HC Deb 04 July 1960 vol 626 cc183-94

Motion made, and Question proposed, That this House do now adjourn.—[Mr. J. E. B. Hill.]

10.40 p.m.

Mr. H. Hynd (Accrington)

Not once or twice in our rough-island story has it been necessary to bring the question of railway superannuitants before the House. I regret the necessity for troubling the House with it again, though this is a very appropriate day for me to bring it to the Minister's attention, because today I become a superannuitant.

In doing so I very vividly have in mind the condition of some of my older colleagues, with whom I used to work in the railway clerical service, who, through no fault of their own, after paying into superannuation funds a percentage of their salaries for many years, retired—on what they thought might be a reasonable pension, at any rate, one which would enable them to live—paringly—for the rest of their lives, but which, because of the increase in the cost of living, has been devalued to the extent that some of them, I understand, have actually less now than the scales of National Assistance—although they paid, I repeat, all during their working lives, usually far forty to forty-five years, into superannuation funds. Now they find themselves in this position. These are men many of whom were in responsible supervisory positions, as heads of departments, station masters, or supervisory staff of various kinds.

In putting Questions and raising this in various ways I have accumulated quite a dossier on the subject. You will notice, Mr. Speaker, that I have not got it with me. The reason is that I think it is quite unnecessary. I want to be brief. For one reason I believe that if the hon. Member for Tynemouth (Dame Irene Ward) is fortunate enough to catch your eye there may be found support for me from the Government benches on this subject. It is not a party matter at all. Over and above that, the Minister knows perfectly well all the facts and figures of the subject: he has had them put before him so often.

I just say this, that people who are still working in the transport salaried service have not forgotten their old colleagues, and at the recent annual conference of the Transport Salaried Staffs Association they laid aside their own difficulties for some time in order to discuss the position of their old colleagues and passed a resolution which the Minister no doubt received in due course. In addition to the efforts of that Association, the superannuitants themselves have formed an association, and I am quite certain that their secretary's name is well known in the Ministry of Transport.

Parliament has recognised this difficulty over a long period. As the value of money has fallen the cost of living has risen; inflation has come upon us. So we have made provision for various sections of workers for whom the Government have direct or indirect responsibility—a very proper thing to do. The House has recognised the difficulty and has dealt with it accordingly, and so it has adjusted the pensions of civil servants, school teachers, municipal officers, and others. I say "Good luck" to all those people, but I must emphasise that some of them were members of non-contributory funds, whereas the people with whom I am concerned tonight have contributed a percentage of their salaries throughout their working lives.

Indeed, the Transport Commission recognised its moral responsibility some time ago, and a small increase was awarded. I will not say it was a derisory amount, because that might seem ungracious and ungrateful, and I do not want to appear ungrateful at all. In fact, I believe that both the Commission and the Ministry itself have recognised that they have a moral responsibility in this matter; I believe the Minister is sympathetic; I believe the Commission is sympathetic; and when the Prime Minister himself was approached he expressed sympathy on it; but always there is the addendum that because of the present financial state of the industry nothing can be done at present.

A new situation has been created recently in that the British Transport Commission, despite the financial state of the industry, has now given wage increases against which the same arguments might have been used as might have been used against the claims of the superannuitants. To enable the Commission to do so the Government have given certain guarantees and have shouldered part of the financial burden. I do not see why they cannot do that in in this case also.

I go further. I believe that so sympathetic has the Minister become on this subject that certain proposals are actually under consideration. One reason why I raise the subject in this public way tonight is to give the Minister an opportunity, which I hope he will take, to give us the good news to send to these old colleagues of mine that in view of the situation in which they find themselves the Government will recognise their moral responsibility to the extent of helping the Commission in some way to meet that obligation. I repeat that I do not think it necessary to quote figures and percentages and go over the whole story that has been gone over so often, but I do hope that we shall have some good news tonight.

10.46 p.m.

Dame Irene Ward (Tynemouth)

I am very glad that the hon. Member for Accrington (Mr. H. Hynd) has raised this very important matter. Many of us have argued it for a long period and I much appreciate the action and attitude of my right hon. Friend the previous Minister of Transport who, in spite of the British Transport Commission's deficiency even at that time, discussed the application of the Pensions (Increase) Act, 1955, with the Commission, and some action was taken. It was only when the Pensions (Increase) Act, 1959, was put on the Statute Book that the difficulty appeared to arise, because the then Minister of Transport, now Minister of Defence, felt that he could not press, even if it was necessary, the Chairman of the Transport Commission to apply the 1959 Act to the railway superannuitants.

It seemed to me, therefore, that in view of the fact that now the Treasury has taken on some of the Commission's deficiencies and will meet some of its financial difficulties as a direct charge on the Treasury, there can be no objection to the Treasury including in that deficiency fair and just treatment for the railway superannuitants. I want to put on record a letter which I received from the Chairman of the Transport Commission. The Minister of Transport is, naturally, in possession of a copy of the letter because he had it sent to me by Sir Brian Robertson, but it is important that it should be on public record for everybody to see.

It is dated 30th May and, written to me, says: Thank you for letting me see the enclosed correspondence you have had with the Chancellor. I had gone far beyond arguing the question with the Minister of Transport, because I know who is the nigger in the woodpile. I assure you I entirely share your feelings about the old railway servants who are down at the bottom of the pensions scale. Towards the end of last year the Commission gave long and anxious thought to the question of further supplementation, following the three schemes of increased allowances which we have brought in over the last six years. The Commission came to the conclusion that there was indeed a strong case for some further assistance but that the cost could not possibly be met from the Commission's own resources having regard to our general financial position. I therefore wrote to the Minister of Transport putting the whole matter to him, and I am awaiting his reply.

Yours sincerely,

Brian H. Robertson."

Like the hon. Member for Accrington, I have raised this question time and time again with the Minister of Transport, the Chancellor of the Exchequer, the Leader of the House—with every possible Minister with whom I could get a word in when I was fortunate enough to be called by you, Mr. Speaker. I particularly want to emphasise that always the answer given to me is that it is a matter for the Chairman of the Transport Commission. Yet here is this letter, written by the Chairman of the Commission.

I take very great exception to the fact that, since he put up this suggestion at the end of last year, all those answers that have been given to me by the Government Front Bench have not been entirely accurate, because it was well known by the Ministers concerned that this difficulty had been put by Sir Brian Robertson to the appropriate Minister. We are now at the beginning of July—nearly seven months later. Like the hon. Member for Accrington, I hope that we shall have some good news tonight. I am not particularly hopeful, however—but perhaps I should not be hopeful, although I always believe that my Government will do the right thing, even though they let me down quite often, which is rather humiliating to me.

I want to point out, however, that Sir Brian wrote this letter at the end of last year in relation to the men who have served the railways for a very long time, very loyally and very courageously during the war, and has been left without an answer. If this had been an official of the National Union of Railwaymen, or of any other big union, or of the T.U.C., or all sorts of grand people, we would have had everybody rushing in, from the Prime Minister downwards. But because these people have nobody to speak for them except some of us in this House, and we think that we are quite powerful, do we not? I say that to my hon. Friend the Member for Accrington—the Minister of Transport thinks that it is appropriate to leave a letter from Sir Brian Robertson unanswered, far as I can make out.

Time and time again we are told that it is very difficult to recruit staff for the railways. Time and time again we are told that the railways need first-class men to help to create an efficient system. What chance will the railways have to recruit first-class men if its old servants, the real salt of the earth, are treated so scurvily by the Government? In a couple of decades none of us may be here; we do not know. But a Minister will no doubt get up and say how pathetic it is that we do not seem to be able to attract the right type of men to British Railways.

The fathers and the grandfathers will not encourage their sons and grandsons to go into the railway service if we cannot treat properly the men who have already served. As I have said before, I am absolutely humiliated that time and time again we have to come here and plead this case. One can get money for all sorts of things, but one cannot get it for railway Superannuitants.

In the past, the difficulty was that it was the responsibility of the Chairman of the Commission. I am only too glad that Sir Brian Robertson—it is a magnificent gesture on his part, and I pay tribute to him for it—has the guts to say to the Minister of Transport, "Here is the situation. We want something to be done. We consider that it is right in the interests of the old railwaymen as a whole that something should be done, but we have not got the money with which to do it." It is very clear to everybody that the money is not there, of course.

However, if the taxpayers can be asked —I would rather that my taxes went in the direction of some of the people about whom we are arguing tonight—to find a deficiency and to forgo tax relief for a year, it is absolutely disgraceful that we cannot find a little more to look after those who looked after us. I should not be in order even to mention the Finance Bill, but I would say again that wealthy widows and widowers have got the Chancellor's support, but we cannot get anything for these people who, as Sir Brian himself says—and it has been emphasised time and time again—are at the bottom.

If I could find a way to stage a demontration in the House I should be glad to do it, because at the last General Election we pledged our support to those who are living on small fixed incomes. We have pledged ourselves to let all the people share in the material prosperity enjoyed by many today. If we do not do something for these people soon many of them may not live to enjoy it. I want to know when the pledge will be redeemed.

I wish that all the members of the Cabinet were sitting on the Front Bench tonight. It would do them all a very great deal of good to listen to what has been said. They have all said how wonderful the railwaymen were during the war, and it is now up to the Government is see that their very difficult situation is met.

10.58 p.m.

The Joint Parliamentary Secretary to the Ministry of Transport (Mr. John Hay)

We are discussing tonight the situation of some 30,000 people, retired railway salaried staff. I am sure that the House would like to congratulate the hon. Member for Accrington (Mr. H. Hynd) upon reaching the retirement age. We hope that he will have many years of useful service still before him, both in the House and outside.

The 30,000 people are ex-employees not of the British Transport Commission, but of the former mainline railway companies which were nationalised in 1948. Their special position—because it is a special situation—arises from two facts. First, they are not former public servants like civil servants or teachers. They are, in fact, former employees of private organisations, and for that reason they have not since the war qualified as public servants have done for increases in pension made under the Pensions (Increase) Acts.

The second fact is that those of them who were in work between 1926 and July, 1948, when the National Insurance Act, 1946, came into operation, were excepted from the State pension schemes, though, of course, they are not excepted from the provisions of National Assistance in appropriate cases, for that is open to everyone. The reason why they were excepted by the House is that between the wars when the original State pension schemes were brought into operation it was considered that on the whole railway pensions schemes were more favourable than the State schemes. It was open to any railwayman to join the State schemes as a voluntary contributor if he wished, and, indeed, a number did, but the great majority of them did not. Of course, they had the compensating advantage of saving the additional contribution.

Immediately following the war, as the House well remembers, we entered into a period of substantial inflation. Between the years 1948 and 1958, the cost of living went up and the value of pensions and fixed incomes fell, a matter which has been discussed many times in the House over these years. But the position of State pensioners was improved to compensate for the fall in the value of their pensions. Between 1948 and 1951, the level of pensions for a number of pensioners was raised once. Between 1951 and 1959, it was raised three times for all, with the consequence that today the State pension is worth about 10s. 7d. more in real terms than it was in 1951. Since 1958, all pensioners have had the inestimable boon of stable prices. Unfortunately, the railway salaried staff pensioners did not come within the general protection which was given to the great majority of pensioners, for the reasons which I have just mentioned.

It is right to put on record what the British Transport Commission has done about it. Of course, it has a moral obligation to the former employees of the railway industry, an obligation which it has accepted on three separate occasions, not once as the hon. Member for Accrington said. In 1953, 1955 and 1956 it introduced supplementation schemes to supplement the existing pensions of those people on a purely ex gratia basis. It benefited some 20,000 out of the 30,000 pensioners and the cost of those supplementation schemes at the moment is running at about £½ million a year.

The important qualification to note is that supplementation was not paid to any pensioner receiving more than £250 a year basic pension and that the voluntary contributors to the State schemes, as well as those who excepted in the way I have described, were also included for supplementation. In addition to this admittedly modest but welcome help, the Transport Commission pay about £9 million a year in matching contributions and deficiency payments to maintain the benefits under superannuation funds on existing scales for salaried staff whether retired or not.

Since 1956, when that last supplementation payment was made, the Commission has taken the stand that it can do no more out of its own resources. It says, and I certainly do not disagree with it, that it must have regard to its general financial situation, a situation with which we are all acquainted and which is very difficult indeed.

I read in the newspapers tonight that Mr. Charles Evans, President of the National Union of Railwaymen, addressing his Union's Conference today, described the Commission's finances as "frightening." That is an expression with which I do not quarrel. In 1956, the deficit of the railways was £571 million; in 1957, £68 million; in 1958, £90 million; and in 1959—we have just had the figures in the latest Report—£84 million. I cannot yet estimate the deficit for 1960, but it will be remembered that £90 million is being borne above the line on this year's Estimates, as the then estimated figure when the Chancellor introduced his Budget.

I come to the letter to which my hon. Friend the Member for Tynemouth (Dame Irene Ward) referred. The position is that at the end of 1959 the Chairman of the Commission, Sir Brian Robertson, wrote to my right hon. Friend and made his proposals. Having said, to start with, that the financial situation was such that the Commission could do little on its own, he proposed, first, that the Exchequer should accept the liability of bringing up to the present level of National Insurance pensions the pensions paid to those super-annuitants. He estimated that that would cost about £400,000 in addition to the sum which I have already mentioned of approximately £½ million being paid by way of supplementation.

The second proposal was a little more unusual in that although he could not estimate the cost involved he suggested that the Government should agree to a general supplementation for all railway superannuitants to bring them into line with the position of former public servants. On the first proposal my right hon. Friend, in reply, said that this would have to be considered in connection with the current broad review that is going on of the Commission's finances. On the second proposal he replied that he would prefer to have some indication of the amount of expenditure which the Commission was envisaging, before he could take any decision upon it. That is the answer to my hon. Friend the Member for Tynemouth. My right hon. Friend has answered the Chairman of the Commission along those lines.

On the general issue, I need hardly say that everyone has sympathy with those who are living on small fixed incomes and, in particular, with groups of people like those of whom we are speaking tonight, who find themselves in special difficulties in the circumstances. Very strong feelings are held on this matter, and we will certainly take account of them, but even at the risk of appearing to be unsympathetic—which I am not—I must reiterate that these superannuitants are the responsibility of the Commission, for the Commission inherited responsibility for them from the old main line companies. As I have said, the Commission is firmly of the view that its financial position does not allow of any further increase in payments to these pensioners. And, in the light of the figures of losses that I have quoted I think that there can be little dissent from that view.

The alternative, which has been canvassed both in this debate and outside the House, on a number of occasions, is that the Government should simply take over the responsibility from the Commission. But to accept this suggestion and to impose on the Exchequer a specific liability in respect of railway pensioners raises some very wide issues. The status of the nationalised industries, their relations with the Government and the relations between them and their employees or former employees, would all be involved. Such a move would be not only a dangerous precedent, but would be unacceptable in principle. It is a well-understood principle that the Exchequer's liability in pensions increases is confined to those who have earned their pensions in the public service, and for the payment of whose pensions public funds are responsible. The civil servant is the prime example.

This principle would be seriously breached if we were to accept this suggestion. Moreover, if we were to take this special step of accepting that these particular superannuitants are a direct responsibility of the Exchequer, that would inevitably have wide repercussions on the many pensioners of other nationalised industries and similar public bodies. These are considerations that the Government must have in mind.

But then it is said that we are already meeting the Commission's deficit, as my hon. Friend the Member for Tynemouth said, and, therefore, all that is required is for us to increase this Exchequer contribution. This is an ingenious argument—

Dame Irene Ward

It is more than ingenious.

Mr. Hay

—but one which I cannot accept. We regard the present financial situation of the Commission and the present system of deficit financing as an interim position only.

As the House knows, both the structure and the finances of the Commission are under special examination by the Special Advisory Group under the chairmanship of Sir Ivan Stedeford, and the purpose of this examination and the whole trend of our policy is to reach, by one means or another, a position of viability for the railways. It is against this background that decisions will have to be taken between the various competing claims on the resources available to the railways, including the claims of the superannuitants. The case of these men should, if anything, be a spur to all of us, whether in the railway industry or outside to do everything possible to ensure that viability is reached at the earliest possible moment, as a means whereby the position of the super-annuitants can be improved. Beyond that, I cannot go tonight.

Dame Irene Ward

What is the point of the Minister of Transport having the powers of direction? Accepting all that has been said tonight, why does not the Minister use his powers of direction and increase the deficit on the Commission? It can come back through the Treasury. That is the only action he need take.

Mr. Hay

That is a point I will consider, but I must tell my hon. Friend that I cannot see that it will salve the difficulty that we are up against—

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

Adjourned at ten minutes past Eleven o'clock.