HC Deb 02 June 1954 vol 528 cc1415-24

Motion made, and Question proposed,—That this House do now adjourn."—[Mr. Studholme.]

10.9 p.m.

Major Sir Frank Markham (Buckingham)

I venture to detain the House for a little longer in order to discuss once again the question of railway pensioners. I have already raised this subject on the Adjournment twice in the course of this Parliament—in June, 1952, and in March, 1953; and I venture to raise it again on the good old theory that if constant dripping will wear away stone, constant Adjournment debates may soften the heart of the British Transport Commission even further than it was softened last year.

I think the position is well known to the House—how, back in 1912, when the National Insurance Acts were introduced, the railway companies contracted out for their administrative and clerical staffs and gave an assurance to the House, through hon. Members who were directors of railway companies, that the men would not suffer by this contracting out or by reason of the provision by the railways of their own pensions scheme.

The same assurances were given by teachers' employers, by local government authorities and by the Civil Service. The strange anomaly is that while in the case of teachers, local government officers and civil servants the pension scales have been made good and brought up to what are regarded, at any rate, as minimum pension scales, those of the railwaymen have lagged so far behind that it has for several years been a scandal. I do not think that there is any more suitable word to describe the position which the British Transport Commission inherited when nationalisation was introduced, or what has continued, with only a minor amelioration, since.

I do not want to criticise the British Transport Commission and, indeed, if this debate were wider. I could say, with several other hon. Members, how marked has been the improvement in many fields by the administration and the service rendered by the British Transport Commission to this country in the last 18 months or so.

I want to concentrate on the fact that last year the British Transport Commission, through the Minister of Transport, announced that it would be prepared to do something towards ameliorating the position of the worse grades of pensions. Many may remember that the old pre-First World War scheme was that in return for a contribution of a penny or twopence a week, railwaymen were entitled to pension of 8s. or 10s. a week. These rates were not increased during the war years nor during the two world wars. There are now many single men whose total pension is well below £84 per year and many married men whose pensions are much below £140 a year.

We had the assurance last year that the British Transport Commission would set aside approximately £40,000 to help all those with less than £140, if married, or £84, if single, and it was estimated that this would assist 6,000 pensioners. A few days ago in this House, in response to Questions asked by hon. Members opposite, and others, it was brought out that instead of 6,000 of these pensioners being helped, only 2,860 had in fact been helped, and instead of the scheme costing a minimum of £40,000 it was costing an estimated £33,000.

One of the causes of this is the interpretation by the British Transport Commission as to what constitutes a pension. To my mind it has chosen an interpretation which reacts very unfairly on many of these men. Hon. Members will remember that the pension is based on 40 years' service, and that at the end of that time a man receives a gratuity of one year's salary plus an annual pension of one-half of his annual salary.

The British Transport Commission has included 10 per cent. of the gratuity or lump sum as being part of the annual pension. I suggest that that is an entirely erroneous definition, and by that interpretation it has deprived possibly as many as 2,000 men of assistance under its own scheme which was propounded to this House a year ago. In any case, the ceiling of £84 for a single man or £140 for a married man is too low, and it ought to be increased. I think that puts the situation very simply as regards the present pre-war pension scheme with which the British Transport Commission is dealing, and for which we in this House have some responsibility.

In contrast with the treatment of railwaymen, the local government officers, the teachers and the civil servants were assisted by Government money being made available to bring their pensions up to what might be regarded as the reasonable minimum. This has not been done in the case of the railways, even though the railways have been nationalised. I suggest to my hon. Friend the Joint Parliamentary Secretary that he might take up this point, through the Minister, for consideration by the Treasury.

Now I turn to quite another matter. The Transport Commission, by adhering to old rules, seems to be treating some of its men most unfairly as regards the pensions position. If a clerk retires at the age of 60, after 40 years' service, he gets his lump sum, and he gets his pension of 50 per cent. of his last year's salary. But if he is retained after the age of 60 by British Railways, as fit and able to continue, and with his skill and knowledge helps the nation in a time, very often, of acute labour shortage, the Transport Commission holds back his lump sum gratuity. The Commission gives him his full pay but keeps back the pension, and for his extra years of service there is no increase in his pension or lump sum; but the man still suffers from the deduction of his pension contribution of at least £25 a year.

It can be said, therefore, that by continuing to employ these men after the age of 60, which is necessary in the national interest, the Commission is making a profit out of them by holding back their gratuities and not improving their pensions. This is a point that should be looked into by my right hon. Friend the Minister, in conjunction with the Transport Commission.

Mr. Percy Morris (Swansea, West)

We are grateful to the hon. and gallant Member for raising these matters. Will he make it clear that conditions are not the same in each region? In some regions they are very much worse than he has described.

Sir F. Markham

I agree, and I am grateful to the hon. Member for his assistance. I am trying to give the broad general picture, and not to make it any worse than it happens to be in the area that I know so well—that is, the old London, Midland and Scottish region. I agree with the hon. Member that conditions were worse in some other regions, Hence the even greater need for a sympathetic approach by both the Ministry and the Transport Commission.

I have received many letters, principally from the Bletchley and Northampton areas, and also from the T.S.S.A., the British Railways Superannuitants' Federation and from the Retired Salaried Staffs' Association; and, as every Member of the House knows, the great trade unions have been helping to fight this battle for many years.

All that we can point to since the war years is the rather meagre advance by the Transport Commission in helping 2,860 out of 31,000 possible cases for assistance. The Commission has spent less than this House was given to understand it would spend, and I think that the time has come when the Ministry and the Transport Commission, together with the Government, should evolve a bold and generous scheme for these men, who have given a lifetime of service in building up and making the railways so efficient.

I know that there are many other Members who could raise these issues far better than I can. My hon. and gallant Friend the Member for Rochdale (Lieut.-Colonel Schofield) has received letters from constituents bringing out these points, and the hon. Members for Swansea, West (Mr. P. Morris) and Southampton, Itchen (Mr. Morley) probably have more information on these points than I have, but I am sure that all will agree with me that the present position with regard to these railway pensioners is a scandal, and should be rectified. I believe that the Transport Commission has already helped to start the improvement, but I want it to go further. If necessary, the Commission should come to the Government for assistance, as the civil servants, the local government officers and the teachers have done in the past.

10.19 p.m.

Mr. Ralph Morley (Southampton, Itchen)

I hope that the Parliamentary Secretary has paid careful attention to what has been said so persuasively by the hon. and gallant Member for Buckingham (Sir F. Markham), and that he will convey to his right hon. Friend the Minister of Transport the urgent need for some improvement in the pensions of this particular class of occupational pensioners. Railway superannuitants have had the rawest deal of any section of the occupational pensioners in the whole of the country. As the hon. Member said, the railway companies contracted out of the National Health Service in 1912 so that none of these men and women are in receipt of the State pension.

At the time of contracting out, the companies promised the railway workers that their interests would be looked after and they would not suffer because of the contracting out. These people paid a proportion of their salaries ranging from 3 per cent. to 8 per cent. towards their contributory pensions. Many of those who retired before 1939 retired upon pensions between £2 and £3 a week. At the price levels in 1938 and 1939, they could, with great care, have jogged along on a pension of that nature. Obviously, it is quite impossible now and many of these people have fallen into dire penury. They are suffering real poverty.

Like the hon. Member, I have had many letters on this subject of poverty among these pensioners, but had I the time I could quote many of them. One lady aged 65 wrote to me recently from St. Annes-on-Sea, in Lancashire. She told me she had had 40 years' service on the London and North-Western Railway and her pension is £100 a year. She is 65 years of age and the National Assistance Board allow her £1 10s. 6d. a week. Her rent is £1 12s. 6d. a week and she has to pay 10s. for her electric fire and cooker. She has nothing left for clothes, stockings, pleasures or anything of that kind. The whole of her pension goes on food, rent, electricity, laundry and household cleaning stuffs. Miss Margaret Stewart, who has written an article on this subject in the "News Chronicle," has received hundreds of letters from railway super-annuitants giving details of extreme poverty. She has kindly shown them to me, but I have not the time to quote them now.

Last year, the Minister listened very sympathetically to us and he promised that he would see there was an increase in these pensions and that it would apply to 6,000 people. As a matter of fact, the increase has only applied to 2,860, fewer than half of the 6,000 people to whom it was promised. The reason for the small number of people receiving an increase has been the very low ceiling which has been placed upon the increase. It is £140 for a married couple and £84 for a single person, and this is even below the National Assistance Board's scales.

A ceiling of £140 compares very unfavourable with the ceiling of £550 for those pensioners who have received benefits from the recent Pensions (Increase) Act. Also, there is no disregard in this scheme of other income beside the pension whereas in the Pensions (Increase) Act, which applies to civil servants, teachers, police and local government pensioners, there is a disregard of £104, so these people are most unfavourably placed.

I know that the Transport Commission has very little money to spare, but the Minister might be able to squeeze a little more out of them and by raising the ceiling bring more of these pensioners in.

In the other pensions assistance schemes under the three Pensions (Increase) Acts which we have had since 1948 the Treasury has been responsible for finding the additional money, and I should think the Treasury might be persuaded to find additional money for this purpose. After all, it will be a declining liability. Most of these people are in their 70s or 80s and, like myself, they cannot expect to be much longer in this somewhat muddied vale of tears. Therefore, the liability on the Treasury would decline steeply from year to year and soon come to very little.

We recognise that the Minister is a very able man. He has piloted complicated Bills through this House with great skill and he has an able assistant in his Parliamentary Secretary. I am sure the ingenuity of these two combined could persuade the Treasury to be a little generous and to make available a decent sum of money in order to give these old servants of the community a chance of having a decent living in the few years left to them.

10.26 p.m.

The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. Hugh Molson)

As my hon. and gallant Friend the Member for Buckingham (Sir F. Markham) has said, this is the third successive year in which he has raised this matter on the Adjournment. The first year my right hon. Friend listened to hon. Members on both sides of the House deploying the case for an increase in railway superannuitants' pensions and he promised to ask the British Transport Commission to see what it could do to meet the case which had been so persuasively and eloquently presented.

Last year, my right hon. Friend was able to announce that he had achieved a measure of success and that supplementation would be made in the case of those annuitants who were in greatest need. In this third Adjournment it is my duty to answer those hon. Members who have expressed themselves as being not satisfied with what has been done. My right hon. Friend is sorry that he cannot be here himself, but he has already left London to open the Woodhead Tunnel and to inaugurate the electrified line between Sheffield and Manchester, so I trust that the House will forgive him for his absence.

Naturally, I shall not repeat what my right hon. Friend said on previous occasions. He mentioned the complete insolvency of the superannuation schemes which the Transport Commission took over. At present, the Commission is paying 75 per cent. of the cost of the pensions, which amounts to £7 million a year.

Hon. Gentlemen have raised several points with which I will try to deal. In the first place, last year my right hon. Friend gave an estimate which had been provided by the Transport Commission of the number of beneficiaries who were likely to receive a supplement. It is true that the number is substantially fewer than 6,000. It is 2,900, of whom 2,650 are railway superannuitants. It was an estimate made in perfectly good faith, but it has turned out to be wrong for a number of reasons.

For one thing, the B.T.C. did not know that a large number of the annuitants who were recorded as married men had become widowers. It did not know that quite a large number of them are in good employment, bringing them in an income in many cases very much in excess of £50 a year. Others, it was not fully realised before, are in receipt of National Insurance pensions. All of this goes to show that the number of those in very great need is less than had been supposed. That should be a matter of satisfaction to all of us.

In any case, the British Transport Commission is spending under this scheme very nearly as much as was estimated. It costs the Commission £39,500 per year, of which £33,900 is paid to railway annuitants. Almost the whole of the balance is paid to annuitants of London Transport.

My hon. and gallant Friend complained that the amount of benefit had been substantially reduced because lump sum gratuities had been taken into account. I do not think it will be disputed—I hope it will not be—that it is fair and reasonable that that should be done. My right hon. Friend indicated last year that that was likely to be done, because he spoke of "retirement benefit" and not simply of "pensions."

I think that it was only fair that that should be done because, as hon. Members have mentioned, there is a considerable diversity between different schemes. In some of them a lump sum is paid; in other cases a somewhat larger pension without a lump sum is paid. It would have resulted in injustice as between the different men if those who had received a lump sum did not have it taken into account when the supplementation of their pension was being calculated.

Ten per cent. of the lump sum paid is estimated to be the annual value. I think my hon. and gallant Friend felt that that was an unreasonable figure. It is, of course, not expected that an investment would bring in 10 per cent. per annum, but if my hon. and gallant Friend will consult Whitaker's Almanack, as I have done, to see what would be the charge for a man between 60 and 65 to buy an annuity, he will find that it is fairly near 10 per cent.

Sir F. Markham

I am not questioning my hon. Friend's figures as to investment and so on. My point is that if 10 per cent. of the lump sum is added to the gratuity, theoretically, every year, in 10 years the lump sum is obviously exhausted, and, in any case, after the 10-year period no longer has any influence on the pension and, consequently, the pension should be increased.

Mr. Molson

Since the lump sum and the pension are both supposed to be paid out of the pensions scheme, it is obvious that the lump sum has to be taken into account.

The hon. Member for Southampton, Itchen (Mr. Morley) suggested that a special Treasury grant should be made to cover a number of the cases which he had in mind. That goes rather beyond the case which has been made in previous years. I do not know on what principle the Treasury could make a grant for the relief of particular categories of people who are outside any pensions scheme otherwise than through the Assistance Board. It seems to me that any compassionate allowance without the test of need applied by the Assistance Board would appear to all those who are not in receipt of that special benefit as unfair discrimination in favour of a certain category of people.

Mr. Morley


Mr. Molson

I have too little time left to give way.

A number of representations have been made to my right hon. Friend during the past year. He did not feel justified in again bringing pressure to bear upon the British Transport Commission, and he has not done so. He has, however, faithfully passed on to the Commission the views expressed. Amidst all its problems and financial difficulties, the Commission has again considered whether it can afford to be more generous to this category of its old workers.

The Commission has reluctantly come to the conclusion that, having regard to all its other commitments and difficulties, it would not be justified in making any further eleemosynary grants to the pensioners, who are now only one category of retired railwaymen. I am very sorry not to be able to give any more comforting answer to my hon. and gallant Friend, and I am afraid that that must be taken to be the Commission's final answer.

In the two or three minutes remaining, I should like to turn my eyes to the future, in respect of which I can announce something a little more cheerful. As the House is aware, there have been negotiations between the Commission and the trade unions for a comprehensive pensions scheme, to include the wages grades who have not generally been included in the scheme that we have been discussing earlier. The last few months have been profitably spent in working out the rules of the scheme. Final agreement was reached recently between the Commission and the trade unions, and they have now presented a complete scheme to my right hon. Friend. He hopes to be able to make a statement in the fairly near future.

I am not able to announce any supplementary scheme for those who have retired, but I hope we can feel that other railwaymen will be provided for the future with a much more generous and comprehensive pensions scheme than that which we have been discussing.

10.37 p.m.

Mr. Percy Morris (Swansea, West)

We are obliged to the Parliamentary Secretary for his statement. The disappointing feature of it is that his right hon. Friend has failed to encourage the B.T.C. to make provision for this diminishing number of people who are below the Public Assistance level.

What the Parliamentary Secretary has said about the future is correct, but in view of the fact that this is a diminishing problem, surely it is not asking the right hon. Gentleman very much to request that he should encourage the B.T.C. to find some money to lift these people out of the penury in which they have been for some considerable time.

The insolvency of the Superannuation Fund is entirely due to conditions which have arisen after two world wars. The men have continued to contribute to the Fund in the hope that they would have a reasonable pension when the time arrived. In respect of the gratuity, described as a "lump sum," some of the men incurred a mortgage on the homes in other parts of the country for when they retired. It was a great disappointment to them to find that they would not be getting the maximum benefit from that amount.

I beg the hon. Gentleman to use his influence with the Minister of Transport to go back to the B.T.C. and say that in view of the small number of people involved, the serious plight in which they find themselves, and the comparatively small sum of money involved, the Commission should do something to ease the burden and not let these people die of sheer want.

The Question having been proposed after Ten o'Clock and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at Twenty-one Minutes to Eleven o'Clock.