§ Order for Second Reading read.
§ 3.56 p.m.
§ The Financial Secretary to the Treasury (Mr. Henry Brooke)
I beg to move. That the Bill be now read a Second time.
The Financial Secretary to the Treasury so constantly has to keep his own visage stern and unrelenting, and the word "no" has so often to be on his lips, as you, Mr. Speaker, will well remember, that it is a pleasure for me today to be entrusted with bringing before the House a Bill which will bring good news to hundreds of thousands of men and women who have earned pensions in the public service. The events of the past few days have made no difference to the determination of my right hon. Friend the Chancellor of the Exchequer, whose name, as the House will note, heads the list of Ministers on the Back of the Bill, to ask Parliament to pass it into law.
The last Pensions (Increase) Act of a general character was passed in 1952, and since this Parliament assembled last summer the Government have been very thoroughly examining whether further legislation should be proposed. In this connection, I want to thank particularly my right hon. and learned Friend the Member for Chertsey (Sir L. Heald) and other hon. Friends who were associated with him in making a special and independent study of this exceedingly complicated subject. I am glad to say that we found that on important matters our views had converged.
After carefully taking into account all the difficulties of the time, both personal and national, the Government have come to the firm conclusion that it is right and just to propose to Parliament a further Measure of practical assistance to people who retired a number of years ago on pensions which they earned in the public service. During the past few weeks we have been able to gain the benefit of the views of representatives of the local authorities, and also of the Trades Union Congress, whom I myself met. We have also had the advantage of the views of the various bodies representing pensioners in the different public services and also of the Civil Service staff side. All these 583 people have given useful advice, and I am most grateful to them. The full responsibility for what is in the Bill remains, of course, with the Government.
Parliament is being invited to enact by legislation the proposals for civilian pensions. The corresponding increases for Service pensioners will be made by Royal Warrant as soon as this Bill becomes law. This is in accordance with precedent. The Service pensions will be dealt with on similar lines and according to the same principles; the only material differences will be those necessitated by the differences in the pension system itself and, for instance, by the fact that new retired pay codes have come into operation for the Services at different dates from the changes in pension—changes resulting from pay increases—in civil employment.
Since 1939, the House will remember, there have been three main Pensions (Increase) Acts, in the years 1944, 1947 and 1952. After the First World War, there were two Pensions (Increase) Acts, in 1920 and in 1924, from which some people, who retired many years ago, even now are benefiting. I have tried to see whether one could repeal the existing Acts, with all their detailed complications with which some of us are perhaps only too familiar, and thus replace the whole of the present structure by some simple, new scheme on broad lines. Most unfortunately, the more one studies that seemingly attractive possibility, the more convinced one becomes that it would be impossible that way to do individual justice.
What we have to do is to take into account a total body of about 600,000 pensioners, who have retired after different kinds of services, with different kinds of pension, at different times over the past 30 years and more. What matters is to do justice, as far as possible, among all those individuals. One has to discard the idea of a simple, new scheme as soon as one discovers that whatever scheme of that kind one can devise, it will do justice that is too rough to be called justice at all.
There is another possible method of proceeding. This other method, which has weighty advocates, is to legislate to bring every old pension up to the amount which the individual concerned would be awarded as pension, if he were retiring today on the same record of service as he 584 actually had. But, apart from any other considerations, this method, too, is seen to run into practical difficulties, which I am afraid are insuperable. We are concerned with more than a quarter of a century of turbulent, national history which has seen enormous changes in the organisation of the various Services with which we are dealing.
The organisation of the Civil Service of today is unrecognisably different from that of the Civil Service of 1919. Indeed, the Civil Service of today is not at all the same as that of 1939. It is literally true that hundreds of grades, which existed even as recently as 1945, vanished in the great reorganisation which took place after the war. Take, for example, the Post Office; the counter clerk and telegraphist as such has now entirely disappeared. Even the apparently unchanging postman is not quite the same as he used to be. He may now be either a postman, or a postman higher grade, with wider responsibilities.
Where these changes in grade have taken place, it becomes impossible to see how one could with justice apply the general principle which I have mentioned. It is not only the grades which have changed. Often systems as well have changed. For example, many officers in the Armed Forces, who retired between the wars, retired on service which today would be too short to qualify them for pension. That is one great practical difficulty about this plan. There is also another practical difficulty.
The actual effects of bringing old pensions up to current rates in many individual cases would appear to be quite unjust, because people who retired in the same year on the same pension would find that if they were now to be treated just as though they were retiring today, their pensions would be increased by startlingly different amounts. I know that that sounds surprising, but it will be found to happen in a great many, cases. For instance, let us take a principal in the Civil Service and a medical officer in the Civil Service, who both retired in the year 1939 after 40 years' service on pensions of about £500 a year—that is roughly what their pensions would have been.
On what I call the present-day basis, which some people have advocated, the retired principal would now get his pen 585 sion increased to about £730 a year, whereas the retired medical officer would get his pension increased, to £1,050 a year. That, of course, is because medical salaries over the years have risen far more than have administrative salaries. It would be impossible to convince our constituents that the man who had his pension raised from £500 to £730 a year was getting a square deal, compared with the other man who found he had his pension increased from £500 to £1,050.
Those are the reasons why the Government have set themselves to solve the problem before us today by building on to the structure created by the existing Pensions (Increase) Acts a further storey as it were, a further storey which is designed to serve two main purposes. The first is to eliminate what were widely felt to be injustices in the present Acts. When I refer to the present Acts, I remind the House that the Acts of 1944, 1947 and 1952 were all based on the same general principle, though they were passed by different Governments, a Coalition Government, a Labour Government and a Conservative Government. If we eliminate these injustices, as they are felt to be, we shall be able to give to many pensioners hitherto denied them the full benefits of these three Acts. Secondly, over and above this, the plan of the Government is designed to give some additional, new benefits not only to pensioners who retired long enough to benefit under the earlier Acts, but also to some of those pensioners who retired later.
Those are the main objectives of the Bill. I know that the Bill appears to be complicated. No one who reads it from cover to cover would describe it exactly as a child's guide to knowledge. The time to go through it, of course, to see whether all these complications are really necessary, will be when we reach the Committee stage. If the Bill becomes law, we shall certainly propose to publish a booklet to make everything as clear as possible for pensioners and for those who have to advise pensioners, and that may include hon. Members. I should like, here and now, to say that the practical result of the Bill will be not to make the administration of all these pensions more complicated still, but rather to simplify it. When the Bill becomes law, it will actually be possible to calculate and pay the pensions with fewer staff than at present required.
586 In this Second Reading debate, I want to concentrate on the main plan. The House will forgive me if I do not attempt to go into every detail, because this is a subject on which only too easily one can get bogged down by details. The Government have decided to recommend Parliament to make, for the benefit of pensioners, far-reaching changes in the existing principles of pension increases. The 1944, 1947, and 1952 Acts, like their earlier counterparts in 1920 and 1924, are all based on the principle that people should not receive an increase if their pensions are above a certain quite moderate figure, and, secondly, that even those whose pensions are below that figure should get no increase if they have other means which bring their total income above certain limits.
These rules are open to criticism from two angles. First, the fall in the value of money since before the war has severely affected the standard of living of all pre-war pensioners, whether their pensions are above £550 a year or below. I know that it could be said that only the people with smaller pensions suffer absolute hardship if nothing is done for them, but I put it to the House that it is not right to ignore the relative hardship which has now been endured for a long time by the older pensioners. Even those with larger pensions have had their standard of living eroded over many years. That is the view of the Government and I hope that the House will endorse it.
Secondly, it is felt to be unfair that some pensioners can get their pensions increased under the existing Acts, whereas others, who have given just as good service to the State under absolutely identical terms, are denied any increase because they happen to have other income from money they have saved or from some other source. After careful consideration, the Government have decided to wipe out these old restrictions.
I believe it to be an act of justice which I am announcing to the House. This is dealt with in Clauses 2, 3 and 4. The Acts of 1920, 1924, 1944, 1947 and 1952 will all be amended by these Clauses so as to repeal the limits on the size of pension and on the size of total income which at present prevent many pensioners, who would otherwise have done so, from 587 benefiting from these Acts. These pension limits happen to be £275 for the married pensioner and £200 for a single pensioner, under the 1920 and 1924 Acts. They are £450 and £350 under the 1944 and 1947 Acts combined, and they are £550 and £425 under the 1952 Act.
These limitations will all disappear. Thus, a very old pensioner who retired long enough ago to come within the scope of the Acts of 1920 and 1924 and whose income is, say, £400 a year, will now have a chance of increases under the whole series of Acts. The pensioner who retired in, let us say, 1939, and whose income is, say, £700 a year, will now get the increases due under the 1944, 1947 and 1952 Acts, and so on.
As we propose to abolish these income and pension limits, it follows that we propose also to give to all pensioners the higher amounts of pension increase which now are due only to pensioners who have dependents. The distinction drawn between what for convenience I will call married and unmarried pensioners can, in certain circumstances, operate very harshly. For instance, a man who has lost his wife, and consequently lost the help she was giving him in the home, finds it extraordinarily difficult to understand why he must then suffer the additional blow of having his extra pension reduced, or cut off completely, because he no longer has a dependent.
§ Mr. Edward Evans (Lowestoft)
If a man who is entitled to a pension of, say, £400, decides to allocate part of it to his wife to guard against widowhood, will the basic pension be as stated in the Second Schedule, or the pension he is actually receiving today, because he has allocated part of the money?
§ Mr. Brooke
I hope that the hon. Gentleman will forgive me if I do not now interrupt my speech to deal with that point. I hope to deal with it at a later stage, but I am now much on guard against confusing hon. Members with detailed points, however important, before I have put before the House the main structure of the Bill.
It also follows from what I have said that various categories of pensioners will now be brought in who were not covered by the earlier Acts, because all of them had pensions higher than the limits in 588 the earlier Acts. Thus by this Bill we shall be bringing in colonial governors, county court judges, sheriffs in Scotland, stipendiary magistrates, coroners, pensioners of the former Indian Services and some others who receive diplomatic pensions awarded under the Diplomatic Salaries Act, 1869.
We do not propose to repeal the provisions which limit eligibility for increase to pensioners who have reached the age of sixty, apart from those who, if they are younger than sixty, are disabled from working. The point here is that those who are under sixty are able to obtain jobs. At a time of brim-full employment, with unemployment down to something negligible, it cannot be right to ask the taxpayer to supplement the incomes of people who can supplement their own incomes by taking work. Help ought to be concentrated under these Acts where it is most needed, and help is much more needed by those over the age of sixty than by those below. Indeed, it is the policy of the Government, which has general support, to encourage people under sixty to remain at work.
The result of these changes is that, subject to what I have just said about the age of sixty, civil pensioners whose pensions are related to any of the various salary levels obtaining up to the spring of 1948, and of course some who retired after that date, will also have varying degrees of increase according to the degree of what I might call the out-of-dateness of their pensions. Some will come in under all the past Acts and some under only one or two; and of course the same will be done for the benefit of members of the Forces, under the Royal Warrant.
Now, I come to the other part of the proposals—the new increases. This matter is dealt with in Clause 1 and the Second Schedule. Since the 1952 Act came into effect, there has been a rise of between 11 per cent. and 12 per cent. in the Retail Prices Index. There was a rise of 31 per cent. between 1939 and the Act of 1947, and there was a rise of 38 per cent. between the Acts of 1947 and 1952. Upon the basis of past precedent, therefore, it could be argued that there is no real justification for further help, beyond that given by the amendment of the earlier Acts, which I have 589 described—but the Government take a different view.
To decide the total of the additional help which should be given towards easing the difficulties of pensioners, and which pensioners should receive that help, are matters of judgment, and one has to form this judgment in the light of the many factors which have to be considered, such as the rise in the cost of living, the level of pensions being currently awarded—which reflect current salary levels—the principle of relative hardship and, lastly, the amount of public money which it is right to spend upon this purpose, having regard to all the other claims upon taxpayers and also ratepayers; for the cost of some of these increases falls upon local authorities.
We have weighed all these considerations and, subject to a maximum of £100, we propose that further help to the extent of up to 10 per cent. of the basic pension should be given to pensioners who retired up to 31st March, 1952, provided that they retired upon a salary of less than £1,500 a year. Those who retired upon a salary of £1,500 or more must have retired on or before 31st December, 1947, to be eligible for this further help.
Taking all these matters together, this is a generous arrangement. The total cost, including the corresponding increases for Service pensioners, will be about £11 million a year. It may interest the House to know that that compares with a total of about £15 million now being paid for all the increases under the Acts of 1944, 1947 and 1952 put together. The total cost in respect of civilian public service pensioners will be about £8 million, of which £5½ million represents the cost of the new increases under Clause 1.
§ Mr. Arthur Moyle (Oldbury and Halesowen)
Can the Financial Secretary tell the House how many of the total of 600,000 pensioners to which he referred earlier were in local government service and the teaching profession?
§ Mr. Brooke
I do not carry those figures in my head, but before the end of the debate I will see that hon. Members have them.
§ Mr. Glenvil Hall (Colne Valley)
I believe that the number of local government officials concerned is about 120,000.
§ Mr. Brooke
I would rather not give a figure on the spur of the moment, by which I might be deceiving the House. I can assure the hon. Member that I will obtain the precise information for him.
I was saying that the total cost of the provisions of the Bill in respect of civilian public service pensioners will be about £8 million, of which £5½ million represents the cost of the new increases under Clause 1, and the other £2½ million the cost of removing the restrictions in the earlier Acts, under Clauses 2, 3 and 4. Of the £8 million, roughly one-quarter falls upon local authorities and three-quarters upon the Exchequer. I can give the approximate total number of people who will benefit, although I should not like to split it up into different categories on the spur of the moment. The number who would actually benefit can be only approximately calculated now, because until all the claims come in we cannot be certain about it.
My estimate is that out of a total of about 430,000 pensioners of the civilian public services, about 330,000 will benefit. The other 100,000 are those who are still under 60 years of age, or those who have only recently retired and are therefore receiving pensions which reflect the salary increases of recent years. If the House gives me leave to speak again at the end of the debate I undertake to give the figures in greater detail.
The House will probably wish to know why we have chosen 31st March, 1952, as the dividing line. In judging where to draw this line one has to look at two things. One is the length of the rises in the cost of living, which are the ultimate cause of pensions increase Bills being brought forward. No pensions increase Bill has ever set out to compensate everybody for rises in the cost of living, however small, since they retired, so it would be absurd to include people who had retired from the civilian public services only a few weeks ago.
The other factor is a more technical one. Under the normal workings of the various public service pension systems the rises in salaries which have taken place in recent years—largely as a result of rises in the cost of living—have themselves been, reflected in rising pensions. It is no part of a pensions increase plan to compensate these pensioners twice over; that would put them in a more 591 favourable position than people retiring today or tomorrow, because the pensions upon which they have retired are already the larger, in that the salaries upon which they are based have risen. Here again, our purpose is to concentrate help where it is most needed; to benefit those pensioners who retired earlier, rather than those who retired quite recently upon pensions which have risen as a result of the salaries having risen.
Looking back for a moment, the 1952 Act assisted pensioners retiring upon pensions which reflected salaries up to the end of March, 1948. Now, four years afterwards, we move the date limit forwards to the end of March, 1952. I readily admit that no one date can fit exactly the salary and pension history of every one of the innumerable classes or grades with which the Bill deals, but we have examined the matter very closely, and the date which we are proposing seems to be reasonable. It is also closely in line with what was done under the 1952 Act.
There is one point which I would emphasise. What I have said does not mean that no one who retires later than 31st March, 1952, can possibly derive any benefit from these proposals. Under many pensions schemes some time has to elapse for salary increases to be fully reflected in pensions, because a pension is based upon average salary over a period of years. Therefore, to the extent that pensioners retiring after March, 1952, have pensions which reflect the earlier salary level before that date, the Bill provides that they shall get some increase.
The next question which the House should ask me is why 31st December, 1947, should be chosen as the cut-off date in respect of those retiring from the higher grades. There are two reasons. Some date earlier than 1952 was inevitable in this case, because the history of salary movements at the higher level has been very different, as the hon. Member for Sowerby (Mr. Houghton) appreciates in the case of civil servants, from the history of salary movements lower down. The two highest ranks in the Civil Service have had no increase since 1951. At the levels immediately below them there have been increases, but they are not in any way comparable with the increases lower down. It would not make sense if we 592 brought the pensions of people who retired five years ago above the pensions of people who are retiring today.
Apart from this, the Government have to make a judgment on the extent to which it is right to ask the taxpayers and ratepayers to assist pensioners at this level. It is one thing to recognise the difficulties of the higher pensioner who retired many years ago and whose standard of life has been considerably brought down by a long-drawn-out fall in the value of money. The case is not so strong for helping the more recently retired pensioners. It is with all this in mind that we propose, for the people who had salaries of £1,500 a year and more when they retired, that the date limit can fairly be put at 31st December, 1947. This does not mean that no one who retired later can get anything at all. I explained that point in the case of the other pensioners; the same considerations apply to these.
It may set some doubts at rest if I add that we are not going to try to force into one rigid pattern all the less usual kinds of pension whose history has been widely divergent from the normal kind. Let me give one obvious instance. Certain very specialised groups are to be found in the judicial field, where the 1947 date does not apply at all. It would not be sensible. In these exceptional cases special arrangements will be made under regulations.
§ Mr. Arthur Palmer (Cleveland)
Would the Financial Secretary care to say why it has not been found convenient to include the pensioners of the nationalised industries, many of whom were previously in local government services?
§ Mr. Brooke
We deal exclusively in the Bill with pensioners who have earned their pensions in the public service and who are paid their pensions from public funds. The pensioners whom the hon. Gentleman has in mind are paid by the nationalised industries. It would be anomalous for Parliament to legislate regarding them in a Bill which is solely and exclusively concerned with people whose pensions are paid from public funds.
§ Mr. Palmer
I see that difficulty, but many of these pensioners were previously in local government service and were transferred to the nationalised industries.
§ Mr. Brooke
I appreciate that point. If the hon. Member will think over it carefully, I think he will also accept and sympathise with the argument which I am putting that the Bill deals with people whose pensions are paid from public funds, and that it would be impracticable to deal with the needs of people whose pensions, however they may have originally earned them in part, are now paid by commercial undertakings.
§ Mr. Moyle
Can we get down a little closer to detail on this transfer of local government personnel to the public services. Some were seconded with transferred pension rights. I was under the impression that this very small category would benefit under the Bill. Would the Financial Secretary look at the point again?
§ Mr. Brooke
I will certainly look at it very carefully and see whether there are any such cases, and I will let the hon. Gentleman know.
I apologise for making a long speech on this complicated matter, but the only way of getting a debate of this character started is for the Minister to go through the main proposals.
I want to explain a feature of the Bill which is new and has given rise to doubt and questioning. The new increases which we propose to give are on a scale from 6 per cent. up to 10 per cent., according to length of service. For 20 years' service or less, the increase is 6 per cent., rising step by step until, for 36 years' service or more, the full 10 per cent. increase is given. Let me mention at once, because I know several hon. Members are interested in this point, that where, for example, in the police or the fire service, full pension can be earned by shorter service, special arrangements will be made.
This idea of graduation from 6 per cent. to 10 per cent, is a complication which some people have told me is unnecessary, but I have come to the conclusion, not without going into the matter pretty deeply, that it is fair and just to introduce this complication.
§ Dr. Horace King (Southampton, Itchen)
Does that mean that if a pensioner has done the length of service to which he was statutorily limited he will be entitled to the full 10 per cent.?
§ Mr. Brooke
Yes. A man who has, as a fireman, done the full length of service to enable him to qualify for the full pension, will get the 10 per cent. on attaining 60 years of age. This part of the Bill is highly abstruse and is much more suitable for discussion in Committee than here. I am sure that, whatever else we may discuss in Committee, we shall have a full discussion on this point. I should like to give the House a brief explanation why we think it is right to introduce this new feature.
At first sight it looks as if we were penalising the short-service man, perhaps penalising him twice. He not only has a smaller pension because he has shorter service, but apparently he is to get a smaller increase on that smaller pension. The fact is that the earlier Acts have given a much greater percentage increase the smaller the pension. In particular the earlier Acts have given increases of a percentage higher than that by which the salaries have risen since, and this has—
§ Mr. W. R. Williams (Manchester, Openshaw)
It was not according to length of service, but was related to the amount of the salary or wages.
§ Mr. Brooke
I am simply describing what happened under the 1947 and 1952 Acts. We have to take the existing situation. The Bill is a topping-up operation and has to have regard to the increases already granted. It is the fact which I have just described that produces a curiously distorted situation, in which already numbers of older short-service pensioners are receiving as much by way of pension, plus increase, as are their colleagues retiring on similar short-service pensions today, and, in some cases, actually more. Thus, if in this part of the Bill we seem to be giving some people less than their due, it is because they really have come much better than others out of the rest of the arrangements.
I do not want to weary the House with further details, but I should be prepared to give individual cases in which, by means of figures, I could prove the 595 anomalies and distortions which have arisen and which we do not want to worsen.
With the enormous variety of pensions covered by these Pensions (Increase) Acts, it would, I grant, be too much to hope that distortions and discrepancies of this kind can be completely avoided. We could not do that. We could not avoid them completely without either introducing the most horrible complications or else depriving people of increases which they already have, which I am sure no one in the House would wish to happen. We are certainly not attempting to do either of those two things, but we do regard it as important that in this Bill we should do nothing to make the anomalies worse, and they certainly would be worse if the further increases now proposed were to be a flat 10 per cent. increase regardless of length of service. This is so technical a matter that we certainly ought to pursue it further in Committee.
I have tried, in moving the Second Reading of the Bill, to pick out the main points of principle which are the real essence of the Bill. I recognise, of course, that there is a great deal of detail on which hon. Members on both sides of the House may very rightly want further information, but most of that will be Committee work. What I have tried to do is to disentangle out of the mass of detail the broad issues, and it is, in particular, those broad lines of advance which I am asking the House to consider and to approve today.
§ Mr. H. Hynd (Accrington)
On a point of order. Would you say, Mr. Deputy-Speaker, for the guidance of the House, whether you intend to call the Amendment standing in my name and those of several of my hon. Friends, to leave out from "House" to the end of the Question and to add instead thereof:declines to give a Second Reading to a Bill concerned with certain civil pensions until further information is available about pensions increases to railway superannuitants"?
§ Mr. Deputy-Speaker
As far as I know, that Amendment will not be called. I gather that the other one, in the name of the hon. Member for Aldershot (Sir E. Errington) will be called, but not yet awhile.
§ 4.42 p.m.
§ Mr. Douglas Houghton (Sowerby)
I am sure the whole House would wish to congratulate the right hon. Gentleman the Financial Secretary to the Treasury on the careful and lucid way in which he has explained this most intricate Bill. I only hope that I can put my points before the House as clearly and in as short a time.
We on these benches—and I am sure that I can speak for the whole House—welcome this Bill, and the right hon. Gentleman must have been very pleased with the good Press which it has had. I have received Press cuttings from all over the country, and there has been a very marked and favourable response to the introduction of this Measure. Headlines such as "Belated Justice," and "Overdue Justice," and phrases of that kind, have revealed the favourable public interest in it.
The principle that we are considering today is the obligation of an employer to ensure that, in conditions of inflation and the falling value of money, retired servants do not suffer unduly from these economic changes. That is the principle of the matter and I well recall that in 1954, when we were discussing a similar special Measure dealing with pensions increases, the Government published a White Paper on the subject (Cmd. 9092).
In that White Paper, they set out some interesting observations on what they believed to be the obligation of the State as an employer towards retired public servants, and I wish to quote from paragraph 44:The fundamental principle of public service pensions, that once they are awarded they are not normally subject to change in either direction, has been upheld by successive Governments. It has also been endorsed by Parliament. Her Majesty's Government are in no way prepared to abandon it.That they regarded as the principle, but, of course, it was qualified by the fact that it would be harsh in the extreme to stick to the purity of that doctrine in the conditions which we have been passing through in recent years. They therefore said:In their view, it is a principle that should be departed from (as it has been) only to the extent that severe falls in money values causing real hardship among pensioners may justify special increases…That has been the basis upon which previous Measures dealing with pensions increases have been introduced, but 597 never has the State recompensed its retired servants wholly or even liberally for the loss of the purchasing power of their retirement pensions. There have been various considerations of relative justice in these matters—-total cost, and so on—and, of course, also a comparison between the degree of compensation for the fall in the value of money to be given to those retired as compared with the degree of compensation given to those still in the public service.
It is notorious that in the public service there has been nothing like full compensation for the fall in the value of money in the adjustment of wages and salaries, so that, weighing the relative justice of the compensation to those who retired with the increase in pay given to those still serving, the pensioners have been denied the full compensation for the fall in the value of their pensions.
Lord Pethick-Lawrence, who was leading for the Opposition when the first of the present series of Pensions (Increase) Acts began, in March, 1944, said this:I am in agreement with the Chancellor of the Exchequer that legalistically interpreted the public pensioner has no precise right to any increase in his pension. The strict law of his contract has been kept, but the fact is that underlying all contracts for payment at some future date there is an assumption, unwritten and unspecified, but nevertheless implied. That is the stability of the purchasing power of money. Unless this is substantially maintained all time contracts are meaningless."—[OFFICIAL REPORT, 3rd March, 1944; Vol. 397, c. 1777.]I am sure that it is in the acceptance of that principle and that interpretation of the basic principle in changing economic conditions that the House will proceed to consider this Bill.
In discussing the Bill, I will follow the sequence adopted by the Financial Secretary. The first welcome thing in the Bill is that it sweeps away the limitation imposed on the pensions increases in the Acts of 1944 to 1952. The 1944 Act, as amended by the 1947 Act, granted pensions in some cases on a percentage basis, with a ceiling placed upon the amount of pension that could be drawn, combined also with restrictions imposed by reference to other income—known as the "means test." There were some pensions under the 1944 and 1947 Acts—but only in the Civil Service—which could be increased by smaller percentages without the means test, but which were also sub 598 ject to an upper limit as to the amount which could be drawn.
The 1952 Act broke with the principles of the two earlier ones. There was introduced in 1952 a scheme of flat-rate increases stepped downwards from the earlier to the more recent pensions. It was a graduated scale, stepping down to give the smaller amount to the person who had retired towards the end of the period covered by the Act, which was 31st March, 1952. Distinctions were made between married and single persons. There is no doubt that the merging of the principles of the 1944 and 1947 Acts with the new principle of the 1952 Act has produced some curious results which are now very troublesome in the arrangements for introducing a still further new principle of compensation. I shall deal with those a little later.
I want to welcome the removal of the source of the hardship and bitterness among public service pensioners which undoubtedly has persisted ever since the earlier Acts. The means test, especially, was resented—the reckoning of savings, of a wife's income and other resources, subject, it is true, to what was called a disregarded amount, but many pensioners thought that it was quite wrong for the State to approach this question of compensation for the loss of purchasing power of a pension by reference to the personal, domestic and economic circumstances of the pensioner. In particular, there was, as the Financial Secretary has pointed Cut, this grievance of a pensioner who, on becoming a widower, found himself drawing a smaller pension than before.
The sweeping away of those restrictions and limitations is, therefore, very welcome. One must remark in passing, of course, that many pensioners will benefit more from the removal of those restrictions than from the new increases provided in the Bill. Nevertheless, they are welcome—increases coming from the removal of earlier restrictions or resulting from the introduction of supplementary increases are both welcome, because they increase the total amount of pension which will be granted.
The Financial Secretary did not mention the date from which this Bill will operate. I hope that before the debate ends he will tell us from what date he is proposing that its provisions shall become effective. The Pensions (Increase) Act, 1944, received the Royal 599 Assent on 24th May, 1944, and was backdated to 31st December, 1943. The Pensions (Increase) Act, 1947, received the Royal Assent on 18th February, 1947, and was effective from 1st December, 1946. The Pensions (Increase) Act, 1952, received the Royal Assent on 1st August, 1952, and was effective from 30th September, 1952. It will be seen that there are two precedents for retrospection and one for a forward date, and if one is to count heads in this referendum the majority for retrospection is two to one.
We hope that the Financial Secretary, especially in view of the simpler administration which is involved in this Bill—and administration has previously been made one of the difficulties for applying a retrospective date—will be able to say that this Bill may date from 1st January, 1956, at the very latest. He has, I know, received representations very strongly suggesting that some date in last year would be more appropriate than 1st January, 1956, because representations were made on this subject nearly a year ago and there is no doubt that the Government have been considering it for some long time. I leave that matter with him. On these benches we want to be reasonable, and, of course, so does the House, but I feel sure that he does not expect the House to accept for this Bill any effective date later than 1st January, 1956.
Another question which arises in this Bill relates to the year from which the pensions count. The Financial Secretary has explained that although the datum line is still 31st March, 1952, pensioners who retired since that date and whose pensions have been calculated on remuneration drawn earlier than that date will come within the provisions of the Bill. He has received representations, I know, suggesting that while that marginal relief is an agreeable change and a departure from the strict drawing of a line between pensioners who retired before the given date and those who retired subsequently to it, there is still a case for bringing the datum line forward a little to 1st April, 1953.
Some have suggested that the datum line should be brought forward to 1st April, 1954. However, I think that the arguments for and against the suggestion will need to be examined more closely when we reach the Committee stage. We shall wish to see what has been the in- 600 cidence of the rise in remuneration since then, what has been the incidence of the rise in the cost of living since then, and what will be equitable as between pensioners who have retired at a later date and those who went out somewhat earlier.
By far the biggest question—and one upon which the right hon. Gentleman rightly said there will be a good deal of discussion in Committee—is the new principle introduced in the Second Schedule of the Bill—that is, the graduated percentage increase based not upon the amount of the pension but on the length of reckon-able service. That is a new principle and, as the Financial Secretary had pointed out, it is a very troublesome one to impose upon the combined principles of the earlier Acts. There is no doubt that some curious results have had to be examined by the Treasury when working out in detail the effect of, for example, a flat-rate percentage increase based on the amount of pension, or a graduated scale percentage increased based on length of service.
The Financial Secretary said that some of the intricacies of the matter will perhaps be better examined in the more intimate atmosphere of the Committee upstairs, but I think it is worth while drawing the attention of the House to what I believe to be the reason for introducing this new principle, the anomalies which it attempts to modify and the anomalies which the new principle itself will create.
What has been discovered, as the Financial Secretary pointed out, is that the principles adopted under the earlier Acts gave more compensation to those on lower pensions than to those higher up, and when, later, the Government came to apply a percentage increase, there was what the Financial Secretary described as distortion. I heard another word for it the other day—over-topping. That came from Treasury Chambers and it will no doubt pass into the current jargon of Pensions (Increase) Acts.
What happened is that when granting further increases under this Bill we find that some pensioners who went out early are getting a higher pension than those who went out later from the same grade, after the same length of service and from the maximum of the grade. I hope that is not too difficult for hon. Members to understand. Let me give an example. A clerical officer who retired from the Civil Service in 1939 after 20 years' reckonable service, and whose pension was calculated 601 on the maximum of his grade, received, in 1939, £88 a year pension. His present total pension is £149. With the 6 per cent. increase which would be applicable to him under the Bill, his pension would be about £155 a year.
A clerical officer who retires in 1956 on the maximum of his grade and after the same period of reckonable service, 20 years, goes out on a pension of £147. Thus the 1939 clerical officer, who went out on his maximum after 20 years' service and who has received a pension increase under the earlier Acts, has a current pension of about £150 a year, whereas the clerical officer retiring this year from the maximum of his grade and after the same length of service receives a pension of less than £150 a year.
§ Mr. Houghton
That is exactly what it means. It means that the percentage compensation given to the retired clerical officer has exceeded the percentage compensation given to the serving officer for the fall in the value of money. I can quite understand how that has happened, because the clerical officer retiring in 1939 on £88 a year obviously had to be given the fullest compensation for the fall in the value of money if we were to relieve his hardship to anything like a satisfactory extent, whereas the clerical officer who continued to serve on his full remuneration could get along, even though in terms of pre-war values his remuneration today has signally lower purchasing power than the scale of pay of his grade before the war.
Under the Bill, the 1939 retired clerical officer will receive an increase of 6 per cent., which will take his pension to £155. That widens the gap slightly between the pension of the 1939 retired clerical officer and that of the 1956 retired clerical officer. If the 1939 man were to be given a 10 per cent. increase it would widen the gap a little more. That is the anomaly which, I believe, lies at the root of this attempt to modify the incidence in granting further pensions increases.
But let us look at the new anomaly which this method creates. We can have two people now on the same pension—a postman after 40 years' reckonable ser- 602 vice and an executive officer after 20 years' reckonable service; and this Bill will give to the postman the full 10 per cent. increase because he has completed 40 years' reckonable service, whereas the executive officer, who completed 20 years' reckonable service by the time of his retirement, will get only 6 per cent. increase under the graduated scale in the Second Schedule. In trying to modify the effect of an anomaly in one direction, another is created.
If I am asked which will be the more acute of these two anomalies, I suggest that it will be the second, because I do not believe that the clerical officer retiring now thinks that his colleague of 1939 vintage is being dealt with too generously. What he laments is that his own pension is being calculated on a remuneration which itself has not been lifted sufficiently to put him on a basis of parity with his 1939 retired colleague. That would be his reasonable attitude. He would certainly not ask that the 1939 pensioner should be given less than a proper increase in the Bill on the ground that it would widen the gap a little between the relative figures of the pension received by the 1939 retired officer and that received by the man retiring in 1956.
The anomaly will give a strong sense of grievance where two pensioners, now on the same rate of pension, will ask how the Bill is supposed to produce a fair and square deal when one is given more than another because of differences in the total of reckonable service. Let me emphasise this point by reminding the Financial Secretary that many of those who will retire have only a comparatively short period of reckonable service because much of their temporary service does not count for pension at all; or it may be because a pension scheme was introduced for some classes comparatively late and therefore probably none is able to complete the full length of reckonable service which would give him the full 10 per cent. increase under the Bill. I am advised that that will be especially so in the local government services, and my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) will no doubt wish to catch Mr. Speaker's eye to say something on the special position of the police.
I fear that the right hon. Gentleman's advisers have been studying the book of 603 the Civil Service too closely, without regard to the effect of this principle when applied to pension conditions which are not the same as in the Civil Service—conditions where there have been variations of remuneration, different conditions of reckonable service and in some cases the introduction of pension schemes in some sections of the public service much later than in the Civil Service.
I suggest to the right hon. Gentleman that he should keep an open mind on this matter until we reach Committee stage and can look at it very closely and carefully. I am sure he wishes to do the right thing. I am sure he would not wish to ask the House to accept a new principle which might leave another legacy of grievances and disappointments. In this Bill we want to do the job properly, because we hope that the need for another Bill of this kind may not arise. We profoundly hope that it will not be necessary for ever and ever to go on introducing Pensions (Increase) Bills in order to relieve the hardships of some of the victims of inflation. This is a challenge to the whole House and to the country to tackle this problem of inflation.
We want to make a good job of this Bill whilst we can shape it to meet all reasonable demands. I suggest that all the interests which are entitled to be heard in connection with this Bill are now united against the graduated percentage proposals. They do not accept the fairness of basing a pension increase on differences in length of reckonable service. The pension is granted by reference to the superannuation conditions and the amount of pension granted. That is what matters, not the conditions on which the amount was calculated. Therefore, we think the right hon. Gentleman should be ready in Committee to move away from the graduated percentage increase arrangement. We would not quarrel for a moment with the principle of the percentage increase, but we think it should be a flat rate percentage increase.
The right hon. Gentleman may say, "If I am asked to abandon percentage increases, which range from 6 per cent. to 10 per cent., would your flat rate percentage increase be the top rate, something lower than the top rate, or what?" I can answer that; we would say the top rate. If 10 per cent. is the right amount of compensation for the persons with the 604 longest service, it is the right amount of compensation on the amount of pension, irrespective of service. I think we shall do well to find the right percentage increase by reference to the rising cost of living since last time, the rise in incomes outside, and the rise in Civil Service remuneration. Those are the things we should be looking at.
It has been suggested, and there probably are strong arguments for it, that 10 per cent. is nothing like enough. In some Press cuttings I saw it was said that it was not only belated justice but only half justice now we had got it and that by reference to the fall in the value of money and the rise in the Index of Retail Prices an increase of much more than 10 per cent. could be justified. On a modest basis, it could be argued that 12½ per cent. would be more appropriate than 10 per cent. But we have to be reasonable about this and look at the proposals in the Bill as a whole. I am sure the right hon. Gentleman will find that we shall offer him our most reasonable co-operation in getting the Bill through Committee without undue delay, but with reasonable consideration of the points I have put forward.
In conclusion, I should like to acknowledge the services of the right hon. and learned Member for Chertsey (Sir L. Heald) and some of his hon. Friends opposite, who have devoted a great deal of time and care to the study of this problem and who, I know, have made representations to the Government upon it. I think it only right and fair that that acknowledgment should come from these benches. We on our side, in our ways, have also studied the problem. Some of us have been called upon to act in a representative capacity for several interests concerned and that has come quite naturally in our vocation as trade union representatives. I thank the right hon. Gentleman once again for this Bill and sincerely hope that when we come to Committee he will study these points most carefully and meet us as far as possible upon them.
§ 5.16 p.m.
§ Sir Lionel Heald (Chertsey)
In welcoming this Bill from the Government back benches, I have both the advantage and disadvantage of following the hon. Member for Sowerby (Mr. Houghton) who is recognised in this House as a master of the subject—in fact, one might 605 almost say he is the high priest. The advantage, of course, is that he makes it all seem very simple and much easier for me to appear to be doing the same. The disadvantage is that it is very difficult to live up to his standard of exposition, apart from understanding, of the very complicated subject with which we are dealing today.
I also think all my hon. Friends would agree to join in a few words of appreciation of the work done by my right hon. Friend the Financial Secretary, and of his very sympathetic attitude and close personal attention to the Bill. Many of us know that he has long had an interest in this subject. It must be a real satisfaction for him to be in a position to do something about a subject he has been wanting to deal with for a long time.
A question of this kind, which affects the rights and conditions of employment of public servants, is—mercifully—something which is high above all party considerations. It is indeed a pleasure to take part in a discussion upon it. I am sure the House will not mind my saying a word or two about the sub-committee of which I had the honour to be chairman, in spite of the fact that it happened to be appointed by what is called the "1922 Committee." Perhaps I might be allowed to say something about that. The name "1922 Committee" causes a great deal of misunderstanding as to its nature, purposes and existence.
§ Sir L. Heald
Many people, like the hon. Member for Cardiff, South-East (Mr. Callaghan) have never heard of it. Others are better-informed, or think they are better-informed. They have an idea from something they have read in the newspapers—written, of course, by gentlemen who have not the advantage of knowing us and our ways here—that it consists of a so-called caucus of very red-faced and white-moustached old gentlemen—
§ Sir L. Heald
—known as "blimps" who have been here at least since 1922 and are opposed to all forms of progress. I ought to inform any hon. Members who have that idea that the "1922 Committee" is a collection of all the Conservative Members in the House, apart 606 from Ministers. That Committee appointed a sub-committee.
Perhaps I should also say that it is not usual for ad hoc sub-committees to be appointed on these matters, but it was felt that on a question of this kind it was helpful to have people with real experience and knowledge of the subject, such as my hon. Friend the Member for Burton (Mr. Jennings), who has very specialised knowledge, and my hon. and gallant Friend the Member for Croydon, North - East (Vice -Admiral Hughes Hallett), who can deal with the Services side of the matter. I must not forget, of course, my hon. Friend the Member for Tynemouth (Dame Irene Ward), who in this case will not mind my describing her as Oliver Twist.
§ Sir L. Heald
I beg my hon. Friend's pardon.
Our report was an entirely private one—there was never any question of publishing it—but the substance of it was conveyed to the Government; and, as my right hon. Friend has said, we found that they had been working upon the same lines of thought and that we were very close together in many of our conclusions.
The point of principle which gave us most concern in the numerous communications that we had from organisations and individuals all over the country was what the hon. Member for Sowerby has just referred to: that is, the effect of twenty years of inflation in creating a terrible difference between the position of the man or woman who retired then and those who retire today, when to some extent they have been compensated in their salaries for the increase in the cost of living and, of course, would have this reflected in their pension. That position was met only to a limited extent by the Pensions (Increase) Acts of 944, 1947 and 1952.
As a committee, we thought that those Acts dealt with the matter in a piecemeal fashion. We thought also that to limit the relief only to what was called severe hardship was something that we could not defend. We thought also that a means test and a ceiling were ideas not consistent with the pensions of those who have given their lives in the service of the public. We were very pleased to 607 know that the Government have in effect accepted that point of view.
The objective at which many people would like to aim was stated in a leading article in The Times of 7th February, but I do not think it would be any secret to disclose that that was not the first time that anybody had thought of it. The worthy object was described as being to see that so far as possible past pensionsshould be kept in line with those payable to currently retiring servants of comparable status.Two of the principal organisations concerned with pensions have said that they wish to acknowledge that the Bill can be regarded as a real step in that direction. That is something about which we can all be pleased. It does not, of course, by any means go the whole way, but there are reasons for this. I accept loyally what my right hon. Friend has told us about the difficulties of carrying that principle into effect in view of the many differing circumstances and all the other troubles that he explained.
Another point that we considered important was that quite a number of people had been left out altogether, and they felt this very deeply. In some cases they had retired many years ago, but they had done good service. Quite apart from the money aspect, my experience is that these people felt very deeply that it was a reflection upon them that they should be left out. Now, I believe that no one has been left out, but I am sure that if anyone can bring to the attention of my right hon. Friend any class which has been overlooked he will be prepared to consider it sympathetically. I believe that the rake has gone over the ground fairly carefully, and I hope everyone is in now.
There are, however, one or two matters upon which we are making a further report in our committee, and perhaps I might mention them 'briefly. I will not go into the question of the 10 per cent. and the 6 per cent. any further beyond saying that I agree with the hon. Member for Sowerby that it does seem to want looking into a good deal more, and I am sure this will be done.
The second question is a striking one. Under a very old Act—the Superannuation Act, 1834—there is a very curious position, which I think hon. Members would wish to have mentioned. It affects the re-employed public servant. If a 608 man serves a number of years in the public service and then leaves, even if only for a week, or if, when he reaches retirement age, he remains at work, in answer to the Government's request, in another capacity, he is, as it were, frozen at that point. If in future there was any additional benefit in the rate of pension, it would be taken off his remuneration. This is causing a good deal of feeling and should be looked into carefully.
One letter in particular that struck me very much was from a public servant who had served 50 years in the public service. He gets no advantage whatever for the last ten years, because he stayed on at the request of the Government at the time when so many people were asked to stay on. It is not altogether appropriate to discuss these things today, but they should be borne in mind.
If a man like that goes to work elsewhere, he will be able to get the benefit. The Government have not been able to say that if he goes to work elsewhere they will take the benefit from him. Therefore, there seems to be something of a fine or punishment, not for having left the public service, but for returning to it. This does not seem to be fair.
Then, there is the complicated story of what is called "modification," a principle under which public pensioners can be denied the old-age pension. I understand that at present 26s. only is taken into account in this way, but there is no guarantee, I imagine, that the figure will not go up to 40s. This will also have the result that if there were any increase in the old-age pension, these people presumably would not get it. This seems to be a rather questionable procedure. It has been the subject of a great deal of discussion. I do not have the right to delay the House by going into the matter now, but it is something about which there is a good deal of feeling. No other category of people seems to be treated in this manner. I do not know what the N.U.M. would say if its members were to be told that they were to be treated in this manner.
Then there is an example from Scotland which has been brought to my attention. The Scottish teachers complain that they are in a really difficult position. It may be that I do not have the facts completely right, but they tell me that their gratification on learning 609 of the benefits under the Bill was short-lived, because when they looked at the Bill they found that the removal of the limitations from which they suffered was covered by the qualification of the words "otherwise eligible" in Clause 3 (3). This qualification is said in most cases completely to cancel out the removal of the limitation. If so, I hope my right hon. Friend will look into it. I am told that the only teachers who, by the Bill, will get an increase of £60 under the 1947 Act and £26 under the 1952 Act, are those who retired before 1947. The year 1947 is a long way away now and since then, unfortunately, there have been rises in costs which have hit these people very hard.
Other hon. Members will deal with Service pensioners. Our committee was, of course, concerned with them and we hope that they will be treated on substantially the same basis as anyone else. We also refer to nationalised industries in our report. Although the position there is that under certain Acts, for example, the Transport Act, the Minister has power to give directions about pension schemes, it has never been thought right, and I do not think that it would be thought right, that the Minister, under Section 92 of the Transport Act, for example, should seek to try to arrange the pensions of a nationalised undertaking. We hope, however, that the hoards of these nationalised undertakings will acquaint themselves with what has been said in this debate, and will do what is right in this matter.
The suggestion has been made in one quarter that what we are proposing to do in the Bill is not really fair because other sections of the public cannot get the same benefit. I do not believe that the House will think that or that it will be the view of the country. There was in a White Paper not many years ago a statement that what we are in effect doing today would be unfair to others in the community living on small fixed incomes and, as taxpayers, bearing part of the cost of pensions given to civil servants.
I do not think that we take that view today and I do not think that many people would say, "I do not like another man getting more than I get." I do not think that that is a representative view today, and I do not think that there is 610 any indication of that in the correspondence which hon. Members have received. We might put it this way—" The fact that you cannot do everything for everybody certainly does not mean that you should not do anything for anybody."
I should like to express sincere thanks not only to the Minister but also to the hon. Member for Sowerby for their very kind remarks. I do not deserve them. I was fortunate in having a very skilled committee who took this matter up very energetically and it was a great satisfaction to feel that we were making a contribution. I am sorry that the right hon. Member for South Shields (Mr. Ede) has left the Chamber. Perhaps it will be conveyed to him that it is nice to think that a report of mine has received a rather more friendly reception this evening than another report of mine received exactly a week ago today.
One thought of great importance and real seriousness that arises from this debate is the vital question of inflation. We have facing us in the future, in any event, a great problem with the increased longevity and the tremendous amount of provision which will have to be made in any event for pensions. The Government have rightly and understandably dealt with this matter on the basis of a single action and, like the hon. Member for Sowerby, we all hope that it will not need to be done again. At the same time, we have to face that danger in the future. The only lasting solution of this trouble, as indeed of all other troubles today, is to control and finally overcome the insatiable monster of inflation.
§ 5.33 p.m.
§ Mr. James Callaghan (Cardiff, South-East)
I am speaking from this unusual position below the Gangway because, as I think many hon. Members know, for the last few months I have been acting as adviser to the Police Federation on pay and pension matters and it has put certain points which it has asked me to raise today.
First, however, I should like to make a few general observations about the date of the Bill. I put a Question to the Financial Secretary on 9th February. I asked…if he will undertake to prescribe by regulation, 1st January, 1956, as the operative date for pension increases under the new Pensions (Increase) Bill.611 The right hon. Gentleman replied in a Written Answer:I cannot give undertakings about particular aspects of matters which will be open to debate when the House comes to consider the Pensions (Increase) Bill."—[OFFICIAL REPORT, 9th February, 1956; Vol. 548, c. 196.]Well, we are debating it today.
I think that 1st January is quite the latest date that the Financial Secretary could possibly prescribe for a Measure of this sort. Hon. Members who have had to handle wage negotiations during the last year or so must have been impressed by the galloping increase in wages and in the cost-of-living index, particularly in 1954 and 1955. Last year was a very bad year indeed from the point of view of inflation. It seems to me that the Financial Secretary, knowing that he will get the Bill through without any difficulty at all, for both sides of the House are in agreement with it, might set the administrative machine to work to churn out the result so as to enable these people to have these overdue increases from 1st January.
I believe that the reason given last time why payment was post-dated to a date after the Royal Assent was the administrative difficulties which made it impossible to fix an earlier date. If the Financial Secretary will take the matter in hand when he gets back to the Treasury and send out a minute saying. "Boys, get to work and get these administrative difficulties settled" he will find no difficulty in getting the House to give permission to backdate these payments to 1st January. We on this side of the House would not raise the slightest objection.
There is a really strong case for that. During the last two years, in speeches in the country, I have said that I do not feel at all sympathetic towards dividend holders or even towards the trade unionists. They have powerful bodies who will protect their interests in a period of inflation. It is the group of people concerned here, together with old-age pensioners and those living on National Insurance benefits, who suffer from this constant erosion of money values. That is why I feel strongly that they should have the benefit of the increases from the earliest possible date which the Financial Secretary can persuade the Chancellor of the Exchequer to give it to them.
612 Another point was raised by my hon. Friend the Member for Sowerby (Mr. Houghton), in his usual polished and authoritative speech. I have listened to many speeches by my hon. Friend during the last twenty-five years and I think that they go on getting better and better. One cannot say that of the speeches of many people. I ask the Financial Secretary to consider carefully what my hon. Friend said about the percentage variation of the pension. Although the Financial Secretary seemed to deny it, I insist that he is doubly penalising the pensioner with twenty years' service as compared with the pensioner with forty years' service.
The pensioner with twenty years' service obviously has only half the pension of the 40-year man initially, and, therefore, my hon. Friend's case for giving a flat-rate percentage increase on top of what is, in any case, a differentiated pension is almost unanswerable. But in the new principle which it introduces, the Schedule says, in effect, to the 20-year man, "You have already suffered because you have only put in half the time. We shall make you suffer more by giving you 6 per cent. or 7 per cent., instead of the 10 per cent. given to the man with forty years' service." I do not see how it can be justified in logic. It certainly has no justification at all in human sympathy, and I am sure that the Financial Secretary wants to do the right thing.
Let us take the case which my hon. Friend the Member for Sowerby mentioned. I took a note of his figures and I hope that I have noted them correctly. It is the case of a clerical officer who retired in 1939 after 20 years' service and who would now, with these increases, be getting £154 a year. That is £3 a week. He retired in 1939, and he must now be getting on for 75 or 76 years of age—
§ Mr. Callaghan
—and yet, because of an anomaly, as my hon. Friend pointed out, he is to be denied the few extra pounds which would lift him to the 10 per cent. level.
I have more sympathy with the older pensioner than with the younger one, if it is a case of comparison. When did the old lady and the old gentleman of 75 or 76 years last replenish their household 613 goods? If we could look behind those carefully mended curtains we should see carpets faded and patched. They have had no money to spend on replenishing their household goods. Compare them with the pensioner who retired only a year or two ago and has, therefore, been living on a relatively higher scale because he has been earning a full salary for all those years. The case of the man who retired in 1939 is much harder.
I estimate, from the figures given by my hon. Friend, that the difference involved in this disparity is anything between £7 and £10. I ask the Financial Secretary whether, for the sake of tidiness, for the sake of logic, will he ask these people to give up £7 or £10 to correct some anomalies which, I agree with my hon. Friend, will create additional anomalies whilst removing the ones which have arisen as a result of the changing salary scales that have existed since 1939? I put that point to the right hon. Gentleman strongly.
I now come to a point relating specifically to the police. I was glad to hear the Financial Secretary say that he hoped to make arrangements about the police. Of course, they are not the only people concerned. There are the fire brigades, the prison officers and, perhaps as important as any in terms of size because they are a bigger body, the Armed Forces. As Clause 1 is drawn, together with the Second-Schedule, as I read them, the police, the prison officers, the Armed Forces and those in the fire brigades cannot possibly, by virtue of their service, get the 10 per cent. increase that is given to the civil servant who serves a full forty years.
We all know that the normal pensionable basis of the Armed Forces is a 21-year period of service but, as the Second Schedule is drawn, between twenty and twenty-five years of service secure a man the entitlement to only a 7 per cent. increase. The Financial Secretary will meet a lot of trouble when that is fully realised by the Armed Forces. I ask him now, what is the justification for saying that a member of the Services, who has served for his full pension time, who is probably getting a pension that is the same as that of a civil servant who retired at the same time, should get a 7 per cent. increase whereas the civil servant gets a 10 per cent. increase?
614 So far as I can see, there is no answer to that question, and I suggest that the Bill has been drafted with both eyes firmly fixed on the Civil Service, without too much regard to other groups of persons who do not fall within that 40-year period. I want to ask the Financial Secretary, or whoever will convey some notes to him, how he proposes to deal with the position of the Armed Forces and that of the police? It seems to me that it will need an Amendment to the Bill. Does the right hon. Gentleman propose to amend the Second Schedule or does he propose to amend Clause 1 to put right that situation, which is obviously wrong?
We are told by the Treasury that this is a hardship Measure caused by the fall in money values. The hardship to a petty officer or a leading seaman, who retired in 1939 on the same amount of pension as a civil servant retired on, is just as great, and I see no reason why one should get an increase of 7 per cent. and another receive 10 per cent. The same is true of the police.
From the hint which the Financial Secretary gave us I concluded that he would try to do something about this matter. Some of us had some words with him before the debate, and I hoped that we should receive a clear understanding from him that the position of the police, the Armed Forces, the fire brigades, and all the other groups who do not put in a full forty years as do those in the Civil Service would be dealt with on exactly the same basis, namely, that they would be entitled to the 10 percent. increase and, in the case of a lesser number of years which would qualify for pension, that they should be entitled to the same relative percentage increase: that is, if the Financial Secretary intends to keep to the percentage basis. I hope that the right hon. Gentleman will depart from it, but if he keeps to it then Service men and police pensioners who serve rather less than the full number of years, but are entitled to a pension, should get the same percentage increase.
The case is exactly made when I remember that the Financial Secretary said that the purpose of this Bill is to give help where it is most needed. If that is the principle behind this Bill, as I think it is, then the right hon. Gentleman must undertake, first, to remedy these anomalies, and, secondly, to undertake 615 to give this increase from the earliest possible date to which the administrative machine will respond.
§ 5.47 p.m.
§ Sir Eric Errington (Aldershot)
I beg to move to leave out from "That" to the end of the Question and to add instead thereof:this House declines to give a Second Reading to a Bill concerned with civil pensions only, until further information is available about the detailed application of the proposed pensions increases to Service pensions.The form of this Amendment might indicate that I was not a supporter of the Bill but it appeared to provide the only opportunity for a discussion of the application of the principles of this Bill to Service personnel. I think it is accurate to say that this has not been done in the past in advance of the Prerogative Instrument. One of the unsatisfactory features of discussing the questions which arise on pensions Instruments after they have come into force is that the procedure of this House does not allow any amendment to be made as the questions have to be raised on such occasions as an Adjournment debate or a humble Address.
In common with all who have spoken, I desire to welcome the Bill. In spite of the economic difficulties of the time, this Bill will cause considerable satisfaction to many people both in the Services and out. The abolition of the means test to public service pensioners is long overdue, and I am also happy that the distinction between married and single pensioners has been abolished, so that the increases are based on the value of the pension and not on the personal position of the pensioner.
Another matter that gives me pleasure is that it looks at last as if the principle of immutability of pensions, which the Government for such a long time sought to continue, has been abolished. I think it is true to say that until this Bill, except in the case of established hardship, original pensions remained immutable. If gratitude is a lively sense of favours to come, I am grateful. In accepting the principle of the Bill, I should like to go into a little detail in regard to its application to Service personnel. The statement has been made by the Financial Secretary that there are matters in the Bill which require careful consideration in Commit- 616 tee. Unfortunately, with regard to Service personnel, there is no opportunity if action is taken under the Prerogative Instrument for Committee and consequent detailed examination.
The first point I should like to make is the general one, that as between civil pensioners and Service pensioners there is, as a rule, a different age of retirement. It would not be unfair to say that the average age of retirement in the Forces is 45 and the average age of retirement in the Civil Service is 60. That operates, or may operate, if consideration is not given in the Instrument, to some disadvantage to Service personnel.
I do not want to go into this matter in detail because I know that some of my hon. Friends have in mind, if they catch your eye, Mr. Deputy-Speaker, some remarks in detail about it. But it is worth while remembering that, not only from the point of view of employment is it important, but it is also important from the point of view of the fact that if one looks at the position of a civil servant who has retired under the 1920 or 1924 code he, if still alive, will be as old as 91, whereas if a similar person retired at the age of 45 in the Services he would be aged 76. That raises a considerable number of difficulties from the pension point of view as to relative amounts.
What I should like to speak about is the non-contributable, as it is called, widow's pension. This kind of pension, for the first time after a hundred years, was raised in 1952. It is also noncontributory, and there is this distinction between it and the Civil Service widow's pension, which is contributory. Of course, the Service pension is non-contributory, but the contribution to the civil pension is a comparatively small one of 1¼ per cent, of salary. The widow of a civil pensioner gets one-third of her husband's pension for that contribution of 1¼ per cent.
It is my submission that very careful consideration should be given to the facts that a Service widow's life is more expensive, entails considerable difficulties, such as upset of home, the discomfort of constantly moving about, the breaking, as often happens, of furniture and chattels which are moved about, and generally the unsettled condition under which that widow, when she was a wife, lived, not allowing her to make savings that others can.
617 I understand, from the Answer which was given to my hon. Friend the Member for Tynemouth (Dame Irene Ward) and myself, that it is proposed that there should be an addition of 5 per cent. Is it quite enough to meet the situation? For a captain's widow it means 2s. 1½d. a week, and a colonel's widow cannot even buy an extra packet of cigarettes because it amounts to only 3s. 6d. a week.
I would submit that that is really very unsatisfactory, for two reasons. The first is that the increase of the pay of civil servants occurs automatically which, of course, produces an automatic increase in the widow's pension of one-third of her husband's pension. The second is that no statement has been made in the White Paper on Service Pay and Pensions in regard to any future alteration to the widow's pension under the new code, so the result of that will be that the pension will be further out of proportion for these widows as compared with other pensioners.
I would suggest that instead of 5 per cent., an appropriate figure to take would be 10 per cent. Even if the figure of 10 per cent, was taken, it would still be less than the amount of the widow's pension in the case of civil servants. The actual rate of a Service widow's pension today is £110 and the proposal of 5 per cent. makes it £115 10s. If my proposal of 10 per cent. were accepted, it would make the pension £121, which would still be £7 less than the £128 which the civil servant's widow would get. I will not weary the House with the application of that principle to the widows of other ranks in the Services.
I should also like to refer to the situation in regard to the recall of pensioners for service. There we have, for a different reason, a similarly unsatisfactory position in the Services. It has to be realised that often the Service pensioners were compulsorily recalled. There was no question in their case of volunteering. Being on the Reserve, they were taken away from the businesses which they had and which they were running as pensioners, and were told to get on with the nation's job during the emergency.
The effect of the White Paper, Command Paper 9092—and I am not going into the details of the calculations—is that they are unable in many cases, by reason 618 of any additional service, on return to the Service, to get any additional pension. So the pensioner who was doing nothing during the war is in the same position in respect of the amount of his pension as the pensioner who was, in fact, serving his country throughout the war. That is another point which causes considerable dissatisfaction.
There is a final source of dissatisfaction which I should like to have cleared up once and for all, and I invite the Financial Secretary to consider it very carefully. It is something which arose out of the stabilisation of pensions. I need not go into very great detail. It will be known to the House that the 1919 code was stabilised in 1935 at 9½ per cent. less than its original rate. There was much very proper dissatisfaction with that situation, and as a result, in 1954, Command Paper 9092 was published which, in effect, said, "In order to meet what some people think is a case of hardship, we are prepared to raise the rates by 10 per cent."
The rates were raised by 10 per cent. on the basis of the lower figures. Therefore, after the transaction, many officers found themselves with not £100 worth of pension, but £98 10s. worth. There is an opportunity on this occasion to treat the increases on the basis of the 1919 figures. If that is done, not a large amount Of cash will be involved—it will mean for a captain £3 a year, for a major £4, for a lieut.-colonel £6, and for a colonel £8—but the amount of satisfaction given to everyone concerned will be very great; if their dissatisfaction were ended once and for all it would be a great step forward, and I am satisfied that it would do much to make many senior officers who have retired encourage people to enter the Services, which they have very often been disinclined to do of late.
I should now like to say a word about commuted pensions. I am sorry if these seem to be Committee points, but, as I have said, there is no opportunity for consideration of these matters in Committee, and as some of us regard them as of importance perhaps I may be excused for raising them. The commuted pension raises a difficulty because it was only comparatively recently—I think the 1945 code did it, but it might have been the 1950 one—that a terminal grant was provided. Many people on pension have had to commute their pen 619 sion in order to provide a home for themselves, to educate their children, because of illness and for reasons of that sort. I would ask the Financial Secretary to consider the possibility of allowing the increase on the full amount of the pension rather than on only the portion not commuted.
There is another matter that I wish to raise which is not a Service question. I have a constituent who wishes to know whether the increase will be available in the case of Indian police pensions under the combined operation of the Pensions (India, Pakistan and Burma) Act, 1955, and Clause 8 (1, d) and (2) of the Bill. I have looked into the matter carefully, and it is far from clear whether those pensioners are covered. If possible, I should like an assurance that they are.
I wish, finally, to ask, in the form of a general observation, that consideration should be given to simplifying the procedure for public pensions. I know it is difficult, and I realise that one cannot just avoid the multifarious pieces of legislation and statutory and other instruments which have gone before. However, it is becoming slightly simpler, and perhaps during the Committee stage of the Bill it will become more so. The Pensions (Increase) Act, 1952, was much simpler than the legislation which preceded it.
It is a commentary on this matter, which affects individuals who sometimes have no facilities for getting good advice, that a situation should arise such as that which occurred in my constituency. A serving soldier who had retired, who had previously been a civilian Government servant and had retired, and who was then working in a humble way, asked me what was the position about his pension. He had received from the War Office a computation, and I read it and could not make head or tail of it. I wrote to the Under-Secretary of State for War, who, with his usual courtesy, was good enough to reply to me with an entirely different computation.
Not being satisfied with the reply—perhaps I was wrong not to be—I requested permission to discuss the matter with the civil servant concerned. I had been with the civil servant about an hour and a half when he said, "I am afraid this has been wrongly calculated." It is 620 obvious that humble people like my constituent and myself have great difficulty in finding our way through the morass of legislation, Instruments, and so on.
In all sincerity, I congratulate the Financial Secretary on the wonderful work that he has done and the interest that he has taken in this matter. I ask him to stretch what he has done still further if he can, and give consideration to the possibility of further simplification of the whole subject of public service pensions.
§ 6.9 p.m.
§ Colonel O. E. Crosthwaite-Eyre (New Forest)
I beg to second the Amendment.
As my hon. Friend the Member for Aldershot (Sir E. Errington) has said, this is purely a procedural Amendment in order to enable us to refer to the categories of pension which will be affected by the Bill although they are not included within it.
I would ask my right hon. Friend the Financial Secretary whether it will be possible, if we ever have another Bill of this kind, to ensure that all pensions which will be covered by it directly or indirectly are included within it. It is a pity that one has to table an Amendment declining to give a Second Reading to a Bill simply in order to be able to refer to a section of pensioners covered by it through implication. This Amendment could obviously give the wrong impression to very many people throughout the country.
Was not my right hon. Friend slightly optimistic when he said that the age of 60 for Service pensions was deliberately chosen because of the present condition of full employment, and that it should, therefore, be easy for any officer retired before that age to find other employment? I will not argue with my right hon. Friend that an officer can find employment of a sort, but it is certainly not true to say that an officer who retires, say after the age of 45—which was the very fair figure given by my hon. Friend the Member for Aldershot—can as a rule find an occupation that will give him a career for the next fifteen years of his working life.
People in industries or trade unions want to train their own people from the time they enter the industry or union, and look upon service and years of service 621 within that industry or union as a criterion for better jobs. I find it very hard to believe that one can seriously say to a man who comes out of the Service with a high and responsible rank that he can easily find a job at the age of 45. I have some figures provided by one of the societies which try to help retired officers, and the incidence of people requiring jobs is remarkable.
Up to the age of 46 there seems to be little or no difficulty, but once an officer has reached the age of 47 or more, it becomes more and more difficult for him to find any job which he can do to his own satisfaction and which will give him the sort of adequate supplement to his retired pay which he wants. It is absolutely wrong, when a man has spent the best years of his life in the Armed Forces in the service of his country, that we should try to shuffle off even part of our responsibility to that officer by saying that it is easy for him in times of full employment to get a supplementary job. If we have used, and he has given, the best years of his life, in our turn we should assume full responsibility for a pension which will give him security.
I want now to turn to the topic of widows. I cannot understand how the rates of 1952 were fixed. As my hon. Friend the Member for Aldershot said, they do not seem to bear very much relationship to any other figures. I have found that if one takes one-quarter of the rates granted to officers under the 1950 Pay Code, one then gets the rate for a Service widow. I hope that before we part with the Bill, we shall consider the rates of those pensions. The widow of, say, a lieutenant-colonel—and in all parts of the House we will agree that a man who has risen to the rank of lieutenant-colonel has given good service—is granted £180 a year, shortly to be increased by the princely sum of less than £9 a year.
I have with me a letter which came to me this morning from a widow of such a lieutenant-colonel. She is now 83 years old, and has had to move out of the guest house in which she was living and, because of her age, she is not entitled to any supplementary pension. She is now trying somehow to drag out her remaining years in the cheapest lodging house she can find. That is not the sort of thing that any hon. Member likes to think happens to the widow of a man who, by the 622 very status which he has achieved, has obviously done well for the country to which he belongs.
When we are told that a civil servant gets a higher pension because of this 1¼ per cent. deduction from his salary, let us remember that the latest Pay Code produced for the Forces realises the enormous expense that occurs during the average serving officer's life through moving, sudden change and movement from one station to another. One of the reasons advanced for the latest Service Pay Code recognises this extra cost to officers. The least we can say is that a serving officer's widow should be entitled to the same rates as a civil servant's widow. That is not asking for more than the most elementary justice.
§ Mr. H. Hynd
Is the hon. and gallant Member pleading only for officers and officers' widows, or is he including other ranks as well?
§ Colonel Crosthwaite-Eyre
Most certainly I am including other ranks. I am sorry that I have been speaking only of officers, but I am certain that the hon. Member realises that that is all I can raise at this particular juncture. I am most grateful to him for raising this issue, and if I have confined myself to officers, it is because that is all I am entitled to do in the present debate. Any remark I have made about officers, of course, applies to other ranks as well, and it applies equally to the 1919 Pay Code, with which I am about to deal.
My hon. Friend the Member for Aldershot has rightly said that we have had many debates over the decision of the Government in 1935 to consolidate pensions payable under the 1919 Code at 91 per cent. below the level originally suggested. Her Majesty's Government have been a little less than generous, particularly in another place, where, in justifying the action that they have taken, a Government spokesman referred to a R.A.F. Warrant saying:No officer shall be entitled to claim hereafter any pay, pension, or other advances conferred by any provision in this scheme in the event of any such provision being at any time added to, varied, or cancelled.That was quoted in another place as being a complete justification of what the Government had done. Actually, that does not come out of an R.A.F. Warrant at all. It is part of an order, 623 published weekly, by the Air Ministry, and it is dated 15th September, 1919.
If one studies every single Pay Warrant produced by any of the Services from 1914 to 1940, one finds that in every case the following proviso is carefully included—I quote now from Article 2, which is standard form in all these Warrants:Except where otherwise provided, nothing contained in this Our Warrant shall be held to deprive any officer, soldier, or other person who retired from our Service before the date of this Our Warrant of any pecuniary advantage of which he is already in enjoyment in virtue of such retirement.I find it very difficult to square that statement in the Warrant with what has happened. Both sides of the House have agreed and as a result a 10 per cent. increase was given, which substantially, or, in the words of the Government, "broadly", restored the position of the 1919 pension.
We now come to the latest proposal which can only do the utmost to open old wounds with the least possible saving of public money, because the present proposed increase is not to take place upon what the pensioner received in 1919 but upon the 1935 adjusted sum. With a man already feeling that he has not been treated properly or generously, he is to be asked to receive this increment on a sum which he already believes to be not proper or generous.
At the most—and these are old figures and are probably reduced by this time—the number of officers affected is 16,000. Let us assume that every single one is a major-general, which is the highest possible rank the holders of which can benefit under the Bill. On those two assumptions the total cost to the Treasury would be £160,000 a year. Surely, that is such a small sum when so much good will is available that the debt should be acknowledged in full rather than skimpily and scantily. It would have been well worth while for my right hon. Friend to have seen that his adjustment on basic rate was made, to the tune of £2 for captains, £3 for majors, £4 for colonels, and so on, to a total cost which could not exceed £160,000. This would give to all these officers a sense that their services were properly recognised.
I know the argument that when an officer accepts a commission he knows the pension to which he will be entitled. 624 But surely it is correct to say that when a young man, either in industry or in the Services, looks at what he has accepted, not only as his salary, but as a pension, he judges it on the value of money at the time he starts. As was said by the hon. Member for Sowerby (Mr. Houghton), it is a very different thing, if after the best years of one's life have been spent, one is paid a pension which looked like a prize to be obtained twenty or more years ago but which is now worth only a half or one-third of its original value. A man cannot go back and start his life again. He has only his pension.
From my experience in my own division, I know that a number of people who have done well and earned high office in our Services are now approaching the exhaustion of their last savings. They are unable to give their children the slightly better education to which they had looked forward. They have, of course, to give up a car. They are unable to go to the cinema. They grudge every cigarette, and have to make a tremendous effort even to provide the odd bottle of beer for a visitor. That is no life for a man who has spent his whole career and earned high office in the Forces. I hope that I quote the hon. Member for Sowerby correctly as saying that a change in pension was necessary and right only if an alteration resulted from a great fall in the value of money.
§ Colonel Crosthwaite-Eyre
When one considers these pensions, particularly those under the 1919 Code, one cannot help but think that they are an obvious example of where there has been an enormous depreciation, and it is time that we helped.
We have just published a new Pay Code for the Services, designed to encourage recruiting. I believe that the best of the entrants to our Forces, either in the Army or the Navy—in which I served—or the Air Force, come from generations of families the members of which, almost as a matter of course, enter the Service in which their father served. We see that particularly in the seaside towns. But there has been a sad falling off of that practice in the last few years. People have seen that the distinguished 625 careers of their fathers led to nothing but present want, because of the scale of pensions to which they are entitled.
I am the first to approve of the new Pay Code. But I think that if we really want a successful recruiting scheme our first job is to see that those who have served us in the past receive a proper tribute to their service. Let us not try to build for the future without acknowledging our duties to the past. If we make that acknowledgment, we shall succeed. But, in my view, to discredit and skimp that which we owe to the past can only prejudice the present, and certainly it will make the future a matter of hazard.
§ 6.25 p.m.
§ Mr. Harry Randall (Gateshead, West)
It is now about six years since I last addressed this House, not because I was present and silent, but because of other circumstances which precluded me from sitting in this Chamber, to which, last December, I was given an opportunity to return once again to enjoy the privileges and traditions of this honourable House.
During that six-year period I missed the to-and-fro of the debate and the spirit which prevails within this House to which I longed to return. But now my return is tinged with deep regret because of the passing of the late Jack Hall. He was a noble soul. Perhaps he was quiet, but he made a generous contribution to the service of his fellow men. While I am glad to be back, behind me I feel the loss of a friend and a colleague.
I am sure that the hon. and gallant Member for the New Forest (Colonel Crosthwaite-Eyre) will not expect me to follow the argument he presented. I wish to return to the Bill, not because I am out of sympathy with the cause for which he was pleading, but because I believe that we should get back to discussing the Measure before us so that we may have the opportunity of influencing the Financial Secretary to be a little more forthcoming when we arrive at the Committee stage; and to meet some of the arguments which will be put to him by hon. Members on both sides of the House.
I have been very pleased to see the goodwill which has prevailed so far during this debate, although for one awful moment, when the right hon. and learned 626 Member for Chertsey (Sir L. Heald) mentioned the 1922 Committee, I thought there would be something more than a ripple on the waters. I was glad, however, that the right hon. and learned Gentleman mentioned the work of that Committee, and particularly when he referred to the 1834 Act and the examination of it by a sub-committee of the 1922 Committee. I am not able to expand even the few thoughts which he gave to us, but I hope that my hon. Friend the Member for Openshaw (Mr. W. R. Williams) will have an opportunity to speak because he has wide experience in dealing with superannuation matters.
I welcome this Bill but, as the Financial Secretary said, the difficulty, when discussing it, is to avoid becoming bogged down in detail. My hon. Friend the Member for Sowerby (Mr. Houghton) made an excellent and most informative speech. He was able to do so because of his background in the Civil Service and his knowledge of the work of Civil Service associations. In my attempt to put before the House my reactions to the Bill, I am afraid that I shall not speak with the same clarity as did my hon. Friend.
I welcome the Bill because it goes some way towards compensating public service pensioners for the rise in the cost of living. I say "some way" because there are some aspects in which it does not go far enough. I shall have something to say about them later. The Bill goes at least some way towards restoring the money values of the pensions of public service pensioners. It also abolishes the ceiling which was imposed by the previous Acts; it removes the necessity to take into account other income—a form of means test which was described so well by my hon. Friend. That stigma upon the service should have been removed long ago. I am very pleased that the Financial Secretary, in reviewing the needs of the public service pensioner, has taken this opportunity of removing the means test.
The Bill also removes the differentiation of treatment of unmarried pensioners, which was a grave disability to many such pensioners, and some of the distortions caused by previous Acts. It records some progress generally. It is moving in the right direction—towards meeting many of the representations which have been made by civil servants.
627 Nevertheless, there are some grounds for criticism of its details. If I go over some of the ground covered by my hon. Friend the Member for Sowerby I hope that I shall not weary the House. It may be that constant dripping will wear away the stone—not that I want to suggest that the Financial Secretary has a stony heart; the manner in which he has presented the Bill and the receptiveness which has so far been shown to interventions made by hon. Members on this side of the House indicate that some progress should be made in Committee.
I want to mention the question of the scaling down of the increase from 10 per cent. to 6 per cent. according to length of service. I hope the Financial Secretary will agree that a reduced percentage basis is clearly inequitable. It just is not fair. Length of service has absolutely nothing to do with changes in money values. If the Bill is to restore some of the money values of pensions, it ought not to deal with the problem on the basis of scaling down pension increases from 10 per cent. to 6 per cent., and we ought not to be afraid of the possibility of producing distortions as a result of introducing a flat rate increase.
If we are to restore money values in accordance with the rising cost of living and other factors, we should do so on the basis of a flat percentage increase. Under the provisions of the Bill a man with 40 years' service will receive a 10 per cent. increase in pension, while a man with 20 years' service will receive an increase of only 6 per cent. There is no justification for offering one man a 10 per cent. increase and the other a 6 per cent. increase. This provision means that people in receipt of identical basic pensions—which have been earned over different periods but have depreciated in value to the same degree—receive inequality of treatment.
A scheme based upon years of service means that the person in receipt of the smallest pension is offered the least assistance. This accentuates the hardship caused to people in receipt of those small pensions. Many examples could be given in this respect. Postmen have been mentioned this afternoon. A postman who retired in 1951 with 40 years' service now receives a basic pension of £167 a year. Under the Bill he will receive an increase which will bring his pension up to £190. 628 An executive officer with 20 years' service who retired in 1951, and whose basic pension was precisely the same as that of the postman to whom I have referred, and who retired in the same year, has his pension increased to £183. That is inequitable. It is not justice, and no argument will persuade me that, simply because distortions exist as a result of legislation passed by this House in 1952, we cannot rectify those distortions by means of this Bill. We must find a way to do so.
Is the percentage increase sufficient? Does it really take into full account the rise in the cost of living? Have public service pensioners the right to expect such increases? Some people argue that the pension now earned upon retirement, based upon salary or wages and length of service, is such that it does not need any supplementation or increase. I do not accept that principle, and I am glad to say that neither previous Governments nor the present one have accepted it. In any case, most of our pensioners regard the pensions they receive at the end of their service as a form of deferred pay, and if any change in money values occurs they look to this House to see that the money values of their pensions are suitably adjusted.
It has been said that the Treasury has a point of view in this matter. Certain authorities have also expressed opinions and apparently do not regard themselves as being under any obligation to make full compensation to pensioners for changes which have occurred. In certain circumstances that could be accepted, but I put it to the House and to the Financial Secretary that if any Government, by a deliberate act of policy, raise the cost of living, they have an obligation to the public pensioners. I do not want to be partisan about this. Some of us would say that under the policies of previous Governments there have been deliberate acts to increase the cost of living. It is my argument that where that has been done the Governments in question ought to have seen to it that adequate compensation was given to public pensioners. Otherwise the public pensioners become the defenceless victims of Government policy. They ought not to be sacrificed in that way.
Let me give the House examples of what has been happening. There have 629 been five Acts dealing with superannuation. Let me show how the cost of living has risen out of all proportion to the pensions received, for example by postmen. Incidentally, I was a postman for many years in the City of London. Here is the case of a postman who gave loyal service for 40 years and was entitled to a full pension. He retired at 60 in 1939. He is now 77. The increase of his pension for that period has been 77 per cent. but, according to the figure which I have obtained—the London and Cambridge figure—the cost of living has risen since 1939 by 147 per cent. There is the old fellow of 77. He has had just half his due. compensation for the rise in the cost of living. That man is suffering, but the Bill does nothing to meet his hardship.
Let us take later cases. Let us take the case of a postman who retired in 1947 after 40 years' service. His pension has been increased by 27 per cent., but the cost of living has risen by 54 per cent. in the same period. Take the case of another postman with 40 years' service, who retired in June, 1951. The increase in his pension has been only 14 per cent., against an increase in the cost of living of 23 per cent. There is, therefore, a very sound case for reviewing this figure of 10 per cent. The scaling down is wrong and should be altered, and we might have another look at the flat percentage rate, because I am not at all sure that 10 per cent. meets the situation.
I come to my last point, which is in connection with the datum line, and not so much to the point that was made by my hon. Friend the Member for Sowerby that, so far, there is an absence of an operative date. That is an important point, and I hope that we shall have a pronouncement upon it as soon as possible, even perhaps to the extent of letting us know precisely what the date will be. For those whose pensions were based on a final emolument of £1,500 or more, there is no increase after 1st January, 1947. For those with less than £1,500 there will be no increase from 1st April, 1952.
I was very interested to hear what the Financial Secretary said on this point when introducing the Bill. For some reason he said that although it says "no increase"—I hope I have got the right hon. Gentleman's words right—there will, in fact, be some increase. I would like the right hon. Gentleman to explain to 630 the House much more clearly and precisely what that means. As I understand the matter, anyone who retired from the service after 1st April, 1952, with less than £1,500 is not entitled to an increase under the Bill. Since the 1952 Pensions (Increase Act) the cost of living has risen by 14 per cent., and pensioners on lower pensions are already suffering hardship to that extent. As I see it, they are not included in the Bill. I hope that no hon. Member is under the impression that the rises in the cost of living from June, 1952, until the present day will be compensated to the pensioners of whom I am talking.
§ Mr. H. Brooke
It may help the House if I endeavour to clear up this point. Some people who retired after March, 1952, will gain advantage. Those whose pension when they retired is calculated on a period which covers at least a year before March, 1952, will gain some advantage from the Bill; it will depend upon the period upon which the pension is based. There is one arrangement for teachers and another for civil servants. We are seeking to secure that if the pension is in part based on service before March, 1952, some advantage will accrue from the Bill.
§ Mr. Randall
I thank the Financial Secretary. I am not referring to the very small margin of pensioners who may get a little advantage but to the very large number of pensioners who retired in 1952, or perhaps a year afterwards, who will not get anything from the Bill at all. Two years have gone by without any increase, and the indications are that another two years will go by, and the cost of living, including rents, will rise further. Unless we can give some assistance to the people who are retiring now, they will suffer in the immediate future.
We have been talking about constant legislation on behalf of pensioners producing distortion. I should have thought that in the comprehensive review we are having at this time we had an opportunity to bring the matter up-to-date and to ensure that there should be no lagging behind. This is one of the main points I want to make on the Bill. My hon. Friend the Member for Sowerby has said that the Bill has been well received outside and in Press notices. Whilst that might be so, it is equally true that there are pensioners—I imagine there must be 631 a very large number—who are disquieted because the Bill does not appear to go far enough.
§ Mr. Houghton
My reference to Press notices was by way of encouragement to the right hon. Gentleman to be a little bolder in the proposals he is bringing forward.
§ Mr. Randall
I am grateful to my hon. Friend for that intervention. I would like to give the House a quotation from a letter from a retired school teacher. It came into my postbag only this morning. He says:The retired teachers of the N.U.T., as one of the constituent bodies of the Public Service Pensioners' Council. which has made several approaches during the past year for improvements in the unfortunate position of older public service pensioners, are extremely disappointed (to put it mildly) at the very meagre relief given in the published Bill, especially to those in greatest need.He goes on to say:Also, the public service pensioners for whom the benefits are being specially requested are men and women who have already passed their allotted span of life, and, while the proposed Bill finally points to the total cost, even if that had been doubled—which in justice it might have been—such annual cost will be a quickly diminishing one which within 10 years twill, no doubt, have disappeared altogether.In those last words there is a real plea. These older people of ours have seen great social changes, and many of them have very greatly influenced the thought of the country in order to encourage those social changes. Now, so often, they feel that that they are the forgotten folk and watch with anxious eyes the constantly rising cost of living, wondering with fear and dread how they will eke out an existence for their last remaining days. As one of my hon. Friends has said, they have no trade union to press their claims. They rely on such occasions as this to hawk round their poverty.
We welcome the Bill and the changes that are to take place, and I hope that when we consider it in Committee there will be that response which will ensure that the Measure is tidy, complete and that it will bring satisfaction to many of our public pensioners.
§ 6.52 p.m.
§ Mr. J. C. Jennings (Burton)
I, also, welcome this Bill, and I am grateful to my right hon. Friend the Financial Secretary for his very able, concise and 632 sympathetic treatment of this subject this afternoon. I am also very proud to follow an hon. Member who has "come back home." I am a native of Durham and am, therefore, pleased to welcome the hon. Member for Gateshead, West (Mr. Randall), as his is a Durham constituency. I am grateful both to him and to the hon. Member for Sowerby (Mr. Houghton) for their very kind references to the work of the Heald Committee on this very complicated and intricate problem of occupational pensions.
The Bill is a considerable step in the right direction—towards the amelioration of the Service pensioners. As I do not want to be guilty of tedious repetition I propose to list my reasons for welcoming this Measure. First, I welcome it because of its wide variety of beneficiaries; second, because it removes the means test and the other income penalties, and, third, because it abolishes the ceiling—the limit—on the size of pensions to benefit. It also enables many who did not previously benefit to receive the accumulated increases under previous Pensions (Increase) Acts. I want to stress that point because I do not think that it has been fully brought out by back benchers on either side today. Again, it does away with what is sometimes called the marital bar, and, lastly, it provides an increase of from 6 to 10 per cent., about which I hope to say more later.
For a few moments I want to look at the principles governing such Bills as this. In the past, successive Governments have said that public service pensions, once awarded, cannot be altered—what one of my hon. Friends has called the immutability principle. That principle is quite sound if prices for ever remain stable, but in the inflationary war years and post-war periods that principle has been blown sky high. As a result we have had, since the 1944 Act—and including it—four successive Pensions (Increase) Acts—1944, 1947, 1952, and now this one in 1956.
That being so it is interesting to look at the change of emphasis or principle that has taken place. Let us take the 1947 Act. What was the principle of the increase in that Measure? I think that my right hon. Friend has said that those three Acts were all based on the same general principle, by which I think he really meant the alleviation of hardship; 633 in the last two cases what has been called absolute hardship but what, in the present Bill, is conveniently called relative hardship.
There is something more to it than that, because the principal increase in the 1947 Act was based on the amount of pension and was on a sliding scale—the higher the pension, the less the increase. In 1952 we had an entirely new principle. The principle there was based on the date of retirement and was a tapering-down scale—that is, the later the retirement, the less the increase in pension. Now we again have an entirely new principle. In this Bill the increase is based on the years of service. It is graded, according to years of service, from 6 per cent. to 10 per cent.
A further interesting point arises. Various hon. Members this afternoon have said that this principle has been adopted because it is based primarily on the Civil Service position. There may be something in that. The committee made a rough computation of the size of this problem. The total number of pensioners is just over 600,000. The Armed Forces constitute the largest number. We are excluded here from considering them, but let us look at the others. The biggest block is made up of civil servants—168,000. The next largest block is the 120,000 servants of local authorities. Then there are teachers, 86,000; police, 63,000; National Health Service, 15,000, and Fire Services, 5,000.
From those figures it might seem that the application of this scheme derives from the fact that the largest block is the Civil Service, and that teachers, and postmen, and policemen and the rest have come in on a side wind.
§ Mr. Jennings
What then should be the principle governing such measures as this? The principle that I want to see adopted was laid down by the then Financial Secretary to the Treasury in 1952 during the Second Reading debate on the Pensions (Increase) Bill of that year. It was then stated that the Government's 634 aim for those pensioners covered by the previous Bill was…to secure that the actual amount of pension received by pensioners of the same rank or grade remains roughly the same regardless of their year of retirement."—[OFFICIAL REPORT, 24th June, 1952; Vol. 502, c. 2067.]That is a principle that I support, and I think that the Government have gone at least half way to meet it.
We have in the Bill an attempt to reach towards the new principle of equity. The Bill will cost about £11 million. If we followed the principle, to make the pension received by pensioners of the same rank or grade roughly the same regardless of the year of retirement would cost about £22 million.
I should be prepared to see such a scheme put into effect and staggered over three to five years, just as the implementation of equal pay is being staggered. I know that we cannot consider nationalised industries within the bounds of the Bill, but the Government are setting a very good example and I hope that the nationalised boards will follow it.
I want next to look at one or two anomalies, although these have been fairly well covered in the debate. Although this is a good Bill, it can certainly be improved in Committee. One improvement which we can make concerns the principle in the Bill that the smaller the pension the smaller the increase. I think that is wrong. The people on the smallest pensions are obviously in the greatest need. I am not averse to the principle of recognising relative hardship, so that whatever grade of life a man is in, his pension should help him to approach the standard of living which he had before retirement. That is a reasonable proposition. It is no argument, however, that the lower a man is in the pension grade the less should be his increase.
Teachers have been mentioned. There are comparatively few short-service pensioners in the teaching profession, as far as I can discover, and the bulk of these are married women who have served for twenty years, with ten years counted for marriage. The cases in the teaching profession which deserve the greatest help are those of teachers on break-down pensions. They are on short-term pensions and will receive the 6 per cent., and not the 10 per cent., increase.
635 Hon. Members have referred to length of service, and here we have the question of Service men and policemen. I was glad to hear my right hon. Friend deal with that question in the sentence in which he said that where a full pension could be earned in a short time, special arrangements will be made. I am grateful to him for that concession, which I take it we shall deal with later.
I turn, finally, to the question of policemen's widows, which I think can be dealt with under Clause 7. The lot of the widow of a policeman who died before 5th July, 1948, is especially hard. She is called a pre-Oaksey widow. Her pension was assessed before the operation of the Oaksey Report. Had she been a post-Oaksey widow she would have received 19s. 3d. a week under the Report, plus 40s. a week National Insurance widows' pension, but as a pre-Oaksey widow she got 11 s. 6d. basic pension at first, which was increased to 16s. Id. by the 1947 Pensions (Increase) Act; and then we were so ashamed of our niggardly treatment of this poor woman that we changed it to the equivalent of the National Insurance widows' pension in 1948, 26s., which afterwards rose automatically to £2 a week.
§ Mr. Jennings
I do not know, but I doubt it.
The last Pensions (Increase) Act did not affect this woman, because when she should have had an increase under the 1952 Act, her pension was changed to the 40s. widows' pension and she had no increase. Where do these widows stand under the Bill? The Home Office has always said that the Oaksey Report was not retrospective, but with the very good will and good feeling shown by the House to this Bill I think we can help these widows and improve their conditions. We have a duty to them.
§ Dame Irene Ward
Is my hon. Friend aware that in answering a Question from me not long ago in the House the Home Secretary said that he would fight inside the Cabinet for these widows? That reinforces his plea.
§ Mr. Jennings
My hon. Friend is a doughty champion of the cause of people on fixed incomes, and I am grateful for her intervention.
§ Mr. Jennings
I have said that I welcome this proposal, and I do so in the firm hope that we can make a good Bill into a far better Bill in Committee.
§ 7.8 p.m.
§ Mr. Arthur Moyle (Oldbury and Halesowen)
I share enthusiastically some of the opinions expressed by the hon. Member for Burton (Mr. Jennings), and I hope that when the members of the Committee are appointed he will be one of them. We shall then hope to hear from him again on the subject.
I asked the Financial Secretary to try to break down this figure of 600,000 because I thought he was unduly affected by what my hon. Friend the Member for Sowerby (Mr. Houghton) called the disease of "over-topping." In other words, he was affected unduly by those who form the hierarchy of the Civil Service, and tended to forget his former experience at County Hall, where he served for so long and so enthusiastically. The right hon. Gentleman must have forgotten the thousands of manual workers and those in the lower clerical grades who are vitally affected by the Bill. I can only put it down to the fact that he was suffering more from middle-class morality than from anything else.
The fact is that a very large body of local government servants and officers and teachers have basic pensions ranging from £110 to £180 a year. That is the kind of picture which I want the Financial Secretary to visualise. These pensioners are not all retired executives and judges. The Bill covers a whole body of men and women whose pensions range from £2 a week to about £180 a year, provided they have done their period of forty years' pensionable and contributory service.
I give the example of the municipal employee who retired in 1938 with a pension of £2 a week. As the Financial Secretary knows, that is a high pension for a local government employee. To get it, the pensioner had had to earn on an average £3 a week for the five years preceding retirement and had had to 637 render not less than forty years' contributory service—that is the important point—and had had to pay 5 per cent. of his earnings.
I was glad that my figures agreed with those of the Financial Secretary when he quoted the rise in the cost of living and its effect on the purchasing value of the £. The right hon. Gentleman said that since March, 1952, there has been a rise in the retail index figure of 12 points. I have translated that into shillings and worked it out as meaning 2s. 5d. in the £ as the decline in the purchasing power of the £. The pensioner to whom I have referred, with a pension of £2 a week, who gets the 10 per cent., will get the magnificent increase of 4s. a week. That does not match the cost of living, but 10 per cent. is the maximum pension increase.
In reference to the manual grades, I was very pleased that the Financial Secretary made clear his intention to look at the position, mentioned by my hon. Friend the Member for Sowerby, of those who received their maximum pension on retirement, but, because of special circumstances in relation to their particular duties, did not do the maximum period of forty years' service. The right hon. Gentleman said he would look sympathetically at that. I think he almost came to the point of conceding that such cases would receive the benefit of the 10 per cent. increase. Thousands of retired local government employees, through no fault of their own, never had a chance of doing forty years of pensionable service.
Unlike the Civil Service, a post in local government has to be designated before it becomes pensionable. In the Civil Service and the teaching profession the job is known to be pensionable before it is taken up, but regular posts in local government have to be designated before being made pensionable. The officer is in the same class as the teacher, but the manual worker must be designated by his employer as filling a pensionable post, and from that time his pensionable service begins. It was not until 1937 that any substantial body of manual employees was brought into pensionable service. The only way in which they could qualify for a longer period of service than from 1937 until they retired was that of converting their pre-pensionable 638 service into pensionable service by buying those pension rights and paying arrears of contributions. Through no fault of their own, but entirely due to their employers, thousands of manual employees now in retirement could not possibly have thirty or forty years to their credit which ranked for pension on retirement.
That reinforces the point made by my hon. Friend the Member for Sowerby and others about how ridiculous is the basis—which the Financial Secretary did not attempt to defend—of linking these percentage increases to the length of service. I have with me particulars of a basic pension of £183 a year. That covers a very substantial body of officers in local government. It can be equated with the pension of a retired male school teacher receiving maximum salary as a teacher and having done forty years of pensionable service to get the basic pension of £183 a year. The 10 per cent. works out approximately at £18 a year, or 7s. a week, yet on the figures agreed, since 1952 there has been a decline in the purchasing value of the £ of not less than 2s. 5d.
I sum up my argument by making two requests. First, I ask the Financial Secretary to consider getting rid of the principle of length of service as a basis, and, secondly, to get rid of the silly idea of the graduated percentage scale. Those are two injustices which cannot possibly be defended. If the Financial Secretary wants my view—which, I think, was implied by the hon. Member for Burton—I would say that I want to see all benefits and all pensions linked to the cost-of-living index so that the contract which we as a community enter into with those who pay for their pensions should be maintained in principle by making the necessary adjustments to their pensions to maintain a standard of purchasing power. That is the fairest approach.
In a question which I put to the Financial Secretary, which he was good enough to attempt to answer, I referred to the nationalised industries. I refer particularly to those serving in local government who were seconded either to the electricity supply industry, or to the gas industry when those industries were nationalised. They were men and women in pensionable employment who had done years of pensionable service before being transferred to those industries. At 639 the point of transfer to their new employment they were given the option of retaining their pension rights derived under the Local Government Superannuation Act, 1937, or of going over to what we might call the new industrial pensions scheme. I ask the Financial Secretary if those local government employees who exercised their option to remain under the Local Government Superannuation Act, 1937, and have since retired will get the benefits of this Bill.
I think it is a good advance to have got rid of the means test and of the anomaly as between the single and the married person. My view is that the Government would be on safer ground if they were to get rid of the graduated scale of percentage increases, to get rid of the basis of length of service, and to endeavour to link the increase to the amount of pension that was received and maintain the purchasing power.
§ 7.20 p.m.
§ Mr. Basil Nield (City of Chester)
My right hon. Friend the Financial Secretary to the Treasury will, I know, give the most careful thought to the important points that the hon. Member for Oldbury and Halesowen (Mr. Moyle) has just made. I am glad to follow the hon. Member, as I am always pleased to do, because I wanted to say something about the position of local government officers.
In December of last year, the National and Local Government Officers Association submitted to my right hon. Friend the Chancellor of the Exchequer a detailed memorandum putting to him its views on the subject of pensions which we are considering today. As my right hon. Friend the Financial Secretary has already said, the memorandum was found to be helpful. I am specifically asked by that association to say that it is grateful for the fact that the Bill goes a long way towards meeting the representations which it made then and has made from time to time, and in particular that help should be given to all pensioners who have suffered from the decline in the purchasing value of the £.
It is generally agreed that it is in equitable to restrict the assistance given by the various Acts to people who can be shown to be suffering extreme hardship, for the reason that all pensioners are adversely affected by the fall in the value of the £. This Bill shows that 640 the Government agree that the criterion of hardship as hitherto interpreted must be modified. To that end, we see for the first time that relative hardship is to be considered, in addition to absolute hardship.
In this short intervention, I want to make two specific points and to ask that they may be considered. One was referred to by the hon. Member for Oldbury and Halesowen. In the Second Schedule to the Bill it is proposed to relate the pension increase to the length of service rendered by a pensioner during his employment and not to the amount of his pension. Logically, one must take the view that if the real purpose of the increase is to meet the increased cost of living, the length of service of the pensioner is not material. The proposal which is made is for a flat rate increase of 10 per cent. What I am asking is that this should be further considered, although I appreciate that three are arguments both ways.
My second point is that also in the Second Schedule, in paragraph 9, power is to be given to the Treasury and to other appropriate authorities to make regulations. Paragraph 9 specifies that these regulations may modify, adapt or even except the pensions which are referred to in the First Schedule. This means that it would be possible for the regulations to render nugatory the pensions provided in the Statute. My object in raising the matter is to seek an assurance, which, I am sure, will be readily forthcoming, that the regulations will not be used to apply provisions less advantageous than those contained in the Bill.
In my sincere view, the Government are to be congratulated upon introducing this Measure, in times of some difficulty, for it is one which will bring considerable relief to a great many deserving people.
§ 7.25 p.m.
§ Dr. Horace King (Southampton, Itchen)
Earlier in the debate, the right hon. and learned Member for Chertsey (Sir L. Heald) drew aside a little the curtain which separates the 1922 Committee from the civilised world. He assured us that we were not to judge the 1922 Committee as though it consisted of men—and, perhaps, women—who looked like the whiskery Colonel Blimp of the famous Low cartoon. We assure 641 the right hon. and learned Gentleman and the members of the 1922 Committee that we do not usually judge them by their complexions or their hirsute adornment, or lack of it, but by their sinister effects upon the Government.
Those effects are usually so reactionary that some of us would not be surprised if we saw members of the 1922 Committee riding up and down the Upper Committee Corridors hooded and white-robed like the American Klu Klux Klan. This afternoon, however, we have to thank members of the 1922 Committee for an excellent piece of detailed work on behalf of the pensioners. I sincerely thank the right hon. and learned Gentleman and those who served with him on the subcommittee of this usually notorious body.
After our bitter fight earlier in the week and before the bitter fights we shall probably return to next week, it is good to interpose a debate of this pleasing character concerning a very good little Bill, with praise and criticism coming from both sides of the House. I echo the thanks which have been paid to the Financial Secretary to the Treasury, and I extend them also to the Lord Privy Seal, who, when Chancellor of the Exchequer, made certain promises to back benchers on both sides who badgered him from time to time on behalf of old pensioners at Question Time. The right hon. Gentleman has loyally kept those pledges. I am certain that the House would want to give credit to the Lord Privy Seal for his initiative behind this Bill.
There never was in my experience a Bill in which one of the Schedules was so important and delightful a feature. As I read it, the First Schedule seems to me almost poetry, and certainly much more entertaining than most modern poetry. We asked all along that the Bill should cast its net as wide as possible and should reach out so that as many pensioners as possible could be encompassed within its ambit. I am almost tempted to read the First Schedule, which achieves this aim, and dilate on some of its most interesting paragraphs.
The First Schedule is a list of twenty kinds of veteran pensioners who are to be brought within the benefits of the Bill, twenty groups of deserving servants of the State who have watched meagre pensions shrink in real value 642 steadily year by year since the last major Pensions (Increase) Acts of 1944 and 1947, for the 1952 Act was rather limited in its scope. Indeed, as the hon. Member for Burton (Mr. Jennings) has pointed out, this Schedule brings in some groups of people who have not benefited from any of the previous Pensions (Increase) Acts.
Perhaps I may be forgiven for dwelling for a moment on one tiny group which is enumerated among those in the First Schedule. They are those with pensions under the Elementary School Teachers (Superannuation) Acts, 1898 to 1912. The word "elementary" has happily vanished from our educational system. The whole concept of education in our time has been revolutionised, but it is worth while paying tribute today to the surviving members of an honourable generation of men and women elementary teachers, who taught very often in classes of over 60 in number and whose annual salaries frequently were not very much more in pounds sterling than the number of children whom they taught in class per day. Yet they built the foundation of British education and made by their moral and intellectual contribution to the children whom they taught a people who attained a quality which enabled it to survive the First World War and shape the modern British State.
I know how the fine old veteran teachers in my own town, to whom I speak from time to time, have been eagerly waiting for this Bill, and what a difference in their lives every scrap of benefit we can get conceded in the Bill will mean. That underlines the importance of having the operative date of the Bill fixed as early as possible I am sure that both sides of the House will cooperate with the Minister, both here and in Committee upstairs, in giving adequate consideration, on the one hand, but speedy consideration, on the other, to the Bill.
The First Schedule contains eight other categories of local government and police servants and then there is one charming subsection (7) as if the men who shaped the Bill were anxious to make no doubt of the Government's intention to bring everybody in. It says that the Bill will also coverAny pension in relation to which the Act of 1944 or the Act of 1952 has effect by virtue of any Order in 643 Council in force on the appointed day under Section four of the Act of 1944, or under that section as applied by Section four of the Act of 1952, as if it were a pension specified in Part II of the First Schedule to the Act of 1944 or, as the case may be. in Part II of the First Schedule to the Act of 1952.I do not ever remember so much enjoying reading the work of Parliamentary draftsmen. They, too, must have enjoyed drawing up a Schedule designed to bring within the ambit of the Bill as many people as possible.
As the Minister so rightly said, the Bill will bring comfort to thousands of people, men and women, who have served their country well in their day and who now endure hardship, but I have some criticisms to make of it. I shall not make captious or grudging points and indulge in the ordinary party controversy as to why we have had to wait so long for the Bill or why the Government have permitted inflation which has made the Bill not only necessary but a matter of acute urgency to some people. Those matters can wait another opportunity. I want to make criticism in the spirit of the debate, which has been admirable.
First, the Bill abolishes the means test principle of the last major pensions Act. I must be frank. I do not hold it against the 1947 Act, which was introduced by my hon. and right hon. Friends, that it gave help where help was most needed. That is what a means test does, and if there were a limited sum available I am sure that most hon. Members would want that sum to go to the pensioners who needed it most.
There is no doubt, however, that the means limits in 1947 were drawn very tightly indeed and many pensioners above the limits there fixed endured very real hardship even at the time when the means test was imposed. It has since, of course, got worse. Indeed, a means test applied to pensioners would have had to have as its lowest figure a comparatively high figure indeed if it was to avoid causing hardship to some of the people involved, because most of the pensioners whom we are now considering are people with very little income indeed, and experience has shown how drawing a line to exclude some from benefits has excluded many comparatively poor pensioners.
I do not complain today, therefore, of the abolition of the means scale. But I do complain that the Government have 644 imposed a means test in reverse. Instead of coming back from the means test principle to the flat-rate principle, the Government have gone to the opposite extreme and, far from giving extra benefit to the people who need help most, have devised a formula which will prevent the people who need it most from securing as much help as is given to those whose need is less, because there is a sliding percentage scale according to years of pensionable service.
The man or woman with 20 years' service gets 6 per cent. increase and a maximum of £60, and for 35 years' service there is an increase of 10 per cent. and a maximum of £100. But the man with the shorter service in any case usually gets a smaller pension, and the same percentage increase—if a uniform percentage increase were given—would already differentiate against him because the percentage would be a percentage of a smaller pension. Under the Bill, such a pensioner suffers both ways. He receives a smaller percentage of a smaller pension. I believe this to be wrong, and I hope that in Committee we shall be able to persuade the Minister to accept the flat-rate principle of 10 per cent. advocated from these benches.
Let us remember that the man with 35 years' pensionable service will not necessarily be older than the man with 20 years' service. My hon. Friend the Member for Sowerby (Mr. Houghton), who has been the excellent unofficial Minister for Pensions, whatever Government has been in power for the last eight or nine years, and who is a great authority on this matter, has made this point. Many people were technically unable to do more than a certain number of pensionable years' service. If a pensions scheme were introduced late in a man's career, it would be physically impossible for him to serve the necessary number of years to qualify for 10 per cent. increase, and some jobs have a shorter pensionable period than others. The Minister has conceded much of our case, but has not yet gone far enough in my opinion.
As the Minister has pointed out, three methods have been advocated to cope with the admitted anomalies in any scheme. One which the Minister posed was to equate the old pensioner's pension with whatever pension was being given for the job at the moment. The right hon. 645 Gentleman pointed out, quite rightly, that that would have been often improper and certainly technically difficult and that the vast amount of difficulty and even injustice involved make such a method impracticable.
We come then to the flat-rate method. It was implicit if not explicit in the Minister's speech that the flat-rate method produces injustice, but there can be no injustice in the granting of a uniform 10 per cent. if that 10 per cent. is not reflecting an injustice further back in the system. In the case, which my hon. Friend the Member for Sowerby described, of two civil servants in which one later in life would get a smaller pension than the one who retired earlier, the reason for the injustice was not that the flat-rate increase was wrong but that the second pensioner had not managed to secure wage increases adequate enough to meet the rise in the cost of living. Therefore, if any anomalies are revealed by a flat-rate increase in pension rates, they are merely anomalies in a previous wage or pension system.
The third method is this differential. If we are to differentiate and produce a scheme of pensions increases varying from 10 per cent. to 6 per cent., the principle which ought to be involved is not the length of service but the amount of pension, and it ought to be in reverse from the way in which the ministerial formula acts. If we are to differentiate, if anyone ought to have the 10 per cent. increase it should be the man with the lowest pension, and if anyone should have the 6 per cent. increase it should be the man with the highest pension. However, I believe as I have said, that the best way is the method of a flate rate.
My second criticism is of the percentage increase itself. We are trying to equate these pensions with 1947 or 1952 or 1939. Indeed the gravamen of the case of the ex-Service men, so eloquently supported by the hon. and gallant Gentleman the Member for New Forest (Colonel Crosthwaite-Eyre), is that the military Service men between the two wars were robbed of some of the value of their pensions on the 1919 basis when the cost of living fell.
I do not want to weary the House with statistical arguments about the rise in the cost of living. I would only say that it is a matter of fact, not argument. that the 646 cost of living has risen more since the last Pensions (Increase) Act in 1952 than this present 10 per cent., and that we are dealing with many people whose pensions were not affected by that Act, so we shall have to go back to 1947 in order to measure what increase would be adequate. I believe it ought to be more than 10 per cent.
I will not make a long argument about the index figures, but I do say that the kind of pensioner I am worried about is the same kind of pensioners whose battle we have fought in our old-age pension debates. They are poor people, who spend their money on food, on clothing, on coal. For them the cost-of-living index is no real measure of the effect of the rise in the price of food, of coal, of the rise in the price of milk and bread, and so on. The kind of pensioner we are talking about this afternoon includes the postman who retired in 1939. I would like to deal in detail with the fine work of veteran postmen but I would be trespassing on the ground of some good ex-postmen on my side of the House. Yet the postman retired in 1939 on a pension of only £98 has previously received increases which bring him to £163 a year and this will give him merely £10 a year more.
The civil servant who retired on a pension of £2 a week received increases from earlier pensions Acts, first in 1944–47, which brought him to £2 14s. In 1952 that went up to £3 4s., and all that this Pensions (Increase) Bill will do will be to increase his pension from that figure to £3 8s. a week. The two gentlemen whose cases I have described must be at least 76 years old, if not older than that. And yet the 10 per cent. gives them very little increase.
I, too, welcome Clause 7 of this Bill. As I said this afternoon at Question Time, as I read it, I think it gives the Government power to make regulations which can benefit what has been so often called the pre-Oaksey widows, the small group of widows on pension whose husbands died or were killed before July, 1948. Because their husbands died before that date, they are excluded from the benefits of the pensions and the great advance in the standard of living secured under the Oaksey Committee and inspired by my right hon. Friend, the friend of policemen, the Member for South Shields (Mr. Ede).
647 I hope I am right in thinking that Clause 7 will be able to take in this group of widows, but if I am wrong I would plead with the Financial Secretary to accept modifications in Committee so that this Bill at long last brings justice, the justice demanded by the present policemen themselves, to the widows of their dead comrades. If this Clause does not make it possible for the Government to do that, I am certain that the retired policemen of England, who never forget their dead brothers, will be bitterly disappointed.
I said at the beginning that this Bill is wide in its scope but, wide as it is, it by no means solves the problems of all pensioners. There are the kindred pensioners, such as the railway annuitants. There are the old servants of the now nationalised, formerly private, industries. I say to the Minister that if he has power to amend the Schedules, which I have praised so highly tonight, I hope that he will do so and bring these groups in. If the Minister has not power to amend the Schedules, I plead with those members of his Government who are in charge of the nationalised industries to carry out the spirit of this Bill by applying it throughout that range of industries over which the Government have, in the last resort, final control. They are groups of people whose case is every whit as deserving as any mentioned in this debate. I think in my own constituency of the old Southeronians, the veterans of the old Southern Railway, and they too, like retired civil servants, like retired policemen, like retired teachers, are waiting for some benefits such as this Bill provides for others.
There are other pensioners that no Minister can help. I would use this debate to beg through Parliament those in industries and big business today to do, what the best businesses have already done, to match up to some of their old pension schemes to the needs of the time. For the people outside the ambit of this Bill, those who watch their pensions steadily shrink in value year by year, there is only one hope of help from the Government. That hope is that the Government will get down to the task which they promised to do four years ago, to control the cost of living, so that people who cannot be shielded from its rise by 648 Bills such as this, may at least in the future have their pensions protected from being further eroded.
§ 7.48 p.m.
§ Mr. Peter Remnant (Wokingham)
I am glad to follow the hon. Member for Southampton, Itchen (Dr. King) because I want to support, if not to reinforce, his plea for the pre-Oaksey widows. My right hon. and learned Friend the Member for Chertsey (Sir L. Heald) said he thought that no one was left out. I am not so sure. I believe that the Bill gives power for the issue of regulations by the Home Office, if it so desires, but the reply given by the Home Secretary today was extremely cautious, to say the least.
Since there have been various suggestions and letters sent by the National Association of Retired Police Officers to the Home Secretary, which have received no answer, I want to go one stage further and ask the Parliamentary Secretary, whether it is intended to do anything for this small body of people or not. Do not let us forget that the basic pensions of such widows are as low as 11s. 6d. a week, to which their husbands contributed when alive, and it was only the influence of hon. Members on both sides of the House which forced their pension scale up to the same level as the State pension.
I do not believe this House will consider that their requests are unreasonable. I shall not go into details but it is likely that the post-Oaksey widow will get about 59s. a week when this Bill is passed. The proposal put on behalf of the pre-Oaksey widows is for a sum of about 46s. a week. I ask my hon. Friend the Joint Under-Secretary to press his right hon. and gallant Friend the Home Secretary to lend a sympathetic ear, which we know he has, to the needs of these people whose husbands have been killed in the service of their country. They are good country people, with a very small organisation, and they rely upon people like the hon. Member for Itchen and, I hope, myself to put forward their case. I have no doubt that if that case is considered in its fullness justice will be done to them.
The only other point to which I wish to refer concerns what I would call the specialist corps of the Army. If I refer to R.E.M.E. it is only because I know their conditions better than any other. It is quite obvious that pay in the Services 649 cannot entirely follow commercial levels of pay, but all the members and officers of that corps have specialist qualifications and industry is short of people with those qualifications. I am well aware that there are two kinds of qualification pay, which I think all the officers get, of 3s. a day, and the others get very little.
When we read the appendices of the White Paper on Service Pay and Pensions which show that the terminal grant and the pension is apparently the same for officers of all corps, one begins to understand why the officers with a love of the Army and of their particular corps, as they rise in rank, are bound to accept the higher salaries and, indeed, the higher pensions which are afforded to them by civil employers. I have a list here, of which I will only quote two instances, of the rates of pay offered to officers in these corps. One is a lieut.-colonel, a Bachelor of Science, who is offered £6,000 a year plus gratuity and allowances, and his lowest rate of pay in the Army is £1,423. Another is a captain whose pay is about £700 and who is offered £2,500 a year, with £1,000 a year allowances and a gratuity of two-thirds of his pay, according to years of service.
These officers do not have the "perks" which it is often suggested that they have when they are in married quarters. I think that it is right and fair to them to remind the House that they pay for their married quarters, pay rent for their garages and pay for the water to wash their own cars. I had intended to ask my hon. Friend the Under-Secretary of State for War, who has been called away, if he would look at the cases of these specialist corps with technical qualifications to see whether a method of attracting those in them to stay in the Army, where their functions are fundamental, should not be by way of some addition to the terminal grant.
These are the two points which I wish to make, and I hope that we shall get a satisfactory conclusion on both of them; but on grounds of sympathy and humanity, I would quite candidly put the pre-Oaksey widows before the others.
§ 7.55 p.m.
§ Lieut.-Colonel Marcus Lipton (Brixton)
I am glad to follow the hon. Member for Wokingham (Mr. Remnant) in this debate. I happen to be one of his constituents, though I never vote for him. 650 He referred to the position of men in the Services. It is only by taking advantage of a procedural device by putting down an Amendment declining to give a Second Reading to the Bill that we are able to refer to the position of Service pensioners at all.
The case has, I think, been adequately made out by the hon. Member for Aldershot (Sir E. Errington) and the hon. and gallant Member for New Forest (Colonel Crosthwaite-Eyre). The only reasons why my name did not appear on the Amendment which they have put down were that, first, I did not want it to be thought that I was opposed to the Bill and, secondly, the appearance of my name in support of the Amendment might have alienated any sympathy which the Government might show to an Amendment put down by Conservative Members only.
It is a fact, of course, that the Bill, and the concomitant measures to be applied under the Royal Warrant to Service pensioners, will be perpetuating an injustice which still rankles in the minds of the Service officers and other ranks concerned. It is this. The increases are assessed on the 1919 rate, less the 9½ per cent., as stabilised in 1935. It is not too much to suggest that the Government should reconsider that decision and assess the percentage increase on the original amount at which the pension stood in 1919. It has always been argued that the 9½ per cent. cut was an arbitrary change imposed by the Government to the detriment of the Service pensioner, and the cost of removing this anomaly will be negligible, as the hon. and gallant Member for New Forest pointed out.
It is perhaps not realised that there are still some officers who retired before 1914 whose rate of pension was fixed in 1887. It is surely reasonable to suggest that, in their case, the 10 per cent. increase should be altered and that perhaps a 20 per cent. increase would not be out of the question. As a matter of fact, in my opinion the fairest and simplest way of dealing with the matter would be to apply the new code of pensions, whenever it appears, to all retired officers. That, I think, would get over all the difficulties and all the anomalies. I hope that the Government will reconsider this 9½ per cent. deduction. It has been talked about for many years past and I am sure that has not had a good effect upon recruiting.
651 The position of widows has been touched upon. There again, I think that the miserable increase of 5 per cent. which is now suggested over the basic rate ought to be reviewed, because for Service widows, as the hon. Member for Aldershot pointed out, the only improvement took place three years ago after the rates had remained unchanged for one hundred years. It will be seen we are not galloping furiously in the direction of seeing that some justice is done. I hope that the Government will consider the plea which has been put forward. The Amendment was not moved with the idea of rejecting this Bill on Second Reading; it was moved merely to provide us with a real opportunity to put forward a case which is fully justified on the facts.
§ 8.0 p.m.
Vice-Admiral John Hughes Hallett (Croydon, North-East)
I am very pleased to find myself following the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton) on what I fancy is one of the very rare occasions when I can truthfully say I am in general agreement with the sentiments that he has expressed.
Perhaps I had better be on the safe side and start by declaring what I think is a potential interest in the Measure. To be frank, I am still unable to make out whether or not I fall within its scope, but, if I do, it is an interest which I share with some 600,000 other people and which in any case, if I understand the Bill correctly, will not mature for a long time to come.
For many years I have held the view that it is the prospect of a good pension rather than a high current rate of pay which is needed to attract the right type of person into the public services. Therefore, I should be less than generous if I did not welcome the Bill and congratulate my right hon. Friend upon its scope and boldness. Of course, it falls short in some ways of what we should have liked, but, bearing in mind the need for economy, I think we have every reason to be grateful. I rather hope that hon. Members on both sides of the House will exercise superhuman restraint, and refrain from pressing for expensive concessions which they must know in their hearts it would be wrong to make at the present time.
652 After all, the Bill goes a very great deal further than any previous legislation to increase pensions. Above all, it abolishes the needs test which many of us thought was so objectionable and so inappropriate when dealing with earned pensions. It is, in fact, no exaggeration to say that the Measure will bring relief, comfort and, indeed, renewed hope to countless thousands of men and women in humble homes who had almost come to believe that Parliament had forgotten their services.
It is rather extraordinary that no hon. Member has found it necessary to defend against attack the general principle which underlies the Bill. That has been entirely taken for granted, and I am delighted that that should prove to be the case. Nevertheless, I ask the House to bear with me while I make some rather more general observations about the underlying case for the Measure. In so doing, I must make it perfectly clear that I am thinking and speaking not of any particular category of public service pensioners but of public service pensioners as a whole.
As I understand it, the object of an occupational pension is to enable a person to live in retirement at a standard at least comparable with that which he has come to enjoy during his working life. In modern times, as we know, that object has been utterly frustrated in a very large number of cases. Two distinct factors have been at work.
The first factor is the fall which has taken place in modern times in the ratio of pensions to salaries. I think it will be found that this is broadly true of all the public professions. I will give some figures relating to the Navy, because I find the Navy Estimates less difficult to disentangle than most of the other Estimates, and also because they illustrate my point in a very striking way. Looking back to the year 1913–14 we see in the Navy a great public profession at the zenith of its peace-time strength at the conclusion of a period of eight years of expansion. One would, therefore, at that time expect to find the proportion of pensions to salaries on the low side. If we look at it today we find that it has shrunk to an almost insignificant fraction of its former self and is bearing the financial burden of two generations of war pensioners. Furthermore, there has 653 been a very great increase in longevity during the past 40 years.
Consequently, one would expect the proportion of pensions to salaries to be a good deal higher today. Yet the reverse is the case. Whereas in 1913 the pensions were about 30 per cent. of the salary bill, today the ratio has fallen to 25 per cent. I believe that we should find those figures matched in the other professions. It is a complete fallacy to think, as some people do when they talk about the "Fare Well State" instead of the "Welfare State," that we are spending more on retired people, at least in the public service, anyhow, in comparison with what was spent a generation ago.
Superimposed upon that factor, there has been the continued fall in the purchasing power of money during the past 40 years, a fall which was only temporarily arrested between 1921 and 1935. It is, of course, this second factor with which the Bill attempts to deal. The problem must be seen against the background of a fall in the real value of pensions, great in all cases and catastrophic in the case of the higher pensions. For example, the real value of a major's pension before 1914 was greater than the value of a major-general's pension today.
Nevertheless, one is often asked what justification there is for singling out public service pensioners for help when other people on small fixed incomes are just as hard hit and equally deserving. There are a number of reasons, most of which have been mentioned during the debate. Public service salaries and public service life admit as a rule of less saving than is desirable. That is particularly true of Service life and of life in the Colonial Service or any other service which involves a number of people living together in a closely knit community where they may have a tendency—it is regrettable, but it is also a fact—to live up to the limits of their incomes. Again, there is the existence of fixed retirement ages and, often, early retirement ages, which deny to public servants the remedy of most professional men at a time of rising prices, which is not to retire at all.
The third reason is one of expediency. If public service pensions are allowed to fall in value too much, and if the pensioners are seen to be impoverished and sometimes embittered, that is a very bad 654 advertisement and the public services are discredited. I cannot agree with my hon. Friend the Member for Wokingham (Mr. Remnant), whose friends in R.E.M.E. appear to have such wonderful alternative careers opening up before them. My experience is that retired officers, especially those who have not been promoted and have retired in the junior ranks, sometimes find it very hard to get decent jobs.
I have a friend, a married man with children, who retired with the rank of major and had to find something to do. After very great difficulty, he was eventually lucky to be taken on as a laboratory boy in his old school. That is not a very good advertisement for the Army. I wonder how many boys of that school have joined the Army after watching him in his present work. That type of example could be multiplied. Furthermore, although the public service pensioner has passed the stage at which he can withhold his own labour, because it is not wanted any more, he very often withholds his son's labour as a result of disappointment about his conditions in retirement.
At the same time it is right to recognise and reply to some of the arguments on the other side, all the more because only very recently they held the field to a large extent. The first argument which we have to meet is the one to which my right hon. and learned Friend the Member for Chertsey (Sir L. Heald) referred. I do not entirely share his view that it is an argument which is not still advanced by a large number of people. I refer to the argument that because there are other people on small incomes who cannot be helped, then we should not help those with whom the Bill deals. My reply is that we should by all means ask the Government to see whether they cannot reach out to help some of those people. Yet even if they cannot, the argument that because one cannot help all one must help none is very poor indeed.
The second and more formidable argument, which has appeared in more than one official document—the hon. Member for Sowerby (Mr. Houghton) quoted one such document—is one so long beloved of the Treasury, that a public service pension, once awarded, cannot be varied. I hope that we have heard the 655 last of that particular piece of nonsense, because, of course, it is entirely contrary to the facts, apart from anything else. It was true in the 19th century, because for decade after decade retail prices remained fairly steady and, in any case, pensions were assessed at such a generous level in those days that they could take care of considerable variations in the cost of living before serious inconvenience was suffered.
However, immediately after the First World War, as has been pointed our, we had two Pensions (Increase) Acts. They were regarded as temporary and ad hoc Measures and were followed, as we all know, by a scheme in which public service pensions were linked to the cost of living. I was interested to note that the hon. Member for Oldbury and Halesowen (Mr. Moyle) somewhat supported the idea of linking pensions to the cost of living. There are very great objections to that. To begin with, it is wrong in principle to insulate one section of the population from the fortunes of the people as a whole, but the other practical reason is that, whereas pensioners are ready enough to accept increases at a time of rising prices, there is the most tremendous fuss when the reverse process is applied.
A whole succession of Pensions (Increase) Acts is not an entirely satisfactory way of meeting the problem; and I have long favoured the principle, to which a number of hon. Members have declared their adherence, of paying all pensioners at the current rate, irrespective of the date of their retirement. My right hon. Friend explained in some detail the arguments against that course. I fully accept that it has great weight for civil pensioners, if we have to go back to before, say, 1950.
On the other hand, there is more to commend it in the case of the fighting Services and I should have thought that it had a lot to commend it for civil pensions which were established after the great post-war changes had taken place, from about 1950 onwards. I therefore hope that the Government will think about this matter again in the years ahead with a view possibly to placing the whole principle on which public pensions are assessed on a more permanent basis. I suspect that one of the objections to 656 adopting that course at present was foreknowledge of the tremendous increase in the Service pensions which were about to be introduced.
In conclusion, I should like to reconcile my support for the Bill with my deep conviction that economy in Government expenditure is still the overriding need of the present hour; but the fact is that we really have no option. The Measure amounts to no more than an act of social justice, long overdue. It is welcome evidence that the Government intend to stand by their former servants at a time when almost every section of the community seems to have become engaged in a terrific scramble for higher incomes.
The men and women who will benefit from the Bill are not, as has been pointed out, backed by powerful unions and they no longer belong to influential associations. They do not have Burnham Committees or Whitley Councils to take care of them and they do not even have the bargaining power which comes from a large mass vote. It is. therefore, to Parliament alone that they have to turn for fair play and for an assurance that they need not indefinitely watch the growing prosperity of the younger generation from the background of their own increasing poverty. Let us see to it that they do not turn to us in vain.
§ 8.17 p.m.
§ Mr. H. Hynd (Accrington)
This has been a remarkable debate in that every hon. Member who has spoken from either side of the House has supported the Bill. May I make it clear that I am no exception to that rule? I believe that the Bill is not only justified but overdue, and if I have any complaint at all about the speeches of hon. Members opposite it is that perhaps rather too much emphasis has been put on the position of officers and not so much on the position of the people who, after all, are not nearly as well off as are the officers—local government servants and people of that kind. However, they are all in the same boat in that they are finding it very difficult to live and need the Bill to bring their pensions up to date.
The Financial Secretary said that ever, the last few days have made no difference to the determination of the Chancellor of the Exchequer to pass the Bill into law. I was rather struck by that phrase, 657 because there should certainly be no difference. Indeed, the events of the last few days have shown the urgent necessity of a Measure of this kind. It has become all the more necessary because of the increased cost of living. Of course, it would have been very much better if the Bill had not been needed. The ideal would have been to have stabilised the cost of living, thereby stabilising the value of pensions, but that is a gospel of perfection which we are far from reaching in these days.
I want to say nothing which will prevent better pensions being paid to all those people whom the hon. Member for Burton (Mr. Jennings) called the wide variety of beneficiaries. It has been said that there are about 600,000 of these people, ranging from colonial pensioners, judges, teachers, civil servants, local government officers, police, ex-Government servants from Ireland, fire brigade officers and men and many others. It was also stated that corresponding increases will follow in the pensions of Service people through an alteration in the Royal Warrant.
The Financial Secretary also said that it was unfair that some pensioners should have their pensions increased while others would not. That brings me to something which I particularly want to say. Some of my hon. Friends and I ventured to table an Amendment which is not being called—and I recognise the reasons why it is not being called. However, it is necessary for the House to face the fact that many of my ex-railway colleagues who are in receipt of pensions are not covered by the Bill and are in a position even worse than that of many people who have been mentioned this afternoon.
The hon. Member for Wokingham (Mr. Remnant) referred to a colonel, a major and a captain who got lump sums of several thousands of pounds and a pension of something over a £1,000 a year. The deplorable position of these men was described. Some of my railway clerk colleagues would be delighted to have anything like that. They are people who during their working life contributed to a superannuation fund and retired on pensions which in many cases are about £2 a week. Until a few years ago the maximum salary for a fifth-class clerk on the railway was £200, which meant a pension 658 at the best of £100, and the pension rate varied from company to company.
The hon. Member for Burton said that people who were worse off should get the most help, and I was immediately reminded of my ex-colleagues in the railway service. It is true that they are not directly Government servants because of a decision of this House. Post Office workers who are similarly employed come under the direct control of the Minister. But it was the decision of this House to set up the British Transport Commission, and so we might call the railway workers quasi-public servants. I do not think that removes the responsibility from this House or from the Minister. I think that our moral responsibility should be recognised.
This matter has been raised several times in this House. The Transport Salaried Staffs Association has continuously put forward the position of these men and their widows, and I suggest it is time that their position was recognised. It was referred to this afternoon by the right hon. and learned Member for Chertsey (Sir L. Heald). He hoped that the boards of the nationalised industries would pay attention to this debate and do what was right. I heartily support that suggestion, because the provisions in the earlier Pension (Increase) Acts were not applied by the nationalised boards, certainly not by the British Transport Commission. Something was done by the gas and electricity boards, but the action of the British Transport Commission was insufficient and far from adequate regarding this problem. As long ago as 1912, when railway clerks were exempted from National Insurance, a pledge was given—
§ Mr. Deputy-Speaker (Sir Rhys Hopkin Morris)
The hon. Member is in order in referring to this matter, but I do not think that he would be in order in carrying it too far.
§ Mr. Hynd
Several references have been made during the debate to the position of the railway superannuitants, and I do not think that we can shut them out of our minds when considering the very good case which has been made for other public servants. We have every sympathy for them, and I am sure that they, in turn, have the greatest sympathy for the railway superannuitants.
§ Mr. Thomas Steele (Dunbartonshire, West)
On a point of order, Mr Deputy-Speaker. We are debating the Second Reading of a Bill to increase pensions, and there is a responsibility which falls on the Minister. As was pointed out by my hon. Friend, it is only by an accident that the railway superannuitants are not in the same position as people drawing pensions from the Post Office. The British Transport Commission was appointed by the Government and the chairman and members are appointed by the Minister. Surely, during the debate on the Second Reading of this Bill, it is in order to draw attention to that fact and to indicate our desire to see that the interests of these people are looked after?
§ Mr. Deputy-Speaker
The utmost that the hon. Member can do is to refer to this matter, as he has done, and to express the hope that the Transport Commission will take notice of what it said in this debate. But pensions under this Bill are provided from public funds. The pensions of railway men are provided by the Transport Commission out of its own funds.
§ Mr. Glenvil Hall
That is so, but may I put a point to you, Mr. Deputy-Speaker, which I hope you will think has some bearing on the matter? We have discussed an Amendment dealing with pensions for ex-Service men who do not come under the provisions of this Bill. It is true that they are paid out of public funds, but it occurred to some of us that the affinity between these two sets of people was so close that both might be referred to.
§ Mr. Deputy-Speaker
They may certainly be referred to, but I think the distinction is that the pensions of one set are provided out of public funds and the pensions of the other are not.
§ Mr. Hynd
The line of argument I was proposing to follow was that Clause 8 of the Bill refers to power to increase other pensions, and there is the case that the Minister is under a certain obligation to railway servants because of obligations taken over from the old railway companies. If the funds of the old companies were not sufficient to bring the pensions up to date, there is a claim on Government funds to be used for that purpose. If you do not wish me to 660 develop that point further, Mr. Deputy-Speaker, I will bow to your Ruling. But I understand that discussions on this matter are taking place. Having mentioned it in this way, I hope that the Minister may be able to give us some news about how these discussions are proceeding, and whether there is hope of any assistance being given from some other direction.
These people have been very patient. We have discussed their problems on Adjournment Motions in this House, but no great amount of lobbying has taken place, certainly nothing to the extent of what the officers' associations have been doing on this Bill. These people have been very patient and deserve some consideration, but I will not pursue the matter further.
This debate has produced some interesting and very valuable by-products. In the first place, hon. Members opposite have pleaded with the Government to do something about the fact that the rise in the cost of living has hurt people who have to live on fixed incomes. The speeches they made in connection with that matter were rather out of harmony with those that we heard from the same benches a little earlier this week. We then got the impression that people were better off now than they had ever been before; that this Government were reducing prices, that everything in the garden was lovely, and that they could not see why hon. Members on this side had anything to complain about.
The other two points, which were a little more interesting, were the support by hon. Members opposite, first, of the proposal that the means test should be abolished, and, secondly, of the proposal that pensioners should be allowed to draw their full pay, without any deduction at all. I support both proposals, and I hope that they will not be deleted from the Bill, but I ask hon. Members opposite to bear in mind upon a future occasion that they also advocated these proposals. If the means test is to be abolished in the case of the pensioners whom we are now discussing, and if retired generals are to be allowed to draw their full salaries as chairmen of national boards, or anything else, the same principle might fairly be applied to other pensioners.
§ 8.30 p.m.
§ Brigadier Terence Clarke (Portsmouth, West)
I am sure that the hon. Member for Accrington (Mr. H. Hynd) will forgive me if I do not follow his speech too closely. I shall declare my interest in this matter here and now. I am a Service officer. I would point out, however, in reply to the hon. Member for Accrington, that I do not belong to any officers' pension or other association, and have always refused to do so. I speak entirely without a brief, and without any interest in any officers' pension association.
§ Mr. H. Hynd
I was not making a point about the hon. and gallant Member for Portsmouth, West (Brigadier Clarke) being a non-unionist. I was drawing attention to the fact that officers' associations have been a little more active than the British Legion in their lobbying upon this occasion.
§ Brigadier Clarke
I accept that.
I want to pay tribute to my hon. Friend the Member for Aldershot (Sir E. Errington) for moving the Amendment, because it means that we can debate Service matters which, up to now, have never been allowed to enter into these debates. I was a member of the Standing Committee which dealt with the last Pensions (Increase) Bill, and every time I tried to raise the question of Service pensions I was told that I was out of order, and that the matter would be dealt with by Royal Warrant. Tonight, after my hon. Friend withdraws his Amendment—as I suspect he will do—we shall not be able to raise these matters again. I am at a loss to understand why we should be allowed to talk about every sort of pension in the world, both on the Floor of this House and in Committee, but cannot discuss Service pensions because they are dealt with by Royal Warrant.
After the 1952 Measure had been passed, when the Royal Warrant was eventually issued I found that there were many things in it which I did not like, but it was never debated in the House, and there never was a time when we could do anything about it. The Royal Warrant incorporated a means test.
I know that I am making a Committee point, but other Committee points have been raised tonight. I hope that I shall not remain out of order for more than a second or two, even presuming that I am 662 now out of order. I would merely point out that many Service pensioners working in the Royal Dockyards are unable to draw their Service pensions because they are earning more than the maximum allowed by the Pensions (Increase) Act. That has caused them very much concern. They object to it very strongly. They feel that they have earned that pension and that if they work a little harder by doing another job in the dockyard they should not have their pension increase hit for six. It is no incentive to them to continue working or doing any overtime. The new Bill removes the means test, and there will now be an incentive for a man who is drawing a pension to work as hard as he likes in order to increase his income. He may have to pay more Income Tax, but we all have to do that if we earn more. There is no injustice about that.
Another point I wish to make is that these Service pensioners can lose their pensions. This may also be true of a pensioner who receives a pension from a municipal authority. I do not know, but I do not think it is so. If a Service pensioner is convicted by a court for receiving cigarettes which have been taken from a ship of the Royal Navy, he is liable to lose every pension he has gained in the Service. It may be said that he should not have accepted the cigarettes, but he may have been acting in ignorance. I know of a case where a man did nothing dishonourable; he was honourably discharged by the court. His crime was that his wife went out and earned 4s. a week as a cleaner in a school. That put his income above the top limit. He had no dishonest intention whatever but he has lost two Service pensions, one from the Royal Marines and one from the Navy. He was thrown out of his dockyard job and unemployed, and he is employed today only because I got him a job in Portsmouth.
The Service man has much more to lose than other people and that should be borne in mind. He has given long service to the country, but it can all be lost overnight by the stroke of the pen. I represented this case to the Admiralty before Christmas and so far I have had only a couple of evasive letters in reply, telling me that the matter is being looked into. In fact, I have had about enough, and I shall cause a little trouble pretty soon unless something is done for this 663 man. It takes a long time to get those matters looked into and we have to fight for our rights. There is nothing I like more than a good fight, and if any of my constituents are suffering I will not give up the fight if I can put it right.
I turn, now, to widows' pensions. My hon. Friend the Member for Tynemouth (Dame Irene Ward), other hon. Members, and I have been fighting this matter ever since I have been here. Indeed, the hon. Lady was fighting hard on their account long before I came here. It is about time we did a little more for the Service widow. Generally speaking she is getting, at most, a quarter of her husband's pension, whereas the civil servant's widow gets about a third. Since a Service man's wife stands a greater chance of becoming a widow, I should have thought she would have been looked after better than the civil servant's widow, but in fact she gets a smaller pension.
The widows about whom I am particularly concerned are elderly and are not pensionable under the old-age pension because their husbands retired before the National Insurance Scheme was introduced. Although we hon. Members may have to wait until we are 60 or 70, most of us will receive the old-age pension one day when we are thrown out of here or retire. That is not the case with these widows. Had they been in the pension scheme they would have been receiving another £2 a week. I certainly hope my wife will be consoled by the fact that she gets £2 a week more than my mother got. I hope my right hon. Friend will look again at the question of Service widows' pensions and see if he cannot do a little better than in the past.
I know that there have been a couple of increases lately and that a lieut.-colonel's widow gets £180 a year, but, as has been said, the increase she now gets is equivalent only to a packet of cigarettes. The hon. Member for Cardiff, South-East (Mr. Callaghan) made a most pathetic appeal on behalf of these old ladies and talked about drawing back the curtains and seeing the carpets and linen worn out and everything decaying. They have no money to go out to buy things. Their husbands served the country well and they should be helped a little more in their old age than they 664 are being helped. I think both sides of the House will agree.
When I first came to the House a widow did not get a pension at all if she had a private income. She had first to prove that she needed a pension. That qualification has been abolished only recently. Then, if the widow could prove her need of a pension, she had to write and claim it, otherwise she did not get it. While hon. Members opposite were in power I managed to get the Labour Government to agree that in future they would inform widows that they were entitled to a pension and allow them to claim it, which was a great improvement on the previous position. Previously, if she did not claim a pension she did not get it. If she discovered a year or two later that she was entitled to it, she was told that she could claim back for only three months because she ought to have known about it. In a time of grief people are not always immediately grasping and asking "What do I get as a result of the old man dying?" I admit that that is an improvement, but I ask the Financial Secretary to see whether he cannot bring the Service widows' pension more into line with that enjoyed by the Civil Service; and if that is not high enough will he please raise both? I do not think they are high enough now.
Their pensions are a very serious matter to a lot of senior retired officers. Officers now serving can, on retirement, look forward, I think, to an extremely good pension I do not think that any one can quibble about those published the other day. If the pension now offered does not retain officers in the Services it ought to—and I think that it will. Not only do serving officers get that pension but they get a very good gratuity. If half the officers who retired before 1950 had then commuted their pensions they would not have got as much as senior officers now get as a terminal grant.
It is a wonderful thing to get not only a lump sum but a pension. The officers of whom I speak got no lump sum and only a very small pension. When they were serving their pay was extremely small and there was very little margin for saving. They have been faced with the increased cost of living which has taken place since 1945 and they have had very little increase in their pension. It may be all right for a civil servant to wait until he is sixty—he does not generally 665 retire until he is sixty—before getting a pension increase, but a considerable amount of hardship may be caused to someone aged 57 or 58 at the present time, who is considered incapable of starting a new occupation. If he is no longer in the Services, and is unemployed, he cannot get a pension increase because he has not reached the age of sixty.
I suggest that the figure of sixty has been put in because the civil servants like it that way and it suits them. I am sure that if my right hon. Friend looks at this again he will make up his mind that there are officers who, if they do not earn anything else, are well deserving of this pension increase before they are sixty years of age. If there is any hardship I certainly think that they should get it before that age. I think that he could look at that condition again and alter it without anyone thinking that he was giving something away in large lumps.
The Financial Secretary said that the First Schedule covered practically everybody, but it does not cover the poor, unfortunate 10s. widow. Why does not some one on one side or other give those poor women 15s. or £1 or something even more reasonable—or take the 10s. away, because 10s. is no good to anyone? I cannot think why one Treasury official after another ducks this 10s. widow issue, and I hope that some day someone on one side or the other of this House will take this problem seriously and give those widows a proper pension. I am sorry to have to stress the point, but my right hon. Friend the Financial Secretary knows for how long and how often I have spoken about these people.
§ 8.45 p.m.
§ Mr. W. R. Williams (Manchester, Openshaw)
I think that the hon. and gallant Member for Portsmouth, West (Brigadier Clarke) will know exactly what I mean when I say that I regret not to have the time to follow some of his arguments. I will confine myself to saying that I have very vivid, and indeed pleasant, recollections of serving on the Committee with the hon. and gallant Gentleman in connection with the last Pensions (Increase) Act.
So far as I can remember now, that was about the only occasion on which I did not hear him using his famous phrase "Six years of Socialism" because he was 666 so busy with points of order to the Chairman of that Committee in regard to officers' pensions. I pay my tribute to him for his persistence in that matter. No doubt he will excuse me if I do not follow his observations any further.
I should like to say, first, how pleased I am that my hon. Friend the Member for Gateshead, West (Mr. Randall) caught Mr. Speaker's eye and made his first effort, on the second round, so to speak. Many of us who were here between 1945 and 1950 will remember that he made many valuable contributions in the House, not only on subjects affecting civil servants but on matters of general interest. I am very pleased indeed that he has secured the confidence of his own constituents and is here to give us a hand once again with problems affecting the Civil Service and other pensioners.
May I say also how very much I appreciated the very fine contribution made by my hon. Friend the Member for Sowerby (Mr. Houghton)? By virtue of his position, his connections and his natural ability he was able to make a contribution which helped us very considerably in our examination of the Bill.
I would add, also, to the tributes already paid by other hon. Members to the lucidity and the precise manner in which the Financial Secretary to the Treasury mastered what must have been a very difficult brief. I imagine that if the right hon. Gentleman had not had a good deal of experience in local government he would have found it difficult indeed to master that brief.
§ Mr. Williams
Many of us found it much easier to understand the Bill after the right hon. Gentleman's speech, and that must be put down as a credit to him individually. Certainly, there was need of explanation and lucidity. When I read the Bill first, it occurred to me that whoever had drafted it must have been laughing at our expense. He certainly made it so complicated that to the lay mind it is completely incomprehensible. I was looking at the Bill with a colleague in this House, who said, "When you are trying to analyse the terms of the Bill you need at least five Acts of Parliament on your knee and a wet towel over your head." 667 That is the situation in which I found myself when trying to master this very complicated Bill.
Let me say, in passing, that the House, and especially lay and back bench Members, will some day make it known to all who are concerned in the drafting of Bills that prospective legislation must be understandable, in the first place, to the legislators and, in the second place, to the people for whom we are legislating. I have found time after time that unless I have a lawyer by my side I am in great difficulty about Bills. In modern days that is a disability under which we ought not to suffer. Having regard to the complexity of the Bill, I congratulate the right hon. Gentleman.
My second point concerns that which was raised by the right hon. and learned Member for Chertsey (Sir L. Heald). He referred to the fact that in certain cases members of the Civil Service who had been pensioned and then re-employed lose their pension or, to use the official phrase, it is absorbed into the current emolument of the grades or classes in which they have been re-employed. In my view, that was always the wrong thing to do. I am glad that that view is shared by the subcommittee of the 1922 Committee. I was fighting that issue as far back as 1930 and 1940.
I well remember that when the national emergency of the Second World War came an appeal was sent immediately to retired Post Office servants of all grades, and they were asked to return to their old duties in the interests of the nation. They were asked to serve the nation in the capacity in which they could be most useful and efficient. When they came back, how were they treated? Their pension was taken away and absorbed in their emoluments; in fact they were robbed of their pensions, although many of them had been working for forty or forty-five years to earn them.
I am a little surprised that in these enlightened days we are still governed in this matter by an Act of 1834 and that no effort has been made by this or any other Government to modify or revise that very unsatisfactory position. I said in the past, and still believe, that it was morally wrong to take away those people's pensions. They were robbed of hundreds of pounds at a time when they 668 were being asked to give of their best in the interests of the security of the nation.
I regard pensions in the Civil Service simply as deferred pay. I know no Treasury official will accept that. Time after time staff associations have represented that to the Treasury, but, so far as I know, the Treasury has not accepted it. It is a very patent fact that the same Treasury, whenever we went to arbitation tribunals—I have had my share of this in my early days—and reference was made by the Official Side's representatives to pensions, gratuities, sick leave, annual leave and such things, it was always assumed that these were given to members of the staff in lieu of higher rates of wages and salaries. That is, in fact, what they were. Many of us even used to assess the equivalent of those things in terms of money.
I believe that the person is something to which the pensioner has a full right. If the House agrees that pensioners are entitled to their pension, and that in no circumstances should it be taken from them—that it is a form of deferred pay to which they are morally entitled—the next thing that we need to say is that they are entitled not only to the pension they had when leaving the service, but that they are morally entitled to the current equivalent of that pension as a matter of right.
They made their contribution to that pension at a certain ratio. I claim that with the variation in the value of the £ and the variation in the cost of living, they are entitled, by virtue of the pension being deferred pay, to have the effect of those variations put right automatically by any Government. I think that this Bill is a small step, but it is a step, in that direction.
Before proceeding further, however, I should like to say that my right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall) was responsible for at least one or two of the Pensions (Increase) Acts whilst the Labour Party was in office, and I know the tremendous practical sympathy that he showed in relation to the issues which were paramount in those days. Today, in the papers and in the Bill, we see references to two kinds of hardship. One is called the absolute hardship and the other is now termed the relative hardship.
669 Although we quarrelled tremendously with my right hon. Friend and with our own people on some of the sub-committees that considered the Pensions (Increase) Acts, there is no doubt that the first thing to be done in those Measures was to deal with the absolute hardship. That is what we did, and it was not done before time. We ought to have done infinitely more than we did for those lowly-paid pensioners, because there were many hundreds of colleagues of mine, men and women who had given years of efficient and loyal service to the Post Office and to other Departments, who were getting less than £2 a week. It was physically impossible for them to sustain body and soul in those days. It was right, therefore, to concentrate most upon the question of absolute hardship. I hasten to say that I never thought that that was completely and fundamentally right.
To return to my original argument that the pensioner is entitled to his pension in full, with no deductions of any kind, I say that the people in the higher grades as well as in the lower grades were entitled to the full fruits of the pension which, I still claim, was theirs by right. I think that we are moving gradually towards those viewpoints, but I should have welcomed a declaration by the Financial Secretary on behalf of the Government that pensions were inviolate, and that even if a man be re-employed in one of the Departments, nobody has a right to tamper with his pension.
The curious thing is that if, in the early years of the war, a man who had worked in the Liverpool office came back into the Post Office in Liverpool, he lost his pension: but if he went to a local firm, he got his pension and the full rate of emolument proper to his class in private industry. That is wrong; and I had expected that there would have been a declaration about it tonight.
I thought that the Government would have taken advantage of this opportunity to clear the decks. It is wasteful of the time and energy of the House for the Government to come back every two years or so to review the situation when, in my opinion and in the opinion of a number of my hon. Friends, it could be automatically adjusted if only we were to look for ways and means of doing it.
670 I thought, therefore, that as a beginning the Financial Secretary would come here today with a proposition that the operative date should not be 1st April, 1952, but 1st April, 1954, or 1955. Had he done so, we should have been in a position to review the matter finally and tidily.
Secondly, I thought that the Government would try to ensure that whatever adjustments and readjustments are to be made to pensions, they should all be on the basis that the cost of living has gone up for everybody. To say that one class of people is to be given 10 per cent. more and another class 6 per cent. more seems to be trifling with the situation and not facing up to it with any great sense of reality.
After saying all those things, I must pay tribute to the Government for having done away with the means test. I never liked the means test in any direction, especially where people have certain fundamental rights. The Government have done away with the means test and with the marriage bar, as I used to call it, and for those changes we are very grateful indeed.
My parting suggestion to the Financial Secretary is, "Take an opportunity some time in the near future to recognise that these pensions are part and parcel of modern life. Make them the property of the individual concerned and then there will be no need to come along from time to time to make a great number of changes, many of which are bound to cause more anomalies than the number of anomalies which they clear up."
I should like to congratulate all concerned and to mention also the assistance given by the Staff Side of the Whitley Council and by other organisations, not forgetting the Veterans' Association. We should congratulate all concerned on getting together and presenting a Bill which is at least an improvement on what we have had up to now.
§ 9.1 p.m.
§ Mr. Glenvil Hall (Colne Valley)
I should like to join with those who have already expressed to my hon. Friend the Member for Gateshead, West (Mr. Randall) our pleasure at seeing him back in the House. Our pleasure was redoubled by his speech, which, I thought, was acceptable in all quarters of the House. I remember that invariably, when earlier 671 Measures of this kind were being debated between 1945 and 1950, his great knowledge of these matters was of the utmost assistance to those of us who then sat on the Government Front Bench.
The Financial Secretary to the Treasury, in opening the debate, reminded us—not that those who had seen the Bill needed reminding—that this is an extremely complex Measure and by no means what one might call a child's guide to knowledge. Although I do not count myself among them, I have been astonished and pleased at the number of my hon. Friends and hon. Members opposite who seem to know a great deal about this subject. I suppose that the Bill is slightly less complicated than were some of its predecessors, but I admit that I had no real desire to read through it, for I realised as I started to read that, as my hon. Friend the Member for Openshaw (Mr. W. R. Williams) has said, there was a great deal in it which involved reference back to previous Acts.
We have all been greatly helped by the fact that we have had a most lucid speech, not only from the Financial Secretary, but also from my hon. Friend the Member for Sowerby (Mr. Houghton), who is so expert on this subject as on so many others. As a result—and I have sat through practically the whole of the debate—there is very little left for me to say, unless I am to go over ground which has already been well covered.
Taking it as a whole, I heartily welcome the Bill. I hope that I shall not be taken to be looking a gift horse in the mouth when I say that when I saw the Bill in print I wondered why the Government had suddenly decided, against all their previous policies, to get rid of the means test and the income limit. The real reason, of course, was that unless they did so they could not have brought the many categories in the higher ranges of the public service within the scope of a Measure of this kind.
I wish it were true, but I am afraid it is not, that the Government have suddenly been converted from the iniquities of the means test. The real reason is that unless they had followed the present plan it would have been impossible for them to bring in the higher ranges of civil servants who are getting £1,500 a year or more, judges and others in 672 various fields of Government endeavour. Therefore, my pleasure and congratulations are tempered by the fact that the real reason is not a change of heart but pure expediency on this occasion. Nevertheless, this Measure will bring a good deal of extra money to many well deserving people in the lower ranges of pensions, and we must be very grateful for that.
I was glad that my hon. Friend the Member for Accrington (Mr. H. Hynd) managed to say what he did about the railway superannuitants. As I think all hon. Members of this House know, this small and dwindling body of men have a real grievance. It has been of great concern to a number of us that up to now the British Transport Commission has not seen its way to do something for these people. The amount involved would not be great, and I was glad to hear that negotiations are proceeding with the British Transport Commission in the hope that something at long last may be done for this deserving and hard-pressed body of pensioners.
This is the seventh Pensions (Increase) Bill that the House has considered. We had two following the First World War. We have had five, including the 1954 Measure, since the war which ended in 1945. The reason why we had only two after the First World War was that, instead of the cost of living continuing to go up, it began to fall rapidly after 1924. Unemployment became rife and those concerned spent their time then, not in pressing for a further increase in pensions, but in trying to prevent the Government of that day from reducing what they were getting. At that time war bonuses and other things were in great jeopardy, and it is a measure of the difference between the economic outlook in the 'twenties and now that in these last few years we have had four pensions Bills in five years. whereas after 1924, between the two wars, no Pensions (Increase) Bill of this kind was necessary.
I shall be grateful if the Financial Secretary to the Treasury will clear up a slight ambiguity about the numbers involved. Taking those under this Bill and the Royal Warrant together, I understand that about 600,000 pensioners will be affected. From what the right hon. Gentleman said, I gathered that about 673 200,000 of them will be Service pensioners. This means that about 400,000 people will come under this Bill.
When we debated the 1952 Bill, we were told that 250,000 pensioners had been covered by the previous Acts and that the 1952 Bill would bring in another 80,000, making a total of between 320,000 and 330,000.
If my figures are correct, or even approximately correct, it means that this Bill will bring in some 80,000 people for the first time. I should like the Financial Secretary to tell us where these 80,000 come from. It seems to me that some of them, perhaps all of them—although I should be astonished if all of them did—come in because of the fact that the upper income limit now goes and the means test is also to go. That, undoubtedly, will make a difference and will bring in a number of new people under the Bill. It would be interesting to know whether the number is, in fact, about 80,000.
I should like to emphasise what has been said on both sides of the House about the effective date when the increases are to come into operation. We are all agreed that it is a good Bill. We welcome its provisions and, except in one or two directions, including the Second Schedule, we have little or no criticism to offer. Obviously, the one thing which does matter, and upon which we must press the Government, is the date on which these proposals are to be put into operation.
As the Bill stands, they will come into operation on the appointed day. That may mean this year, next year or any other date in the future. I think that I speak for both sides of the House when I say that we are all interested and keen to see the Bill passed and we all believe that what it is proposed to do should be done. That being so, I think that we ought to press the Financial Secretary, before we pass the Second Reading of the Bill tonight, to give us some indication as to when the Government propose to put it into operation. I hope that they will make the operative date retrospective.
There are very good reasons why that should be so. It would be an act of common justice. Some of the pensioners concerned, if not all of them, have been suffering from the rising cost of living for many years. No one on either side 674 of the House has pretended that for the vast majority of them their pensions have really caught up with the cost of living. I do not want to quote figures, but one has only to go to HANSARD to see the Questions answered from the Government Front Bench in the last week or two to realise that the cost of living since 1951 has gone up considerably. According to one figure quoted, it has gone up by 20 per cent. The most that anyone can get under this Bill is 10 per cent., and a very large number will get only 6 per cent. or thereabouts. Therefore, as an act of justice, as the cost of living has gone up so sharply, the least that the Government can do is to make the changes retrospective.
The Treasury cannot, on this occasion, say that it will take them a long time to work out the figures. This Bill is simpler than any we have had of this kind for quite a long time. The Treasury have a simple and straightforward formula to work on, and if we can alter it in Committee, as some of us hope we may be able to do, the scale will be even simpler still. That being so, it is not in the mouth of the Treasury to say, "You must give us time to work out these figures." Even if there were anything in the argument that we had to give them time to work out the figures, it would still be possible to pay any arrears retrospectively if the House so decided.
As my hon. Friend the Member for Sowerby and others have pointed out, we have excellent precedents for making it retrospective. So far as I know, the only Measure since the war which applied a forward date in respect of a decision of this kind was the 1952 Act. The Coalition Government made the 1944 Act retrospective to 31st December, 1943, although the Bill was not passed until late in May, 1944. The Royal Assent was given to the 1947 Act, with which I and some of my hon. Friends had something to do, on 18th November, 1947, and we back-dated it to 1st December of the previous year.
These are excellent precedents, and I hope the right hon. Gentleman will press upon the Chancellor of the Exchequer that he ought to follow them, both because it is, I understand, a Tory principle to favour precedents, and because it is an act of common justice.
A good deal has been said—I do not wish to elaborate the matter further 675 tonight—about the scales dealt with in the Second Schedule. As the right hon. Gentleman knows, the Schedule has created a good deal of criticism. The only criticisms of the Bill that I have received have been connected with that Schedule. I have had letters asking me to do what I can to ensure that it is altered. People think the basis there laid down is wrong and that it leads to a very large number of injustices and anomalies.
My hon. Friend the Member for Sowerby gave some excellent examples of those anomalies. The astonishing thing is, if I understood the Financial Secretary correctly, that the scale is laid down in the shape it is in order to avoid further anomalies which, according to him, already exist; but by this method it seems to us the Government will not avoid anomalies. My hon. Friend showed all too clearly that the Government will, in fact, by this method, add to them. If there is a distorted situation now, the distortion will not be lessened by accepting the Schedule as it stands.
I want to put to the Financial Secretary a point which I do not think has been previously mentioned in the debate. There are large numbers of retired civil servants whose pensions were assessed largely on a period when unestablished service was the rule rather than the exception. It was only in 1949 or 1950 that we got down to the task of starting to clear the jungle of unestablished service. We then began—not too soon—to establish people at a more rapid rate and to see that at any rate some of the unestablished service counted. Many of the people who will benefit under the Bill had a great deal of unestablished service which will never, so far as they are concerned, count. That is an added reason why the basis should be changed. The basis should be the pension itself and not the length of service.
Finally, I listened with the utmost interest to the right hon. and learned Member for Chertsey (Sir L. Heald). He reminded us that in some quarters outside it is believed that as the cost of living hits us all alike the ordinary taxpayer and ratepayer should not be asked to pay more in order to enhance the pensions of civil servants, local government officers and others. The 676 House, however, has refused to look at the matter in that way.
We have to remember, that these people have been the employees of the State, and that this House has a special responsibility for them. As employers we have to act as we would like the best employers of labour to act. Therefore, I for one make no apology for the fact that I support a Bill of this kind. We are right to recognise that the cost of living has gone up and that those who have served the State in the past, as these people have done so faithfully and well, should in the evening of their days continue to receive something commensurate with the value of the pension which they had when they first retired from the Service.
I have not the slightest doubt that the right hon. Gentleman knows that we do not intend to vote against the Second Reading of the Bill tonight. On the contrary, we heartily support it. But that does not mean to say that we accept the whole of it. When we reach Committee stage we intend to move certain Amendments. I hope that the right hon. Gentleman is then in the same frame of mind as he is tonight, and that as a result he will not only accept them but, possibly, add his name to some of them.
§ 9.22 p.m.
§ Mr. H. Brooke
My first words must be words of gratitude to the whole House for the welcome that has been given to the Bill and I say that very sincerely. I realise that, as a result of the debate, we can proceed without a Division in the House to the Committee stage when we will all seek to do constructive work and improve the Bill, if it is capable of improvement. I know that we have all approached this matter in a responsible frame of mind. Nobody has suggested that the State and the local authorities can afford unlimited sums of money for pension increases. Let us make sure that the money which is available is applied to the best advantage.
I should like especially to express my gratitude to my right hon. and learned Friend the Member for Chertsey (Sir L. Heald) for the kind words he said, and also to the hon. Member for Sowerby (Mr. Houghton). Both are clearly experts on these subjects and they have proved that again today. The House has been 677 fortunate, on a Bill which has caused some head-scratching for ordinary hon. Members, to have had on each side of the House hon. Members able to make so distinguished a contribution from their special knowledge.
Some rather unkind words were spoken about Parliamentary counsel in respect of the complexity of the Bill. Any criticism of that kind Treasury Ministers must take on themselves. Parliamentary counsel have gallantly done what they were asked to do and when, for the reasons I indicated, the Government felt it unavoidable for us to start afresh and build another storey on the existing structure, a great many of these, to us laymen, incomprehensible Clauses became unavoidable, if there was to be clarity.
I should like to think that I carry the House with me in conveying to all concerned the appreciation that has been expressed: to the civil servants concerned with the Bill, not only in the Treasury, but in other Departments, too. I can disclose to the House that Treasury officials readily grant that this is one of the most complicated subjects with which even the Treasury has ever had to deal. I want to thank all hon. Members for their comments, and I promise that I will study all the points raised in this valuable debate before we come to the Committee stage.
The right hon. Gentleman the Member for Colne Valley (Mr. Glenvil Hall) asked me frankly what I could say about the date of the operation of the Bill. I wish to come to this straight away, because I know it is a matter about which there is widespread interest. I cannot undertake to advise my right hon. Friend the Chancellor to appoint a day which would be retrospective to the beginning of the year. Let us get forward with the Bill as rapidly as we can. We have only five weeks of Parliamentary time between now and Easter. From this debate it is obvious that there will be substantial Amendments moved and discussed during the Committee stage. I cannot forecast how long the Committee stage will take, though I appreciate the remark of the hon. Member for Sowerby that the Opposition would wish, within the bounds of reason, to be helpful in carrying the Bill through Committee.
678 None of us can forecast how soon this Measure will pass through Committee and Report stages, receive its Third Reading in this House and be dealt with in another place, but I say now to the House that my hope is that we shall put the Bill on the Statute Book in time for the appointed day to be fixed as 1st April, the beginning of the new financial year. I hope that we shall try to get the Bill through as close to that date as possible. When I say that, I am trusting that the hon. Member's promise will be fulfilled and that we shall not have an unreasonable delay at any stage of the Bill.
When I said that the Bill would be easier to administer than previous Pension (Increase) Acts, I had in mind the administration and payment of these pensions when they had once been recalculated, but I think that everyone who is familiar with the subject will appreciate that we are putting a heavy burden on those who will have the task of recalculating all these pensions and arriving at the correct figure in the first instance. It is after that great exercise has been completed that I foresee that the procedure will be simplified.
Before I come back to the main subject of the civilian side of the Bill, I should like to reply to the friendly Amendment moved by my hon. Friend the Member for Aldershot (Sir E. Errington). Some hon. Members may ask why I presume to reply to an Amendment which so obviously concerns the Armed Forces. So far as the Services are concerned pension increases are of course the responsibility of my right hon. and learned Friend the Minister of Defence. The House will have noticed that my hon. Friend the Under-Secretary of State for War was present during a great part of the debate, especially that part when the Amendment was moved. He will have taken a note of everything that was said.
Though the points raised by the Amendment are matters for the Ministry of Defence, nevertheless this is a Treasury Bill. I appreciate that the Amendment was moved to ensure that the House could see that Service pensioners were to be treated equitably in relation to the civilian pensioners. Questions about pension increases for the Services must be addressed to my right hon. and learned Friend the Minister of Defence. However, I feel that it is not 679 unreasonable that I should reply now, because, after all, it is in my interests to get the Bill approved by the House. On Service matters I feel a little as though I have strayed on to War Department land or that I am appearing on parade in a lounge suit, but I will do my best.
My hon. and gallant Friend the Member for the New Forest (Colonel Crosthwaite-Eyre), whose speech I listened to with interest, asked whether the Forces' pensions increases could not be included within the scope of any future Pensions (Increase) Bill. My first reply is that we all hope that this will be the last Pensions (Increase) Bill. [HON. MEMBERS: "Oh."] Hon. Members on both sides of the House have said that the need to introduce a Pensions (Increase) Bill means that the country is continuing to suffer from inflation and rising prices, and we all wish that situation to be ended. If we can end it the case for these recurrent Bills will fall.
It is not for me to speak with authority about the handling of Service pensions matters. I have always understood that it was regarded as a treasured privilege by the Services that their retired pay was fixed by Prerogative Instrument, and was not subject to debate in the House. On a day like this, however, it becomes apparent that there is an obverse to that medal. It means that it is more difficult for matters of interest concerning Service pensions to be raised in the House. But my hon. Friend the Member for Aldershot discovered the device of the Amendment, and I believe that it has added to the value of our debate. It would clearly be out of order for me to seek to justify the relationship between, on the one hand, Service pensions and, on the other, civilian pensions, as originally awarded. Here, we are discussing the increase of both types of pensions.
I must say quite frankly that I cannot accept the breach of faith argument which was mentioned again 'today by some hon. Members. That matter has been dealt with in the White Paper of 1954, which is familiar to hon. and right hon. Members. When it was published I was—as I believe the hon. Member for Accrington (Mr. H. Hynd) described me—an obscure back-bencher. I had nothing to do with the production 680 of the White Paper, but I have had to study the whole subject with extreme care since then, and I am sure that the House will realise that I am speaking in all sincerity when I say that I am completely convinced that the charge of breach of faith is unfounded. I am equally convinced that we should seek to treat fairly, and do justice by, all the older pensioners, whether from the Services or from civilian life.
My hon. Friend the Member for Aldershot and other hon. Members referred to Service widows, and pointed out that in the reply which my right hon. and learned Friend the Minister of Defence made in the House a few days ago it was stated that Service widows' pensions were to be increased by only 5 per cent. instead of 10 per cent. At first sight that seems callous, but the reason is that all those Service widows' pensions were fixed as recently as December, 1952. A scheme was promulgated then, and the 5 per cent. is not an unreasonable rate of increase if one bears in mind that what one is increasing is a pension awarded under so recent a scheme as that, whereas in the case of the Civil Service the increases will be based upon pensions awarded perhaps many years ago, which have suffered much more seriously from erosion caused by the rise in the cost of living.
A number of hon. Members mentioned the sixty-year-old rule, and some asked whether it could be reconsidered. In fact, sixty has always been the age limit for pensions increases. We should be making a fundamental departure if we altered that figure at this time.
It would seem most curious to choose this particular moment to alter it when it is less difficult, I suppose, for somebody under sixty who is physically fit to get work than at any previous time in the memory of most of us. I quite appreciate that it is not so easy between fifty and sixty as it is for a young man, but nevertheless I should say that all such people should be able to get work to bring them in an additional income considerably greater than any they could possibly qualify to receive under pensions increase.
I most sincerely hope that those who have the interest of these officers at heart—I know a great many people rightly have—will put away from them the sort 681 of argument which suggests that the Civil Service puts a sixty-year-old rule because civil servants like it that way. That is not the way these things are managed at all. It really is an unworthy reproach if it be suggested that these absolutely objective people in Government Departments who have to advise Ministers on these matters are influenced in any way by their own interests or by the interests of the Civil Service. We are all trying to get equality and equity.
My hon. Friend the Member for Aldershot mentioned commutation of Service' pensions. I could not give him a final answer today. Perhaps he might like to pursue the matter with the Minister of Defence. A note has been taken of the point.
§ Sir E. Errington
Will there be a further opportunity to discuss these matters? This appears to be the last occasion on which they can be discussed.
§ Colonel Crosthwaite-Eyre
The right hon. Gentleman has made an ex-parte statement. Will it be possible for the Government to put down some sort of Clause or instruction to enable this matter to be carried further? Would it not be right to do something to ensure that what the right hon. Gentleman said tonight can be carried further during the Committee?
§ Mr. Brooke
That is the dilemma to which I have referred. So long as matters of men retiring from the Services are dealt with by Prerogative Instrument, it is difficult to see how they can be discussed in the House in the same way as a Bill for civil pensioners. I am sure that the Minister of Defence will wish to help hon. Members in any way possible. Perhaps my hon. and gallant Friend would like to pursue that matter with the right hon. and learned Gentleman.
I was asked by more than one hon. Member about Indian police pensions. It may be helpful if I indicate which of the Indian services will be covered by this Bill. The people who will have, prima facie, a claim for benefit are all Indian Government civil pensioners who reside outside India, Pakistan, Aden and 682 Burma whose retirement took place either before 15th August, 1947, or was attributable to the passing of the India Independence Act.
That includes all such pensioners who are in the payment of the High Commissioner for Pakistan. Others who will, prima facie, be able to benefit from the Bill are all Burma Government civil pensioners who reside outside India, Pakistan, Aden or Burma whose retirement took place either before 4th January, 1948, or was attributable to the passing of the Burma Independence Act. What I have just said includes not only former members of the Secretary of State's services—that is to say, the Indian Civil Service, the Indian Police, the Indian Forest Service, etc.—but also those who were appointed by the central and provincial governments in India or Burma. That is the broad position. If any hon. Member wants to follow up a particular constituency case perhaps he will kindly write in about it.
Several hon. Members mentioned the railway superannuitants. I know that I must not get out of order by saying too much about them, because they are outside the scope of the Bill, but I think, Mr. Speaker, that you will allow me to refer those hon. Members who have a special interest in this subject to the reply given by my right hon. Friend the Minister of Transport and Civil Aviation on 25th January last, when he said:Discussions are taking place with the Commission on the question of further assistance to pensioners, but I am not yet able to make a statement."—[OFFICIAL REPORT, 25th January, 1956; Vol. 548, c. 201.]That is the position, and I understand that up to today there is nothing further that can be said.
The hon. Member for Cardiff, South-East (Mr. Callaghan) referred to the police force, in which he is specially interested. I am glad that he did so, because there are certain classes of people like the police and those in the fire services who can qualify for full pension after a shorter period of service than the normal. It is the intention to make regulations which may enable people in such services, who have served the full time required by that service, to qualify for the 10 per cent. rate of pension. That is the broad statement that I can make today but perhaps we can pursue the details later.
683 What I cannot do, however, is to help the hon. Member for Oldbury and Halesowen (Mr. Moyle) by saying that the same treatment can be given to local government pensioners who are unable to qualify by fulfilling their full 40 years because their particular council had not got a pension scheme for that length of time. I do not want to raise any hopes there and, of course, it is well known that many local government servants have not had the opportunity to enter pensions schemes until comparatively recently.
§ Mr. Callaghan
There will be many pensioners who will be most grateful for the assurance which the right hon. Gentleman has just given—there was a great deal of concern about this. Will it not, however, be necessary for the Government to introduce an Amendment to the Second Schedule? Otherwise, as I read Clause 1—which says that the amounts payable must be those set out in the Second Schedule—I should have thought that a regulation would be ultra vires.
§ Mr. Brooke
I do not think that it will be necessary, but the hon. Member will have noticed that my hon. Friend the Joint Under-Secretary of State for the Home Department has sat through most of the debate, and I hope that he may join us in Committee on the Bill. If so, I shall be glad to have his assistance to clear up these police and fire service matters.
My hon. Friends the Member for Burton (Mr. Jennings) and for Woking-ham (Mr. Remnant) referred to those people who are described by the not particularly complimentary term of "pre-Oaksey widows." I have nothing that I am authorised to say about that today. We shall have to see how the Bill takes shape in Committee. I am advised that, in any case, those who are so described would fall to be dealt with not under this Bill but under the Police Pension Regulations and that, clearly, would be an action subsequent to the passing of this Bill. I am sure that hon. Members on both sides will appreciate that I am most anxious to avoid giving any answer on the spur 684 of the moment today that might raise in someone hopes that may not be fulfilled. That is a most cruel thing to do. I shall be delighted if hon. Members will put questions to me; I will store them up in my mind and try to work out the answers. However, I do not want anybody to be led by any chance word of mine to think that they may be getting something more than they will actually receive.
I was asked during my earlier speech what would happen when a man allocated part of his pension to his widow. The answer is that it would be the reduced pension that would qualify for pensions increase, and after his death it would be the widow's pension that would qualify.
The hon. Member for Oldbury and Halesowen asked me certain questions about the numbers involved. One cannot speak with absolute certainty about the numbers. My estimate is that altogether there are some 120,000 local government pensioners and about 90,000 teacher pensioners. We cannot say how many of them will actually benefit from the Bill until we see how the Bill works out. With regard to civil servants, the House will realise from the figures which I gave that about three-quarters of them are likely to benefit from the Bill. I can certainly assure the hon. Member for Oldbury and Halesowen that manual workers who retired from local government service will have just the same opportunity to benefit as salaried workers. I am afraid I cannot help him about the class of men who transferred from local government service to the nationalised concerns but opted to remain within the local government pensions scheme. Their pensions are the responsibility of the nationalised concerns, and they fall outside the Bill.
I should like at this stage to express my appreciation of what my hon. and learned Friend the Member for the City of Chester (Mr. Nield) said when he conveyed the thanks of N.A.L.G.O. for the Bill. With my local government past, I have a special regard for that body, and I am very glad indeed if what the Government have done receives its general approbation.
My hon. and learned Friend asked especially that regulations made under the Second Schedule should not operate so as to treat anybody less favourably than 685 he would be treated under the Clauses of the Bill. The object of the power to make regulations is to deal with exceptional cases where the Clauses would fail to do justice in one direction or another. There is certainly no desire to use the power to make regulations in order to treat anybody unfairly. The pensions and the service on which they are based can vary so widely that if one simply attempted in a flat-footed way to apply the provisions of the Bill, one might find that one was treating some people most cruelly whereas others might come off unduly favourably. The purpose of the regulations is simply to tailor the provisions of the Bill so that fair justice can be done between one man and another.
I think you might call me to order, Mr. Speaker, if I pursued very far the questions raised about Section 20 of the Superannuation Act, 1834. That appears to me to be rather outside the scope of the Bill. However, hon. Members will know that superannuation questions are under discussion at the present time. Any change in superannuation provisions for the Civil Service would be a matter for another Bill.
§ Mr. Glenvil Hall
All that the House would be interested to know at this stage on that matter is whether the view which is now apparently universal on the Government back benches has yet penetrated to the Government, and whether the Government now agree that something should be done to amend the 1834 Act.
§ Mr. Brooke
I am certainly aware of the issue to which a number of Members referred, but I think I should be getting into serious trouble in many quarters—not least in the—if I were to make pronouncements about the 1834 Act when discussing the provisions of this Pensions (Increase) Bill.
My right hon. and learned Friend the Member for Chertsey also asked about subsection (3) of Clause 3, about which he said Scottish teachers were worried. I do not know why Scottish teachers should be more worried than anyone else. It is a Clause of general application and a similar provision, known as the "War Bonus Clause," was made in the 1954 Act. It is a detailed matter on which I hope I can satisfy my right hon. 686 and learned Friend. I assure him that there is nothing sinister about it.
I should also like to welcome back to the House the hon. Member for Gateshead, West (Mr. Randall). He is in the same position, returning to this Chamber after an absence of about five years, as I was in at the time he left it. His "second" maiden speech was well worth listening to, but I could not go all the way with him when he suggested that Governments which allowed the cost of living to rise had a direct responsibility to public service pensioners to compensate them in full.
The cost of living has risen under Governments of different character, and in my opinion it should be a major object of all Governments to keep the value of money stable if they can. If they fail to do that, they are failing in part of their duty to the nation, but I could not accept that when that happens there should be a call on the rest of the nation to make a very special and exceptional effort to ensure that public service pensioners, and they alone, should be insulated from any of the effects.
Similarly, when the hon. Member for Oldbury and Halesowen urged that pensions should be linked to the cost of living, it occurred to me that if one accepted that for pensions and did not accept it automatically for salaries, one might soon find one was treating pensioners more favourably than those still at work. We all know the difficulties we would be in if, throughout the whole economy, salaries were automatically linked with rises in the cost of living. I thought the hon. Member's views were, shall I say, offset by the more responsible views expressed in an interesting speech by my hon. and gallant Friend the Member for Croydon, North-East (Vice-Admiral Hughes Hallett), who, while he welcomed the Bill as an act of justice, at the same time warned us to bear in mind that there were not, and could not be, unlimited funds available for pensions increases.
That brings me back to the main structure of the Bill, with which the hon. Member for Sowerby dealt in his speech. There has been, I think, universal approval for the removal of the means tests and the various restrictions in the former Measures. I should like to assure the right hon. Member for Colne Valley that 687 this was done not simply because we wanted to bring in the larger pensioners and could not see any way of doing it unless we removed those limits. We had come quite genuinely to the conclusion that after this passage of time it would be a mistake to keep on with these means tests. We felt a new start should be made, and I hope that without any differences of opinion between us we can agree that that is a right and honest thing to do.
As to what I might call the "cut off dates"—the dates in 1947 and 1952—let us argue in Committee whether those are the right dates or not. I consider they are right and I shall be able to adduce in Committee a number of reasons, based on figures, and so forth, which to my mind justify those dates in preference to any other dates which reasonably could be chosen. Ultimately, however, it is a matter of judgment. Ultimately, we must try to put on to the Statute Book dates that will, so far as possible, do justice between one pensioner and another.
Finally, I come to what has been the one really juicy bone of contention today, the scale between 6 per cent. and 10 per cent. It appears to have had few friends in the House. I do not have a closed mind on this, and what I ask is that hon. Members who have criticised it will not come to the Committee with closed minds either. If the Government can produce facts and figures for the Committee which indicate that this is the best way of overcoming a genuine difficulty, I trust that the Committee will accept that; but I entirely recognise that there will be a responsibility on me to justify it.
The difficulty, as I indicated, is that we must avoid increasing the pensions of older pensioners—those who have been retired for a longer period—grossly beyond what people with similar service would be retiring on today. It may be that some other device can be discovered for doing this, but if we can put our minds together perhaps we shall find a solution. At any rate, I beg the House not to accept that it is an unfair arrange- 688 ment, as some hon. Members have suggested.
The hon. Member for Sowerby instanced the clerical officer who had retired in 1939 with 10 years' service. It is true that under the Bill that officer would get only a 6 per cent. increase, but I calculate that he has already, under previous Bills, had a 69 per cent. increase, so that altogether he would have a 75 per cent. increase; whereas if he had had 40 years' service and retired in 1939, he would at present be getting only a 45 per cent. increase, to which he would now get another 10 per cent. added, making 55 per cent. Therefore, the short-service man, even under the Bill, would be getting a 75 per cent. increase, as against the long-service man, who would get 55 per cent. We will, however, examine this device carefully. All I ask is that we shall all approach the question with open minds.
I conclude with two personal references. As I said before, this is not my Bill. It is the Chancellor of the Exchequer's Bill. Hard things are sometimes mid about Chancellors of the Exchequer. I hope that in this case it will be seen that, where matters of human good are concerned,Behind a frowning providenceHe hides a smiling face.Secondly, on this day, when we have been discussing a subject dear to the heart of my hon. Friend the Member for Tynemouth (Dame Irene Ward)—I am sorry she has not spoken today, but we all know her interest in people living on small fixed incomes—I am sure that the whole House would like to know that we are celebrating my hon. Friend's birthday.
§ Amendment, by leave, withdrawn.
§ Main Question put and agreed to.
§ Bill accordingly read a Second time.
§ Bill committed to a Standing Committee, pursuant to Standing Order No. 38 (Committal of Bills).