HC Deb 26 May 1950 vol 475 cc2458-69

2.53 p.m.

General Sir George Jeffreys (Petersfield)

I desire to raise the question of the retired pay of officers of the Army, Navy and Royal Air Force, and particularly to stress the sense of grievance felt by those officers who retired under the provisions of the Royal Warrant of 1919 and the corresponding Admiralty and Air Force instruments, and who have not been given the full benefit of those provisions.

I am very sorry to see that the Treasury is not in any way represented on the Government Front Bench and that the Under-Secretaries of the three Service Departments are apparently to reply to this Debate, which concerns all these Departments equally and in no respect differently. As those who were in the House at the time of the Pensions (Increase) Acts of 1944 and 1947 will remember, the matter was then dealt with entirely by the Treasury and not by the Service Departments. Indeed I have some reason to think that the Under-Secretary of State for War is not unsympathetic, at all events, to our point of view, and I dare say the same applies to the representatives of the other two Services. But I greatly regret that the Treasury is taking no notice of this Debate.

I should, in the first place, in dealing with this matter, disclaim any personal interest. My retired pay was granted under a special Warrant applicable only to general officers, and I am consequently not affected by the Warrant of 1919, which deals with the retired pay of practically all officers of the three Services, who retired up to the end of the last war and before the introduction of new scales of retired pay. The new rates of retired pay prescribed by the Royal Warrant and the corresponding instruments of 1919 laid it down, in the following words: The rates will be subject after five years to revision either upwards or downwards according as the cost of living rises or falls. After 1st July, 1924, a further revision may take place every three years. These words constituted, in my submission, a promise, and they were certainly taken as a promise by all the officers concerned, though I believe I am right in saying the Treasury claim the word "may" in "may take place," gives them the option of disregarding the definite sentence which precedes it, and which states: The rates will be subject … to revision. … Are we to understand that only the "gentleman in Whitehall," who is quoted with approval by the Financial Secretary to the Treasury, knows what is meant by apparently plain English? At least, that is what it looks like. I suggest that this quibble is quite unworthy of a Government Department.

Now, as regards what actually happens, from 1919 to 1922 the cost of living rose but as that period was less than five years and the Warrant said "after five years," the rise was not taken into account. Thereafter the cost of living fell steadily for a number of years, and from 1924 onwards retired pay was reduced accordingly until in 1933 it had been reduced to as much as 11 per cent. below the basic rates of 1919. There was no question of any doubt or option as to the action of the Government so long as the cost of living was falling. The words "will be subject … to revision …" were taken absolutely literally and were acted upon.

In 1934, however, there was a slight rise in the cost of living figure, and further rises appeared probable. The Government then decided to, as they expressed it, "consolidate and stabilise" the rates of retired pay. In 1935, retired pay was stabilised at 9½ per cent. below the rates of 1919—that is at the end of the First World War. This was a wholly one-sided and, I suggest, not very creditable arrangement, to which the agreement of those affected was neither asked nor given.

Then, by the Pensions (Increase) Act, 1944, Section 2, which was applicable only to officers—the cost of living having, I may say, meanwhile risen very steeply—an increase of 10 per cent. was granted on pensions not exceeding £400 a year; that is to say, these lower pensions got the whole reduction back plus ½ per cent.: no question of rising with the cost of living; they just got back what had been taken away. By the Pensions (Increase) Act, 1947, further increases were granted on pensions between £600 a year and £750 a year, on which an increase of 5 per cent. was given, leaving them still short by 4½ per cent. of the basic rates of 1919. On all higher pensions no increase at all was granted, and all such pensions remain to this day at 9½ per cent. below the basic rates of 1919.

What is the general position after that? The cost of living is well above that of 1919. Nominally, I think, taken in terms of pounds, it is some 13 or 14 per cent. above that of 1919. But the value of money is enormously less than it was in 1919, prices are very greatly above those of 1919, and consequently salaries, wages and even Service rates of pay and retired pay have risen, as have also some other forms of pensions, though they have not risen, in my opinion, sufficiently. Last but not least, I would mention that the hon. Members of this House have voted themselves a very substantial increase of salary, on account of the rise in the cost of living, that they never had promised in writing beforehand.

Only the lowest rates of Service pensions now get even the 1919 rates. They get no increase on account of the rise in the cost of living—not a penny—whilst in the higher pensions there is not only no increase but an actual and considerable reduction as compared with the 1919 rates; and this in spite of the provisions of the Royal Warrant and of the other Instruments which I will quote again, and which say that: The rates will be subject to revision either upwards or downwards according as the cost of living rises or falls. This failure to implement the provisions of the Royal Warrant and of the other Instruments is regarded as a breach of faith by the officers affected, and I respectfully submit that it is in fact a breach of faith, and a gross breach of faith. Its effect, too, is to hit hardest those senior officers who have served the longest and have borne by far the heaviest responsibilities. And let it not be forgotten that, whatever view the Treasury may take as to its liability to make payments, it does not omit to collect every 6d. of tax and to reduce these pensions accordingly. The effect of that is that pensions of £700, or £1,000, or £1,200, or whatever they may nominally be, are, after deduction of tax, worth very much smaller amounts.

I would further submit that in these days, when regular officers of good quality are so badly wanted, it is worth while for the Government to have a good reputation as an employer. At present many old officers are discouraging their own sons and other young men from entering the Services because they say that their own experience is that they do not get just treatment and that promises made to them are not kept. It is a very bad thing when the Services begin to get that sort of reputation. The actual cost to the Exchequer of implementing the provisions of the Royal Warrant of 1919, and of making these not very large increases, would be comparatively trifling—trifling when compared with our enormous national expenditure today.

Another argument against doing this may be used by the Treasury. They may say that, if they do justice to Service pensioners claims will be made by others—for instance, civil servants. I quite agree that these claims might be considerable, and might very well be justified, but I submit that the strongest claims are those of officers who have served all over the world, who have faced dangers, endured hardships, often have never known a settled home during their service, whose conditions have been less safe and less comfortable than those of any civilians, and, lastly, who have been given—I repeat it again—a definite promise in writing that they should have certain treatment by the Government. I trust that the Government may see fit at long last to do them justice, and to make good their promise, not only as to the fall of retired pay when the cost of living falls—they have kept that part of the promise—but also that a rise should take place when the cost of living rises, as is laid down in the Royal Warrant of 1919.

I would add one word in regard to the officers who retired before 1919. These have had no promises made to them such as were made to those who retired under the 1919 Warrant, but their pensions are very much smaller. They were granted when the pound was worth a pound, and they are equally affected by the high cost of living. They are far from young in the majority of cases now, and there are not many of them. Some small concession in their retired pay would be a welcome and generous gesture on the part of the Government. They do not claim it, but I think they might very well be considered.

Officers in the services are a comparatively small body. They have no organisation, no trade unions, no means of making their voice heard about their conditions and pay, such as civilians would have, but because of that, I do not think there is any reason why they should be treated with complete lack of consideration by the Government. They do not muster many votes, but they have given faithful service over many years to the Government. The time is long overdue when they should be reasonably and properly treated as regards their pensions, and when the promises made in the Royal Warrant of 1919 should be carried out.

3.7 p.m.

Brigadier Clarke (Portsmouth, West)

Hon. Members on both sides of the House will agree that Service officers are among the lowest paid classes in relation to what they do, and are the first to suffer when there is a rise in the cost of living. They have no chance, during their service, of putting by for a rainy day. They can just make ends meet as they mount the ladder of promotion. I remember very well that when I joined up I was told, "Do not bother about the tailor. You will be able to pay him when you become a colonel." The days when tailors could wait until a cadet became a colonel have long passed. We are paid a miserable pittance today but we have to try to pay the tailor as well. I have no need to tell the House what is the price of a suit now.

If one could save during one's working days in the Army the pension would be a reward for past services, and one would have something to live on. What Army officers and Service officers generally have been forced to do for a number of years is to take on odd jobs as secretaries of golf clubs, tennis clubs, sailing clubs, and so on. That is not good enough. There are not enough of sailing clubs, tennis clubs, and golf clubs for them all now to get a job. They have suffered at every cut. The 1919 officers have suffered the worst of the lot. There was a time when officers joined the Army and expected to live, not on their pay, but on their private income. I had to live on my pay, but it was very difficult. More recently the pay has gone up and things are a bit better, but the cost of living has risen step by step with the pay, and the present-day officer is little better off than he was before.

Old pensioners of the period before 1919 are really in a pitiful condition. If a visit is paid to some of the Service clubs officers will be seen who have not any private income but who are living on their pensions. One cannot help feeling sorry for them. How can they pay 25 guineas for a suit, which is the price today? It is pathetic to see these poor people struggling along with no one to speak on their behalf. They have no union or society to speak for them; nevertheless, they have a problem, and I hope that the Financial Secretary will say something favourable to the Army pensioner, and the Service pensioner generally.

I do not want to go over the ground covered by my hon. and gallant Friend the Member for Petersfield (Sir G. Jeffreys), but I would like to stress one or two points. I left the Army with my eyes wide open, and I must say that they opened a little wider when I heard about my money yesterday. I got about 4d. more than I expected. It took me a long time to get that. I have raised at Question time the subject of these pensioners, and the Prime Minister has answered me on behalf of the Secretary of State for War. The officer should be in a position to know what his pension will be when he retires. Hon. Members may say, "He can find out," but it is not as easy as that. Pensions, in these days, are extremely complicated. A large number of rankers count their service in the ranks at only half while the rest of their service is counted as full.

I have raised the case of the officer who had done 17½ years' service. He had his pension assessed and he was told that he was two days short of 18 years. There was an asterisk saying that that meant 17 years' pension, according to the Regulations. I hope that the Minister will bring that case to the notice of the Treasury and that he will try to humanise the payment of pensions. Surely an officer who has served for more than 17½ years, who has 17 years and 363 days to his credit, should at least be allowed pension for an extra year. That man will be the worst advertisement for the Army. The Government want men to join the Army and to become officers, but if men are to be treated in that way they will go to the hotels and pubs saying, "Don't put your son into the Army. This is what they did to me." We can put up placards saying, "Join the Army and see the world," but one man like that, will undo all the work we do by all our placards.

I would like to say a word for the widows, not only of officers but of other ranks as well. Some people tell me that there is not a means test, but I say that there still is a means test. The widow of an Army or Navy man is not entitled to a pension unless she proves that she has no other adequate means of support. That is wrong. Her husband has served his country. Most people think that the officer's widow automatically gets a pension. In any case she gets a miserable pittance, but she does not get that unless she proves that it is her only means of support, and that her private income is not sufficient to keep her. The Army officer is badly paid and he gets a very poor pension. He is finally faced with the possibility of leaving behind a widow who will get very little money, and then only if she can prove that she has nothing in the bank beyond a small pittance.

These widows should have the right to a pension. Their husbands have given their lives to the service of our country. We have no other trade and nothing else to fall back upon. We are sometimes told, "When you leave the Army you go to work." We do, but there are not enough golf clubs to employ us all, and the House of Commons is not big enough for all retired officers to get into. Thank goodness there was one vacancy ! I beg the Under-Secretary to humanise the system of pensions. He should not stick to the letter of the law and say, "You have done only 364 days." He should forget the leap years and everything else and not refuse to give an officer the full amount which he has honestly and justly earned.

3.15 p.m.

Commander Noble (Chelsea)

I rise to support my hon. and gallant Friend the Member for Petersfield (Sir G. Jeffreys) and to emphasise that this is a matter which affects all three Services. We are very glad to see the Civil Lord of the Admiralty on the Government Front Bench, but I agree with my hon. and gallant Friend that it is a pity that the Debate will not be answered by the Minister of Defence or one of the Treasury Ministers. The fact that the Under-Secretary of State for War will reply seems to imply that this matter affects only the Army. My hon. and gallant Friend has set out the arguments very fully and I hope that the Under-Secretary will give us some very good news to the effect that these grievances—there is no doubt that these ex-officers really feel that they have a grievance—will be settled once and for all.

3.17 p.m.

The Under-Secretary of State for War (Mr. Michael Stewart)

The hon. and gallant Gentleman the Member for Petersfield (Sir G. Jeffreys) laid great emphasis on what he contended was a broken pledge with regard to the 1919 Warrant and its subsequent interpretation. I realise that the question whether or not there was a broken pledge is not the whole of this matter, but since the hon. and gallant Gentleman was at such pains to suggest that there was an explicit broken pledge, I must say that I cannot share that view and cannot see that it is supported by the words used. What was said was that the rates "will be adjusted after five years." It is perfectly clear that the word "will" applies to "after five years." It then goes on to say that after 1st July, 1924—that is, after the five years are over—further adjustments "may take place." It is really not a question of quibbling or inviting the gentleman who lives in Whitehall to interpret plain English. Everyone knows the difference in meaning between "will" and "may"

Sir G. Jeffreys

Perhaps the hon. Gentleman will go on to explain how it was that the Treasury and the Governments of the day interpreted it as a pledge, or, at any rate, as an obligation, so long as the cost of living was falling and continued to reduce the retired pay of officers during that time, and only when the cost of living began to rise did it occur to them that they might make a play on words and cease adjusting these pensions.

Mr. Stewart

I must again reject the suggestion about a play on words. The hon. and gallant Gentleman and I have argued this before. If he cannot follow the difference between the words "will" and "may," we must leave the matter there.

I will come to the second matter which he mentioned just now. The review took place after the five years, as was laid down. Then, as the hon. and gallant Gentleman has said, certain other reductions, partly, though not wholly, in step with the fall in the cost of living, took place. Every one of those reductions was a cause of dissatisfaction, although the reductions in the rates were not as great as the reductions in the cost of living. One of the morals I draw from that is that it is extremely difficult to work any system of pensions or incomes that fluctuates with the cost of living. It gives rise always to arguments and dissatisfaction.

What were the figures which were arrived at in 1935 when the rates were stabilised? They were stabilised at a figure of 9½ per cent. below the 1919 level. What was the cost of living in those two years? In 1919 the figure was 207—that is, on the 1914 basis of 100—and in 1935 the figure was 143; that is to say, the cost of living had fallen by about one-third between 1919 and 1935 and the rates were stabilised at just over 90 per cent. of their 1919 level. We must not suppose, therefore, as was rather suggested, that the Treasury have been diligently seeking every penny it could snatch. In fact, when the rates were stabilised in 1935, it resulted in a substantially better position for the officers concerned than they had had in 1919. So it was not a question of cutting down the pension as far as could possibly be justified in response to the fall in the cost of living over that period.

Pursuing the story from 1935 on through the war, in 1945 the new code of pensions came into operation and officers retiring after 19th December, 1945, are not really in argument as far as we are now concerned. We should also remember that a considerable number of officers who had retired were re-employed during the war, and for them a special assessment of pension was ultimately made which has left them somewhat better off than if the 1919 settlement had been rigidly adhered to.

Further we must notice the working of the Pensions (Increase) Acts, 1944 and 1947, particularly their effect on these officers. It was as follows. If a man's retired pay was £400 a year or less, in effect he was put back where he would have been if the 1919 settlement had been literally operated. If his rate was between £400 and £600, about three-quarters of the 9½ per cent. cut on the 1919 figure was restored to him. If his rate was between £600 and £750, about half of that cut was restored and, finally, in the higher levels none of the cut was restored with the exception of some special arrangements made in respect of some general officers.

So again it cannot be suggested that the Government have ignored this problem. The number of officers whose difficulties have been met, either through the fact that they were re-employed during the war or through the working of the Pensions (Increase) Acts, is considerable. It is quite true we are left with a small residue, mainly consisting of general officers and ranks immediately below, who are somewhat worse off than they would have been if the 1919 arrangement had continued indefinitely. And it should be noted, although I do not suggest that any of those men will find it easy to make ends meet, that we are not dealing here with a problem of real poverty. No figures of pension have been given—because no doubt hon. Members were assuming that these are matters of common knowledge—but perhaps I should draw attention to the position. With regard to the officers of whom we are speaking and who retired before 19th December, 1945, a major is drawing a pension of £440, a lieutenant-colonel £583, a colonel £760, a major-general, due to a special arrangement, £950.

So I would argue, first, that the suggestion that there has been any breach of pledge has not been made out, and that it was quite clear that, although alterations might take place, there was no definite pledge that alterations would take place. As to the point that they were made in one direction and not in another I have already pointed out that the reductions made when the cost of living was falling were much less than the fall in the cost of living and that, when the cost of living has been rising, the situation has been dealt with by the Pensions (Increase) Acts, at any rate in part.

If we were really dealing with an undoubted broken pledge, then I think we ought to proceed to put the matter right, irrespective of any other group of people; but since we are not and since the matter is to be urged, if urged at all, on the ground of the difficulty some of these officers meet in living at a reasonable standard, we are obliged to look at the consequential changes that would occur elsewhere if we made any substantial alteration in their position. Indeed, I think the real nature of the case was brought out strikingly, but perhaps unconsciously, by the hon. and gallant Member for Portsmouth, West (Brigadier Clarke). He went rather wider than the hon. and gallant Member for Petersfield and drew my attention to certain other things which a Government with unlimited supplies of money would no doubt be glad to do in pensions administration.

For example, he drew our attention to the fact—and I would agree with him that it is a fact of which the public are often unaware—that an officer's widow is not entitled to a grant of pension as of right, although I think it is fair to point out that the scale of need as applied is a reasonably generous one. It really cannot be compared with the Means Test which used to be operated against unemployed persons. The whole order of figures is different. That is one thing which a Government with unlimited supplies of money might put right.

Another example he quoted was of a man who has the really bad luck to complete 17 years and 363 days' service, rather than 18 years. I ask him to consider this. Suppose we say it should be the rule that a man who falls short of the complete year by, say, only five days, should count as though he had done the complete year. Then we would be asked about the hard case of a man who falls short by six days and fails to get into the Regulation. There is no solution of that problem.

Brigadier Clarke

I agree that if one gives way on 363 days one might have to give way on 360 or even 350 days, but the Royal Warrant should be made to act so that the officer could get what he has earned and if it was nearer 18 years than 17 years, he should get that. That is the fault in the Royal Warrant into which I ask the hon. Gentleman to look and which I ask him to rectify.

Mr. Stewart

I think the hon. and gallant Member will agree that that is a somewhat different proposition from the one he put forward, although I agree it is an important point and worth looking into. When the present Government came into power we found that not only were there a great many hardships and difficulties which were a direct result of the war, both in this field and in many others, but there was a long legacy of injustices and hardships suffered by many people, all of which were clamouring to be rectified. The whole country has been faced with a whole list of injustices queueing up to be remedied and hardships queueing up to be alleviated. That is why I say that if a pledge had been broken, we would have had to put it right without regard to the claims of others on which money should be spent, but since that is not so, we are obliged to weigh this claim, with which I have some sympathy, with other desirable objects, such as those suggested by the hon. and gallant Member for Portsmouth, on which money would need to be spent.

I will certainly call the attention of my right hon. Friend the Minister of Defence and my hon. Friend the Financial Secretary to the Treasury to what has been said in this Debate. All I suggest for the present is that we have not been guilty of a breach of faith and that, although there are difficulties for the officers and their families whom we have been discussing, there is nothing which could really be called acute poverty or hardship.