HC Deb 05 May 1948 vol 450 cc1393-405

Order for Second Reading read.

10.1 p.m.

The Lord President of the Council (Mr. Herbert Morrison)

I beg to move, "That the Bill be now read a Second time."

The House of Commons Members' Fund is a purely domestic matter for the Members of the House, a matter in which the Government take a friendly interest, and in which a special responsibility falls upon myself as Leader of the House for advising the House. Happily it is one which does not arouse any conflict of view between the political parties and I hope, therefore, that I shall secure agreement on all sides of the House in moving the Second Reading of the Bill. If, however, as I believe and hope is unlikely, a Division should be challenged, the Whips will be off, as this is a matter for the Members of the House in their individual capacity.

The Fund is characteristically of a type that is peculiar to the House of Commons. It is a cross between a contributory pension and a benevolent fund. It is not quite a full pension fund in the sense that contributions automatically convey a right to benefit; if they did, I am afraid that the contribution would have to be much higher than it is at present; and it is not quite a benevolent fund on which any Member or ex-Member may claim, since the conditions and limits of grant are strictly prescribed in the Act of 1939, which this Bill seeks to amend, and only those who have contributed can qualify for benefit.

There is one aspect of the Fund to which I should like to draw particular attention straight away, because I think it important and, to judge from the Debate we had on this subject on 17th December last, it does not seem to be generally recognised. When the Trustees make an award to any new person, they must expect to have to continue making payments for some years to come. It may well be that some person may receive a grant on account of some temporary embarrassment and then get clear and cease to require it. But the only safe assumption for the Trustees in most cases is that their beneficiaries will be continuing liabilities; and, as the Home Secretary said in the Debate on 17th December last, it is important that benefit, once given, should not have to be reduced for lack of resources in the Fund. This means that the income of the Fund year by year cannot just be regarded as available for distribution to whatever deserving cases may crop up in that particular year. On the contrary, every new beneficiary of the Fund must be regarded as a potential annuitant; and this is why the Fund requires to build up a substantial balance, particularly in the early years of its life.

The Fund was created by an Act of 1939 and, after seven years of life, the House appointed a Select Committee to examine and report on the financial position of the Fund. This Committee reported in June of last year, and made certain recommendations, which may be summed up briefly by saying they thought that benefits ought to be increased and contributions reduced. The Government have looked carefully at these recommendations and they agree about the benefits, but they do not think it wise or prudent to reduce the contributions at this stage.

The Bill now before the House amends the Act of 1939 in three main respects. First of all, it makes the widowers as well as the widows of past Members eligible for the benefits of the Fund. That is, one might say, in the interests of sex equality, but it is the other way round from the way in which we are accustomed to consider this exciting and interesting topic. Secondly, it provides for increased maximum limits of grant. Thirdly, it enables the maximum amounts of both payments and contributions to be varied by Affirmative Resolution of the House, thus dispensing with the necessity for an amending Act whenever it is desired to alter the amount of the contribution or the limits of grant.

As the House will remember, in the case of widows, the Select Committee recommended that: in order to secure that the rights of men and women Members under the provisions of the Act should, so far as possible, be similar, the trustees should be empowered to make periodical or other payments out of the Fund to the widower of a woman who has been a Member of the House of Commons, if, in the opinion of the trustees, he is, by reason of age or mental or bodily infirmity, incapable of earning his living. Clause 1 of the Bill implements this recommendation.

Clause 2 prescribes the new maximum limits of benefit which the Select Committee recommended. The hon. Member for West Willesden (Mr. Viant) recommended that there should be a power to vary contributions by Affirmative Resolution of the House, and in our view it is right that the House should be able to vary the finances from time to time by simple Affirmative Resolution.

Clause 3 is therefore an escalator Clause, providing both for the variation of contribution, and for the variation of the maximum rates of benefit by means of an Affirmative Resolution of the House. I think it will be generally agreed that this is an advantage. One of the difficulties of running a Fund of this sort is to keep a balance between income and commitments having regard to future liabilities. Now, if every time an adjustment is thought to be, needed, either on the contribution side or on the payment side, it is necessary to introduce and find time for the passage of an amending Bill, the adjustments will prove cumbrous and slow and expensive of Parliamentary time. We, therefore, propose this simpler procedure which will give the House all the control it needs of the affairs of the Fund without the necessity of passing an Act of Parliament whenever a small alteration is required.

It will be observed that the Bill itself makes no change in the deduction from Members' salaries, which remain at the rate of £12 per annum. This deliberate omission is one of the chief points of departure from the recommendations of the Select Committee. The reason why we disagree with the Select Committee on this point is that we regard the experience of the eight years of the Fund's life as abnormal and no sure guide to the future. It is too short a time on which to base any reliable estimate of the future claims on the Fund. The Fund has not yet reached a stable condition, where new awards are on the average balanced by the termination of old awards. We shall, it is true, know better where we are in this respect after the next dissolution of Parliament; but meanwhile it is only safe and prudent to assume that at the end of this Parliament will see a substantial increase in the claims on the Fund. That is a precautionary point of view. I know it looks as though we were sitting unnecessarily tight on a big surplus, but I do urge upon Members to take into account not only future uncertainties and the probability of a big increase in claims, but also the importance of not reducing annual grants once made. For these reasons, I think we should, in these next few years, keep a close watch on the financial effects of the new limits of grant and regard this next year or two as an experimental period. The next review is due within a year of the dissolution, and nobody can say what the position will be at that time.

This brings me to the responsibilities of the Government Actuary who will carry out the review and report to the House, as provided in Clause 4. In the Debate on 17th December, some Members said some not very nice things about the Government Actuary—though I do not think they were intended personally—and took the line that, since the future liabilities of the Fund were so uncertain, anybody's guess was as good as the Government Actuary's, as to what they might be. With respect, I do not agree with this view. I grant the uncertainties, but I am myself convinced that it needs an actuary to advise upon a scheme of this sort. Nobody but an actuary can say how much of the resources of a Fund of this sort it is safe to disperse at any particular time without running the risk of not being able to meet future liabilities. There are, it is true, many uncertainties here and too little experience so far, on which to base a judgment. But that does not alter the fact that to advise on the Fund is the job of an actuary and not—as some hon. Members suggested, when we last debated this subject—the job of the Comptroller and AuditorGeneral—good man as he is. And if we are going to have an actuary, I am sure it will be agreed that the Government Actuary is the man we must have.

Mr. Scollan (Renfrew, Western)

Would my right hon. Friend make one point clear? There seems to be a popular conception that every Member of Parliament qualifies for this pension. Would the Lord President make it clear that they have to serve for ten years and satisfy a means test, and that only a few will ever qualify for benefits from the Fund?

Mr. Morrison

It is quite true that hon. Members must have served in the House for ten years. It is true that their means are taken into account. If we did not have those qualifications the contribution of hon. Members would have to be much greater than it is at the present time. I am not disputing my hon. Friend's arguments. I am only warning him of the financial implications of the argument which he is putting, which I am sure should appeal to him as a good Scot.

Mr. Scollan

I think that we shall be able to pay off the National Debt with this before we are finished.

Mr. Morrison

I think that is unduly optimistic.

Of course the scheme could be run another way. We could "pay as we go" from year to year, but that would certainly mean sharp and indeed burdensome increases in the rate of contribution, as the claims on the Fund accumulate—as they are bound to do in the next few years. Moreover, we should be laying up a debt which our successors in this House would have to meet for our benefit. This is a primrose path which I am sure we should be ill-advised to take. We had much better stick to the present system.

I have received recently from the Chairman of the Trustees, the hon. and gallant Member for Ayr and Bute, Northern (Sir C. MacAndrew), who has taken such a great and valued interest in this matter—and I am sure he will not mind my coupling with his name the name of my hon. Friend the Member for Willesden, West (Mr. Viant) who, with him, has taken a very great interest in the Fund—a private suggestion to the effect that the Trustees should be given in this Bill some reasonable discretion to make ex-gratia payment to ex-M.P.s and widows who are not qualified by reason of the fact that they have not subscribed. We are considering this suggestion, 'and I can assure the hon. and gallant Gentleman that we are not unsympathetic to it.

I cannot end without saying—and here I am sure I speak for the Whole House, in all quarters—how greatly indebted we all are to the Trustees for the conscientious and skilful manner in which they have discharged their duties in administering the Fund. The House owes them, and particularly the Chairman, a great debt for this important and valuable service. I hope that it may always be discharged with the same tact, discretion and efficiency, as it has been over these last eight years.

This Fund was an effort which was made to help ex-Members of the House who were in difficulties. It was a matter in which the late Mr. Neville Chamberlain took a strong personal interest and in which he was exceedingly helpful when the Fund was initiated. I hope that this Bill, which gives us a somewhat greater elasticity in the administration of the Fund, will commend itself to the favourable consideration of the House.

10.17 p.m.

Colonel Sir Charles MacAndrew (Ayr and Bute, Northern)

First of all, I should like to thank the right hon. Gentleman the Leader of the House for being so kind about myself because I feel that for the last two years I have had rather a nuisance value on this subject, from his point of view. I was glad the right hon. Gentleman pointed out that this is not a contributory fund, but is really a system of periodical payments which are reviewed annually. I think there is a certain amount of misunderstanding about what the Fund really intends to do. As the Select Committee said, it is for the purpose of preserving former Members, their widows and orphans from destitution.

It is not a pensions fund in the ordinary sense of the word. Therefore, the means test which so many people think is degrading, humiliating and unpleasant is absolutely essential. I have had letters complaining about the means test from beneficiaries and others, but I do not think it is humiliating because, after all, every Income Tax payer has to furnish details of his position; in that case he furnishes details in order to pay something and in this case he furnishes details in order to receive something. I do not think anyone has any reason to complain about the means test, which is absolutely necessary.

As the right hon. Gentleman said, the Bill before the House largely carries out the proposals of the Select Committee which reported last Summer, and the grants have been increased very considerably in their recommendations. Ex-M.P.s get £100 a year more and widows' grants are doubled to £150. Orphans receive an increase as well, and the upper limit is raised in each case by £100. That will be a very great help to the 20 beneficiaries who, at the moment, are benefiting from the fund. There are 10 widows and nine ex-Members, and there is another case of a Member who will come into benefit on 1st June. Thus there are 20 people right away, and with the raising of the upper limit no doubt there will be others of whom we do not know at the moment, but who will be able to receive benefits of which they are probably badly in need.

The right hon. Gentleman referred to the contributions. In the report of the Select Committee it is said that Members should not be called upon to contribute more than is necessary, and I rather hold to that view, which I have no doubt is shared by a great many other hon. Members. The Select Committee suggested that the £12 which we all pay should be reduced to £9. However, as we have just been told, the £12 stays. It is quite obvious that an insurance scheme such as this—if I may so call it—covers such a small field that it is quite impossible for any actuary, whether a Government one or not, to have the slightest idea about it. He does not know who are going to lose their seats, whether they will be over 60, who will be here for 10 years, and who will be badly off. It is impossible for any actuary to tell. To ask a man to tell such things is to ask him to do an impossibility.

As to finance at present, if under the new proposals our expenditure is doubled, even then—suppose we were to reduce our contributions from£12 to £6—we should be running on a surplus of over £1,000 a year, so we need not think we are to be short of money. However, I welcome the suggestion that by way of Resolution of the House we can put up or down the contributions or benefits. The present procedure of putting a Bill through Parliament, in this House and in another place, is cumbersome, and is quite unnecessary, because it is a purely domestic matter, and I think we can deal with it perfectly well. The right hon. Gentleman said he thought it would take a year or two before we could see what is going to happen. My feeling is that in a very few months we shall see to some extent how we are placed. We must not forget that we have in reserve £60,000. The Select Committee thought £50,000 was adequate. We have plenty of money to come and go on, and although I am against running the sum down, I do not think we need in the least be worried about any pension now being given, or fear that we shall have to withdraw it. That is quite unthinkable.

I would say a word about the Government Actuary. This may, perhaps, be controversial, but what I think is this. Under the present Act, at least every five years the trustees have a report from the Government Actuary. The cost of these reports is very great. As the Select Committee pointed out, it is more than double the annual allowance to the secretariat of the Fund who supply the Actuary with the figures. The two reports we have had have cost very nearly £300, which could very well have been spent in the case of some of these widows or ex-M.Ps. With regard to these reports, Lord Courthope, who was my immediate predecessor as Chairman of the Trustees, when he gave evidence before the Select Committee, said that the trustees had been shocked at the heaviness of the charge made by the Government Actuary for these statutory reports.

I aim to put down an Amendment in Committee to wash out this Government Actuary's report altogether, and for this reason. The Leader of the House said something about the Comptroller and Auditor-General. I do not for a moment suggest that he is an actuary, but he is an auditor and, so far as the safeguarding of the accounts is concerned, he can do that adequately. As far as investing money is concerned, we get advice from the Public Trustee, and, in any case, it all goes into Government securities. I honestly think that the reports by the Government actuary are quite unnecessary. I think we can be sufficiently safeguarded by the auditor's report. I do not think it is possible for the Government actuary to tell us anything we do not know, and I have the cheek to believe that I know more about this than he does.

There is another point about which I want to move an Amendment, to carry out the recommendations of the Select Committee. In their Report they say that in no circumstances should a grant from this Fund be made to a Member of the House of Lords. As the House knows very well, all the money which we give to these people is kept an absolute secret. But should it happen that we, as a House of Commons, are giving financial assistance to Members of another place, a constitutional issue of some magnitude might arise. Personally, it does not in the least matter to me whether the House accepts or rejects the Amendment which we are putting down, but to place the obligation of financing people in another place on us as trustees and on the House itself, is, I think, asking people such as myself to bear too great a responsibility in view of all the possible repercussions which might arise.

In regard to what the right hon. Gentleman said about this lump sum which I suggest should be given to us to use and spend according to our discretion, ac he pointed out anyone who has not been a Member of this House since 28th July, 1939, or their widow, is not eligible for any money from the Fund. Some of us know old Members of this House who would be very much helped by a little money. We have plenty of money, and these are old people and, therefore, it would be a diminishing claim. I think that if we were given £5,000 to use at our discretion it might be very usefully used, and I do not think that the recipients are people who would be likely to spend it in any silly way. I think that if we were given freedom to deal with a sum of that kind, it would be a very wise action on the part of the House. I sincerely hope that none of us here will ever have cause to make any claim on the House of Commons Members' Fund.

10.28 p.m.

Mr. Nigel Birch (Flint)

The Leader of the House mentioned this as being a recommendation of the committee on which I had the honour to sit, but it was not a unanimous recommendation, and it raises a question of principle of some importance. I imagine that it is doubtful whether it affects anyone at all—whether there are any widowers of past Members—hut it has never been a principle of our law that a woman was responsible for keeping her husband. Obviously, the man is responsible for his children and for his wife, but under this Bill it does appear that being the husband of a female Member of Parliament is rated as a full-time job, and he is entitled to a douceur from the Fund because his wife was a woman of ambition and activity. It seems to me that that cuts across all our social legislation, and if we establish for our own benefit this principle that under certain circumstances the man is entitled to a pension owing to the activities of his wife, we are doing something which is new, for which there is no precedent, and which I do not think we ought rightly to do.

10.29 p.m.

Mr. Viant (Willesden, West)

I am deeply indebted to the Lord President of the Council for the admirable manner in which he has introduced this Bill. As Chairman of the Select Committee I can say that the committee gave a considerable amount of time to the preparation of the report, and we were very much impressed by the admirable manner in which the Fund had been administered by the trustees. All this is done in private. Few Members have any idea, unless they read the report, of the amount of work done by the trustees and the officers of the Fees Department, who are mainly responsible for the office work in connection with the Fund. They have done a really good job of work and I want to avail myself of this opportunity of saying how much their work was appreciated by members of the Select Committee during their inquiry.

The hon. Member for Flint (Mr. Birch) raised the point of widowers, on which he said there was not unanimity. There was no minority report, and I was very grateful for that. The feeling of the Select Committee about lady Members of the House was this. This is not a pensions fund; it is more in the nature of a benefit fund. Lady Members pay the same subscriptions as male Members and they and their husbands stand in the same position as male Members and their wives. They are equally liable to be overcome by adverse circumstances, and this Fund is nothing other than a preparation for a day of adversity. On these grounds alone the majority of the committee felt they could not make an exception in any way. I think the majority of this House will appreciate that these are sterling principles on which to base the advantages which are to accrue from the administration of the Fund. I would have anticipated opposition to any differentiation not only from lady Members, but also from some of the male Members. In these days of equality, lady Members are accepted on precisely the same conditions as male Members. I hope the House will not embark on a discussion of that consideration.

I was impressed by the manner in which the report was received. Now we have the Bill. I hope it is going to receive its Second Reading without any controversial discussion. The Fund has already served a great and useful purpose in helping ex-Members of this House, more especially the widows of ex-Members. In the early days of building up this Fund many Members were not in a position to prepare for their old age. The Fund enables preparation to be made and assistance to be given where it is needed. The point has been made that there should be a sum set aside for ex gratia payments. There are a number of widows today whom the Trustees are unable to assist. I hope the Lord President of the Council will look favourably on the proposal that has been made and that when we come to Committee stage there will be an Amendment or a new Clause which will give the trustees power to act along these lines.

10.35 p.m.

The Financial Secretary to the Treasury (Mr. Glenvil Hall)

Three points were made which require, perhaps, some brief reply. The hon. and gallant Member for Ayr and Bute, Northern (Sir C. MacAndrew) had some hard things to say about the Government Actuary; but as the hon. and gallant Member knows, it is obligatory upon the Government Actuary, under the Act of 1939, to report at quinquennial periods. This is a domestic matter, and it will be for hon. Members to decide when we come to the Committee stage whether they accept the view put forward by the hon. and gallant Member, or that of the Leader of the House. It is our view that actuaries do serve a good purpose.

Some hon. Members may take the view that the facts upon which they have to go in this matter are not many. Nevertheless, this Fund will continue down the years and obviously the time will come when the advice of the Government Actuary will build up a body of evidence on which we can judge. The Actuary then will be of the utmost use. I cannot help feeling that the hon. and gallant Gentleman was a little hard on the Government Actuary when he suggested that the charges made were excessive. As I think I said when we debated this on 17th December last, the work was carried out by senior staff under great difficulties during the war. More, than one inquiry was held by the Actuary. We went into this at the time, and we came to the conclusion that the cost, though it might seem to be a lot to some hon. Members, was nevertheless justified by the work involved.

The hon. and gallant Member also made a point about hon. Members who became peers, and voiced the view that we should insert in the Bill provisions to prevent their enjoying, if they come within the terms of the Act, any benefits from the Fund. That, of course, the Government will consider and we can discuss it at the appropriate time. Nevertheless, we must remember that hon. Members who happen to be in that position will have subscribed for the appropriate period and would not otherwise come within the ambit of the Fund. It may be their view, and that view may be shared by the majority of hon. Members in this House, that they should not be debarred simply because they have gone to the other place. Nevertheless, we note the point of view put forward, and on behalf of my right hon. Friend, I can assure the hon. and gallant Gentleman that it will be considered.

Sir C. MacAndrew

I was merely speaking on the constitutional point. I wanted to take the responsibility for deciding this question from the trustees.

Mr. Glenvil Hall

What the hon. and gallant Gentleman says is perfectly fair. I was referring to the constitutional point, which is, I agree, a point which must be considered. May I say in reply to the hon. Member for Flint (Mr. Birch), who in this matter is against equality of the sexes, that it is true that the Select Committee was not unanimous when it made this recommendation; but if he will read that part of the committee's report which deals with this point, he will find that it is only permissive, and that the type of case which was envisaged by the committee, as I understand their report, was that of a widower who is, by reason of age, or mental or bodily infirmity, incapable of earning his living. I think that the hon. Member will agree, on reflection, that in a case of that kind, the trustees of the Fund might like permission to give assistance if they felt that was the right course to take.

10.40 p.m.

Mr. Charles Williams (Torquay)

I would not have intervened except for the fact that the right hon. Gentleman has just attacked rather viciously the hon. and gallant Member for Ayr and Bute, Northern (Sir C. MacAndrew). Anyone who took the trouble to listen to my hon. and gallant Friend would realise that he put the matter in a kindly way and was only expressing a point of view which a good many of us feel, that the charge was a heavy one in proportion to the fund. I think it a pity that, when replying on a Bill of this sort, where we are all trying to work together, the right hon. Gentleman, in referring to my hon. and gallant Friend who is notorious for his kindliness and good feeling towards Members of this House, should be provocative. I would ask him in future, when dealing with a Bill of this kind not to try to stir up feeling.

Question put, and agreed to.

Bill read a Second time.

Committee to a Committee of the Whole House for Monday next.—[Mr. Popplewell.]