HC Deb 20 November 1962 vol 667 cc1131-42

Amendment proposed: In page 6, line 41, to leave out from the second "the" to the end of line 43 and insert "1st July 1962".

Question again proposed, That the words proposed to be left out stand part of the Clause.

10.2 p.m.

The Chief Secretary to the Treasury and Paymaster-General (Mr. Boyd-Carpenter)

I think that, with admirable timing, the hon. Member for Sowerby (Mr. Houghton) had just concluded his speech in moving the Amendment when the clock struck four on Friday afternoon. As he told us, the point in the Amendment is a short and simple one; it is a claim for retrospection in the benefits of the Bill back to 1st July. The point is a simple and clear one, but I think that the Committee will agree that there has to be a very strong case to support a claim for retrospection, and, although the hon. Member deployed his argument with his usual skill, I am bound to say that he did not make on my mind the impression that he had made out the sort of substantial case that is necessary if one is to make a case for retrospection.

There are great difficulties about it, and the first and most obvious one is the cost. As we may discuss on a later Amendment, it is our hope that if the Committee and, later, the House are prepared to deal with the Bill tonight we may be able to bring it into force as from the beginning of next year. Therefore, if one is to bring the effective date back to 1st July the cost for that extra period will be about £11 million. That is a substantial figure, and of it—and I think that the Committee may attach importance to this—about £2½ million would fall on the local authorities.

I had, of course, some discussions with the local authorities, who bear some of the cost of the Measure, before the Bill was introduced. I certainly did not put to them any suggestion that they should bear a retrospective charge. Clearly, they have not made, and will not have been able to make, arrangements to bear any additional charge of this nature between 1st July and the end of the year. Therefore, the Committee must weigh seriously the difficulty in which they would be placed by this additional and unexpected expenditure.

There is no case whatever for retrospection on grounds either of delay in introducing or pushing forward with the Bill or on grounds of movements of the index of retail prices. We have fully carried out the undertaking that I gave at this Box on 17th July to introduce the Bill early in the Session. That is why we have it at this stage, so early in the present Session. As to price changes, I am glad to say that they have been favourable. When I made my statement on 17th July, the latest index of retail prices was 120.4. The latest figure now, as the House knows tonight, is 119.1.

The hon. Member for Sowerby based a little of his case for retrospection on the fact that I made a statement on 17th July. That does not establish any argument for retrospection.

Mr. Houghton

The Minister keeps repeating the word "retrospection". The Amendment asks him to pay the bill from the date when he said it was due.

Mr. Boyd-Carpenter

No, however ingeniously it is put, I did not say that the Bill was due. I said the exact contrary. I said that in the next Session—that is, this Session—I would introduce a Bill to do this. I did not say that the Bill was due.

As I was saying when the hon. Member tried to help me, he based a certain amount of his argument on the fact that I made a statement. I made it for the good and simple constitutional reason that when a Government has made up its mind about something, it is a good thing to tell the House of Commons at the earliest possible date. That is a very good principle. I made it clear, however, that we should be introducing a Bill this Session, not in the last Session.

Mr. W. R. Williams (Manchester, Openshaw)

Would it not be fair to assume that when a Minister goes to the trouble of making a statement of the importance of the one made by the right hon. Gentleman, it was because it had been recognised that there was an urgent need?

Mr. Boyd-Carpenter

I do not think so. The statement was made because we had made up our minds. I hope the Committee will agree that when the Government have made up their minds about a matter of public importance, there is a certain amount to be said for telling the House of Commons. Indeed, I have often heard complaint in the contrary sense. Had we waited until the Recess and made an announcement then, no one would have been more indignant than the hon. Member for Sowerby that I had not made the statement to the House of Commons. Therefore, there is nothing in that argument.

Then there is a purely practical point. What we are trying to do in the Bill is to put up substantially the rate of pension which will be paid to former servants of the State to enable them to live a little more comfortably. If we have a retrospective provision of this sort, we do not affect the date from which people actually get an increase. We do something quite different; we give them a lump sum payment calculated over a number of months from the date from which, theoretically, they would have had the pension.

I very much doubt whether the right course in a matter of this kind is to include lump sum payments. What we are trying to do is to increase the current payments on which the former servants of the public live, not to give them a lump sum bonus based upon an arbitrary date which the hon. Member for Sowerby has suggested.

Therefore, I cannot recommend acceptance of the Amendment. It is not a sensible use of £11 million of public money to give a lump sum payment when we put the Bill into operation, because of a notional attachment of an increase to a date at which that increase was not, and indeed could not have been, payable. Therefore, although the hon. Member has put his case with his usual persuasiveness, I cannot recommend the Committee to accept it.

Mr. W. R. Williams

I had not intended to rise, but the right hon. Gentleman said that my hon. Friend the Member for Sowerby (Mr. Houghton) had not put the case in his usual persuasiveness.

Mr. Boyd-Carpenter

I said that he did put it with his usual persuasiveness, but that it was so bad a case that it did not persuade.

Mr. Williams

I accept that correction. May I now address my comments to the right hon. Gentleman's speech? He has certainly not used the same logic for which he is famous in the House and was very famous when be was in opposition.

There are two points that I want to make. First, I return to the point that I made on the question of this very important statement. The pensioners in the Civil Service assumed that, after a close survey of their position and the hardships that were accruing to them, the Government thought it sufficiently urgent and important to make a pronounced declaration at that time. It is not unreasonable to assume from that and to deduce that in the hearts and minds of these men and women there arose the idea that the right hon. Gentleman would not only treat their case with urgency, but would recognise the hardship from the time when he had seen the light.

The right hon. Gentleman advanced a most queer argument tonight. He said that it does not matter whether we have a case or not, that it does not matter how sound the argument is today, that it does not matter how much the need of these people was from July until now—it is a monstrous idea to make a lump sum payment to these people. There is nothing monstrous, nothing inconsistent and nothing that we have not precedents for in these lump sum payments. It has always happened that way. If anything is back-dated a lump sum is, in many cases, automatically involved. I have had many awards in which there have been lump sums in addition to the increases in the scales of pay of the various grades. There is nothing monstrous about the idea that these people should have £11 million in the form of grants and not weekly increases.

If my argument is sound and there was hardship before is it not reasonable to assume that these people went without many things that they would have got if they had had the resources to go for them. Taking that line of argument, what is wrong in the Government making up to those people, who have been quite a long time waiting for increases in their pensions, for the leeway that has occurred concerning their increases? I am surprised that with his logical mind, the right hon. Gentleman put such an illogical argument. Looking round the House, hon. Members even behind him can hardly understand why he made that statement this evening, and I hope that he will have second thoughts and concede the points that we are making in the Amendment.

10.15 p.m.

Mr. E. C. Redhead (Walthamstow, West)

I find it very difficult to reconcile the right hon. Gentleman's attitude to this Amendment with the claim which he has so constantly reiterated in respect of the Bill, and the Financial Secretary has also echoed the view, that this is a generous It has been acknowledged, and I freely repeat it, that the Bill is an advance on its predecessors. But I think that the term "generosity" is an overstatement. The Bill does not, as has been demonstrated repeatedly, give to public service pensioners, particularly those longest retired, anything like a reasonable degree of compensation for the loss in value of their pensions. Every Amendment that we have proposed so far, and which has been designed to improve that situation, has been resisted by the Chief Secretary.

If his mood and intention are really those of generosity, why does he resist this Amendment, for which I contend, notwithstanding what he has said, that there is a good case in justice and equity? He has tried to suggest that his announcement on 17th July was no more than a courtesy to the House. Its very unprecedented nature suggests that there was a much firmer reason behind it than that.

I put it to the right hon. Gentleman that in making this announcement in these positive terms he must have been satisfied then that the circumstances justified it, that the changes which had occurred since the 1959 Act as of that date warranted the Measure now before us. Indeed, I suggest that the Bill was all ready in draft substantially in its present form, for he will remember that he promised in the announcement that the Measure would be not less generous than the 1959 Act. Why then defer its implementation until the 1st January, 1963, which we understand to be the present aim and intention of the Government?

By reason of the fact that the Bill has been introduced so early in the Session and is being hurried through, it is reasonable to assume that, but for the intervention of the three months' Summer Recess, the Government, having made up their mind, would have introduced it at a much earlier date. It would, in fact, at the present pace of events, have been law and, indeed, would have had a much earlier operative date than that which is now contemplated.

Why should the pensioners be denied for six months the benefits which were recognised to be due in July? There is no logic in this. Far less is there any aspect of generosity. What we are asking for is in no way inconsistent with the usual practice which operates in a very considerable area of public service in respect of revisions of pay, which are quite frequently backdated to the point at which it is agreed that the circumstances justified the revision even though the decision is not reached until some months later.

Pensioners already suffer a serious disadvantage in this respect compared with those still in service, for they have no regular channel for submitting their claims, no recognised means of communication, no organisation recognised as a negotiating body on their behalf, and no standard practice by which pensions can be reviewed. They are wholly dependent on enlisting the sympathy of hon. Members of the House and on agitation and representation by seeking to build up pressure on the Government until the latter, under the weight of that pressure, or for reasons of expediency, feel compelled to do something, belatedly and usually inadequately.

Why should pensioners be put to the further disadvantage of having in this instance to wait until next January for improvements which the Government thought to be justified last July? I hope that, even at this stage, if the right hon. Gentleman is moved by feelings of generosity he will recognise in this Amendment an opportunity to give exercise to his intention of generosity. I assure him that, whatever be the measure of cost, the measure of good will which he will gain by accepting the Amendment and the opportunity to make some further redress to those who have suffered unduly long by having the value of their pensions debased by the depreciation in money values will be greater. I beg him even now to give some consideration to agreeing if not to the full effect of the Amendment, at least to some measure of retrospection which will take account of what was in the minds of the Government last July and which will take account of what I believe to be the claims of justice.

Mr. Boyd-Carpenter

The hon. Member for Walthamstow, West (Mr. Redhead) has tried to attach an argument for this Amendment to my statement of 17th July. I have, therefore, sent for a copy of my statement and I have again read it and the supplementary questions which were put to it. There is a very clear indication that the Amendment is an afterthought on the part of hon. Members opposite in the fact that none of the supplementary questions, including those of the hon. Member for Sowell-by (Mr. Houghton), on 17th July suggested for a moment that this provision should be made retrospective.

I made a clear statement that we would introduce a Bill in the new Session, and we have implemented that to the full by introducing it as one of the earliest Measures of the Session. If the hon. Member for Walthamstow, West looks at his own supplementary question, or at my statement, or at the discussion which took place on 17th July, he will see that there was really not the faintest suggestion by any hon. Member on either side of the House that this Measure Should be made retrospective, or that my statement gave any indication whatever that that was the intention.

As regards the hon. Gentleman's observations that the Bill must have been drafted by then, I think that, on reflection, he will recall that I then pointed out that the subject of overseas pensioners was at the stage of the operation of a committee, appointed by my right hon. Friend the Secretary for Technical Co-operation, which was investigating how this should be done. All that I could say on 17th July was that we hoped and, indeed, expected that the committee's report would be available, so that if it did recommend anything to help these pensioners, we should be able to deal with them in the Bill, as we are now doing.

Really, the hon. Gentleman's argument turned very substantially on two points on which I wholly disagree. One was that the Bill was late. He said that the pensioners had waited unduly long. But that is not true. The gap between the dates when we hope to operate the Bill and the operation of the previous one, three years and five month's, is exactly the same as that between the previous Measure and its predecessor. When he says that it is so inadequate that it has to be extended backwards, really he is allowing a little bias to disturb his normally very clear judgment of these things.

As I said on Second Reading, the total additional provision made for pensioners by the Bill is approximately twice—at £22 million—that made by any previous Pensions (Increase) Measure—the last two were about £11 million while others before that, including that of right hon. Gentlemen opposite, were smaller. The argument that because the Measure is belated and inadequate it must be made retrospective does not stand up, because on fair consideration of the facts it can be seen that it is not belated and is very far from being inadequate.

Mr. Douglas Houghton (Sowerby)

I cannot let all that pass without a word in reply. The right hon Gentleman has been very free with his "reallys" and I say, "Really, he must not chide me with not having raised the question of the effective date when putting supplementary questions to his statement in July". I was pressing the right hon. Gentleman to say what the Bill was to contain. At that stage, that was more important than the effective date. Had I pressed the question of the effective date, the right hon. Gentleman would have suggested that I had better wait and see what was in the Bill before asking a date from which it could operate.

The right hon. Gentleman is so resourceful that we cannot pin him down. He jumps about all over the place. He throws back at one the arguments which one has not used. He chides one with omissions which were not omissions. At the time I was concentrating on more important matters.

The real truth of why the right hon. Gentleman made his statement in July is that the right hon. Member for Ashford (Mr. Deedes) and the hon. Member for Liverpool, Wavertree (Mr. Tilney) both declined to join the Government unless they were assured that a statement of this kind would be made. It is not correct to say that the statement was made when the Government had made up their minds. The announcement was made when right hon. and hon. Gentlemen opposite had made up the Government's mind for them. The right hon. Gentleman knows that. He had to appease the discontent on his own side, and that is why he made the announcement.

I will not go into all the arguments about lump sums. If something is backdated, it is recompense for people having waited longer than they should have. To describe it as a lump sum is quite inaccurate. However, we cannot go on flogging this question of the effective date. We have had the answer. Hon. Gentlemen opposite are not apparently as moved as we are about this and we shall have to allow the Committee to make a decision on the matter. It is regrettable, because we have gone through this Bill with patience and with reasonableness. We have deployed arguments on one or two matters which have not been received favourably, but we have done our best, and I rest content with that.

Mr. Charles Loughlin (Gloucestershire, West)

Assuming that the right hon. Gentleman's argument is valid, that this was an afterthought, that this request for retrospection was an afterthought, is there any less virtue in it? Is it not usually the case that an afterthought results from further consideration of a particular problem? What was the point of the right hon. Gentleman's argument?

Mr. Boyd-Carpenter

If the hon. Gentleman did not follow my argument before, I can only beg the Committee's forgiveness if I repeat it. His hon. Friends argued that because I made the statement on 17th July, that was an argument for relating back the benefits to the beginning of the month in which I made it. I should have thought it was relevant, and I hope that the hon. Gentleman will think it was relevant, to the suggestion that my making the statement in some way or other supported their arguments and raised expectations of this, that when I made the statement no hon. Member made this suggestion at all. Perhaps the hon. Gentleman will think that out.

Mr. Loughlin

I do not want to delay the Committee for very long, but when the right hon. Gentleman made his announcement nobody on either side knew what his intentions were. I therefore do not see any validity in his arguments.

Amendment negatived.

Question proposed, That the Clause stand part of the Bill.

Mr. Redhead

I do not want to detain the Committee, but as regards the definition of the appointed day it is specified that this means the earliest day after the passing of this Act which is the first day of a calendar month. We understood that it was the Government's intention and desire that the Bill should become operative as from 1st January. I was debarred from moving an Amendment which sought to define it in more precise terms. The proceedings on the Bill have been conducted with the expectation that 1st January would be the operative date, and I would be glad to know whether the Government still intend to ensure that that is the operative date.

10.30 p.m.

Mr. Boyd-Carpenter

I can give that assurance. The provision in the Bill is as the hon. Member stated, the definition of the appointed day being in Clause 10: the earliest day after the passing of this Act which is the first day of a calendar month". If the House is good enough to conclude its consideration of the Bill tonight I have every reason to believe we can get it to another place and submit it for the Royal Assent during December, in which case, without further ado, the provision of the Bill to which I have referred would bring it into operation on 1st January next.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Clause 11 ordered to stand part of the Bill.