pensioner should not live in penury. I find it difficult to understand how he could avoid living in penury if his pension was below the subsistence level. Somebody who rises to the position of Chancellor of the Exchequer may understand that, but to my mind it seems inconsistent and impossible. We feel that the pension increase ought to be greater for two or three reasons. Those people who have fixed incomes and have not been able to do additional work during the war because of age or disability have been hit hard by the increase in the cost of living and
  1816
  the increase in taxation. One of my constituents, a man whose income is about £210 a year, had provided by the Income Tax inspector the amounts that he had to pay for Income Tax in 1937–8 and in 1941–3. The amount in the latter period was seven times as much as in the former. The retired Crown Servant is, therefore, hit both ways. He now sees that men who are doing the job he once did are in receipt of higher salaries than he was getting. That means that they will get a better pension when they retire.
  Men who served the State well ask that they should be treated more generously. They believe that this generosity is all the more possible because this Bill is only of limited duration. The Chancellor could well have approached the matter in a more generous spirit. With regard to the cost, it is not fair to suggest that by doing the decent and proper thing for these pensioners we shall create inflation. A large proportion of the cost will come back to the Treasury in the form of Income Tax and other taxes. Every time one of these pensioners buys cigarettes or tobacco or drinks a glass of beer, he will give some of it back to the Treasury. I would appeal strongly to the Chancellor to try to raise the ceiling. It is not enough to say that one class should be limited to £260 and the other to £600 while there are men in the Civil Service earning £1,000 a year who are able to get a bonus. For these reasons, because the Bill does not really meet the widespread need, because these ex-Crowe servants have waited a long time for this redress, I appeal to the Chancellor to try and unbend a little and behave as we have seen him do to the satisfaction of the House, on more than one occasion recently, and meet the view of the House and the country that these retired Crown servants should receive a better deal than the Bill promises.
  Mr. Maxton: In this matter I support the hon. Member for Rugby (Mr. W. J. Brown) completely, and if he goes into the Lobby against the Second Reading I shall go with him. I do not know who the fellow was who first used the phrase quoted by the hon. Member for Cheltenham (Mr. Lipson), that half a loaf was better than no bread. If I knew where he had been buried I would have his bones exhumed and interred in some public place. There is a certain measure

  1817
  of truth in his statement, but it should stand as a warning to us, for in my experience in this House it has been used over and over again to the detriment of any intelligent way of making social progress. I see myself in this matter, as in the treatment of the unemployed, of the aged people generally, of the sick, of workmen's compensation and of wages of public employees trotting along behind all these social problems and-getting not half loaves, but merely slices of bread. Not one of these problems ever gets to the point where one can say, "We have settled that now and we can say that it is out of the road in a reasonable and satisfactory way for a period of years."
  This Bill is an outstanding example of the same kind. The Chancellor told us to-day that he could have done nothing and that he need not have done this. That is true. I must say, as one of the original signatories to the Motion which preceded this Bill, that I was more than surprised that the Chancellor surrendered so easily. Indeed, not only was I surprised, but I was very suspicious. For once I was right. I would have liked to see a large scale examination of the whole pensions problem and some general plan brought in that we could regard as a satisfactory method of dealing with pensions in general. I see Government legislation just now in two different compartments: one, dealing with reconstruction for the post-war period, long-term reconstruction; and the other, consisting of little measures dealing with acute problems of the times. We should not have that. There should not be these two different types of legislation on matters of this description. Admittedly, things arising out of the war have to be dealt with from day to day as they arise because they are only temporary. But as the Government seem to be trying to go into a better and different kind of world after the war every one of these problems should be looked at, not from the point of view of how the Government can get out of this little bit of public discontent or how they can buy off that little group of the community, but from the point of view of what is the right and just thing to do in a country that is well organised and well off.
  My own political philosophy does not lead me to conclude that people who have been in definite public service should
  1818
  necessarily be treated in a different may from people who have served the community in ordinary industry. I am not satisfied that it is right and just that someone who has-worked in a shipyard or an engineering works should have a 10s. old age pension, and somebody who has been in the police force should have £4 £5 a week. My political philosophy does not accept that as being right and proper, but as long as it is regarded that 10s. is a satisfactory pension for a general worker, I am not going to say that State servants should be brought down to that level. If there is an alteration, it should be the other way round. I think that there is a general feeling operating in our minds with regard to people who have been in public appointments, who have served the public and have been recognised as servants of the public, that there is something offensive in the idea that, say, a man who was the local postmaster or a sergeant of the police should be living in abject poverty in a slum quarter of the town, for it reflects back on to the service he was in. I am getting to a stage in my life when one begins to think of one's declining years. I must confess that, unlike the good people in the story books, I have not made any adequate arrangements for my old age. I can sometimes visualise myself standing on a kerbstone playing a musical instrument in order to get a reasonable competence.
  Mr. Bartle Bull: Which musical instrument does the hon. Gentleman favour?
  Mr. Maxton: I am not going to give away the innermost secrets of my soul, but it would be a portable instrument on which I could give suitable performances on the kerbstone. There is something objectionable about people going past and saying, "That fellow playing a so-and-so used to be the Member for Bridgeton in the House of Commons." I am sure that hon. Members would not like that. That is the sort of general feeling in the minds of Members that leads them to feel that public servants should receive proper pensions, not merely for themselves but for the dignity of the service in which they served.
  I am opposing the Bill because it deals in a pettifogging way with a problem that is a permanent problem in a well-organised community. There are details in it

  1819
  that I find wholly unsatisfactory. I notice that the party above the Gangway have already tabled one or two Amendments for the Committee stage, but they do not seem to me to meet the problem I have in mind. In thinking about this problem I have in my mind a case which is well known to me. It is that of a widow of a sergeant of police, a first-class little woman in every way. Her husband retired with a pension between £3 and £4 a week. There were three in family not beyond school age. He drew his pension for four years, and then he died. She has to complete the education of the three youngsters and get them out in the world. The pension she gets is 10s. 5d. a week. That is, she gets 5d. for her special position as a widow of a State servant. The general run of the community would get 10s.
  It would not be true in cities, but it is true in villages, that the wife of a sergeant has not merely the position of being her husband's wife but has certain duties about the local police station. The cells have to be kept in order, and certain services have to be done for young unmarried constables. The Chancellor of the Exchequer will know more about this than I do. His experience is wider than mine, which is more of the "cabin'd, cribb'd, confin'd" order. She is getting 10s. 5d., struggling to give her family training, and when they go out into the world she is left. We should do something to put that woman in a better position. If I read the Bill correctly she will get 25 per cent. on that 10s. 5d. a week. That would bring it up, I suppose, to 13s. 0½d. Does the Chancellor of the Exchequer think that is right and proper? Does he think that is a first class way of dealing with this problem?
  I would ask him, if he is fortunate enough to get a Second Reading of this Bill, to consider whether he could not put a minimum for at least the lowest rates of pensions, and say that people in receipt of them should be on such and such a level. There has been a lot of talk about the ceiling. I am talking now about the floor. I have another case I would like to mention that is completely outwith the Bill. I had a letter from an old friend of mine, a constituent of the Chancellor of the Exchequer, who is a parish minister up in one of the little islands in the North of Scotland. He writes:
  "DEAR MAXTOR,
  Our lady who has been acting as sub-postmistress in the island for the last 40 years is retiring at the age of 80. Can you tell me what she is entitled to in the way of pension?"
  Mr. Bull: That could only happen in Scotland.
  Mr. Maxton: It certainly shows great sticking power. I should think it would be unprecedented even in Scotland. I did not know what she would get, so I wrote to the Postmaster-General, and I was told she would get nothing because she was only an unestablished civil servant. This woman, for 40 years sub-postmistress in the Orkney Islands, retires at 80 years of age, and the Postmaster-General tells me that so far as his Department is concerned she is just "out." The matter will be brought before the Treasury in due course, and I hope there will be some small gratuity coming as a recognition of her services.
  The Chancellor of the Exchequer may argue that the question of unestablished civil servants is beyond the scope of this Bill, but if we want to do the decent thing by people who have rendered public service is not that lady entitled to something? Ought there not to be some provision inserted in the Bill that persons who have served as public servants for a certain period of time, even though that service is called unestablished, should have something to enable them to spend their last years in reasonable comfort in such a way that they shall not be an object of pity to the community. I am supporting the hon. Member for Rugby (Mr. W. J. Brown) on this subject. For this day only I have appointed him my leader, and if he goes into the Division Lobby I will follow him.
  Sir Stanley Reed: Are conditions in Scotland different from those in England? In England a sub-postmistress usually has a small independent business.
  Mr. Maxton: She sold bootlaces in her spare time, if that is any satisfaction to the hon. Member.
  Mr. Palmer: I am glad, of course, that the Chancellor of the Exchequer, by bringing this Bill forward, has recognised that there are real hardships to be met amongst the class of persons with whom the Bill deals, and I

  1821
  know that he is not only fulfilling his pledge to try to deal with these cases, but has put a very precise interpretation on the words he used when he said he would concentrate on cases of real hardship. I must admit, however, that I share the feeling of a good many other hon. Members and wish he had gone a great deal further. Of course, the Chancellor of the Exchequer has to consider the argument about inflation, and, of course, he has to consider comparisons with other categories of pensioners to a certain extent, but I must say it seems very easy to exaggerate the argument of inflation. One might suppose, when listening to that argument, that these pensions were liable to be raised to quite an extravagant figure.
  When the Chancellor of the Exchequer spoke about the short duration of this Bill I was hopeful that he was going to indicate the possibility of certain improvements later, but I was disappointed when he went on to prejudice, as it seems to me, any future scheme for dealing with this subject not on grounds of hardship but on grounds of equity. I wish he had not come down as strongly as he did against the claim for reconsideration of consolidation which took place in 1935. He did not seem to me to advance any argument at all in favour of consolidation, except to say it was sound. That did not seem to me to be an argument. It was a simple statement of opinion. No doubt he could produce arguments, but he did not do so. What he did was to make a great deal of the point that it was decidedly in favour of the recipient. That is a matter of chance. It might quite well have been the other way. I should have thought in cases of this kind it would be better to adopt the principle of attaining long-term security rather than a short-term stroke of luck. I should have thought that that principle would have appealed to the Chancellor as well as to the hon. Member for Bridgeton (Mr. Maxton).
  I hope that what the Chancellor said on that principle will not prejudice the future review. We shall have a review, sometime next year, I suppose, and I would ask the Chancellor whether he can make some statement now which will give the House confidence that, when these questions come up for review, the principle of relating pensions to the cost of living
  1822
  is not finally settled to the prejudice of the persons who are affected. There is a real grievance that these people have had a raw deal in this matter. I quite believe that the Chancellor is trying to do something and is anxious to meet the case, but although he has gone some way to do so, the method has involved the introduction of a principle which is repugnant and has prejudiced the actual claim, on grounds of equity. I should be grateful if the Chancellor would find some way of meeting that point. If he cannot—although I would not wish the beneficiaries to lose what he has promised—none the less I should feel that I could not support the Bill.
  Mr. McEntee: I do not propose to vote against the Bill even if the Chancellor refuses to accept the Amendment. I disagree entirely with the hon. Member for Bridgeton (Mr. Maxton) in reference to the half loaf. He may have been one of the people who, for the best part of his life, was able to enjoy the full loaf, but for the greater part of my life I have been in a position where half a loaf, or even a quarter of a loaf, would have been very much appreciated. I happen to have personal knowledge of the conditions of life of a great many people in this country, including former members of the Royal Irish Constabulary, to whom, by the way, the Bill will be of great benefit, even in its present form. I agree that there is need for improvement in the Bill, in ways that have been referred to by the hon. Member for Rugby (Mr. W. J. Brown).
  I am dissatisfied with the general attitude of the Government to the question of the cost of living. This is not the first time in our experience that the Government have taken full advantage of a decreasing cost of living, but when the tendency went the other way and cost of living was rising, they refused to give any concession to the people affected by that increase. The Government take great advantage of it when the cost-of-living figures go down, and then up. They should be prepared to make some concession along the lines suggested by the hon. Member for Rugby. I would like to stake a claim for a wider interpretation of the word "dependant." Children up to 16 are admitted in the Bill, but every hon. Member knows that people have dependants up to 60 and older. A good

  1823
  many people are the dependants of pensioners to-day, such as cripples, people who have been in a mental home or are physically deformed or defective in some way. The Chancellor ought to have some regard to those dependants and I hope that he will make some concession along those lines.
  The limit of £52 in the thrift aspect of the Bill is far too low, and the Chancellor might well double it and make the disregard figure £104. Men or women who have been saving all their lives and have possibly missed many of the good things of life in order to make provision for a comfortable old age, should not be penalised because they have made that provision, and I hope that the Chancellor will be willing to make that alteration. The principal feature of the Bill is the increase of 25 per cent. and 20 per cent., respectively, to the married man with dependants and children, and to the unmarried or married person without dependants, but those figures are too low. The amount of the increase, in many instances, will be so small that the pensioners will be living in actual poverty. I know it may be said that we can find individual cases of actual poverty, and that, broadly speaking, 25 per cent. is a fairly good increase, but things are not always what they seem. The Chancellor ought to put it beyond doubt that he meant that these people should be taken out of the reach of poverty on to a plane where they can have a more reasonable, comfortable life.
  I would like to give my personal support to the hon. and gallant Member for Armagh (Sir W. Allen), who spoke for the Royal Irish Constabulary. I was among them for a good number of years and, in my younger days, I am afraid, I gave them a good deal of trouble. I bear them no malice for the action they took in curbing my youthful exuberance, and I am sure they have none against me. There is no question in the mind of anybody who knew them in their active days, that they were a really fine body of men and that they did a very fine piece of work under extremely difficult circumstances. Thev often had to deal with difficult people, including myself, and, having done their lob very well, special consideration ought to be given to them, especially to the cases of hardship. Penalties were inflicted on them because of their service, and the handicaps of many of
  1824
  them exist to the present time. Anything I can do during the passage of the Bill to influence the Chancellor of the Exchequer to give special consideration to these men, I shall certainly do.
  Mr. Quintin Hoģģ: It is becoming almost a commonplace on these occasions to point out that not a speech during the Debate has exactly favoured the proposals put forward by the Government. This occasion is no exception to the rule. I was one of the very few people whom the Government succeeded in whipping into the Lobby last night in their favour, and, for this reason, I think I may be allowed to offer a few observations on policy in relation to this Bill. The choice before the House, as it seems to me, is whether it amends this Bill considerably in Committee, or whether it proceeds to its rejection on Second Reading, as proposed by the hon. Member for Rugby (Mr. W. J. Brown). I am bound to say that unless a considerable concession can be made, I am for the second course of going the whole hog in this matter.
  I am not concerned with the particular classes supported by particular Members who have spoken. I am not concerned with the particular terms of the Amendment which has been put down by the hon. Member for Rugby. What I am concerned with, is the broad political situation which this Bill has presented. There is no denying the fact that the Debate yesterday has brought on a political crisis. It was brought on, as I see it, by the mishandling of this House by the Government, in the matter of the pay of a particular set of servants of the Crown, namely, the Armed Forces. Today, we are discussing a parallel subject, namely, the pensions given to servants of the Crown and certain other public servants. And what do we find? The right hon. Gentleman the Chancellor of the Exchequer said we had learned something since 1919, but apparently we have learned nothing since yesterday. He adopts exactly the same attitude again. As I understand the concrete argument he presented, it was that we cannot do too much for this class of Crown servants, for the reason that it would bring their emoluments as pensioners out of relation with the men in the front line. Yesterday we were told very little about what we could do for the men in the front line. The

  1825
  right hon. Gentleman, his arms red up to the shoulders with the blood of the hon. Member for Grantham (Mr. Kendall), who moved the Amendment yesterday, now asks us to murder the hon. Member for Rugby because of his support of the pensioners of the Crown. Really, I think this is going a great deal too far.
  The situation we are facing at the present time is this: There is not a person in the House who does not know that the treatment by the Crown of its servants, by and large, has been very bad in the past, and is very bad in the present. It does not particularly matter whether the elaborate and closely reasoned legal case put forward by the Chancellor against the mover and seconder or the rejection of this Bill is well-founded or not. What does matter is that everybody knows that the pensions of Crown servants are far too low, and that the proposed increases of these pensions are far too niggardly. The question is, what should we now do about it? Should we proceed with the Second Reading of the Bill and amend it elaborately in Committee, or should we ask the Government to make some statement offering a concession before we grant the Second Reading of the Bill? It seems to me that the second is the proper course for us to take.
  We are told that if we threaten to vote against this Bill, it will be withdrawn—that it will be, in the phrase of the hon. Member for Aberavon (Mr. Cove), killed stone dead. I ask the House not to believe that argument. There was a story of a dog that bit a man, but it was the dog that died and not the man. If this House, having expressed a unanimous opinion that this Bill is insufficiently generous, felt that opinion so strongly that it drove the Government into withdrawing the Bill, I can only say it is extremely improbable that the Bill and not the Government would suffer in the end. I see dangers in this business of amendment in Committee. These negotiations have reached the present stage of proposed legislation for one reason only. For years individual Members were putting forward the views of separate interests. My hon. and gallant Friend the Member for Petersfield (Sir G. Jeffreys) who so ably represents the ex-officers in this House, and the hon. Member for Rugby who represents the Civil Service, and various other hon.
  1826
  Gentleman have put forward the views and interests of diverse sets of people affected under this Bill—teachers, policemen, Royal Irish Constabulary and so on. The concessions which have been embodied in this Bill have, in fact, been made as a result of a happy marriage between these interests, a happy marriage primarily between the views of the hon. and gallant Member for Petersfield and those of the hon. Member for Rugby. This Bill may be said to be the rather small offspring of that marriage.
  If we are to proceed to amend the Bill in Committee I foresee that the Government will resort to the old policy of divide et impera. Concessions will perhaps be made here and there and hon. Members will show again the tendency they have shown throughout this Debate, of each representing only a small class of public servants in whom he is particularly interested. I feel that a general attack must be made on this Bill, based on the broad equitable grounds that the Crown is a bad employer and that it is not showing itself a very much better employer by the concessions it proposes to make.
  Sir Percy Harris: I hope it will not embarrass my hon. Friend who has just spoken if I intervene to say that I find myself, strange to say, in agreement with him. I hope there is no danger of being rebuked for breaking the party truce. I agree that in a House where there is an absence of party considerations and where we pull together, we, naturally, hesitate to embarrass the Government. So far as I am concerned I would be satisfied to give this Bill its Second Reading on one condition, that we can really amend it. But I have a shrewd suspicion that nearly all the Amendments proposed would be ruled out of Order, because they would involve an increased charge on the State. At any rate, my experience is that a private Member can never move an Amendment which involves an addition to the charge to the Exchequer.
  Sir Irvinģ Albery: Perhaps the right hon. Gentleman has not looked at the Financial Resolution?
  Sir P. Harris: It is one thing to look at a Financial Resolution and another to get an Amendment past the Chair. I should be very surprised, if we sought to

  1827
  move Arnendmenis which would involve an additional charge of, say, £10,000,000—and we have to face the fact that we cannot do what we want except by an additional charge—that such Amendments would be ruled to be in Order. The feeling of the House is almost general that the intentions are good, but the translation of those intentions into the Bill is bad. The more I study the Bill, the more convinced I am that the proposals are complex, involved and intricate and will be difficult to apply. What the House wants is a simple Bill, adding a bonus to meet the increased cost of living resulting from war conditions; and that is what we expected the Chancellor of the Exchequer to introduce. Instead, he has introduced into pensions an elaborate means test, based on the amount of savings which a civil servant might have acquired. If the Chancellor would reconsider the position; if he were content not to be guided so closely by the Treasury, with its complex mind and involved ways of doing things, and if he would evolve some simple system which the beneficiaries can understand, I think the House would be much more satisfied.
  Commander Galbraith: I intervene only for a moment, because the case that I wished to put has already been put very fully and clearly, both by the hon. Member for Rugby (Mr. W. J. Brown) and by my hon. and gallant Friend the Member for Petersfield (Sir G. Jeffreys). I want to impress upon the House that the feeling in the Navy on this matter is exactly the same as that in the Army. There is, throughout that Service, on the part of both serving officers and retired officers, a feeling that great injustice was done when pensions were stabilised at the 1935 level. They do not understand the reason for that stabilisation, unless it was to save money for the Treasury. I do not wish to suggest that I am not accepting what my right hon. Friend said to-day, that that was not the end in view, but he will find it very hard to convince the people in the Services of that. We are asking simply that the Government should restore, in the light of the increased cost of living, what was taken away from the pensioners by their earlier decreases. We want to restore what the pensioners lost under the Royal Warrant of 1919 I hope that my right hon. Friend who replies
  1828
  will be able to announce that he is going to consider the matter anew, in the light of what has been said to-day.
  Mr. Rhys Davies: I hesitate very much to take part in the Debate after the speech of the hon. Member for Oxford (Mr. Hogg), and, still more, after that of my hon. Friend the Member for Bridgeton (Mr. Maxton). My hon. Friend gave rather a gloomy picture of his future, standing on the kerb as an old man, playing an instrument and collecting charity. I wonder whether his personal charm would not be sufficient to make him the best collector of all on any kerb. If that failed, I would sing for him—I would sing the "Lost Chord," which might be the most appropriate in such an event.
  This is a very strange House of Commons to me; it is getting more so every day. Everything the Government do nowadays is unpopular. Their unpopularity grows, the more Bills they produce. It is, of course, the Government themselves who are unpopular. Hon. Members ought by this time to understand the old adage that political parties join coalitions in ignorance and usually separate in disgrace. That is already the tendency here. Hon. Members must not misunderstand me; I support any increased pensions for ex-civil servants and ex-teachers. But, as an old coal miner, I can never understand—and I am 66—how it is that there is never the same sympathy for the producers of wealth in this country as there is for other sections of the community who administer our affairs. I had hoped to see in my lifetime the miners, agricultural workers and the others who do real and necessary work in this country, having a fair deal at the hands of Parliament. I wonder whether I can hope to live to see Members of Parliament even thinking of a 25 per cent. increase for colliery workers receiving pensions up to £600 a year. In spite of all that, I support these increases, and, quite frankly, remembering the system under which we work and carry on our Government, I think the challenge of the hon. Member for Rugby to-day is highly justified. I hope that the Government will take heed of the keen sense of the House of Commons on this Bill.
  The first sentence in the Financial Memorandum about the increase is really humorous in the extreme. It says that

  1829
  it will apply to persons who have dependants under 16 years of age. How many men over 60 years of age, I wonder, who are drawing these pensions, have children under 16? They would have to be very clever. [HON. MEMBERS: "No."] Hon. Members had better study the vital statistics. I am sure that the Treasury know from those statistics how many men of that age there are with children under 16. The number is bound to be small. The Explanatory Memorandum attached to this Bill is, therefore, very largely a piece of propaganda. These beneficiaries must not be misled into thinking that they will get the 25 per cent. or 20 per cent. increase as a matter of course. They will all be subject to a needs test. The Chancellor of the Exchequer has already told us that a large number of them are in employment. If that be so, the amount to be paid under this Bill will be infinitesimal. The point at issue, as I see it—and I have had something to do with the administration of these matters—is this: What is to be the test of need under this Bill? Regulations are to be issued by the Treasury to determine this test of need. I do not know whether the hon. Member for Rugby, who speaks so well on behalf of the civil servants, has himself given adequate attention to this simple fact which will confront his people later on. What is, therefore, to be the test of need in the case of one of these individuals? I would like the right hon. Gentleman to tell us what test they intend to apply.
  The Financial Secretary to the Treasury (Mr. Assheton): It is a test of means.
  Mr. Davies: I think the words in the Bill are, "in cases of need." I hope I can get the attention of the House for one other thing which has bothered me, after being here for many years. With the growth of social insurance schemes and other benefits that are not contributory, there has developed in this House—and it is shown in this Bill—a policy of attaching to almost every one of our schemes a test of need. What some of us fear is that the mentality of the British people is gravitating back to what you may call the Speenhamland system under which, in fact, the workers are paid even wages on the basis of need. That tendency has appeared in connection with ail our social insurance schemes.
  1830
  There is one thing further. I do not know that the Chancellor of the Exchequer has yet told us how many people are involved in this Bill. [An HON. MEMBER: "250,000."] Will the right hon. Gentleman himself therefore tell us how many persons are involved? I remember, and older Members of the House will remember, too, that when we dealt with supplementary old age pensions the administrative cost of those pensions was equivalent to an increase of 2s. per week on the basic rate of the old age pension itself. I know the Chancellor will agree with me when I say that when you deal with very small amounts of payments on a weekly basis, administrative costs may, in fact, be greater than the total amount of the benefits you pay away. I do not know whether the Chancellor can give me any information on that point.
  I would put this to him. I take it that, in his estimate, he has estimated that a large number of these people will be at work, and the Bill will end in 1945. They are now at work, I suppose, because we are at war. This war will end some day, I suppose, and, when it ends, probably a large number of these people will then be unemployed. What I would like to know is this: can the right hon. Gentleman give us an estimate, not of those in full employment during the war period, but of the average unemployment rate for people of this kind in peace times?
  I do not know what the House will do with the Bill. It is in a bad temper. [HON. MEMBERS: "No."] Oh, yes, and I am not sure whether the Government is always wise in the type of person it puts up to speak for it. There are some Members of this Government who can get away with anything, and there are others who annoy everybody in turn when they speak. I am sure the Chancellor of the Exchequer is not one of the latter. Finally, let me put one more point. I welcome any increase of any kind in this sort of pension. What the Government is really doing is coming too late in the day; these people have actually met the increased cost of living before they get the increased pension, but I agree with the statement made many times to-day that this Bill, with all its favourable provisions, looking at it from every point of view, is not worthy even of a very poor type of coalition Government.
  Mr. Spearman: The line I want to take is rather contrary to what has been expressed in the speeches of other hon. Members. In the speeches we have heard, there has been a certain lack of realism. We have been talking about distribution without really knowing what there is in the pot to distribute. In times of peace, it may very well be that the State can increase its distributions to a very great extent at the expense of the rich and there may be occasions when it is very right to "sting" the rich. The position in wartime, surely, is entirely different. At the present time there are no surplus goods available. It is true that we could make more goods available by reducing the war effort, but that none of us are prepared to do. Therefore, there are two alternatives. The first is that you can increase pensions and thereby the demand for goods in which case you get a scramble for goods and rising prices. We know the story of the man who "asked for bread and was given a stone." It seems that if we press the Chancellor too much he may find himself in the position of having to give us a stone. I disagree with the point made by the hon. Member for Cheltenham (Mr. Lipson) who said that it is easier to afford this because it is only for the war period. It is just because it is war time, when we cannot have more goods available, that it is far more difficult to make such distributions than it would be in time of peace.
  In the one alternative, then, you get a scramble for goods and a rise in prices and are no better off. The other is to cut down the effective demand. How are you to do that? I am all in favour of making such an increase on the distributions as we can, but I suggest that, before we press the Chancellor too much, we ought to get from him some review of the position so that we can see how much the demand for goods could be cut down by further taxation or by further extensions in rationing. I think we should face up to these facts and know just what the position is. We ought to know what price in further taxation or rationing we should have to pay for these increases; we should then have a clear picture on which we could base our priorities.
  Mr. Evelyn Walkden; I intervene for a moment or two for one reason alone. I accompanied the regional
  1832
  deputation which met the Financial Secretary to the Treasury, and my reason for joining it was because of my concern for the servants of local authorities, and I presumed to state a case, not because I was briefed by a trade union, but simply because I felt that injustice was being meted out to local authority servants. May I say right away that I am not criticising many aspects of this Bill, or arguing about a means test, or whether it falls short of what we expected? I say quite frankly to those on the Treasury Bench that, in the main, I welcome this Bill. It goes a long way towards meeting what I believe we ought to ask for. I will tell the House why. I cannot become enthusiastic, for example, about surveyors and town clerks and ex-officers of local authorities, like the engineer of the borough of Wimbledon. I do not know whether his pension is £1,000 or £1,200, or whether the surveyor of a neighbouring authority has a pension of £700 or £800. I cannot become enthusiastic about his having a 12 or 25 per cent. increase. I do not feel like that. I do feel that the man at the bottom, who has done the scavenging for local authorities, laid the sewers, looked after the highways and done all those dirty jobs associated with local government, is not getting a square deal in this Bill, and I do not see how one can expect, at this stage, a Bill that will give him a square deal. We cannot adjust what has been wrong for years and years by introducing in wartime some Measure which will give 25 per cent. on the cost-of-living basis.
  There ought to be a complete overhaul of the whole superannuation scheme affecting local government, and we may as well face it. There are men in the Surrey borough in which I reside who have undoubtedly saved the borough thousands of pounds by their ingenuity and skill as navvies and labourers, and they have a pension of 10s. a week, and that is all they can get. Maybe, over recent years, they have had a slight adjustment, making it 12s. 6d., and this Bill may make it 15s. I cannot feel satisfied with that. On the other hand, I could not sincerely criticise the Government for having carried out a promise which was given on the Floor of the House, regarding an adjustment because of war-time needs and the increased cost-of-living.
  Will the Government during the Committee stage look at one or two examples which will be quoted in respect of Amend-

  1833
  ments to be moved by hon. Members on this side of the House? Will they take into account some of the shortcomings which we shall endeavour to present in a sincere manner? Will the right hon. Gentleman give an undertaking that the Chancellor will concede whatever measure of adjustment he can afford to those who are receiving small amounts, particularly from local authorities by accepting whatever Amendment is possible. I believe that, if we approach the matter in that spirit rather than in a spirit of carping criticism, the Chancellor will get support from both sides of the House. I do not think for a moment that anybody on these benches could possibly become enthusiastic because many of the officers at the top of the scale in local authorities are not getting an increase of 20 per cent. or 25 per cent. because the Bill is based on a means test. I support the principle of the Bill, and I hope that we shall get it placed on the Statute Book without much delay.
  The Financial Secretary to the Treasury (Mr. Assheton): Although a number of hon. Members on both sides of the House have criticised the Bill and some hon. Members have not exactly wreathed the rod of criticism with roses, none the less, there has been quite a measure of support for the Bill itself. More than one hon. Member who has spoken has told the House that the Bill has gone a long way towards meeting the case which he himself has felt was in need of being met. The hon. Member for Doncaster (Mr. E. Walkden), who accompanied the deputation which came to see me not very long ago, put that point of view forward, and he asked whether, when it comes to the Committee stage, my right hon. Friend the Chancellor will be prepared to meet the House in a helpful way. I think that I can give the House that assurance. There are a number of points which may be suitable for consideration on the Committee stage and which may be brought forward, but I want to make it clear, that there are certain principles which my right hon. Friend has laid down from which he does not see his way to depart.
  I would like to deal with some of the minor points which have been raised in the course of the Debate, and then perhaps to turn to the principal points of attack made in the speeches of the hon.
  1834
  Member for Rugby (Mr. W. J. Brown) and my hon. and gallant Friend the Member for Petersfield (Sir G. Jeffreys). The right hon. Gentleman the Member for East Edinburgh (Mr. Pethick-Lawrence) began by asking a number of questions, which I will try to answer. The first question he asked was as to the significance of the word "may." As far as the powers of the Government are concerned, it is the habit, which has long tradition behind it, to use the word "may" when the executive is concerned, and the word "shall" when local authorities and others are concerned, and we are not departing from precedent on this occasion. It has always been done in that way and the fact that the Treasury is given a power is no new thing. It is clear that these powers will be exercised. The right hon. Gentleman asked about local government officers and wanted it to be made clear whether the provision covered all local government servants. I want to make it clear that it does cover all pensionable local government servant and not only local government officers. He asked whether there was an option to local government authorities to exercise the powers under this Bill or whether it was mandatory. It is mandatory upon local authorities and not optional.
  The point was raised, both by the right hon. Gentleman and by another hon. Member, as to whether the Port of London Authority, the Metropolitan Water Board and the Thames Conservancy Board were covered by the Bill. The answer is that the Metropolitan Water Board is covered because it is a local authority, but the Port of London Authority and the Thames Conservancy Board are not covered by the Bill. They were not directly covered in the earlier legislation. Although wide powers were given to bring other classes of pensioners within it, they were not exercised in relation to these two bodies and it is not thought proper that they should be put into this Bill because they are not directly the concern of the Government. The right hon. Gentleman asked why Clause 4 was framed as it is. It deals with the question of extending the provisions of Clause I. As the House will have noticed, the Government ask for powers under this Clause to extend the provisions of the Bill to certain other closely defined categories.

  1835
  The reason for it is, that it is not possible to be certain in advance what all these categories may be. We have made provision that, if any category is to be brought in, there shall be an affirmative Resolution by this House, and so, there will be opportunity for hon. Members to criticise when the time comes. The right hon. Gentleman the Member for East Edinburgh also asked whether in fact we could underwrite changes in the cost-of-living. That raises a very big question.
  Mr. Pethick-Lawrence: May I ask the right hon. Gentleman whether the provision covers persons employed by local government officers and includes these local government servants though they are not so in technical wording?
  Mr. Assheton: I must apologise for not having remembered that point, but it is one of the very classes with which Clause 4 is designed to deal, and we have not overlooked it. The right hon. Gentleman then raised a point of whether the Government would underwrite changes in the cost-of-living as a whole. My right hon. Friend the Chancellor does not feel able to do that without the risk of getting into that inflationary spiral of which we have heard so much already. It is a subject on which a great deal could be said, and I do not think this is the occasion for developing it further. If it were to be developed further, there are all sorts of classes of persons who have a contract with the State, such as those who obtain interest on Government loans and so on, who might also have a case which might have to be considered.
  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 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.
  On the main issue which was raised by my hon. and gallant Friend the Member for. Petersfield (Sir G. Jeffreys), I should like to say a word or two. I am quite certain that every hon. Member of this House appreciates the sincerity with which the
  1836
  hon. and gallant Member put forward his case, and no one speaking from this Box could complain that an ex-officer with so distinguished a record of service as the hon. and gallant Member should put forward this case. I remember very well the first occasion on which I had the privilege of seeing my hon. and gallant Friend. It was more than 25 years ago, when he was reviewing a parade of cadets and I was occupying a position in the rear rank of a platoon—such a position as is properly occupied by someone who might easily make a mistake. I remember, after the parade, asking someone about my hon. and gallant Friend. I remember being told that there were two qualities for which he was known. One of them was that he was very attached to dogs, and that seemed to me a very good quality; the other quality was that he was a man who took an exceptional interest in the welfare of the officers and men who served under him. Those are qualities which every hon. Member of the House must appreciate. I do not complain at all of what my hon. and gallant Friend has said on this occasion. He did make one charge, however, which must be gone into. He made a charge of bad faith on the part of the Government and referred to certain passages in the Royal Warrant of 1919 to which the signature of my right hon. Friend the Prime Minister is attached. There has not been time to examine fully that particular point, but I would like to assure my hon. and gallant Friend that we will go into that before the Committee stage and be prepared to meet him with full argument on that particular matter.
  With regard to his main point, I want to make this clear to the House. In the first place I do not think it is fully appreciated that it was only 20 per cent. of the pensions of officers to which the cost of living variation applied. In other words, four-fifths of the pension were stabilised and one-fifth was subject to this variation. But the criticism was made that five per cent., seven and a half per cent. or ten per cent. was a very inadequate percentage of increase to apply in connection with the rise in the cost-of-living of some 30 per cent. I am sure those hon. Members have not fully in mind the fact that it is only one-fifth of the pension of the ex-officer which is concerned in this argument.

  1837
  Some hon. Members have asked why it was that consolidation took place in 1935, and suggested that consolidation was a bad thing. I really do ask the House to consider that seriously. There is a good deal to be said against fluctuating pensions. They only have something to be said for them if the cost of living itself is fluctuating very much also. After the last war, unfortunately, the cost of living did fluctuate for a very considerable time but, by 1935, it had become apparent that the fluctuations were not so violent as they had been in the past and so, in 1935 stabilisation was determined upon. That was not altogether inconvenient to pensioners. It was an advantage to them in many ways, and it would have remained an advantage to them if the cost of living had not gone up. From 1935 until 1939 no pensioner suffered from this consolidation because it took place on the basis of a cost-of-living, figure of 155. When the consolidation took place the cost of living was a little over 140 and even in 1939, when the war broke out in September, the figure was still only 155. So it is quite clear that no pensioner suffered from this consolidation until the time when war broke out.
  Mr. W. J. Brown: That just is not the case. The right hon. Gentleman is talking complete nonsense. When pension was consolidated in 1935, it is perfectly true that it was consolidated higher than the cost-of-living figure, but that was done for reasons that have no relation whatever to pensions. The reasons were related to the low levels of payment of the public services which the Royal Warrant of 1935 to 1939 recognised. Between those two dates, 1935 and 1939, the pensioner got less money as the result of what the Chancellor did than he would have done if the cost-of-living bonus had continued in operation.
  Mr. Assheton: Making allowance for the invariable courtesy of the hon. Member, I would like to point out that the facts as I gave them were strictly true.
  Mr. Brown: But not the construction which the right hon. Gentleman put upon them.
  Mr. Assheton: It is strictly true that no officer suffered from this consolidation of pension between 1935 and 1939. I am sure my hon. and gallant Friend does not challenge that because, when the matter
  1838
  was discussed with him when he came to the Treasury, though he was not at all satisfied with the response, and the Chancellor's view on the matter, he did not challenge that particular point then, and neither does he challenge it now.
  Sir G. Jeffreys: I am certainly not challenging that particular point now, but what I am saying is that between 1919 and the present day the pensions of a large number of pensioners have been substantially reduced.
  Mr. Assheton: Another point which my hon. and gallant Friend raised, which I would like to deal with in passing, was the question of disability pensions. He mentioned the fact that those have been restored and wondered why, if it was possible to restore those, it was not possible to restore fully those cuts which have been made in connection with the retired pay. There is a great difference, because disability pensions are related to subsistence, whereas retired pay is related to length of service and pay and rank and so forth but not in any way to subsistence.
  I would like to deal for a moment with some of the points put by my hon. Friend the Member for Rugby. He complained of three things. He complained of the scale of the increases, of the means test, and of the whole approach of my right hon. Friend the Chancellor of the Exchequer to this matter. I think those were the three main points he made, and he made his case as he always does, extremely well. On the question of the means test—and I should like to point out to my hon. Friend the Member for Westhoughton (Mr. Rhys Davies) who is no longer in his place, that this is a case of a means test rather than a needs test—my hon. Friend will bear this in mind, that the whole approach of the Chancellor to this matter has been on the basis of hardship. He said at the start that it was on grounds of hardship that he was dealing with this matter, and not on other grounds. There may be many pensioners who have small pensions and who would like to see those pensions increased but who are now, fortunately, in the circumstances of war, able to earn a good living, and we are very grateful indeed to them for coming back and working as they are in the war effort. Moreover, there are some of them who are not in any need owing to the fact that they have other resources. Those are the reasons why the

  1839
  Chancellor has found it necessary to impose the test of means in this Bill. If the House understands that the approach is the approach of hardship, it will be appreciated why it is necessary to have a means test. But when it comes to the second part of the scheme, which deals with the retired pay of ex-officers and ex-civil servants, the matter is somewhat different because the increases being given there are being made not to meet hardships so much as a grievance, a grievance which has been so fully expressed by my hon. Friend the Member for Rugby and my hon. and gallant Friend the Member for Petersfield. The Chancellor felt that that sense of grievance should in some way be met and he has gone some way to meet it. He was asked why he could not go the whole way, and the answer he gave was that if he were to do that he would be doing a great deal more for pensioners than he would be doing for those now serving. Those serving in the higher ranks of the Army and the Civil Service have not had increases of pay, and if my hon. and gallant Friend the Member for Petersfield's proposals were to be met fully it would be very difficult to see why the man who is now serving should not be put in exactly the same position.
  Sir G. Jeffreys: Does my right hon. Friend accept the fact stated by the Chancellor of the Exchequer last year, that to restore what was taken away—which is what we are asking for—would cost only £500,000 per annum?
  Mr. Assheton: I have not checked the exact figure, but it is not the amount of money involved which has determined my right hon. Friend's decision in this matter; there are other considerations which I have been trying to put before the House. My hon. Friend the Member for Rugby talked about the cost-of-living index. There has been a lot of talk about that ever since it started, and I am quite certain that it will always be possible to criticise it. But for comparative purposes it is the best instrument we have to hand, and although my hon. Friend pointed to a document which was issued by a learned authority in Oxford, which stated that the cost of living had risen by 45 per cent., he did not say or, if he did, he will allow me to point it out again, that if you take into account the cost of living as including not
  1840
  only necessities but luxuries you will find that there is a greater rise than 30 per cent. It has been the policy of the Government to keep the prices of necessities down and let luxuries rise. In fact, we have taxed luxuries very heavily indeed, and in consequence their prices have risen very much more than the prices of necessities.
  Mr. W. J. Brown: Does my right hon. Friend really believe that in the case of four civil servants out of five, who are on retired pay and receiving 30s. a week, or less, this element of luxury expenditure comes into the picture?
  Mr. Assheton: If that is the case then it is all the better for my argument. It is the luxuries which have risen in price and the necessities which have been maintained at this 30 per cent.
  Mr. Brown: Will my right hon. Friend bear in mind that Professor Bowles and the Oxford Institute say that whereas the Ministry of Labour's figure for food alone has increased by 6 per cent. they put it at six times that amount, at 36 per cent.?
  Mr. Assheton: If only I had a little more time and I could find the document I was looking for, and from which the hon. Member quoted—I have it here now—I could point out that in spite of what he has said there is this conclusion:
  "The analysis of the 208 budgets collected in 1943 conveys the impression that, official and semi-official, rationing on the one side and the raising of the lowest income levels on the other, continue to operate towards a fair share-out of essentials."
  It backs up the policy which the Government have been trying to enforce throughout the war—
  Mr. Brown: That is not the right document.
  Mr. Assheton: —which is to level all essentials down and to allow the level of luxuries to rise. My hon. Friend the Member for Bridgeton (Mr. Maxton), who is not in his place at the moment—
  Mr. Maxton: No, I am over here.
  Mr. Assheton: I had no intention whatever of burking the issue or failing to meet my hon. Friend's points. He went rather wide of the subject matter of this Bill and made an interesting speech which dealt with the question of superannuation and was, in fact, a criticism of a very

  1841
  large number of the superannuation Measures under which we are now operating. That is, of course, a much wider matter than the one we are trying to deal with in this Bill. He quoted an illustration of a widow of a police sergeant who was receiving, I think, 10s. 5d. a week. I must point out that that widow is in a much more favourable position than many because she has a pension, whereas widows of Crown servants do not necessarily have any pension. Moreover, a great many of these pensions are in no way subsistence pensions and have never been thought of as such. They are, however, at the least a little help to them in their old age.
  Mr. Maxton: I think the woman is 5d. better off than an ordinary member of the community would be.
  Mr. Assheton: No, I think she gets the advantage of the old age pension as well. My hon. Friend the Member for Oxford (Mr. Hogg) made a charge which I cannot allow to pass without saying something in reply. He said that the Crown was a bad employer. That is not a statement which anyone speaking on behalf of the Government can for one moment allow to pass unchallenged. The Crown has a great responsibility and discharges that responsibility to its servants as best it can. In many cases the Crown has led the way. Indeed, there were pensions for servants of the Crown long before they were made available in industry. I am not saying that servants of the Crown are all treated as well as they should be. I hope that in time, when our circumstances are better, there may be opportunities for improving their circumstances but I cannot let it go forth from this House, unchallenged, that the Crown is a bad employer.
  Mr. Montaģue: How many private employers are increasing their superannuation by 25 per cent.?
  Mr. Assheton: I think very few are in a position to do so. I have done my best to answer the main criticisms of this Bill. My hon. Friend the Member for Rugby and my hon. and gallant Friend the Member for Petersfield were among those who have been on deputations to the Treasury in the past year. On neither occasion have their full demands been met, but here is offered a distinct improvement, particularly for those whose circumstances
  1842
  are the least fortunate. I hope the House will give this Bill a Second Reading now and allow us to consider its provisions in greater detail when we come to the Committee stage.
  Sir I. Albery: There may be some hon. Members who are inclined to vote against the Second Reading under the impression that they will not have much liberty of amendment on the Committee stage. I am under the impression that the Financial Resolution is very widely drawn and that there is nothing to prevent them moving, where they think fit, for certain increases. Could my right hon. Friend confirm that or otherwise?
  Mr. Assheton: I should really have mentioned the point because it was raised by the right hon. Gentleman the Member for South-West Bethnal Green (Sir P. Harris). The Financial Resolution has, on this occasion, been somewhat generously drawn and the House will have an opportunity of moving Amendments, with regard to percentage increases.
  Question, "That the words proposed to be left out stand part of the Question," put, and agreed to.
  Question, "That the Bill be now read a Second time," put, and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the Whole House.—[Captain McEwen.]
  Committee upon the next Sitting Day.

  PENSIONS (INCREASE) [MONEY]
  Considered in Committee.
  [Major MILNER in the Chair]
  Resolved:
  "That for the purposes of any Act of the present Session to provide for the increase of certain pensions payable in respect of public service, it is expedient to provide for the payment out of moneys provided by Parliament of any additional sums required to be paid out of such moneys for the purpose of any increase which may be authorised by the said Act to be made, in respect of any period after the 31st day of December, 1943, in any pension payable out of the Exchequer or out of the Education (Scotland) Fund, in respect of any pensioner whose income does not exceed such limit as may be provided by the said Act, being a pension payable under the Superannuation Acts, 1834 to 1943, the Elementary School Teachers (Superannuation) Acts, 1898 to 1912, the Teachers (Superannuation) Acts, 1918 to 1939, the Education

  1843
  (Scotland) (Superannuation) Acts, 1919 to 1939, section 29 of the Finance Act, 1932, or the enactments relating to the pensions of the Royal Irish Constabulary.
  Provided that in the case of any pension payable under the Superannuation Acts, 1834 to 1943, which does not exceed such amount as may be prescribed by the said Act, an increase may be authorised without regard to the income of the pensioner." (King's Recommendation signified.)—[Sir J. Anderson.]
  Resolution to be reported upon the next Sitting Day.

  PUBLIC WORKS LOANS (REMISSION OF DEBT)
  Resolution reported:
  "That, for the purposes of any Act of the present Session relating to local loans, it is expedient to authorise the remission of arrears of principal and interest due to the Public Works Loan Commissioners in respect of Eye-mouth Harbour."
  Resolution agreed to.

  PUBLIC WORKS LOANS BILL
  Considered in Committee.
  [Major MILNER in the Chair]
  Clause 1 ordered to stand part of the Bill.

  PUBLIC WORKS LOANS BILL

    CLAUSE 2.—("Certain debts not to be reckoned as assets of the Local Loans Fund.")
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. Boothby: This is the operative Clause of the Bill, which is in effect a Bill for the relief of one harbour—Eyemouth Harbour. The question I want to ask is—why only Eyemouth Harbour? There appears to be neither rhyme nor reason in the policy of the Government as far as public works loans are concerned. Some debts are written off, and some are not. I asked on the Second Reading what was the reason governing the writing off of debts of harbours, and I was informed that they were written off only when there was no reasonable prospect of their being repaid. That leads to a very haphazard state of affairs.
    The Chairman: I do not really think this is in Order on this Clause.
    Mr. Boothby: I was under the impression that this, and the next Clause, specifically remitted the debt of Eyemouth
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    Harbour to the Public Works Loans Board. If it is out of Order, I will defer my remarks to the Third Reading.
    Question, "That the Clause stand part of the Bill," put, and agreed to.
    Clauses 3 to 5 ordered to stand part of the Bill.
    Schedule agreed to.
    Bill reported, without Amendment.
    Motion made, and Question proposed, "That the Bill be now read the Third time."
    Mr. Pethick-Lawrence: There is only one word I wish to say with regard to the power of local authorities to repay their debts. Because of the possibility of their failure to meet their liabilities, many local authorities have desired to pay off their debts before the date of redemption comes along. I hope the difficulties which arose out of the special circumstances of the war of 1914–18 will be kept in mind and that because of the price of money the situation after this war will be quite different from what it was before. That is an argument for taking care that after the war the price of money does not rise.
    Mr. Boothby: I was saying on the Committee stage that the reason given by my right hon. Friend the Financial Secretary on Second Reading for writing off this debt of Eyemouth Harbour was that there was no reasonable expectation of their being able to repay their loan. If that is the only reason why the loan should be written off, it will certainly discourage other bodies, and particularly local authorities, from giving guarantees, or underwriting grants or loans, or taking any financial responsibility for loans made to harbour authorities in the future. It is surely a very haphazard principle to apply to what is, after all, a very important part of our public life. I have no objection to the Eyemouth Harbour debt being written off. What I am complaining about is that the sole reason for doing it should be that they are financially "bust" beyond hope of recovery. I submit that the reason which ought to be given for writing off this debt is, for example, the special importance of the harbour to the fishing industry. It seems to me that the Government, or the Public Works Loans Board, have no regard to the future requirements or responsibilities

    1845
    of harbours or for the interests of the fishing industry as a whole. I think there should be a moratorium on all harbour debts during the war, and therefore that this Bill should have been extended to cover many other harbours—
    Mr. Deputy-Speaker (Major Milner): The hon. Member cannot develop that argument on this Bill.
    Mr. Boothby: In that case I will hastily move to my final point. I would like my right hon. Friend to give an assurance, arising out of this Bill, and the inadequate explanation he gave on Second Reading, that the Government will reconsider the whole policy of public works loans in the near future; because this matter, which involves the whole question of national development, cannot be left as it is for very much longer.
    The Financial Secretary to the Treasury (Mr. Assheton): I shall, naturally, take note of all my hon. Friend has said, but I would get outside the rules of Order if I attempted to go into it in much detail. Under the original Act under which we operate, the only circumstances which we are allowed to look at in deciding whether to write off a loan or not is whether the
    1846
    debtor is likely to be able to repay it. My right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) raised an important point about the rate of interest. As he understands, the fundamental reason why you cannot reduce the rate on existing loans is that the fund has borrowed on long-term substantially at the rate of interest at which the money has been lent. I appreciate the point he made about the benefits to be derived from cheap money. The statements which have been made with regard to cheap money by my right hon. Friend the Chancellor of the Exchequer in the past still hold good.
    Question put, and agreed to.
    Bill accordingly read the Third time, and passed.

  NAVAL FORCES (EXTENSION OF SERVICE) BILL [Lords]
  Considered in Commitee; reported, without Amendment; read the Third time, and passed, without Amendment.
  NAVAL FORCES (EXTENSION OF SERVICE) BILL [Lords]
    ADJOURNMENT
    Resolved: "That this House do now adjourn."—[Captain McEwen.]