Vote 13. Non-effective Services (Hansard, 10 March 1959)

§ Mr. Willis
I wish to make a few comments about pensions. It appears from this Estimate that the increases in pension and gratuities will not increase the Estimate; in other words, the Navy has made a gesture which does not appear to cost it any more. I do not know about the other Services.
I am interested in what has happened, because the Grigg Committee, upon whose recommendations the new proposals were based, said that: The Admiralty scheme was directly related to pay at the point of retirement… The Committee said that this was apparently quite a different scheme from the one proposed by it in respect of the other Services. I am not altogether happy about the Admiralty scheme. The Report continued: The Admiralty's engagement structure is, however, somewhat different from that of the other two Services, and we do not regard it as absolutely essential that the pension schemes should be identical. That being so, we suggest that the Admiralty might be left free to devise a scheme of its own to suit the needs 1177 of the Royal Navy, provided that the cost is roughly the same as that of applying to the Royal Navy the scheme we recommend for the other two Services. The recommendations of the Grigg Committee applied to the Army and the Air Force and said nothing about the Navy. The recommendations were not that the Navy should be fitted into the scheme for the Army and Air Force. Now, however, we find that each scheme is the same. It is difficult to work out the scheme in respect of individual ratings but in future, according to the White Paper dealing with the scheme, pensions will normally vary with the rank held at the time of discharge and total length of service. At present, these also vary with the length of service in each rank.
Last night I drew attention to the effect of this upon the artificer branches, who get-very little out of the scheme. I understand that a chief artificer will get only a few shillings. I cannot give the exact figures because I have not found it possible to work them out from the White Paper, so I need more information. It can be seen that for anyone who has held the rank of chief petty officer for a long time the scheme will not provide very much. It gives little indeed to artificers.
Why was the Navy pushed into the same scheme as the other Services? I presume that that was due to Treasury pressure. The Treasury is ridden with a desire to compel all Services to be exactly the same in respect of pay, pensions, gratuities and everything else. Personally, I am not altogether happy that that is a good policy. It may be easy from the Treasury point of view, but from the point of view of the Services it is not altogether right.
What happened to the Admiralty scheme, and why has the Navy gone into the present scheme when the Grigg Committee recommended something quite different? It may be that the scheme which the Admiralty had in mind, as indicated in paragraph 115 of the Grigg Report, would have had the same effect. One does not know what that scheme was, but even if it had the same effect, it seems that the increase would have been of such a substantial character that the criticism which I am now making would not have arisen.
Over many years I have spoken about pensions. For two or three years. pen- 1178 sions have been more important than pay. That is why I am disappointed with the results for the branches of the Navy which I have mentioned and for which it is difficult to get recruits. The hon. Gentleman knows all the problems of this matter as well as I do, and I do not want to go over them again, but I hope that we can hear something about this matter.

§ Mr. G. R. Howard
I want to refer to Subhead F, under which there is a decrease of £9,500. There appears to be an anomaly. I believe that my figures are correct. A chief petty officer who retired in 1952 has a pension at the rate of £120 a year. Retirement in 1956 would have made that £200 and in 1959 it would have been approximately £360 a year.
Three men retiring on those dates might be working in the same employment in civil life, with the added annoyance that they would all be subject to recall, possibly to the same sort of job, until they were 55. I do not know what the position would be if a Pensions (Increase) Bill were brought in this year. If there is such a Measure, I hope that the Government will consider bringing these pensions into line, because it is the children of these men who are our possible recruits for the Navy of the future.

§ Mr. Wilkins
My remarks closely follow those of the hon. Member for St. Ives (Mr. G. R. Howard). Can the hon. Gentleman remind us when the last pensions review took place? Under Subhead F, there is a reference to the Appendix to the Navy List, and to the Order in Council of 28th January, 1958, but that relates to ratings retiring prematurely. Below that is a paragraph which states that pensioners not entitled to pensions at current rates may receive increases of pension under conditions similar to those of the current Pensions (Increase) Acts.
By sheer coincidence, one of the "old brigade" came to see me last Saturday week. He had joined the Royal Navy in 1900, at a time when, as he told me, sailors had to buy everything for themselves, their clothing, bedding and kit. He reminded me that today we provide most of those things, and in some cases 1179 all of them, and provide a substantial gratuity when men finish their service, giving that as an inducement to recruiting.
This, again, is the case of the chief petty officer mentioned by the hon. Member for St. Ives. His original pension was £76 per annum. I do not want to make a personal case of this, because the same circumstances probably apply to a few other men, if not too many. His pension is now £145 per annum. I was interested in the figures which the hon. Member for St. Ives gave to the Committee. The number of people involved must be very small and, although I do not imagine that he can do it now, I should like the Parliamentary Secretary to say whether, in any pensions review, the claims of those people will be taken into account.
If it is possible to get the information, I should like to know how many of these people are still left, how many would be affected by any pensions increase and how much such an increase would cost.

§ Miss Vickers
There is an enormous decrease, about £¾ million, under Subhead A. I presume that that is due to a fall in numbers, but I should like to know how many men come under that heading. I should have thought that it was high time for pensions to be reviewed. We like to see savings, but not with pensions, and I should have thought that we might now be able to increase pensions for existing pensioners.
I am glad to see from Subhead D that there has been an increase in the amount paid in pensions to widows, children, and other relatives of deceased officers. The amount has increased by £92,000. I presume that there has been a fall in numbers and that that means that some of those people have had further increases in their pensions.
There is another decrease under Subhead F. We have to remember the magnificent service which these people have rendered the country and the fact that they see present-day recruits offered much better conditions. It also has to be remembered that the real value of their pensions has fallen. In view of their magnificent service. I think that they are due for an increase.
There is one matter which I should like my hon. Friend to take up with the Treasury. That is the fact that pensioners 1180 still have to pay Income Tax on money they receive for any kind of medal which they have earned. For instance, the holder of the D.S.M. receives 6d. a day. Even that very small amount may be subject to taxation. Some pensioners are still working and have to pay tax on their pensions, which comes very harshly if they work overtime. Others may be completely retired. It is time that there was a review and that better pensions were paid for those who have given their services to their country.

§ Mr. C. Ian Orr-Ewing
The hon. Member for Edinburgh, East (Mr. Willis) and the hon. Lady the Member for Plymouth, Devonport (Miss Vickers) ask why the total amount under Subhead A had decreased by about £¾ million. That is not, as the hon. Member for Edinburgh, East suggested, because we have given with one hand and taken back with the other. It shows the amalgamation of three different sums and the net result is a decrease of £778,000. The retirement pension expenditure will increase by no less than £808,000 in the coming year.
To offset that there will be a saving in terminal grants of £875,000. That is obvious because the rundown has been to a large extent effected. There will also be a saving on capital grant, which also comes under this heading and is more appropriately known as the "golden bowler" scheme. In this case, the saving will be about £720,000. The net result will be that although pensions will rise by £808,000 the two offsetting items will mean a total decrease on the Vote of £778,000.
The hon. Member for Edinburgh, East also asked what had happened to the Admiralty scheme. The Grigg Committee did not compel us to set up our own scheme; it merely suggested that we should not be dragooned into introducing the same scheme as operated in the other Services. We looked into the possibility of introducing our own scheme and discussed the matter with the other two Services. After considerable discussion we came to the conclusion that we might as well accept the same scheme as was operating in the other Services. We were trying to relate our scheme more exactly to our points of retirement, and that made our pensions largely out of step with the pensions paid by the other two Services at any particular time in a 1181 man's life. We thought that in the general interest we ought to row in and accept the same arrangements.
The hon. Member was right when he said that the rating's pension is geared to his final rank multiplied by the number of years' service. He went on to say that this provision adversely affected the artificer branch. It is true that that branch will benefit only to a small extent, and chief artificers will get an increase of only about £50 a year under the new scheme. But we ought to remember that artificers have always had very much quicker promotion than people in other branches. Earlier in their Service life they are getting very much more pay, and they have always had it.
It is one of the jealousies of other branches that the artificers have always been so well rewarded. I do not think that it is unfair, now that the new structure is being introduced, that the artificer should get less and everyone else very much more, thereby narrowing the differential at the end point. The artificer still gains in getting larger rewards earlier on in his career.
My hon. Friend the Member for St. Ives (Mr. G. R. Howard) pointed out that there are always hardships when a new pensions scheme is introduced, and I agree. There always are people who fall just on the wrong side of the date line and who quite understandably feel victimised. It may be that there are three chief petty officers who will each receive a different pension as a result of retiring in different years, but there is no easy solution to this problem.
The Government have said that as a result of the recommendations made by the Grigg Committee in respect of all three Services they will consider, roughly every two years, pay and pensions conditions to make sure that they keep approximately in step with possible rises in the cost of living and with commensurate standards in civil life. But I do not think that we can retrospectively adjust the pensions in one branch of the public service only. The Government have made statements on this point, as did Sir James Grigg, who understood that on the narrow ground of recruiting he c3uld not recommend something which would have to be applied only in this part of the Government service. The Government are considering the question, 1182 but I am not in a position tonight—and certainly in a debate on a single Vote—to make any further statements.
My hon. Friend the Member for Devonport, under Subhead D, said that she was pleased to see that the pensions and gratuities paid to widows, children and other relatives of deceased officers had risen. It is true that, with effect from the end of last year, women who had been widowed recently received an increase, but the whole of the £92,000 cannot be put down to that improvement; £57,000 of it arises from increased pensions, and another £32,000 arises from the very strange reason that the Paymaster-General has just introduced a system of mechanised payments and is also staggering them, so that they do not all come at a rush. He is trying to ensure a level loading throughout the year. The introduction of mechanised payments and the other adjustments mean that a number of people will receive an extra three week's payment in the coming year, and that accounts for £32,000 of the £92,000.
I shall certainly consider the point raised by the hon. Member for Bristol. South (Mr. Wilkins).