INDIA (FAMILY PENSIONS SCHEME) (Hansard, 6 July 1950)

§ The Secretary for Overseas Trade (Mr. Bottomley)
My right hon. Friend the Secretary of State for Commonwealth Relations would have explained more fully the purpose of this Order had it not been for the procedure in the House at the time when he was speaking on 28th June. That being so, I should now like to put the position as clearly as I can in the shortest possible time.
The object of the Amendment to the Government of India (Family Pension Funds) Order is to enlarge the powers of investment of the trustees established as a result of the Act. It enables the commissioners to buy annuities on the lives of pensioners and to extend the present powers covering the purchase of property rights. The reasons for this are that there are difficulties in being able to meet the present liabilities to pay the present pensioners. The decline in the yield on gilt-edged securities soon after the war has been one of the causes for this, and another reason, a very fortunate one in some respects, is that the pensioners are living much longer.
The custody and investment of these funds are in very good hands. They are the responsibility of appointed commissioners, one of whom is the Public Trustee, and I can assure the House that the Order is one which is worthy of its support.

§ Mr. Manningham-Buller (Northants, South)
I want to draw attention to one minor point with reference to this Order in the hope that in any further Orders this error will not be made. In considering the full effect of an Order like this, it is of great convenience to have a reference, 790 on the Order, to any other Orders which are amended. If the Secretary for Overseas Trade has studied this Order, he will see that while specific reference is made to one amending Order, no reference is made to any of the other Orders making subsequent amendments.
I am sure that the hon. Gentleman would agree that when an Order of this nature is laid, it facilitates comprehension of what the Order means if any amending Orders also are specifically referred to in a footnote. I say that by the way, because it is only a minor point but is one to which, I think, it is worth drawing attention.
We do not object to these powers of investment being extended. I should, however, have welcomed a fuller account from the hon. Gentleman of the way these funds have been managed. There have been rumours—I do not know with what truth, and I should like to know—that considerable sums have been lost since the power of investment was transferred to the commissioners. I would like to know to what extent that is true and whether to any extent that was the result of advice or instructions from the Treasury.
It may be—I do not know—that there was considerable investment in the stocks commonly referred to as "Daltons" and, perhaps, in nationalised industries. But we certainly do not object to this extended power of investment, and it is perhaps worthy of note that this power of purchasing annuities, to which the hon. Gentleman referred, was first suggested on 9th March, 1949, in the House of Lords. That suggestion was not adopted. I am glad that the Government, rather belatedly, have now thought fit to adopt it. I hope that if any losses have been made as a result of investment in "Daltons," or things of that sort, these wider powers of investment which are now being taken will lead to these losses being recovered, so that at least the beneficiaries under the Fund, to whom we all owe an obligation, will secure their full pensions and their full rights.

§ Mr. A. R. W. Low (Blackpool, North)
What the Secretary for Overseas Trade has said, has been little more than what was said by the Secretary of State for Commonwealth Relations (Mr. Gordon-Walker) in the short time available to him 791 on 28th June. However, he omitted one thing which the Secretary of State for Commonwealth Relations said on that occasion. I believe he was wise to omit it, for what he said was: The effect of the draft Order would be to enable the rates of pensions to be increased.."(OFFICIAL REPORT, 28th June, 1950; Vol. 476. c. 2361.) As I understand it, that is the object of the Order. It is certainly not the object set out in the explanatory note, and it will not be the effect of the Order according to the Secretary for Overseas Trade, who said that it was necessary to maintain the rates of pensions. This is not just quibbling because the words of the Secretary of State for Commonwealth Relations were read by many people interested in this Fund. They are naturally excited, to put it no less than that, at the prospect that their pensions may be increased again to the rates they have been lead to expect.

§ Mr. Speaker
I do not think the amount of the pensions comes into the Order, as it only provides for the enlargement of the powers of the authorities to buy annuities on the lives of those people affected by it.

§ Mr. Low
I was trying to correct, or ask the Government to correct, the statement by the Secretary of State for Commonwealth Relations, Sir. We should be clear, for the benefit of the people to whom these pensions apply, whether the result of the Order will be to increase their pensions, or, as the Secretary for Overseas Trade said, to maintain the rate of pensions. It is quite a short point but it has, to my knowledge, affected a great many people concerned with these pensions, and I am sure they would like to know who is right.
My second point is to mention again the purchase of annuities. This is perhaps a commentary on things we discuss at other times, whether insurance should be in State hands or not. In this case, in order to get a better yield, it has been decided, quite rightly, to purchase annuities from other people.

§ Mr. Manningham-Buller
Are we not to have a reply to this Debate?

§ Mr. Bottomley
By leave of the House I would like to speak again. The hon. Member for Blackpool, North (Mr. Low) 792 wanted to know whether the Secretary of State for Commonwealth Relations or I were right. We are both right. If my right hon. Friend had been able to finish what he was saying on 28th June, he would have said what I have said tonight, that the reason is to maintain the existing rates to beneficiaries. I will see that the first point of the hon. and learned Gentleman the Member for Northants, South, (Mr, Manningham-Buller) is duly noted.
In connection with the way we propose to operate, I should say that within the powers we are circumscribed but the commissioners have done their best. There is the Public Trustee, whom I have already mentioned; there is a person of high repute in the City of London; a Commonwealth Relations Office representative, and two representatives of the pensioners themselves. I think, therefore, that we may be reasonably assured that the interests of the pensioners will be well looked after.

§ Mr. Manningham-Buller
The hon. Member has not answered the question put by my hon. Friend. Are the rates to be increased or not? He must give an answer to that.

§ Mr. Bottomley
I thought I had made it clear that there will not be any increase.