HC Deb 26 June 1959 vol 607 cc1557-84

11.3 a.m.

Mr. Douglas Houghton (Sowerby)

I beg to move, in page 1, line 7, to leave out "thirty-first day of March" and to insert "first day of April".

The Deputy-Chairman

I understand that it would be convenient for the Committee to discuss together all the Amendments relating to the dates. These are the Amendments in lines 7, 12, 16, 19, 22 and 25.

Mr. Houghton

Yes, Sir Gordon. These Amendments deal with the cut-off date, 31st March, in each of the years concerned. They deal with the simple point whether the date should be 31st March or 1st April.

I am grateful for the opportunity of dealing with the matter again. In the Standing Committee the fact that many public service pensioners felt that the Bill as it stands is disadvantageous to them on this point was not drawn to our attention until a very late hour, and, therefore, it was not possible to have a discussion on it during that Committee stage.

The simple issue is whether to take the end of the month of March as a dividing line between the different percentage increases is fair and appropriate. A number of public service pensioners have written to draw attention to the unfairness, as they see it, of the date 31st March. They point out that it is customary for public servants to retire at the end of a month and that their pension, therefore, begins on the day following the end of the month. I realise that in some cases, particularly public servants reaching the age of 65 who must retire on their birthday, there cannot usually be an extension of service until the end of the month—they retire on or the day before their 65th birthday—hut many civil servants and public service pensioners affected by the Bill retired before the age of 65 and were, therefore, able in many cases to complete a month of service before going on pension.

I have a case before me of a local government officer who was due to retire on the 25th of the month but continued to serve, at the wish of his employers, until the 31st of the month. Many civil servants and local government officers of one kind and another will have retired at the end of the month. They naturally feel that one day makes a difference in the percentage increase to their pension.

The Financial Secretary to the Treasury will probably say that one day is going to make a difference anyhow. It certainly is, but the important question is, what is the day of the month on which people customarily retire? That is the simple point. A great many of them retire at the end of the month. Of course, if they retire at the end of earlier or later months they are unaffected by this point of division between one percentage and another under the Bill. A pension beginning not later than 31st March, 1952, will carry a 12 per cent. increase. A pension begin-ginning after 31st March, 1952, and up to the end of March, 1953, will carry a pension increase of 10 per cent. All those who retired on 31st March, 1952, will find that pension increase will be 10 per cent.—not 12 per cent.—because their pension began after 31st March, 1952.

Whatever else I say, I shall come back to the same point. I think it is a question of judgment as to whether we wish to bring into the maximum benefit under the Bill those who retired on 31st March in any of the years in question. I think it very unlikely that many public service pensioners retired on, say, 2nd April. Most of those who were going out about that time of year will have retired on 31st March and their pension will have begun on the following day, 1st April.

Another point which the Financial Secretary may make is that it has been usual to take the 31st of the month in previous pensions increase Measures. That to an extent is true. Although there have been such different divisions in earlier pensions increase Acts, I doubt whether the point has arisen quite as acutely before as under this Bill. The Committee will remember that under the 1956 Act there was a descending scale of percentage increases based upon the period covered by the averaging arrangements. In many cases there the beginning date was not in fact the 31st of the month but the 1st of the month. I think each pensions increase Act has taken its material dates and periods from the provisions that were embodied in the Act itself. Here we have reached a new phase in pensions increases, one which is simpler than ever before and which has a clear and unmistakable scale of percentage increases relative to the date of the beginning of the pension. We are entitled to look at this question more closely now than on previous occasions.

Finally, this Bill and the 1956 Act show the flexibility of approach to this question on the part of the Government and this House. We would not wish anything that has gone before to inhibit us from making a small but important change in the arrangements under this Bill in order to remove any causes of dissatisfaction on this particular point. I hope that in view of the time he has had for consideration of this point—which, perhaps, I raised unexpectedly in Committee upstairs on the second day—the Financial Secretary will feel able to tell us whether this change can be made and, if not, why not. I think everybody will accept from him any reasonable and full explanation of all the Difficulties, as well as advantages, which may lie in the change, but I have received so many appeals from civil servants to give attention to this matter that I think there must be a great deal in it.

11.15 a.m.

The Financial Secretary to the Treasury (Mr. J. E. S. Simon) rose—

Dame Irene Ward (Tynemouth)

May I have a go first?

The Deputy-Chairman (Sir Gordon Touche)

Dame Irene Ward.

Dame Irene Ward

I wish to thank the Financial Secretary for allowing me to intervene. It is very important that both sides of the Committee should have an opportunity of giving their views on an important matter of this kind. I am personally very grateful to the hon. Member for Sowerby (Mr. Houghton) for having raised it. It is a very complicated question for anybody like me who is not in possession of all the facts and who has had no experience inside the Civil Service nor of dealing with staff problems to be able to make an informed contribution, but I am bound to say that in matters of this kind I follow with great attention and sympathy the points of view put by the hon. Member. I have had a number of representations on this question. In all the representations I have had, some of which I have sent to my hon. and learned Friend the Financial Secretary, I cannot say that I have been convinced—this is not unusual in the case of Treasury Ministers—with the replies I have received.

I feel very certain that my hon. and learned Friend and the Chancellor of the Exchequer want to be absolutely fair. I fully realise that whatever date is given in the Bill it will preclude some people from obtaining the advantages of the Bill. The difficulty about this Bill is that so many people will not know the details until it is on the Statute Book. That is why it is so important to have all the facts fairly and squarely put before us. As the hon. Member for Sowerby said, he had his attention drawn to this problem only when it was too late to have a really fair discussion in Committee. I know my hon. and learned Friend will agree when I say that when the Government finally decided, after a great deal of pressure, to introduce this Bill they went ahead at enormous speed. I cannot help feeling that, having taken the decision to move forward quickly after being brought to that point, the Government did not find very much time to have all the details examined in the Treasury.

One of the difficulties in all these Pensions (Increase) Bills is that there is never a real opportunity for an ordinary back bencher like myself, who is enormously interested in the details of the Bill, to get down to a proper examination of it. How do I know the dates or the percentages of people who retire on any one date, or how many people have been asked to stay on to suit the Civil Service working generally? I have no idea, but am prepared to accept what the hon. Member for Sowerby says.

I am not going to say any more, because I have nothing in the way of an informed solution to offer. I always look slightly suspiciously at what the Treasury does, because it is so difficult to discuss the material points. I feel, as the Government rightly do, very pleased and proud that the money has been found for this Bill. I do not want the Bill to be spoilt by some niggling little difficulty which raises a great deal of appeal inside the Civil Service. I hope, therefore, that my hon. and learned Friend will look at this in great detail if he cannot be convinced now and say that he is always in a position to amend the Bill in another place if it should prove necessary to do so.

Mr. Simon

One of the advantages of recommitting the Bill is that we have had a contribution from my hon. Friend the Member for Tynemouth (Dame Irene Ward), whom I need hardly say I did not wish to shut out of the debate, nor was I conscious that I was doing so. The hon. Lady is particularly entitled to be heard because she has done so much for the beneficiaries of this Bill and others in similar positions.

I suppose the hon. Lady is right to be suspicious of Treasury Ministers. Indeed, the House is right to be suspicious of any Minister, but I think the Committee appreciate that it is my duty to weigh and place before it the interests not only of the beneficiaries, the public servants to whom we have a very definite duty if they fall on hard times, but also to those who have to raise the money to increase pensions—who themselves, in many cases, have had their means eroded by inflation and who may be in circumstances just as straitened as the public servants. If, therefore, I point out the difficulties and mention the cost from time to time, it is for that reason.

This matter was raised on the Question, That the Clause stand part of the Bill. It was not the matter of a specific Amendment, but I promised to consider it before the further stages of the Bill. I pointed out that there was no general pattern of retirement which the Amendment would be needed to meet. In general, a civil servant retires on his birthday. Teachers tend to retire at the end of a term, and National Health Service retirements are completely at random. As the hon. Member for Sowerby (Mr. Houghton), who has had a very close connection with these problems, and my hon. Friend the Member for Tynemouth have pointed out today, there is considerable pressure, which indicates that, taking the great mass of long-term retirements, a certain number tend to take place at the end of the month rather than at the beginning of the following month.

The Bill applies percentage increases which operate according to the date when the pension began, and the dividing line between the various percentages is drawn between a pension beginning on the 31st March and a pension beginning on the 1st April in each of the years from 1952 to 1957. The effect of the Amendment will be to move the dividing line on by one day so that it will fall between pensions beginning on 1st and 2nd April.

The argument is that the beginning of a pension is defined in Clause 5 (1) in such a way that it is generally the day following the day of retirement. It means that anybody retiring on the 31st March will not benefit by the larger increase but if the date were moved forward a day he would benefit under such circumstances.

I am advised that, so far as the Civil Service is concerned, the cost of the Amendment will not be very substantial. As there is no general pattern of retirement, the cost is obviously likely to be small. There will be some cost in so far as we will be meeting a grievance. The Amendment will make a difference when we consider the increase of pensions of the Armed Forces. We are not strictly in order in discussing this; but, as the Committee knows, there will be parallel-Prerogative Instruments which will give similar effect to the pensions of the Armed Forces. There is a point here, because the 1956 code took effect on 1st April, 1956. Under the Bill the appropriate increase on this code will be 2 per cent. Under the Amendment it will be 4 per cent. The initial cost will be negligible because most of the people on the 1956 code are under 60. It will rise in time, and might rise to the region of £150,000 a year.

The Amendment proposed will obviate a number of anomalies which exist in the Services code and which would continue on a parallel arrangement to the Bill as drafted. In that respect, therefore, the Amendment will not only meet some cases of grievances within the Bill but a considerably greater number of grievances outside the Bill in the Armed Forces.

Having given, as I promised, the matter the best consideration that I could after the Committee stage, it seems to me that the Amendment is well advised and one which the Committee could properly accept.

Mr. Glenvil Hall (Colne Valley)

I think those of us who sat in the Committee would wish that the Financial Secretary had been as amenable then to suggestions from both sides of the Committee as he apparently has been up to now this morning. I do not know whether his sweet reasonableness will continue when we come to further Amendments, but I sincerely hope that it will. Because of the number of Bills that are now Acts that we have had on this subject, it seems to me astonishing that at this late stage we have discovered that by changing the date in the Bill by just one day it makes a considerable difference to a large number of pensioners, particularly those in the Armed Forces.

11.30 a.m.

Mr. Simon

The right hon. Gentleman will appreciate that that problem arises only under this Bill, because the 1956 code came into existence in consequence of the 1956 Act.

Mr. Hall

What the hon. and learned member says is true. Nevertheless, on his own admission it increases the cost somewhat. That being so, we are glad that he has agreed to the change.

Many of us objected in Committee, and still object, to what are called the yearly "rests". In previous Measures we thought that the Treasury should have made the scale rise or descend in half-yearly instead of yearly stages. Although 1st April is better than 31st March, many people who retired between 1st April and the following 1st April will suffer, because there is no 'rest" in October. It would have meant a difference of at least 1 per cent. if not 2 per cent. to the individuals concerned.

In Committee the hon. and learned Member indicated that 2 per. cent. did not amount to very much. I agree that £2 a year is not a great sum to people in the higher ranges, such as judges, but unfortunately the average Civil Service pension is still only about £200 a year, and £4 a year to somebody with a pension of £200 a year is well worth picking up. Therefore, although we accept the hon. and learned Gentleman's concession with as much gratitude as we can muster, we would have liked the Bill to provide for half-yearly instead of yearly "rests".

Amendment agreed to.

Further Amendments made: In page 1, line 12, leave out "thirty-first day of March" and insert "first day of April".

In line 16, leave out "thirty-first day of March" and insert "first day of April".

In line 19, leave out "thirty-first day of March" and insert "first day of April".

In line 22, leave out "thirty-first day of March" and insert "first day of April".

In line 25, leave out "thirty-first day of March" and insert "first day of April".—[Mr. Glenvil Hall.]

Mr. Houghton (Sowerby)

I beg to move, in page 2, line 8, after "years", to insert: (fifty-five years in the case of pensions specified in sub-paragraph (i) of paragraph (c) of subsection (3) of section three of this Act, and in paragraphs 6, 7, 8, and 19 of Part I and paragraphs 3, 4, and 5 of Part II of the Schedule to this Act)". I move the Amendment solely for the purpose of considering once again the position of those public servants, especially in the police, the fire services, and similar services, whose retirement age is often under 60. These public servants, who serve at home, do work which entails some danger, where physical fitness is of paramount importance, and their terms of service provide, therefore, for the completion of pensionable service before the age of 60.

It is rightly assumed that if these public servants were allowed to continue to the normal retiring age applicable to clerical, executive or office workers, the efficiency of their force might be reduced. They are therefore permitted to retire, having earned full pension, before reaching the age of 60. Certain overseas civil servants who are covered by the Bill were specially provided for in the 1956 Act, particularly those who were serving in India, Pakistan and Burma, who were compulsorily retired on the change of status of the country in which they were serving and who came home on pensions related to their length of service. Some, no doubt, received compensation payments, but others probably retired before they could qualify for any such addition to their pensions.

This matter has been debated before, and up to now the House has decided that since the pensions increase legislation is intended to relieve hardship we should draw the line between those who are still relatively young and those who have passed the normal retirement age. It must be admitted that many of those public servants who retire from the police force, the fire service or similar services at an age lower than 60 find other employment and supplement their police or fire service pensions by earnings at one level or another.

If we consider the matter from a logical standpoint we must admit that if a pension has lost its value some restitution should be given, according to the degree of loss suffered and not by reference to the question whether the pensioner concerned has reached a certain age. If, after a person has fulfilled the conditions of service and the length of service, the State tells him, "Here is your pension. You may now leave. This is the pension that we have contracted to pay you. It is implicit in the whole contract of service that a pension should be paid to you which will give you a certain standard of life in proportion to that which you enjoyed when on full pay," the State is also entitled to say, "Since the pension that we have given you has lost a good deal of its value, you are entitled to some restoration of its purchasing power."

In earlier days pension legislation was probably so strictly related to the relief of hardship, and the introduction of many inequalities in the process, that we were right in saying that we could not relieve hardship at lower than the customary retirement age for public servants generally, because it was unlikely that hardship would exist there to the degree which would call for special relieving action. Under the Bill, however, we are moving away from the rigid idea of the relief of hardship, and towards fair treatment to those who have public service pensions.

Under the 1956 Act, for example, we went into the higher range of pensions when awarding a pensions increase. We never did that before. Nevertheless, in 1956 we were still so inhibited by our conception of the relief of hardship that we put a ceiling on the increase which could be granted for pensions in the higher ranges.

Under this Bill, we are removing that ceiling. There will be no ceiling. I quote that as an example of the way in which we are moving towards a principle of restitution of the purchasing power of pensions rather than sticking to our earlier conception about the relief of hardship. The question is whether we have gone far enough yet to enable us to cut this knot which has hitherto held public service pensioners under 60 away from the increases which we have provided in the various Pensions (Increase) Acts.

With regard to certain civil servants serving in India and Pakistan, at the time when the 1956 Bill was in another place one noble Lord raised this matter. When the plea for the Indian and Pakistan Civil Service was being put very cogently by the noble Lord Hailey, the Government reply was to relate their claim to that of many civil servants at home who were subject to earlier retirement—firemen, policemen, prison officers and nurses. The Government spokesman in another place said: …it has always been the practice, with the exception of the special circumstances under the 1954 Act, to pay pensions increases to pensioners who reach sixty. I think the reason for this is quite clear: that pensions increase payments are made in consideration of the fall in the value of money. The taxpayer himself is also concerned adversely in this factor. It is difficult to ask the taxpayer to make a special payment of this character to pensioners who are, in fact, of an age when they are still capable of working."—[OFFICIAL REPORT, House of Lords, 19th April, 1956; c. 1142.] That is the case against the Amendment that I am moving, and I fully understand the strength of that argument.

As I have said on previous occasions when discussing this matter both in Committee and before the House, sometimes the Government can do the taxpayer an injustice. They presume to think that the taxpayer does not want to improve the pensions of public servants and that he would not assent to the step which is proposed. The taxpayers, from whom we never hear, this body of people outside for whom the Government always presume to speak, have not, as far as I know, expressed any will in the matter. I have had no letter from any taxpayer who says he did not want to give any pensions increases to Indian civil servants, police or firemen who retired earlier than sixty. I have had no single communication on the subject at all.

I have had plenty of other communications, but none like that, and I do not believe that the Financial Secretary could go out of this Committee now into Parliament Square and bring into this Chamber any taxpayer who would echo the sentiments that have been expressed on some other occasions, when matters of this kind were raised. After all, the taxpayer is very conscious of equity. Indeed, our passion for equity makes our administration so horribly complicated.

The taxpayer knows that fair is fair, and if the taxpayers have engaged, through the instrument of Government, that certain persons should render service to the public, like the police, members of the fire services, nurses and prison officers, and if these public servants are told "The nature of your duties is such that it would not be in the interests of the public service to allow you to go on to the age of 60 to allow you to earn your pension in the normal way, and we are going to retire you earlier than that, but we shall of course give you a pension," I do not think the taxpayer would say "If that pension is eroded in your hands when you get it, do not come to us for restitution, because we will not give you a penny until you have reached the age of 60 and we are satisfied that you have reached decrepitude and incapacity and are unable to supplement your pension by earnings."

11.45 a.m.

After all, a pension is a pension. It is deferred pay. The conditions of service take the pension into account, and especially in the public sector, where comparisons with outside conditions of service are being brought more closely to bear in wage negotiations. The value of a pension in the public service sector is being taken into account in making these comparisons, and there is no difference in principle between a pension which is drawn earlier and the pension which is drawn later. They are both pensions, and both are affected by the consequences of inflation, so that I think there is a stronger case today than before for asking the Committee to give attention to this matter.

We are now looking rather more to considerations of equity and not quite so closely to considerations of the relief of hardship, and that enables us to look at some aspects of the present pensions increase arrangements that we have felt unable to attend to before. Other things which were ruled out in earlier legislation have later been brought in. I have given an example of one, but there are others. There was once a means test, but we have abolished it, and now here we have another aspect of this problem which I think the Committee might perhaps feel more favourably today than it has done when discussing the matter on earlier occasions.

Vice-Admiral John Hughes Hallett (Croydon, North-East)

I must begin by declaring an interest in this Amendment, because I think that if it were carried I should receive an immediate and substantial increase in my own income. Nevertheless, although I fully appreciate the sentiments behind the Amendment and what the hon. Member for Sowerby (Mr. Houghton) said in moving it, I cannot support it. I am not saying that I oppose it so strongly that if my hon. and learned Friend the Financial Secretary announced that the Government were prepared to accept it, I should go into the Lobby against them, but, at the same time, I could not possibly press him to accept it.

Here again, I should like to ask for a little latitude to refer to the effect which the Amendment will have on the Armed Forces, because although they are not mentioned in the text of the Bill we are told in the last paragraph of the Explanatory Memorandum: As in the case of the existing Pensions (Increase) Acts, former members of the Forces will be granted similar increases by Prerogative Instruments"— when the Bill is passed. I deduce from that that if the Amendment is carried it would be applied to those who have retired from the Armed Forces as well, and, therefore, it is highly relevant when we consider the effect of the Amendment, because the consequence of the change of the qualifying age from 60 to 55 would be immensely greater in the case of the Armed Forces than in those of the other categories to which the hon. Gentleman referred when moving the Amendment.

After all, the great majority of those who retire from the Armed Forces do so either at the age of 40 in the case of other ranks or 45 in the case of officers, and it is a well-known fact that, with few exceptions, they find some other jobs. They go into industry in most cases, or become commissionaires and so forth. The effect of this Amendment would be to make a statutory increase in their Service pensions at the age of 55. I think we can truthfully say that five or ten years before, they had no intention at all of retiring from whatever work they are doing. I think it would be extremely difficult to justify.

I hope that my hon. and learned Friend will be able to give us some sort of estimate of the cost of this concession. I am not sure that the estimates will be correct, because it is an established and undisputed medical fact that the most dangerous thing which a man can do in life is to retire from work. I honestly and sincerely believe that if the Amend- ment were accepted it would, in practice, result in quite a number of people who are able to go on working, and in whose real interest it is that they should go on working if they are to go on living until they would retire, going to seed. I do not believe that we should do any service to them at all. Therefore, I find myself unable to support the Amendment although I fully appreciate the sentiments behind it.

Mr. George Thomas (Cardiff, West)

It was not my privilege to participate in the Committee stage of the Bill, but I have read the report of the proceedings there with great interest. I do not think that I have ever read the report of a Committee in more felicitous terms. It seems that much of the time was spent in hon. and right hon. Gentlemen paying each other compliments—well deserved I have no doubt at all.

Mr. Houghton

My hon. Friend will have noticed that the Financial Secretary did not get much of a compliment from my right hon. Friend a few minutes ago.

Mr. Thomas

I noticed that most of the compliments were being paid when my hon. Friend the Member for Sowerby (Mr. Houghton) was away.

I rise to support the Amendment. I thought that the argument of the hon. and gallant Member for Croydon, North-East (Vice-Admiral Hughes Hallett) was a little thin this morning. It is a little tall for us to say that if we give an increase in pension we shall encourage people to retire, and, therefore, that they may go to seed. The hon. and gallant Gentleman must have sat up all night trying to look for an argument to produce a weedy little argument like that which is no argument at all.

Looking at the merits of the Amendment, this Bill is such an improvement on other Pensions (Increase) Measures that it seems a pity that the Treasury should spoil it in this regard. After all, when people go to spend their pensions they are not asked if they are over or under 60 years of age. They do not get things cheaper if they are under instead of over 60. All the arguments which apply for increasing the public pensions for people over 60 years of age apply equally to those under that age.

The hon. and learned Gentleman seemed to be bringing back the old argument of hardship, whether we are increasing pensions solely in cases of greatest hardship. That has now gone. We are increasing pensions of four figures. Therefore, I think that all logic is on the side of giving the increase to these public servants, some of whom have been abroad and come home and cannot work the same as other people. Many of them have been serving in different climates. They have to take lesser jobs because they are out of touch with life at home. I think it is unfair to say to them, "You shall be the only pensioners whom we will cut out. Although you have justifiably received this danger pay from the Government, you shall not benefit by this Pensions (Increase) Bill."

I hope that the hon. and learned Gentleman who has come to the House in such a good mood this morning will announce that he is prepared to meet my hon. Friend on this question.

Dame Irene Ward

I am sorry to have to keep on intervening, though I think that the last interventions from both this side of the Committee and from the benches opposite were very successful. Of course, I was not on the Standing Committee, and therefore I would like to express my views.

I have listened very carefully to the speeches made this morning from the benches opposite and to that made by my hon. and gallant Friend the Member for Croydon, North-East (Vice-Admiral Hughes Hallett). Of course, immediately the question is raised as to whether every point of view has been properly and thoroughly considered, I must say that do not believe that it has.

I try to be logical in my Parliamentary life and I have observed that whenever we want to build up the police force, the fire service or the nursing service we always ask for improvements in conditions of service and in salaries, and quite rightly so. From my point of view, however, I always think that when we are discussing that matter we ought also to consider improving pensions. I have a feeling, and I have had it for a very long time, and that is why I take such an interest in the matter, that we are always very concerned with the future when we really need police, firemen or nurses. But we do not seem to realise—and the same goes, of course, for the Armed Forces—that in order to be really fair and to do what I think the country wants by these very important public servants, we ought to consider those who have done good service in the past. We never examine the whole picture, and that is my complaint.

I can quite see the force of some of the arguments used by my hon. and gallant Friend. I am not going to develop this point because I hope that between the passing of this Bill and the next Pensions (Increase) Measure we shall get down to a proper examination of all these problems. I do not think that they have been properly examined or that justice has been done. Therefore, I feel that the whole matter must be properly looked at.

I want, however, to support the hon. Member for Sowerby (Mr. Houghton) who spoke for the Indian civil servants and for those who were serving in Pakistan and in Burma. I want to quote one small paragraph from a letter which I and a lot of other people have received. It is from the Secretary to the Indian Civil Service (Retired) Association, and states: I am to urge that the position of those pensioners of the Indian Services is not comparable to those of the Home Civil Services in that the full pension has ordinarily been earned before the age of 60. Further the body of pensioners on behalf of whom I write were compulsorily retired and, it is thought, should merit special consideration. I would accept that, but I can quite see that there may be some other arguments which we have never had a chance of examining.

I would say, if my hon. and learned Friend is going to use the argument, which is perfectly true, I am glad to say, that our police, firemen and nurses find valuable and rewarding work to do in this country, that it is not nearly as easy for those people who have served in India, Pakistan and Burma. That is another aspect of the situation. Therefore. I will confine myself to saying, in support of the hon. Gentleman who moved the Amendment, that I have a feeling that my hon. and learned Friend is not going to accept the Amendment. However, I hope that he will go as far as to state that nobody in this House or the taxpayer believes that this whole question has had proper and adequate consideration. I am hoping that we shall be told today that it will have consideration in the future.

12 noon.

Sir Lionel Heald (Chertsey)

I wish to add a word to what has already been said by my hon. Friend the Member for Tynemouth (Dame Irene Ward) regarding cases from India, Pakistan and Burma. I hope that my hon. and learned Friend the Financial Secretary will try to give those concerned a careful and sympathetic explanation of the position. They are among those people who have already had cause to feel that they have not been very fairly treated. When we went into this matter in 1955, we found that there were some who had no benefit at all. That was remedied; this time they are all in. But I think that makes it all the more important that they should be made to feel their case has been considered very carefully and sympathetically.

There is a great deal in what was said by my hon. Friend the Member for Tynemouth. There is a feeling that individual considerations are not given sufficient weight. We are told that we cannot have anomalies, and I think that sometimes those who deal with these matters—even in a small way such as in the unofficial committee with which I have the privilege of working—find that is true. If once we start trying to deal with individual cases, we get into great difficulty. On the other hand, sometimes there is a temptation to say that if we can arrive at a nice easy figure, we need not trouble about the anomalies.

There is another point of view which I have expressed before and I do so again today, but not in any complaining manner. There is a tendency to say that there are different kinds of anomalies. If there be an anomaly in which a number of people get £5 less than they should, that is something about which nothing can be done. But if there be an anomaly enabling someone to get 6d. too much, of course that amount has to be shaved off. I know the Committee will understand that I am not saving this in a complaining way, but it is curious that that kind of thing seems to happen every now and again.

No doubt my hon. and learned Friend the Financial Secretary will point out—I do not think that we can get away from it—that in a Bill of this type, and working on these lines, it would be unjustifiable suddenly to make an exception in favour of the people from India, Pakistan and Burma. I am sure that such people, who have devoted their lives to their country and given most valuable service, would not like to feel that they were enjoying an unfair advantage. But it underlines what my hon. Friend the Member for Tynemouth said, that in the future we must consider whether we are dealing with this matter in the right way by adopting a sort of flat percentage approach which does not enable us to deal with individual cases.

The matter does not especially arise in the consideration of this Amendment, but I think it justifiable—I hope that my hon. and learned Friend will agree—that I should ask him to be particularly careful to explain to these people that their case has had close and sympathetic consideration. We must realise and bear in mind where these people have spent most of their lives the great burdens which many of them have to sustain and the difficulty they experience in getting a job when they return to this country.

I am sure that my hon. and gallant Friend the Member for Croydon, North-East (Vice-Admiral Hughes Hallett) would never have any difficulty in getting suitable employment whatever happened. But there are many people—I know one or two of them—who spent a great many years of their lives in India. After all, some parts of India are pretty wearing places in which to live. A man aged 55 who has lived in certain places in India is not always in very good shape to work in this country Not only that, but when he comes to look for work, very often he cannot find anything suitable. Although, as I say, I do not wish the Committee to think that I am complaining in any way, I think that we should realise these things. There is no doubt that there has been a considerable improvement in the general attitude towards old age and the way we approach the whole problem. That is all the more reason why we should not spoil things by leaving some people with a feeling that they have not had a fair deal.

Mr. Arthur Moyle (Oldbury and Halesowen)

I welcome the opportunity to reinforce what has been said about this Amendment. I cannot understand why the Government have not tidied up this aspect of superannuation rights. It is not something which relates merely to colonial ex-public servants. It also affects our domestic public servants. I speak from memory—if I am wrong perhaps the Financial Secretary will correct me—but I think that for the police, and certain sections of the staffs employed in mental hospitals, the normal retiring age is 55. That is the pensionable age.

The reason for this difference between the normal retiring age of 65 and their retiring age is the type of employment in which they are engaged. Therefore, it seems to me the essence of the case—if we agree that a person shall be entitled to a cost of living adjustment at the age of 65 in certain circumstances, or, because of physical disability, at the age of 60 and so on—to say that the person who retires in the normal way at 55 shall get the adjustment.

I am glad, Dr. King, that you called the right hon. and learned Gentleman the Member for Chertsey (Sir L. Heald). I thought he made a first-class speech. I was somewhat surprised at the manner in which my hon. Friend the Member for Cardiff, West (Mr. G. Thomas) chided my right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall).

Mr. G. Thomas

I was congratulating him.

Mr. Moyle

I thought my hon. Friend was chiding the right hon. Gentleman for having been too agreeable and complaisant and ready to compromise. I was surprised to hear that from my hon. Friend, who comes from a distinguished profession whose main ethic in politics is to flirt with all parties but to marry none.

Mr. Thomas

My hon. Friend is making a remarkable contribution to the debate. I would remind him that I said nothing derogatory to my right hon. Friend who is always so courteous and polite both to his opponents and to his friends. I was commending his disposition.

Mr. Moyle

I am quite prepared to be corrected, but I thought the burden of my hon. Friend's complaint was that my right hon. Friend was so excessively courteous to the Government in Standing Committee and I must say, as a Member who served on that Committee—

The Temporary Chairman (Dr. Horace King)

Order. I think that this exchange of pleasantries has continued long enough. I would ask the hon. Gentleman to speak to the Amendment.

Mr. Moyle

I must accept your correction, Dr. King, but the going was so good in this discussion that I succumbed to the blandishments of hon. Members on both sides of the Committee. I hope that anything I say will serve to strengthen the revolt of hon. Members opposite and secure from the Financial Secretary, whom I see is sitting beaming on the Government Front Bench, the kind of answer which will bring solace not only to the "rebels" on this side of the Committee but to those on the benches opposite as well.

Mr. John Rankin (Glasgow, Govan)

I, too, was a little surprised that my hon. Friend the Member for Cardiff, West (Mr. G. Thomas) should say that it appeared that compliments flowed from one Front Bench to the other during the proceedings in the Standing Committee which dealt with this Bill. I think that this must be a case where "distance lends enchantment to the view". I attended the Committee and what appeared to my hon. Friend, who was not in the Committee, was entirely hidden from me.

I come now to my main theme, which arises out of what the hon. and gallant Member for Croydon, North-East (Vice-Admiral Hughes Hallett) said about people who retire at 45, 50, 55, who will be affected by the Amendment, and who, he said, when they leave their professions, as many policemen do, can walk into other jobs. That was an interesting and, in my view, somewhat provocative remark.

Vice-Admiral Hughes Hallett

I did not say a word about policemen. I was talking about members of the Forces who leave not at 55 but at 40.

Mr. Rankin

Perhaps I was misled a little in thinking that the hon. and gallant Gentleman was referring to the police forces. But even taking the Forces in the sense of the Armed Forces, I think that the impression I gained still applies. I have in mind the city in which I live, where many people in the Armed Forces, such as those to whom he referred, have their homes. I was trying to think of where they would find jobs to walk into. Over the whole of Scotland today, there are about 100,000 people out of work. In my division, there is redundancy in the shipbuilding trade. The dock workers are very often idle to the extent of 800 to 1,000 men unemployed on certain days. I give those as illustrations of my contention that it is not as easy as many people imagine for those who have retired and who are still able to work to walk into some other kind of job.

The jobs are just not there, whether we look for them in industry or elsewhere. Therefore, it is important that this Amendment should appeal to the heart of the hon. and learned Gentleman the Financial Secretary who has the power to say "Yea" or "Nay" to what we on this side are suggesting. Whether people are not yet 60 or are 60 years of age, they have to buy in the same market, as my right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall) said. Because of that fact, and because of the appeal which has come from the benches behind him, I hope that the hon. and learned Gentleman will favourably receive the Amendment and affirm what he said in opening the proceedings by telling us now that he will continue to follow the lead which we have presented.

Mr. Simon

The hon. Member for Glasgow, Govan (Mr. Rankin) says, quite rightly, that it falls to me now to say "Yea" or "Nay" as to whether I can recommend the Committee to accept the Amendment. I am sorry to have to tell him that my answer is "Nay". My only consolation is that I shall not thereby strain the loyalty of my hon. and gallant Friend the Member for Croydon, North-East (Vice-Admiral Hughes Hallett) by forcing him to go into the Lobby against his conscience.

As the hon. Member for Sowerby (Mr. Houghton) indicated, the matter has been considered by successive Governments on successive Pensions (Increase) Measures. It has been scrutinised closely by the House of Commons, and I can assure my right hon. and learned Friend the Member for Chertsey (Sir L. Heald) that it has had renewed consideration on this occasion. It is a fundamental point of principle. My right hon. Friend stated it on Second Reading, and perhaps I might remind the Committee of what he said: To abandon the limitation which Governments up to now have considered right would mean undermining the philosophy which, I think, we must maintain in these Bills, that the object of increasing any pension is primarily to relieve hardship. 12.15 p.m.

Interpolating there, I think that that is a principle which certainly commended itself to the House on Second Reading and commended itself overwhelmingly to the Committee when we scrutinised the Bill with great care. Even if, as I think it is right to do, we speak of "relative hardship", the principle still remains. My right hon. Friend went on to say: Moreover, and perhaps it is even more important, it would be, I would have thought, inconsistent with national policy on the age of retirement, namely, that people should be encouraged to continue at work, though not necessarily in the same jobs, as long as they can. The taxpayers should not be asked to pay for increases of this kind in the pensions of people of working age who may reasonably be expected to get work at current rates of pay."—[OFFICIAL REPORT, 2nd June, 1959; Vol. 606, c. 42.] I am sure that my hon. and gallant Friend was right when he said that it is in the interests of the pensioner no less than of the nation as a whole that there should not be premature retirement when the pensioner still has a valuable contribution to make towards our economy and society.

Mr. Moyle

What would be the position, having regard to the nature of the employment which many of these people who retire at 55 have and the conditions to which they are subject during most of their working lives, if such a pensioner broke down in health at, shall we say, the age of 57 and was unable to remain in employment? What would be his position?

Mr. Simon

I am very grateful to the hon. Member for Oldbury & Halesowen (Mr. Moyle) for raising that point. In the event of a breakdown in health or, indeed, premature retirement owing to ill health, the pension increase is payable. It is only where the person is fit to work that the pension increase is postponed until the age of 60. That is provided for in Clause 1 (2, b) of the Bill.

Mr. Moyle

That is after retirement at 55?

Mr. Simon

After retirement at any age. The subsection says: A pension payable in respect of the pensioner's own services shall not be increased under this Section unless the pensioner—

  1. (a) has attained the age of sixty years; or
  2. (b) has retired on account of physical or mental infirmity from the office or employment, in respect of which, or on retirement from which, the pension is payable …"

Mr. G. Thomas

That is different, is it not? The argument of my hon. Friend the Member for Oldbury & Halesowen (Mr. Moyle) relates to the man who retires in good health but, who, two years later, has a breakdown in health. Is he to have no benefit?

Mr. Simon

I hope that I shall not be interrupted in the middle of every sentence. If the hon. Gentleman had only had patience, he would have heard me go on to draw attention to the concluding words of the subsection: … or the pension authority are satisfied that the pensioner is disabled by physical or mental infirmity. I hope that that meets both points. I see that the hon. Member for Govan is restive, in spite of all that.

Mr. Rankin

I apologise to the hon. and learned Gentleman, but my main purpose this morning is to try to deal with a particular case in the category which the hon. and learned Gentleman has just instanced. Unfortunately, time may defeat me. I have here details of a particular case which, if I cannot deal with it this morning. I shall send to the hon. and learned Gentleman. The person in question is a civil servant who has retired due to ill health and, according to all his knowledge and my knowledge of the Bill, he is not to have one single penny out of these new provisions. He retired of course, after March, 1957. His belief is that he receives nothing. If I cannot intervene again, I shall send details of the case to the hon. and learned Gentleman.

Mr. Simon

I shall, of course, look with care into any communication I receive from the hon. Member for Govan.

Having dealt with that point, I must tell the Committee what the cost of the proposal would be. All along, we have had to weigh the interest of the taxpayer against the interest of the public service pensioner, remembering that many taxpayers are in circumstances as difficult and as straitened as those of the pensioners themselves. The immediate cost is about £1½ million, of which about £750,000 would relate to the Armed Services. It seems to me that it would be quite unrealistic to take that as the figure of cost, because every argument that has been put forward in support of this Amendment would equally apply to abandoning the age limit altogether.

The Amendment reduces the age limit to 55, but all the arguments for shifting it from 60, the general retirement age, would equally apply to whatever is the age of retirement. If the retirement age limit were abandoned altogether, the cost would be a further £1½ million. Equally, the arguments apply not only to the age limit in this Bill but to all the previous Pension (Increase) Bills put forward by both parties, and taking those into account, the total amount at stake is about £6½ million. I am sure that the Committee will see that in the scheme which has been approved and which has commended itself generally to the Committee and the House, figures of that sort are unacceptable.

My right hon. and learned Friend the Member for Chertsey asked me about the Indian and Pakistan pensioners, and my hon. Friend the Member for Tyne-mouth (Dame Irene Ward) and other hon. Members also mentioned their position. I can assure my right hon. and learned Friend that their case has been considered and, to use his words, considered "closely and sympathetically". He asked me to say why they are not given special treatment. The first reason is that it would be quite inappropriate to give them special treatment and not to give it to all the other people who also retire before the normal retirement age—that is those who retire before 60. I am sure that the Amendment which has been put forward is logical in extending it to the various other classes of early retirement.

Secondly, it is quite true, as my right hon. and learned Friend said, and several hon. Members have pointed out, quit they have had an exacting career, in many cases in difficult and exacting climates, but this was taken account of in their pension as originally fixed, and, in addition, the fact that they have suffered hardship in having their career prematurely determined in many cases has already been taken account of, in that the arrangements for terminating their services, I think in almost every case, included an element of compensation, apart from the pension for early retirement.

For those reasons, it seems to me that, with the best will in the world, it is not possible to treat them separately. In the end, too, they are governed by the general principle which my right hon. Friend indicated—that in balancing the needs of the taxpayer and ratepayer and the needs of the public service pensioner the same arguments apply to them as apply to the police and the fire service, and so on.

That brings me to the final point of principle, which is one indicated by my right hon. Friend. This is a matter which has been examined by successive Governments, and I believe that we are all united in saying that we should encourage people to stay on working as long as they can do so properly and as long as they have a contribution to make. It is in their interest and in the interest of society generally.

The hon. Gentleman the Member for Sowerby challenged me to say whether it would be possible to find a taxpayer who would say "No" to this. I am quite ready to respond to that challenge. If I went into Trafalgar Square and found somebody, aged 63, who had not enjoyed a pensionable occupation but who had saved over the years for his old age, and whose savings and the income from his savings had been eroded by the inflation to guard against which this Bill is intended, and we said to him, "Is it right that you, aged 63, with your meagre savings eroded by inflation, should be further taxed or forgo remission in taxation so that some- one aged 40 or even 55 who is still able to work may have his pension increased," I have no doubt that he would say, "No". We too would say that it would be inequitable to tax him for that purpose.

Mr. Houghton

If I know that taxpayer he would say, "What did we promise him? Did we promise him a pension as part of his condition of service?—Yes. Have we depreciated the value of his pension?—Yes. All right, he ought to have something." That is my taxpayer, and I am sure I could find him.

Mr. Simon

The hon. Gentleman, in spite of all his declarations of principle, is now going over to the argument of parity. It is not one that we have accepted or that the House as a whole has accepted. After all, a contract was made to pay a certain pension, just as in the case of savings a contract is made to pay a certain rate of interest or dividend. Inflation has affected them both. Therefore, it seems to me that in trying to balance interests and trying to do what is fair and equitable, which I am sure is what the Committee and the House wish to do, fair is fair, as the hon. Gentleman said. But what is fair is to say that if a person can go on working and if he is capable of helping himself against rising prices by continuing in employment, it is wrong to call on the taxpayer to increase his pension.

For those who have reached the age of 60, the matter is different. They quite properly, when they suffer severe hardship, look to the taxpayer and the ratepayer for the relief which we have so gladly put forward in this Bill.

Mr. Glenvil Hall

I think that the real answer to the Trafalgar Square taxpayer to whom the hon. and learned Gentleman has so movingly referred is: Why have any Bills of this kind at all? The argument which the hon. and learned Gentleman has used could be applied equally to any of the Acts which have been passed to increase pensions because of the change in the value of money. One thing which he did not remark and which I will, if I may, is that in every speech, except the speech of the hon. and gallant Gentleman the Member for Croydon, North-East (Vice-Admiral Hughes Hallett), from both sides of the Committee, as on previous occasions when we had discussed this matter, there has been practically unanimity in the whole Committee on this subject.

Mr. Simon

I take it that the right hon. Gentleman who occupied my position at that time was in a minority of one, but, nevertheless, he got his way.

12.30 p.m.

Mr. Glenvil Hall

I should be out of order if I went back as to what happened between 1945 and 1950, and I will not attempt it. We have plenty of matter before us this morning when discussing this subject.

It is obvious that on both sides of the Committee, apart from one dissentient, there is a feeling that something should be done for those who have been mentioned. That, I might say to my hon. Friend the Member for Cardiff, West (Mr. G. Thomas), was the position when we dealt with this matter in Committee. My hon. Friend chided myself and others of my hon. Friends for the friendliness we showed towards Members opposite and to the Minister himself. The reason was that we were all of one mind, except the Minister. There was no point whatever in attacking hon. Ladies and Gentlemen on the other side of the Committee, because they were with us and they were making every effort, as we were, to improve the Bill. We made no impression whatever on the Minister. This morning when we began and he accepted our first Amendment, we thought that perhaps he had had a change of heart. We are, however, no further forward than the second Amendment and he is saying, "No" to us, as he did throughout the proceedings upstairs.

The speech of the right hon. and learned Member for Chertsey (Sir L. Heald) put the case very well, as did, as he always does, my hon. Friend the Member for Sowerby (Mr. Houghton). The real question is not the age, but why these people have retired at an earlier age than 60. The reason is that their occupation was such that it was essential in the public interest that an earlier retiring age should be laid down. That is the yardstick. If they have served their time, surely they have earned their pension. Therefore, their age is quite immaterial in this matter. It is a ques- tion of whether they have served twenty, twenty-five, thirty or thirty-five years and what the pension at the end of that period should be. If, as a result of having drawn that pension, and properly so, under their contract, they find as the years go on that their pension buys less than they had anticipated, it is only right and proper that the Government should do something to help to make it up.

The drop in the value of money means a drop in the burden on the Exchequer. We are sometimes inclined to forget that. A drop in the value of money, however, is an increase in the burden on the pensioner, because the cost of things to him has gone up. Therefore, it is not a case of the Treasury or the taxpayer finding extra money. All that we would be doing is, because of the drop in the value of money, making up to the pensioner something he has lost through no fault of his own owing to the change in the cost of living.

If the Financial Secretary considers our Amendment too modest in that we fix the age of 55 and if it would lead to anomalies, of which we have heard a great deal, we are very willing to iron them out if he so wishes and to change the age limit laid down in the Amendment so that it covers all who have retired, irrespective of age. I am sure that in the great majority of cases, it would not mean a vast increase to them and I am positive, too, that in the circumstances they well deserve it.

Therefore, on behalf of my hon. Friends on this side, we regret very much that the Financial Secretary has not seen his way to accept the Amendment. Attempts have been repeatedly made. We discussed this issue at length in 1956 and so far we have failed to make any impression on the Government. I am sorry that we can do no more than put the case before them and leave it to their conscience when the Bill reaches another place.

Amendment negatived.

Clause, as amended, ordered to stand part of the Bill.