Clause 38.—(RECKONING OF UNESTABLISHED SERVICE.) (Hansard, 31 May 1949)

§ Mr. Glenvil Hall
I beg to move, in page 32, line 3, after "1935," to insert: and section three of the Superannuation Act, 1887. This and a number of subsequent Amendments to the Clause all have the same object. I think the House is well aware that when we were dealing with this matter upstairs the Committee came to the conclusion by a narrow majority that the whole of the service should count. We are endeavouring here to make the change.

§ Mr. Peake
I would respectfully suggest that we should accept the first two Amendments, which are, I think merely of a drafting character, and take the discussion on the third Amendment, which proposes to leave out certain words inserted by the Standing Committee, for it is upon that Amendment that we on this side shall wish to make a demonstration.

§ The Chancellor of the Exchequer (Sir Stafford Cripps)
I beg to move, in page 32, line 4, to leave out from "shall" to "apply," in line 8.
This matter arises, as my right hon. Friend has said, from a discussion which took place on the Committee stage as a result of which the Government were defeated in Committee and an alteration was made to the Clause. This is a matter in which it is very easy to arouse people's sympathy and, indeed, it is very easy for us all to feel sympathy for the cause. It is a question which arises out of the policies of past Governments who have not seen fit to reckon unestablished service towards established pension. The House will recollect that the Tomlin Commission made an investigation into this subject matter, which was very much discussed as a result of the large amount of unestablished service which originated in the first world war—and discussion was increased by the entrance of a great many ex-Service men on that basis after the first world war.
The Tomlin Commission recommended that the unestablished service, if the performer of that service was subsequently established, should be counted as to half towards the pension which would be earned under establishment. In 1935, a very long time after the problem arose, the Act was passed which, as from 1935, made one half of the unestablished service countable towards the established pension and that state of affairs continued until 1946, when my predecessor decided to extend the period during which unestablished service could count for half back to 1919, the end of the first world war, from 1935. So the situation remains today.
The claim which has been put forward is that, instead of that unestablished service back to 1919 reckoning for one half, it should reckon in total, 100 per cent. That was the effect of the Amendment passed on Committee stage and my right hon. Friend, who was conducting the Bill through the Committee, told the Committee that he would lay the matter before me and acquaint me with the arguments which had been brought forward in the Committee. He has duly acquainted me with them and the Government have considered the situation. Everyone will agree that, broadly speaking, the Bill is a very good advance as a whole in the matter of superannuation of civil servants, 1940 but, as in all these matters, there must at any given time be a limit to the amount of advance which can be made.
If one were to give way to all the desirable suggestions which are made for the improvement of the conditions and the lot of the people of this country in every sort of walk of life, I am afraid that the demands of hon. and right hon. Members opposite that we should reduce taxation would never even look like being met. As I remarked on the occasion of the Budget Debate, it is, after all, the privilege of the House of Commons to protect the taxpayer from undue charges and, when one has worked out an elaborate scheme for assisting any particular body of taxpayers, one has to regard it in the light of the general economic situation of the country. That is what I have attempted to do in this case.
My right hon. Friend told the Committee that if the alteration were made—which in fact the Committee made in the Bill—it would lead to an immediate cost of between £1 million and £2 million a year, climbing to an eventual cost of £5 million to £7 million in about 15 years' time. I have had to consider whether we are justified in view of competing demands and in view of what we have already done for the civil servants, in spending this money in trying to put right what it is alleged some former Government did wrongly. My view is that, much as I should like to do this to assist those who have unestablished service, it is not possible or justifiable to make that immediate or prospective expenditure.
On the other hand, I am anxious that we should make it quite clear that this system both of long periods of unestablishment and of not taking those periods into account for pension purposes, should cease. I do not believe it was ever right to have these very long, indeed unending, periods of unestablishment. Nor was it right in the first place to introduce a system which might result over these long periods in very great loss of ultimate pension rights granted on establishment. We suggest that we should so alter this Clause—and the Amendment I am moving is one which will have that result in association with the other Amendments—that, as from the passing of this Bill, all unestablished service will in 1941 future count 100 per cent. towards pension and that we should leave the antecedent period as it is at present. That would mean very little expense for the immediate next few years——

§ Mr. Peake
Surely it could not possibly mean any expense for the next 10 years, because no one qualifies for civil service pension unless he has 10 years of established service.

§ Sir S. Cripps
It would probably make no substantial effect for that period of time; that is perfectly correct. Eventually, of course, it would make an effect in so far as there was a continued long period of unestablishment. If there were no long period of unestablishment, it would have no effect, and we hope that in the future the unestablished period will be more of a probationary period and will not form a large factor in the employment of any civil servant who subsequently becomes established. We therefore suggest that these Amendments should be passed which will protect us from the immediate additional expenditure which would otherwise be incurred and which, as I have said quite frankly, we are not prepared to face; and on the other hand we suggest that we should make it quite clear that in future these evil effects of past policies will not be perpetuated.

§ Mr. P. Thorneycroft
The speech which the right hon. and learned Gentleman has just delivered to the House and the Amendment which he was moving will, as I think he must recognise, be a very great disappointment to thousands of civil servants——