§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Rees.]
§ Commander Pursey
As I was saying, once all the facts are assembled a genuine human interest story could be told about the mere pittance which is paid for long service in the three Services. There can be no doubt that, if this were done, the Government would have to act. The eight Tory Members who represent constituencies in Portsmouth, Devonport and Chatham could be ousted at the next election by a proper pnesions campaign.
I challenge the Press, the B.B.C., all hon. Members and the Government to see 1574 that justice, including an immediate increase, is done for the silent forgotten army of n.c.o.s and other ranks and, particularly, for the widows who are receiving no pension at all. I also appeal for those who are drawing long-service pensions which represent a national scandal and a disgrace to Parliament, which is wholly responsible.
§ 10.2 p.m.
§ Dame Irene Ward (Tynemouth)
I hope that the Secretary of State for War and his Service colleagues will look into the case put by the hon. and gallant Member for Kingston-upon-Hull, East (Commander Pursey) and I imagine that the whole House will express the hope that we shall hear in detail after the Christmas Recess an adequate answer to that case. I do not want to delay the House, because a great deal remains to be said on this wide topic by a number of hon. Members. I should like, firstly, to support the case so adequately made by hon. Members on both sides of the House on the general issue of Service pensions for retired officers, for widows and for other ranks.
There are two points I should like to address to the Financial Secretary and to the Secretary of State for War. I listened the other day to the statement about compensation in respect of those who suffered loss of property in Egypt. The Under-Secretary of State for Foreign Affairs went out of his way to explain in great detail that under the Government's proposals, the people who had the most would get the least and that the people who had the least would get the most.
I should like the Secretary of State for War to explain why, if that is the policy for foreign affairs—and those proposals must have had the support of the Cabinet—when we come to discuss Service pensions, the exact opposite is the rule of the day. While I welcome the proposals for the increases under the Royal Warrant, my objection is that the whole scheme has not been looked at in sufficient detail to obtain what is fair and just for those concerned.
I throw this out merely as a suggestion. If the amount of compensation payable to people who lost their property in Egypt is based on the smallest amount for the people who had the most and the most compensation for the people 1575 who had the least, why cannot we apply that to Service pensioners? After all, the general complaint about the present scheme is that, with the sole exception of the bonus at the age of 70, the scheme is exactly the same as it was before. Like a great many of my hon. Friends, I am getting a little tired of the fact that after years of drawing the attention of the Government to what we—the House of Commons; in other words, democracy—consider inequalities which need to be dealt with, the Government pay not the slightest attention to us. After years of trying to get Service pension improvements my right hon. Friend has produced the same sort of scheme as existed before. We believe that when the House of Commons speaks with one voice, as indeed it has dome, Her Majesty's Government ought to take some notice of it.
I want to make one other point, for the record, on the question of Service widows. The case has been argued from both sides of the House very effectively and all the figures have been given, but the argument will probably come from my right hon. Friend that the greatest percentage increase has been given to these special categories before 1958. But that is not the point. The percentage is not nearly enough. The basic pension is far too low. I would once more draw the attention of my right hon. Friend to the fact that the basic pension of Service widows has not been altered for a hundred years. I cannot blame the Secretary of State for War for that, or indeed the present Government; but I want to have it put on the record that how the heads of the Service Departments could have allowed that position to go on year after year, I simply cannot understand.
I want to add this letter to the record as an indication of what I mean by the fact that the basic pension is far too low for Service widows before the new date, and that, therefore, the precentage increase is, as I think was said in the Grigg Report, derisory. This is a letter from the widow of a naval commander:When I heard on my wireless one day last week that the Government had dealt with the civil servants and service pensions, and that the figure they mentioned was 12½ per cent. or 12 per cent, increase I almost jumped from my bed in delight. I hastily got out a pencil and pad 1576 and began to work out what 12 per cent. would be of £161 14s. Id. With decreasing enthusiasm I found that 12½ per cent. would be £20 ls. 9d. a year, so that my pension would now be £181, if I was included in this category. It would mean that my £13 9s. a month would become about £14 18s. 6d.! I deflated slowly. Then I went to unlock my flat, and on my doormat were two letters. One was from the Officers' Families Housing Association saying that owing to our Charlton Kings rates going up, my rent will be increased by £8 a year, and the second one was from my brother-in-law saying that as his stocks and shares were in such a shaky state he was sorry he was unable to send me his usual £5 birthday present, but he enclosed a card of good wishes. I sat down and cried my eyes out! Surely, if the present widows' get £310 a year and that has been considered due for increase how can they think we older widows can cope on £181? I cannot understand it. Last week I had exactly 2s. 10d. to feed myself on for the whole week, because I had to have my shoes soled and heeled and they were 12s. 10d. (and not sewn at that!) I can only allow 15s. for my food, so when an item like this comes along, housekeeping has to go. I cancelled my milk, had tea without milk, and a 1s. 1½d. loaf of bread and margarine were my meals. I do not ever want to have to do this again, and the irony of it was to find a dear little envelope pushed through my door for relief of hunger in Africa—Oxfam. I found a fellow feeling, but could only spare them 1d., I am afraid. I have to haunt jumble sales for clothes like some old second-hand clothes dealer. I feel degraded but am thankful for them. For my summer holiday, for which I had been saving up for three years, I found when I had booked in at the bed-and-breakfast boarding house (spotlessly clean) and had booked my fare there and back, I had exactly 2s. 4d. to spend during my week's holiday. I went, and I sat all day in a shelter loving the glorious sea-air, wind, rain, the lot. It was heaven, and was I hungry by night time, as you can imagine. The young think elderly people are boring because they live in the past but what future is there?That widow goes on to explain what life was like when her husband was in the Service. I simply cannot understand how Her Majesty's Government can allow older Service widows to get into this terrible condition.
I am very grateful, as I have said before, that we have the Royal Warrant with some pensions increases, but I cannot understand why my right hon. Friend the Chief Secretary to the Treasury and the Service Ministers did not go into the whole question. I am not in the least interested whether, if we give someone something, someone else happens to have 2s. less than before. The wit of all our Cabinet can surely find an answer to all this, and that is what I am looking for.
1577 I repeat one suggestion that I have made, which is that it would have been much fairer to have put into one category all the retired officers and officers' widows and, if it were appropriate—because I cannot go into all the detail entered into by the hon. and gallant Member for Kingston upon Hull, East—the other ranks as well, who are not able to qualify for the retirement pension because they have not had an opportunity to pay the contribution, and to have put in another category all those who were in a position to contribute and get the pension, and divide the money fairly. We might then have gone in the right direction for the solution of this very difficult problem.
The Secretary of State for War will no doubt give a lot of figures in a very charming way, and try to point out what has happened—or what he thinks has happened—but it will all be "hooey", because it will not be based on the facts of life. We have to accept the Royal Warrant as it is, there is nothing else we can do, but I want a firm assurance from my right hon. Friend the Secretary of State, here and now, that the Chief Secretary, after examining what machinery can be put into operation to make sure that we do not again have to go through this terrible business of trying to help these people, will tell us that the position of these older people will be looked at seriously and humanely, and a real attempt made to alter it. If he does that, he will have the thanks of the whole House and, for once, democracy will have triumphed over the Executive.
§ 10.15 p.m.
§ Mr. Emlyn Hooson (Montgomery)
Over the years, it seems to have become more and more accepted on both sides of the House that hon. Members have a special responsibility to those members of the community who have a just claim on the community, but who are in a weak bargaining position to succeed in their claim. I am sure that all hon. Members will agree that the existing widows—possibly the most unhappy description one could possibly think of—are precisely in that situation. I am sure that it will be agreed on both sides that they have a just claim on the community, and, further, that it would be hard to imagine a body of people in a weaker bargaining position to succeed in their claim. There- 1578 fore, a very special responsibility for these people rests upon hon. Members.
We must face reality. It has been said that there has been a 12 per cent. increase in the existing widow's pension. That is so, of course, and it is a large percentage increase, but it must be remembered that the initial pension was so pitifully small that the increase meant very little. The extra £20 for the over-70s was extremely acceptable but, again, it is very small when one takes into account the small size of the initial pension.
I take the example which has already been cited, the captain's widow over 70 years of age. I think that I am right in saying that her present pension is £162 7s. Putting it bluntly, if she were prepared to go on National Assistance, and if she were paying a modest rent, she would be better off without the pension, living on National Assistance.
This is not a partisan matter. We should all feel thoroughly ashamed of ourselves because we let this state of affairs continue. This group of people—I am told that there are only just over 5,000 of them now—have been very shabbily treated. This is parsimony. They have been kept in a state of penury, and we all ought to determine that the present state of affairs shall continue no longer.
I entirely sympathise with the points made by the hon. and gallant Member for Kingston upon Hull, East (Commander Pursey) about other ranks' widows who are not provided with any pension. That is indefensible. Nevertheless, I am sure that he will, on reflection, agree that that situation being indefensible is no argument against trying to right the injustice from which the existing widows suffer today.
I turn now to pensions generally. There have been references to the various codes. It is ridiculous that there should be so many codes today. The Government have frequently made clear that they are not prepared to accept the principle of parity in Service pensions. Nevertheless, it would be an enormous advantage if the greater inequities which exist were swept away. For example, why could not all the codes prior to 1956 be swept away so that all those whose pension codes date from before 1956 were now to enjoy the 1956 code? There would thus be only two codes, which would be an advantage, and it would be an advantage 1579 based on principle. One of the difficulties of introducing an increase of £20 here and there is that we introduce further anomalies into the pension system which it would be very difficult to justify.
Thirdly, and lastly, I wish to add my plea to that of the hon. Member for Macclesfield (Sir A. V. Harvey) that there should be a biennial review of Service pensions. That would have one inestimable advantage, namely, that it would take Service pensions and, if possible, all pensions out of political controversy. I believe that in this day and age we appreciate that the Government have responsibilities to the taxpayer, but, nevertheless, I speak, perhaps, for a younger generation in this House in saying that we are conscious of the fact that we also owe a responsibility to those who served the country well.
Surely the Government should consider very carefully the possibility of having a biennial review of pensions so that this difficult subject is removed, as far as possible, from the field of political controversy.
§ 10.21 p.m.
§ Mr. Antony Buck (Colchester)
I am most grateful to the hon. and learned Member for Montgomery (Mr. Hooson) for confining his remarks within a narrow compass, which enables me to address the House for a short time.
A long series of hardship pension cases has been cited to the House. I could similarly cite from constituents who write to me and others many cases of hardship, particularly among widows, both those who have no pensions and those who have minute pensions.
Since little time remains, I should like to deal with the matter of principle. On what principle should these pensions generally be awarded? It was stated by my right hon. Friend the Chief Secretary on 9th November, when he said that the Government should intervene—I do not quote precisely what he said, but I think that this is the sense of it—to take account of the hardship of their former employees, speaking more generally, especially when that hardship has arisen through no fault of their own. No one would quarrel with that principle, but does it go far enough?
1580 The other two possibilities are to tie the pension to the cost of living or to the current rate of pay. I would discard the first. I do not think it appropriate to tie Service pensions or public officer pensions generally to the cost of living. There is great force in the argument that no class of society should be insulated completely from the vicissitudes of the economy. Further, this would involve there being an infusion into the economy of extra spending power at, perhaps, the start of an inflationary spiral, and this would stimulate the spiral or make it greater to the detriment of the country. I, therefore, think that it is right to discard the possibility of tying pensions to the cost of living.
The second possibility—to tie the rates of pension of the Armed Forces to the current rate of pay—should commend itself to the Government. I am reinforced in recommending this because I recall the words of my right hon. Friend the Minister without Portfolio. I mentioned to him earlier that I proposed to refer to what he said. As a Government supporter on the back benches, I take very great note of what Cabinet Ministers say, but I also notice what they said before they became Cabinet Ministers.
On 25th May, my right hon. Friend the Member for Ashford (Mr. Deedes) was most firmly in favour of the scheme by which pensions were tied to the current rate of pay. This seems to me to be right. What difference can there conceivably be between a man who gave Service to the country in the 1914–18 war or thereafter and one who has given service recently? If this proposal is discarded on the ground of cast, then let us have the figures so that we can see what a scheme such as that suggested by my right hon. Friend would cost. He suggested a pension of about 40 per cent. of pay at the current rate. This seems to be fair and equitable. On this basis, how much would it cost? Similarly, widows' pensions could be tied to a proportion of the current rate of pay which their spouses, if still living, would be receiving. Therefore, as a matter of principle, I commend to my right hon. Friends on the Front Bench that they should heed the words of their Cabinet colleague the right hon. Member for Ashford and adopt the scheme which he suggested to the House on 25th May.
1581 In the few minutes that remain, I should like to mention one further matter, which also arises from the speech of my right hon. Friend who is now the Minister without Portfolio. In the debate on 25th May, which was more far-ranging and involved a wider class of pensioners than we are considering today, he suggested for pensioners from the Commonwealth territories the creation of a loan fund to top up their pensions. There is something to be said for considering something like that to assist Service pensioners and especially other-rank pensioners.
One of the matters which I have in mind is the difficulty experienced by a serving man in getting a house when he leaves the Forces. Some of the letters which I receive from Service men which upset me the most are from people who are now being turned off council housing lists because on their discharge they receive fairly substantial payment and have a bounty, perhaps, of £1,000. Because of this, they are turned off many council housing lists.
A man who leaves the Service, albeit with a certain amount of money—say, £1,000 or more—does not want initially to have to put down the whole of it to purchase a house. He is not in as favourable a position as people who have been able to accumulate furniture, and establish a permanent home. He does not at once know exactly where he wants to settle for the rest of his life. He needs a house which he can rent.
I suggest that the ex-Service organisations—.the British Legion, S.S.A.F.A. and the others—should consider whether to form a housing association to be registered under the Industrial and Provident Societies Act, 1893, to take advantage of the Housing Act, 1961, whereby the Government can make money available to such housing associations for houses to let. This would enable a Service man at the end of his service to go into such a house, perhaps only for a short time until he finds his feet and knows where he wants to live and can reorientate himself generally to civilian life. This is especially important until the Government adopt the criterion which I have suggested of tying the rate of pension to the existing pay for the job. Some of the people whom I have in mind have been out of the 1582 Services for some little time, and I envisage their being able to take advantage of such a scheme as I have suggested, if it were started, as well as other men as they leave the Services.
I associate myself with what has been said about making the pension code more simple. It is absurd to have seven separate codes for officers and about five codes divided into two for other ranks. Although we do our best, this makes the whole pensions business incredibly complicated for us to understand. We highly commend the Government for the proposed increases, but many cases of hardship still remain and I suggest that the principle which I suggested in the earlier part of my speech might well be adopted by the Government.
§ 10.28 p.m.
§ Mr. Douglas Houghton (Sowerby)
Forces pensions have recently become the Cinderella of our debates. The other week we were squeezed out altogether and tonight we are seriously curtailed. I would have felt better had the first Order of the Day been the more pressing subject. I say that with due respect to the British Museum. This has not been a satisfactory debate, because there are hon. Members on both sides who still wish to speak.
This is a most important subject and the Leader of the House was mistaken in thinking that the debate could be covered by the debates on the Pensions (Increase) Bill. They are two quite different subjects, although similarities in treatment run through them both. As, however, the right hon. and gallant Member for Norwood (Sir J. Smyth) pointed out, there are dissimilarities in the structure of pensions for the Armed Forces and the Civil Service and other civilian parts of the public sector.
The right hon. and gallant Member for Norwood opened the debate in a mood of good will towards the Government, fully in keeping with the Christmas spirit. That is what we expect of him, because he is a generous-minded hon. Member of this House and, if I may say so, rather too uncritical of Her Majesty's Government in this respect. He said that the Government have an extremely good record in pensions matters and he added that this was the sixth pension increase since the war and that this was 1583 the crowning glory of Her Majesty's Government in this respect.
But in the debates that we had on the recent Pensions (Increase) Bill there was a good deal of criticism of the fact that we had had six Pensions (Increase) Measures since the war. It was regarded as a condemnation of the treatment of public service pensioners. It was clear proof that pensions had been paid in bad money almost continuously, and it required frequent Pensions (Increase) Measures to meat obvious hardship.
In the debate on the Pensions (Increase Bill) the Chief Secretary to the Treasury made a statement which, I hope, applies to Armed Forces pensions as well as to civilian pensions. He was pressed very strongly during the debate on that Bill to try to find a better method than the ad hoc way of introducing pensions increases from time to time without reference to any agreed criteria and almost at the hazard of parliamentary time and other political considerations.
The Minister said that he would try to find a better solution. I will quote his words:I shall endeavour to find a better one, which will enable the consideration of all these very human and important matters to be a little more smooth and a little more effective, in some ways, than is the present procedure. I will try to do that, and I give that undertaking to the Committee."—(OFFICIAL REPORT, 20th November, 1962; Vol. 667, c. 1163.]I hope that that assurance holds good for the main subject that we are discussing now.
That enables me to say that the arrangements regarding the review of Forces pensions, in common with public service pensions generally, are most unsatisfactory, haphazard and even capricious. The Grigg Committee in Cmnd. 545, of October, 1958, recommended in paragraph 116 that biennial reviews of pay should also cover pensions and that pensions should normally take into account movements in pay. As far as I know, Her Majesty's Government have remained silent on that review. There was nothing about it in Cmnd 675 or in the White Paper of February, 1959. I assume, therefore, that the Government have left that to be dealt with alongside pensions increase legislation generally. We hope that we shall get something more satisfactory in future than linking 1584 Forces pensions increases to Pensions (Increase) Bills which themselves have neither regularity nor agreed principles.
The Pensions (Increase) Act was given the Royal Assent a few hours ago. Therefore, I assume that the draft Prerogative Instruments are almost in the hands of the Minister. The Government know what they are going to do about Forces pensions. It is all there now, surely. It must be promulgated very quickly because the increases are to be effective from 1st January, so I am sure that the Government are ready, or almost ready, to say what they propose to do.
I think that it is one of the great disadvantages of our constitution that we are not able to discuss Prerogative Instruments. We never get the opportunity to debate the practical proposals that the Government intend to implement. That puts us in a very unsatisfactory position. All we can do is talk generally on this topic, leaving the Government to advise Her Majesty on the Prerogative Instrument to be promulgated. Thereafter, we cannot debate it, either. If we are to modernise our procedure, I hope that this will be one of the matters to which attention will be given.
I cannot spend time now discussing the most interesting question of the principles upon which pensions should be paid. The hon. Member for Colchester (Mr. Buck) enunciated a principle with which I have a great deal of sympathy—personally, more sympathy perhaps than in some quarters of the House—but I feel that the time is rapidly coming when it will be necessary, in an expanding economy with rising standards, to define some principle, which everyone will understand and which will appear to be fair, for regulating pensions and keeping them in line with progressing standards in the community generally.
All we know about Forces pensions at the moment is that increases similar to the Pensions (Increase) Act provisions are to be carried out under the Prerogative Instrument. But at once we come up against the difficulty that, if the statement made by the Minister of Defence in column 9 of Written Answers in the OFFICIAL REPORT on Friday, 2nd November, is the guide, a 12 per cent. increase will be given for the 1956 and 1585 earlier codes, plus £20 for those over 70, while the next increase in the scale will drop to 4 per cent. for the 1960 codes, with £7 for those over 70, and, of course, there will be nothing at all for the 1962 code.
The attempt to marry the escalator of Pensions (Increase) Act provisions to the Forces pensions shows great disparity. Under the pension increase provisions, there are increases of 12, 10, 8, 6, 4 and 2 per cent. according to the year of retirement. The Forces increase is 12 per cent., for the pre-1956 pensioners, and 4 per cent. for 1960 pensioners. That is the scale. This shows how different is, or should be, the basis of dealing with Forces pensions in comparison with civilian pensions. They do not tally at all.
The Forces pensioners do not retire in the same annual steps—at least they are not covered for pension purposes at annual rates as is the case with civilian pensions. The result is discrepancies between pensions granted in earlier years and those granted more recently. As far as I can discover, there are bigger disparities than can occur in the Civil Service or in the other public service pension scales.
Then there is the case of the addition for the over-70s. The right hon. and gallant Member for Norwood called it a "booster". The more conventional or respectable Treasury term is "age addition." Civil servants over 70 who got the benefit of the increase may have retired only ten years ago and will have had the benefit in the calculation of the pensions of the higher salaries paid in more recent years.
The great bulk of Forces pensioners who are over 70 retired many years ago, however, at very much lower pay than the current or even the recent standards. There again, there is a disparity between two classes of pensioners which does not seem to be covered by adopting exactly the same structure.
§ Mr. Houghton
I regret that I cannot give way. I have only three minutes more and the House wants to hear the Minister, not me. I must give the Minister the time he wishes.
I think that another thing which has to be specially considered in connection 1586 with Forces pensions is the under-60s. As the right hon. and gallant Gentleman said, it is all right for civilian pensioners who have regular employment to the age of 60, and those who retire before 60 are mostly health cases, in which event they are covered by pension increase provisions, or they have gone out of their own initiative at the age of 50 or later under the provisions of the Superannuation Act, 1959.
I acknowledge that the police and fire services come very close indeed to the conditions of the Armed Forces, because for physical reasons they are required to retire earlier than people in ordinary civilian jobs, but, as my hon. and gallant Friend the Member for Kingston upon Hull, East (Commander Pursey) said, it means that probably the great majority of Forces pensioners are excluded completely from all pension increases over the years because they have not reached the age of 60.
Then there is the question of the widows, and here, I think, is quite honestly the most disgraceful feature of the present arrangements. This absurd business of distinguishing between those who were widowed before and after a specified date leads to anomalies between the two which are absolutely indefensible. I need not dwell on them. Hon. Members who have studied the matter can see how indefensible the position is.
The hon. Member for Manchester, Blackley (Mr. E. Johnson), who I see in his place, during the course of the debate on 23rd November, in column 1641 of the OFFICIAL REPORT, referred to this matter and to the comparatively small cost to the Exchequer of bringing the so-called existing widows, pre-November 1948, into line with future widows. It would be a very small cost, and it would remove a serious anomaly.
I am sure that on both sides of the House this is pin-pointed as one of the reforms which, sooner or later, the Government will have to make, because I am sure that the House will not tolerate this distinction very much longer. I regret—I may have some responsibility, I do not know—that this matter was not thrashed out at the time of the Grigg Report and the ensuing White Paper, but it is probably because we do not have a normal opportunity of discussing what the Government are 1587 proposing to do. It all comes out in a Prerogative Instrument, which is not debatable in this House.
I do not want to spoil the atmosphere of the House at this late hour and so close to Christmas, but the right hon. and gallant Member for Norwood, and the hon. and gallant Member for Macclesfield (Sir A. V. Harvey) said some words about the Government which were in strange contrast with what I read in the Spectator the other day. Mr. Angus Maude, who, but for certain difficulties in South Dorset, would have been able to be on the benches opposite tonight, said on 7th December, after castigating the Treasury for having done more harm to the Government than any other institution:It is not simply that it has been wrong about economics; its whole attitude has been repulsive to intelligent people.He went on to say:It has alienated a substantial body of loyal Conservative supporters by an approach to Service pensions that has been mean to the point almost of dishonesty; the amount of resentment caused has been enormous, while the total quantity of money in question has been relatively small.I could not have said it better myself.
§ 10.44 p.m.
§ The Secretary of State for War (Mr. John Profumo)
I am grateful to all those hon. Members on both sides of the House who have persisted in urging the need for this debate on Service pensions, and I am sure that it has been very useful. It has certainly been instructive to me, and I know that if my right hon. Friend the Minister of Defence had been here he would have felt the same. I do not need to tell the House the reasons why he was not able to be present this evening, but it is a privilege for me—I must admit a difficult privilege—to reply in his place.
The hon. Member for Sowerby (Mr. Houghton) said that we had been squeezed out of our pension debates, squeezed out of a full day recently, and also squeezed out of a fair amount of time today. I can only say that we have had a debate, but the hon. and gallant Member for Kingston upon Hull, East (Commander Pursey) managed to squeeze us for 40 minutes more, otherwise there might have been more useful 1588 contributions to the debate. I regret the fact that some of my hon. Friend's have not been able to take part.
At the outset I want to make one point clear. My right hon. Friend is responsible only for the pensions of retired Regular Service men and their widows, and not for disabled ex-Service men or for war widows. I say this because the hon. Member for Southampton, Itchen (Dr. King)—who has given me notice that he has had to leave—paid some compliments to the authorities for what has been done for ex-Service men, and this would be out of order for me to discuss now.
I have no desire to blind the House with a lot of figures, as my hon. Friend the Member for Tynemouth (Dame Irene Ward) thought I might be going to do. The new Pensions (Increase) Act which has just received the Royal Assent, as the hon. Member for Sowerby said, has the effect of improving the pensions of those who retired from the civilian branches of the public service. I assure him that I shall be submitting the Royal Warrant to Her Majesty tomorrow, so there will be no delay. Ever since the first Pensions (Increase) Bill was passed it has been the traditional practice to follow it up with Prerogative Instruments which apply the same benefits to retired members of the Armed Forces and their widows.
My right hon. and gallant Friend the Member for Norwood (Brigadier Smyth), in an interesting speech, argued that this is wrong—that the conditions of service in the Armed Forces and the way in which their pensions are calculated are very different from those which apply to the Civil Service, and that therefore it is not right simply to apply to the fighting Services the terms of the Pensions (Increase) Act.
There may be some misunderstanding here. It is true that the terms and conditions of service vary between one Service and another, and it is no doubt for this reason that their pensions differ in amount as well in method of assessment. But once awarded they are subject to the erosion of inflation in exactly the same way. To my hon. Friend the Member for Colchester (Mr. Buck) I say that the fundamental purpose for each Pensions 1589 (Increase) Act is to alleviate the hardships caused by the erosion of inflation since the last Act came into force. I believe, therefore, that it is right to apply the terms of the new Act to the Armed Forces without any modification, as we have always done.
This is not to say that the pension terms of the Armed Forces cannot be altered relative to those of the Civil Service. This could be done at any time, also by Prerogative Instrument, if the Government were satisfied that this was the right thing to do. But, as 1 see it, Service pensions differ from Civil Service pensions in one respect; whereas a civil servant has his pension calculated as a proportion of his salary at the time of his retirement, a member of the Armed Forces has a rate of pension fixed in relation to his rank. From time to time these rates, Which are laid down in a code, are altered—that is to say, a new code is issued—but the rates in the new code are enjoyed only by those who retire after the date on which the code is issued. In addition, those widowed since 1958 have had pensions equal to one-third of their husbands' pensions. Before that they, too had a flat rate, depending on their husbands' rank. Meanwhile, many of these pensioners have benefited to various extents from successive Pensions (Increase) Acts passed since 1944, to which hon. Members on both sides have referred.
It has been suggested that the existing number of pension codes is unnecessarily confusing. There are certainly a number of these codes in operation, but each pensioner is concerned only with one code and, anyway, the variety of individual rates which they produce is certainly no greater than the variety of rates for civil servants, each of whom has a separate assessment related to the length of his career and the amount of his salary in the last three years of his service.
I want now to deal with a few of the main issues which seemed to me to run as a theme through our debate. The first thing to get clear is the purpose of pensions. One thing is clear; these pensions when originally awarded, were never designed to meet any particular level of subsistence, or related to any criteria of need. They were simply intended as rewards for service. I 1590 wonder whether some at least of our difficulties have not arisen from a failure to keep this in mind. It puts occupational pensions in a different category from, say National Insurance or disability pensions.
The next point is that when we are dealing with alterations to existing pensions it would be wrong—at any rate, it has always been said to be wrong—to deal with retired Service men separately or differently from other public service pensioners. To put it no higher, it would be a drastic reversal of the policy adhered to by all parties over many years, and I think that we must look to a solution for our difficulties within the limits of that principle rather than outside it.
In all the controversies which have raged over this question there have been two main opposing positions which, describing them in their extremist forms, we might call immutability and parity. The pure doctrine of immutability would run something like this. A public service pension once awarded is not subject to change except in so far as a severe fall in the value of money gives rise to hardship which has to be alleviated by means of Pension (Increase) Acts. The very wording that I have used shows that immutability is far from sacrosanct even in the minds of its stoutest defenders and when we reflect that the new Act is the seventh since 1944 it will be readily understood why the word "immutability" is seldom used by Government spokesmen.
At the other extreme are those who say that every pensioner, no matter when he retired, should enjoy the same pension terms as if he were retiring today. I suggest that this is a proposition which cannot be sustained. Current pensions are part of a contract or bargain to which the man who retired a long time ago was never a party. Many features of the terms of service in his profession may have changed in the meantime, some for better and some for worse. The contract of service under which he served cannot be reopened. I believe that this would be a fatal objection to parity, even if we disregarded the cost to the taxpayer now estimated at about £90 million for all public service pensioners.
1591 As was said by my right hon. and gallant Friend the Member for Norwood the real essence of the problem which confronts all of us is inflation—the attempt by many to extract from the economy more than we are putting in. This is a relentless process which has caused serious hardship to many of the worthiest members of the community, not only pensioners but all who live on fixed incomes, and we do all that we can to alleviate the hardship so caused.
Within these limits the new measures are certainly neither unhelpful nor ungenerous. They will put £22 million into pensioners' pockets, a larger measure of help than was provided by any of the six predecessors of the Measure, and they do so in ways designed to give the most help to the oldest pensioners and those who have been on pension longest. I am sure that this must be right. Those who retired in 1956 or earlier will get an increase of 12 per cent. as against an increase in the cost of living of 9 per cent. since the last Act; and there is the extra £20 a year for those over 70. This is the first time that help of this sort has been given.
The hon. Member for Itchen said that perhaps that did not help all the Service people equally. It does not. But it is the case that some of the younger ones are still able, whatever we may feel about this, to do a useful job of work.
I should now like to turn to one or two matters raised by hon. Members during the debate—
§ Mr. Paget
The right hon. Gentleman has now dealt with the main point. The whole problem is the assurance. Either one has the principle of parity or one has the principle of "honest money." "Honest money" is paying the pensions at the purchasing power which they bore when one bargained to give them. That would give a great deal more expense than parity. What the Government are doing is refusing either. They are bilking of paying what they promised to pay in "honest money", and they are also refusing to give parity with the others.
§ Mr. Profumo
If the hon. and learned Gentleman had not interrupted me, would, perhaps, have dealt with one or two more points that my hon. Friends have made. If he reads my speech he will see, whether he likes it or not, that there is logic in it.
I turn to the question of widows, and I want to say something about them even though I have only five minutes left. This subject was raised by my right hon. and gallant Friend, the hon. Member for Itchen, my hon. and gallant Friend the Member for Macclesfield (Sir A. V. Harvey), my hon. Friend the Member for Tynemouth (Dame Irene Ward) and the hon. and learned Member for Montgomery (Mr. Hooson). In particular, I think that hon. Members have had in mind those widows now on pension whose husbands died before November, 1958.
A percentage increase means that the smaller the existing pension is, the smaller the increase. I accept that the current measures bring only very small cash benefits to those on very small pensions, but, as I have said, the current pensions increase Measures aim to do something towards restoring the original pension of those who have retired. They are not meant to rewrite history and revise the whole basis on which previous awards were made. All the pensions that we are now discussing today were awarded on the basis of services rendered and were never intended to be measures of social security assessed in relation to need.
I know that many Service widows, both of officers and of other ranks, are living in straitened circumstances. Some, indeed, are receiving no Service pension at all, and are, therefore, receiving no benefit from the present Measure. I recognise their plight and sincerely share the sympathy expressed for them. The Government considered with care and sympathy whether it would be possible to extend the improvement given to those who were widowed after 4th November, 1958, to those who had been widowed before that date, but we had to decide that there was no basis on which such widows could be distinguished from any other category of existing pensioners. Any decision to reassess their pension in the light of the recommendations of the 1593 Grigg Committee could only be justified if all other public service pensioners were to be reassessed in parallel.
I did not like the idea of my hon. Friend the Member for Tynemouth that I might be going to talk this evening a lot of "hooey". As I explained, the House need not feel that if the matter is not dealt with in the Prerogative Instrument which will apply to the Services the terms of the Pension (Increase) Act, the opportunity will have been lost. If the Government were in the position to make any changes—I am not to be taken as implying that they will—they could be made at any time. It must be accepted as a general proposition that we cannot depart from the general principle that changes in Service pensions march in step with changes in other public service pensions. We really must not start a game of leap-frog.
I know that there is widespread feeling which has been voiced tonight and in other debates on pensions that we ought to have some satisfactory procedure for ensuring that Pensions (Increase) Measures are introduced when there is need for them. As one hon. Member said, my right hon. Friend the Chief Secretary to the Treasury mentioned this in his speech on the Bill. If something of that sort were done—if my right hon. Friend were able to do it—it would have its repercussions in the sphere of Service pensions as well.
Many other points were raised. I want to tell my hon. Friends and other hon. Members that as soon as the Minister of Defence gets back I will see that his attention is called to all these points. I know he will study them very carefully indeed. I feel very sorry that I have not been able to give a more definite help to the House in a matter on which I feel very strongly myself, as any Service Minister would, but I think that the fact remains that we have consistently tried 1594 to help the Service pensioner and we have advanced the Service pensions in line with civil pensions. I believe that this is the way to proceed in doing it, at the same time as trying to see that we do not cause more inflation, which would only harm the very people that we are trying to help.
§ The Treasurer of Her Majesty's Household (Mr. Michael Hughes-Young)
I beg to ask leave to withdraw the Motion.
§ Motion, by leave, withdrawn.