OFFICERS' PENSIONS

HC Deb 28 February 1955 vol 537 cc1846-56

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

10.5 p.m.

Brigadier Ralph Rayner (Totnes)

As a retired officer, I rise once again to bring forward the question of the pay of retired officers, for I consider that the Treasury must reconsider its attitude towards the Services. When I was a young officer that attitude used to be, "Give 'em as little as you can and take back what you can when you can," and it is an attitude which still persists. In those early days it was regarded as rather a joke, if a wry one, because the pound was still a golden sovereign, and although pay and pensions had not changed between 1840 and 1914, most officers had private resources. The-first world war began to change all that, the value of the£ began to vary, and private means to melt away.

In debates we have had on this subject one Government spokesman after another has held that all servants of the Crown must be considered as a whole. This is not fair. The civil servant is able to marry early, establish a home, buy a house, perhaps to save, whereas the officer who is moved about the world chessboard, can do none of those things. I will not labour the differences between the officer and the civil servant because they have been referred to so many times, but there is one Treasury argument I must mention, that the officer retires early and therefore draws his pension for a much longer time. The fair way of expressing that truth is that the civil servant is lucky enough to enjoy full pay much longer than the officer.

Moreover, the dictum that servants of the Crown should be treated equally becomes even more suspect when one notices how often the Civil Service is able to better itself. Again I will not waste the time of the House by quoting figures that have often been quoted, but there is no doubt that our national set-up is a bit cock-eyed in that way as in so many others. The agricultural worker is perhaps the most skilled and hard-working man in the country. Yet when his wages So up, the wages of the industrial worker, even though he is still something to the good, have to go up too so that he may keep his place.

So I am afraid it is with the Civil Service. If the pensions and pay of the Army go up, the pay of the civil servant, who is already several notches to the good, has to go up so that he may keep his advantage. Senior civil servants, usually first-class chaps, often agree that this is unfair, and Lord Hailey, speaking in another place in the debate on this subject on 20th January, 1953, in referring to the pensions of officers who retired in 1919 said: I believe that all retired civil officers … would agree that the officers of the Armed Forces must have a prior claim."—[Official Report, House of Lords, 20th January, 1953; Vol. 179, c. 1123.] I draw the attention of the Government to that powerful and generous expression of opinion. I hope that the Undersecretary of State for War will suggest to his right hon. Friend the Minister of Defence that, amidst all the terrible problems that cluster around him, he should ask the Chancellor of the Exchequer to take a new look at the question of officers' pensions. Surely no increase in pension should be subject to a means test. Surely a pension is earned or it is not earned, and in these days, when the industrial unemployment pay means test has been abolished, it is disgraceful that an officer or his widow should be subject to a means test. Surely, too, it is the duty of the State to see that an officer is adequately looked after in his old age. He may have retired at 45, but we all know that after 45 it is very difficult to get a job and impossible to save.

I do not know whether some such scheme as this could be arranged. It is obviously not fair to expect that all new codes of pensions should be brought in with implemented retrospection, but could not an officer retiring be given, according to his appropriate code, x pounds per year and when he reaches 60 or 65 be given x plus y pounds per year, the y element depending upon the cost of living? I am not competent to say whether that would work or not, but I repeat that we ought to do something a bit better about our Service pensions. Other countries all over the world are doing their retired warriors rather than better than we do ours.

I think it might even be fair to argue that a review of Service pensions should be included in the general review of armaments which is now taking place. Tomorrow and the day after we shall talk about all sorts of fantastic weapons, but we all know that when it comes to the point what matters most is men and morale. There is no doubt about it that many serving officers, however satisfied they may be with their pay, are very worried about their pensions. They see their elderly friends of the 1919 vintage trying to make do on the 1919 pension, and they wonder whether when the time comes their own pensions will buy no more than the 1919 pension buys today. This is not good enough in these days when we want the best boys in the Service. There is no doubt that a lot of serving and retired officers are dissuading their boys from entering the Service, and it is their boys that the Services want.

I now turn to the specific case of the officers who retired on the 1919 code. In that year the Government established a code by which pensions would rise or fall by 20 per cent. according to the cost of living. In 1935 another Government stabilised those pensions at 9½ per cent. below the 1919 rate. Under pressure, 10 per cent. was restored by the Government the other day with all the trappings of a generous gesture. It was not generous at all. If one takes 9½ from 100 one gets 90½ if one increases that by 10 per cent. one gets 99½. Therefore, the situation is that the survivors of the bloodiest war in history, a war in which most Regular officers in the Army, at any rate, were killed bearing the first brunt, are subsisting today on less than the 1919 pension. That cannot be described as "generosity."

But it is not really a matter of generosity; it is a matter of right. I hold that the 1919 officers were promised 20 per cent. more and that they should get it. But the Government say "No," so I propose now to examine the arguments which the last Minister of Defence put forward in another place and his Parliamentary Secretary put forward in this place in three debates, with considerable personal discomfort I thought at that time.

First, it is held that in the Royal Warrant of 1919 the word "may" was used and not "shall" or "will." If any hon. Member reads that Royal Warrant today, he will decide, I think, that the intention of the Government of 1919 was that the pension would be raised 20 per cent. with the cost of living. Indeed, in the orders that translated that Royal Warrant into Naval and Air parlance, the words "shall" and "will" were in fact used. In 1935 the Treasury got hold of the word "may" and twisted it in the usual Treasury way to the disadvantages of the Services. That action was described in another place as "a rather mean quibble," and so of course it was.

Their second argument was that in 1935 officers welcomed the stabilisation of the Code. I have made wide inquiries and I cannot believe that that was so. Officers knew their Treasury and had seen the cost of living go up a little in 1934. However, although I cannot prove that they did not welcome it, the Government certainly cannot prove that they did. The truth of the matter is that it was not a question of "Take it or leave it," but just a question of "Take it."

Their third argument was even poorer. No Government, they said, could be expected to hark back and restore benefits cancelled out so long ago, and that if they did it would open the door to all sorts of other claims from all sorts of other pensioners. The open-door argument is a classic Treasury argument, but in this case it certainly does not apply, for there was a definite agreement in 1919 between a definite Government and a definite number of officers. There are not many left and the liability is even more limited today.

Lastly, they stated that in 1935 the new stabilisation seemed to be eminently fair as the cost of living was steady and seemed likely to remain so. "How could the Treasury be expected to foresee a vast rearmament programme?" asked the Parliamentary Secretary in a debate in this House in December, 1952. That is the poorest argument of them all. In 1934, Hitler had got into his stride and all over the country people were seeing the red light. Even I as a most humble candidate in South Devon had made 19 reported speeches in 1934 in which I said that unless we rearmed to the teeth war was inevitable. I have my news cuttings book here, if anybody likes to challenge that statement.

The Treasury, as we all know, is always filled with some of the very best chaps in the Civil Service. We have reason as taxpayers to be grateful to them on many occasions. But on that occasion and on that date, if they were so stupid as not to see what was coming to us, then they have no right to visit their stupidity on a few helpless pensioners. I therefore submit that the Government's defence is so lame as to be permanently disabled and that it would be rejected by any 12 good men and true anywhere in the country. I ask once again that this limited, but very definite liability of the 1919 pensions should be reconsidered by the Treasury.

I conclude as I began on a rather wider note. In this country we are enveloped in a welfare state which appropriates a very large slice of the national income. A good deal of that money is used to provide benefits for people who could well fend for themselves and it is rather a pity that we cannot divert some of it towards giving better pensions. But although we live in the age of the common man it is still to the uncommon man that we must look to give us prosperity in peace and to save us in war. I have tried this evening to plead for those uncommon men who fought our ships and led our regiments and wings in one of the greatest wars in history. I hope that the Government will give it further consideration, for it will not pay in the long run to neglect them.

10.20 p.m.

Brigadier Christopher Peto (Devon, North): I wish to reinforce what has been said by my hon. and gallant Friend the Member for Totnes (Brigadier Rayner). In particular, I want to ask the Undersecretary to answer a question which has not so far been answered—why it was that in Command Paper 9092, in paragraph 26, it was stated that the Government: accepted the recommendation of the Royal Commission in respect of Civil Servants and a similar recommendation made by the May Committee in respect of Forces' Officers… that these pensions should be stabilised, whereas, in fact, paragraph 114 of the May Report says exactly the opposite, that: We think it is not inequitable that as from a date as soon as possible after 1st July, 1931, the rate of deduction should be based on the average cost of living over a period of six months before that date and that it should thereafter be subject to more frequent review. That is entirely in the opposite sense to Command Paper 9092.

Paragraph 173 says: We have already recommended an acceleration of the cost of living adjustment on pay and existing pensions and a similar adjustment should be made on future pensions. Will the Government kindly answer the question why they have misquoted the May Report, misrepresented it throughout the country, and misinterpreted it.

The Under-Secretary of State for War (Mr. Fitzroy Maclean) rose——

Miss Irene Ward (Tynemouth)

Tell your boss to fight the Treasury.

Mr. Maclean

My right hon. Friend the Minister of Defence has asked me to reply to the debate. Everybody is bound to have considerable sympathy with the retired officers whose cause my hon. and gallant Friend the Member for Totnes (Brigadier Rayner) has pleaded so eloquently. I certainly have myself. But it must be remembered that their claims must inevitably be considered in relation to numerous other claims also deserving of sympathy, and in relation to the limited sums of money available.

As my hon. and gallant Friend pointed out, this whole subject has been debated a number of times recently. The arguments on both sides have been repeated again and again, and I am afraid that there is very little that I can add to the very full statements on Government policy which have been made on those occasions and in the White Paper of March, 1954.

As I understand the position, my hon. and gallant Friend's fundamental demand is for a general increase in officers' retired pay unrestricted by any means test. That would cut across a principle to which the present Government and their predecessors have long adhered; that is the principle that occupational pensions are varied only on grounds of hardship. By "hardship" in this context I mean not merely a reduction in the standard of living but severe hardships suffered by those on small total incomes, caused by falls in the value of money. It was on this principle that the Pensions Increase Acts of 1920, 1924, 1944, 1947, and 1952 and the corresponding Prerogative Instruments were based.

There are two points which I should like to emphasise once more in this connection. First, it must be remembered that public service pensions, being occupational pensions, are entirely different in character from, on the one hand, national retirement pensions and, on the other, war disability pensions. For instance, the old-age pension is contributory and aims at providing an assured basic income for old age. The Ministry of Pensions war pension compensates for loss of faculties, for disabilities sustained by the Service man due to his service.

The public service pension, on the other hand, is based on length of service and rank or pay on retirement. The other point is——

Lieut.-Colonel Marcus Lipton (Brixton)

But——

Mr. Maclean

I am sorry, but I cannot give way——

Mr. Ede (South Shields)

The hon. Member would lose his place if he gave way.

Mr. Maclean

Secondly, retired officers in the lower income ranges are already entitled to have their awards supplemented on grounds of hardship, and any proposal to remove the means test would benefit principally those who are relatively better off.

My hon. and gallant Friend has suggested some kind of reversion to the system of varying pensions in accordance with the cost-of-living index. That was the system introduced in 1919, and it was decided to abolish it in 1932 on the grounds that it was thought unsound that the remuneration of Crown servants should vary directly with the cost of living, whereas the remuneration of other members of the community should not.

Brigadier Peto

They are the only people who do not.

Mr. Maclean

There are large categories of people with fixed incomes as well as Crown servants.

My hon. and gallant Friend also suggested that officers who retired under the 1919 pensions code have been the victims of a breach of faith—[HON. Members: "Hear, hear."]—because of the decision to stabilise pensions at a level of 9£ per cent, below the rates of 1919; But it is important to realise that the pensions code of 1919 was no more a contract entered into between the Government and retired officers than was the stabilisation of 1935. They were, in fact, both imposed—if "impose" is the word to use of an administrative act—by the Government on the officers in question. As has been said before, there is no real reason to suppose that the decision to stabilise which was taken in 1932 and implemented in 1935 was unpopular with those concerned.

Lieut.-Colonel Lipton

It was still an imposition.

Mr. Maclean

There is a tendency to talk as though the 9½ per cent. cut were still in operation. But, as hon. Members will be aware, that is not the case. Although my hon. and gallant Friend accused the Government of lacking in generosity, they did restore that cut, and that has, in one sense, finally done away with the whole system of variable awards. It was a system which was tried for a short time and was found to be unsatisfactory, and it was finally abandoned in 1935.

I would repeat once more that the principle regulating Government policy in this whole question is that the pensions of former public servants should not, in general, be adjusted to meet changes in circumstances which arise after their retirement.

Brigadier Peto

Why was it done in 1932?

Mr. Maclean

That change has been done away with by the Government's Measure last year. In 1935, pensions were stabilised finally to meet the cost of living at that time.

Miss Ward

Jolly bad show.

Mr. Ede

The poor fellow has to read it.

Mr. Maclean

I can only repeat that that is the principle upon which these pensions are awarded. It has also to be borne in mind that there is another aspect of the question. It is all very well for the right hon. Member for South Shields (Mr. Ede) to chip in the whole time, but the same principle was applied by his Government and by succeeding Governments.

Miss Ward

But we must do better than they did.

Mr. Maclean

I am addressing myself to the right hon. Member for South Shields, and what his Government did.

Miss Ward

But they were no good.

Mr. Maclean

My hon. Friend supported the Governments——

Miss Ward

I never supported the Opposition when they were the Government.

Mr. Maclean

She supported the Governments before and during the war, who followed the same principle.

It is also important to remember that to introduce variable service pensions would be unfair to those other members of the community also living upon small fixed incomes, and who, as taxpayers, would have to bear part of any additional help given to public service pensioners.

Captain Richard Pilkington (Poole)

Cannot they be considered as a category completely apart?

Mr. Maclean

They cannot be considered completely in isolation from all other classes of the community.

The purpose of the Government's policy is to give assistance where assistance is required to relieve real hardship, as distinct from relative hardship, which a fall in the value of money is bound to inflict upon all those who live upon fixed incomes. As I have said before, the amount of assistance given must depend upon the amount of money available and upon the numerous conflicting claims with which any Government are faced. For those reasons, it would be quite wrong for my right hon. Friend to hold out any hope of an all-round increase.

10.33 p.m.

Lieut.-Colonel Marcus Lipton (Brixton)

I have never heard a weaker or more unsatisfactory reply given at the Dispatch Box. I hope that further opportunities will present themselves of raising this matter again. It cannot be right that such an injustice should be perpetuated ad infinitum. The Under-Secretary of State has not adduced a single valid argument for the perpetuation of this injustice, and I hope that hon. Members on both sides of the House will keep on raising this matter until whatever Government are in power are pestered into seeing that justice is done.

The hon. and gallant Member for Totnes (Brigadier Rayner) said that it was a limited liability. It is more than that; it is a diminishing liability, because the number of people concerned is diminishing. I hope that further pressure will be brought to bear upon this Government and any succeeding Government until justice is done.

Hon. Members

Hear, hear.

10.34 p.m.

Mr. Anthony Marlowe (Hove)

The House deplores the speech of the Undersecretary of State. He completely failed to address his mind to the problem. The case of these officers is undoubtedly distinct from that of other persons, because a promise was made in 1919. His answer seems to be, "What is the difference between making a promise and breaking a promise?" It was most——

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-five minutes to Eleven o'clock