HC Deb 15 March 1965 vol 708 cc949-64

Motion made, and Question proposed, That a sum, not exceeding £22,324,000, be granted to Her Majesty, to defray the expense of non-effective services, which will come in course of payment during the year ending on the 31st day of March, 1966.

6.55 p.m.

Mr. Ian Fraser (Plymouth, Sutton)

I wish to relate my remarks closely to Subheads A and B of this Vote in order to make a plea to the Minister that he and his right hon. Friends should distinguish their term of office from that of all parties which have preceded them by endeavouring to make really substantial progress towards the principle of parity in respect of retired naval pay and pensions. I relise that this is a matter which is under review and I am glad of it, but I am sure that if we are to make substantial progress, it is necessary that all who believe that progress should be made should constantly put forward and urge that view. Parity is essentially something which is far more attractive to an Opposition than to a Government. Of its nature that must be so.

I am quite sure that if hon. Gentlemen opposite look back to their election literature they will find that they gave some enthusiastic undertakings for things of an undertaking type—I do not impose any strictures on them for that—which appealed in the days when they were on this side of the Committee. It certainly does not lie in my mouth to criticise hon. Members opposite for that. In my own election address I pledged myself to continue to work for progress towards parity. That is in no way inconsistent with my very junior membership of the previous Government which did a great deal for Service pensions. In any case—if I may, for five seconds diverge from the strict path of order—I would say that anyone who, acted as an unpaid Whip in the previous Administration as I did, could certainly not be criticised for having an interest in parity, when we see the comfortably rewarded holders of such offices now whom we meet with such pleasure when swimming about in the usual channels. "Channel" or "mud bank", I know that these hon. Members are not carried on Vote 9. I note that fact and I will return to the retired officers and ratings who are carried on Vote 9.

I wish to suggest to the Minister that in considering progress towards parity we need not pay too much attention to the obstacles often held to arise by reason of the repercussions which parity in any particular case may have in other walks of life. This always seems to me the major stumbling block. Here, on the contrary, there is much that would be of great value to these retired officers and men. There is much which could be done simply by reviewing, adjusting, assimilating and upgrading the complex and obsolete codes under which retired pay and pensions are drawn. This is a process for which there is ample precedent in the past. Whatever views may be held by hon. Members on either side of the Committee on the pure principle of parity, I am sure there will be no division of opinion that the present tangle of obsolete codes is an anachronism and an injustice, which ought to be remedied.

There is another recent factor, small enough, no doubt, in itself, which is impressing this fact on the minds of those affected. It is the increase in the pensions of Merchant Navy officers, an increase on a sliding scale. I think that the nature of the sliding scale is something like this. The increases range from about 7½ per cent. for men under 45 to 70 per cent. for those aged 75. It is that sort of sliding scale which, I have evidence from my constituency correspondence, is making a considerable impact on the minds of the older officers who are affected.

Commander Pursey

I am following this point with very great interest. The point which I should be like to be clear about at this stage is whether the hon. Member is advocating large increases on the present very high scale of officers' pensions as compared with ratings, or is he advocating a large increase in the old low pensions? In justice to himself, as he is making a very good speech, I think that he should make clear precisely which of these two horses he is backing.

Mr. Fraser

I thank the hon. and gallant Member for his intervention. In fact, there is no question here of officer or man. I am not making any distinction in what I am saying between the question of retired pay for officers and pensions for ratings or anything of that kind—

Commander Pursey

Present or past.

Mr. Fraser

Past. I am sorry. I should have made that more clear.

I must not go on much longer, because we are running late, but it is the case that serving personnel are sometimes apt—I expect that this was true of oneself when one was serving—to be less interested in those drawing retirement pay and pensions than they might be. Nevertheless, what we in the Committee must remember—I am certain that the Minister is as conscious of this as anybody—is that it is the retired, and it must be the retired, officers and ratings alike, who constitute the soil in which the Services are rooted.

There is a real and vital connection between Vote 9, retired pay and pensions, and the present manpower deficiencies which we discussed on Vote 1. It is that vital link which I am sure the Committee ought to keep constantly in mind when it considers the revision of the tangle of out-dated codes under which retired pay and pensions are now drawn.

7.3 p.m.

Commander Pursey

I am very pleased to follow the hon. Member for Plymouth, Sutton (Mr. Ian Fraser). In some of my remarks I shall be supporting his argument. I would assure him that my intervention was intended to aid him in clearing up what I thought was a very important point.

I must say to hon. Members on the other side of the Committee that it is the greatest pity that we did not have that speech 13 or 20 years ago. Then we might have got somewhere with parity under a Tory Government, which did absolutely nothing about parity.

Mr. Ian Fraser

Perhaps that would be due to the difference between the Opposition and the Government, to which I made reference earlier.

Commander Pursey

I quite appreciate that the hon. Gentleman made that point, but we must get this straight. There is no question at all that the Tory Party is and always has been much better in opposition, advocating reforms for the Services which they never attempt to carry out when they become the Government.

Having sat through practically the whole of this debate since 3.30 and after two Votes largely on materiel—ships, organisation and the like—it is pleasing now to pass to a Vote which is mainly concerned with personnel and the important subject of pensions for officers and men, and also widows, where those latter pensions are paid. The hon. Member for Sutton made no reference at all to ratings' widows who are not entitled to any pension. In a short debate such as this is supposed to be, I wish to deal only with two lower deck pension points under Subhead B: first, the lousy low rates of pensions still being paid to ratings who served in the Second World War; and, secondly, the scandalous position of the pre-1958 widows of ratings who received no Service pension at all.

I hope that we shall have some information tonight about this question: what will the Labour Government do about these two very important personnel matters? Both these problems, as has been said, have a serious adverse effect on recruitment, particularly in cases of a son drawing three times the amount of pension which his father draws for the same number of years' service. No longer is one of the main recruiting sources a son following his father, as happened in my family.

I now wish to say a few words about the check and the impudence of the hon. and gallant Member for Winchester (Rear-Admiral Morgan Giles), who, I note, is not in his place, but whom I attempted to inform that I would refer to his speech on Thursday last and his attack on my hon. and learned Friend the Member for Northampton (Mr. Paget), over the point raised by the hon. Member for Sutton, namely, parity of pensions.

It ill becomes a newcomer and a "nozzer" to our debates from the Tory Party to attack Labour Members, and some Conservatives, for our arguments over many years over this very thing, parity of pensions—which is what the hon. and gallant Member for Winchester attempted to do—when successive Tory Governments did nothing in 13 years to improve the scandalously low earlier basic pension of other ranks in all three Services. The crux of this problem is that ratings go to pension at 40 and the Pensions (Increase) Acts do not apply until the age of 60. There is thus a vacuum of 20 years for ratings, when no increase takes place, but no one else—Service officers or other Government employees—is so affected for such a long period.

The obvious solution, as the hon. Member for Sutton has said, is that there should be the same cost of living increase in the old and earlier pensions already in payment as there are in the new pensions to be paid. In other words, my complaint is that when Service pensions are considered and increased, the increase is based on future requirements and nothing is done for past service.

I can deal with ratings' pensions from personal knowledge. When I joined the Navy as a seaman boy, my pay was 6d. per day, and the basic pension for an able seaman was ½id. per day pension per year of service. In other words, after 20 years, the basic pension was 10d. a day. Admittedly, there were additions of pennies for good conduct and halfpennies for petty officer time and farthings for leading seaman time.

I notice that the hon. Lady the Member for Plymouth, Devonport (Dame Joan Vickers) is enjoying this and is laughing her head off, but shortly I will quote a current pension and how it is made up, and then perhaps the smile will go from her face.

Dame Joan Vickers

I was not laughing. I was saying that we had had the benefit of this speech for two or three years running.

Commander Pursey

What is the objection to that?

Dame Joan Vickers

None at all.

Mr. Emlyn Hooson (Montgomery) rose—

Commander Pursey

What is the object of making a speech? It is to try to get reforms. If one does not get them, one has to go on making the speeches. I have read speeches by the hon. Lady—and I do not want to discredit anything which she does—in which she has repeated her argument and has admitted doing so. There is no reason for me to say that I am repeating the argument. I am simply stating the current facts. Now I will give way to the hon. and learned Member for Montgomery (Mr. Hooson).

Mr. Hooson

The hon. and gallant Gentleman is doing the hon. Lady the Member for Plymouth, Devonport (Dame Joan Vickers) an injustice. She is obviously enjoying the hon. and gallant Member's speech, and has done so for three years running, and she was looking forward to enjoying it a fourth time.

Commander Pursey

I have been too long in the House of Commons not to know when my speeches are being enjoyed and when they are being ridiculed. The hon. and learned Member cannot use that bait to catch an old fish.

Here is an interesting point about my pension: this was the same basic rate as for my father and as for my grandfather, who fought in the Crimean War. In fact, it was introduced by William IV, in 1831, and continued throughout the century and later. These William IV farthings are still being paid, as I will show by an example in a moment.

I jump to 1919, after the First World War, in which I served, as did my hon. Friend the Member for Bristol, South (Mr. Wilkins). It may be that we are two of the few in the Committee today who served in the Navy in that war. In 1919, the Admiralty announced: The basic rate of pensions will be 1½d. a day instead of ½d. a day for each year of service. That was 1919, and those halfpenny pensions had a lifetime to run from that date. That quotation should satisfy hon. Members that this halfpenny argument is not a figment of my imagination.

Ten years later, however, pensions were reduced, and the weekly basic was started, giving only 8d. a week instead of 10½d. a week. The Admiralty suddenly realised that quoting these pensions by the day produced such an infinitesimal sum that the answer was to make it a weekly payment and then to reduce it to 8d. This 8d. basic pension per week continued until after the Second World War and is still being paid.

In 1945—I am jumping periods quickly—the Labour Government introduced a basic rate for all three Services of £1 6s. 4d. per week. But what was the result of that? It gave the R.A.F. other ranks only 1d. per day pension more than the 1919 basic rate of 25 years earlier. Hon. Members opposite who wish to start to study this problem of ratings' pensions should consult the full page schedule in HANSARD of 27th June, 1962, columns 149–150.

For naval pensioners the new 1945 rate of £1 6s. 4d. was no increase at all—it was 1s. 8d. less than the earlier 1919 basic which, with additions of 5d. and 3d. per day, brought the pension up to £1 8s. My Lords of the Admiralty graciously offered ratings the option of the old 1919 rate or the new 1945 rate. What a pension! What a scheme! A first impression may give the idea that this year, 1965, all the 1945 rate pensioners will reach the age of 60 and receive the pension increase. This is not so. The 1945 rates were not increased until 1950, so that these low pensions of 1919 to 1945 will continue in payment until 1970, or later.

I will quote only one example—from an Admiralty letter dated 21st September, 1962, which is less than three years ago—of a petty officer's pension in payment today: Your pension, is made up as follows: Service, badges and good conduct medal per day 3s. 2d., equals £1 2s. 2d. per week; 16 years' double petty officer's time at ½d.—4s. 8d. per week; five years' double leading time at ¼d.—8¾d. per week; giving a total of £1 7s. 6¾d. per week. The Board of Admiralty, in its generosity, allowed £1 7s. 7d. a week. It gave him the benefit of the additional ¼d.

But who is this pension for? This is for a petty officer, the backbone of the Navy, the man on whom the admirals and the captains on the other side of the Committee depended for their success right through their careers. Yet in this year of grace, 1965, after Second World War service, a petty officer is getting less than 30s. a week Service pension. It is a scandal. Here are the William IV 1831 halfpennies and farthings in payment, over 130 years later. There are numerous other cases.

Every ex-naval officer on the Tory benches should hang his head in shame that petty officers and ratings, who have given the best years of their lives to the same Service, as they have, should be treated so shabbily when those officers themselves—and I say this without hesitation and admitting that I am drawing a pension myself—are drawing comparatively good pensions. From the other side of the Committee we have all these arguments for officers' pensions—arguments for the officers' widows pension being increased, but there has never been a worth-while speech made from that side about an increase in ratings' pensions and particularly about the lousy position of the ratings' widows who get no pension at all. I therefore appeal to the Minister and the new Labour Government to give sympathetic consideration to this peculiar position—of the other ranks in all three Services who have been pensioned early in their lives, in their 40s and 50s—and to make a special pensions increase to remedy this wholly incredible state of affairs.

As has been pointed out, there is no other class of people in the country in a similar position to these ratings. I urge hon. Members to keep this to ratings because officers serve longer and consequently get their pensions increases earlier. I am not out to make a class argument of this and to distinguish between ratings and officers because I have taken officers into account in my earlier remarks. Because of the time available tonight, I must limit my remarks to ratings.

We ate in a completely different situation this evening when discussing this question than for some time past. Will we receive the support of the Tory Party's ex-officers, in their comparative affluence? That remains to be seen. We have never had their support in the 20 years I have been in Parliament. There is no question of my repeating my arguments because, after all, we have the Tory Party in opposition and not in the Government.

I welcome wholeheartedly the complete change of attitude by hon. Gentlemen opposite in favour of parity, and since this argument came initially from them tonight there is no reason why progress should not be made. I hasten to make a constructive suggestion. I understand that certain ex-Service organisations have produced a minor scheme of amelioration for some of the worst cases, for a start, which would cost only about £5 million. Since the Defence Estimates contain total expenditure of about £544 million, the amount would not be overloaded if it were increased by that £5 million. Indeed, it would round the figure off at £550 million and provide equity and justice for men who have served their country well.

I hope that we will hear nothing from the benches opposite about increased pensions at the top, for officers, because on present rates what we need is a reduction in the large disparity which exists between pensions at the top and those at the bottom. In a whole day's debate on Service pensions—on 25th May, 1962; and there was a second debate on the subject in December of that year—I made several suggestions.

I will not weary the Committee by quoting what I said, but, to paraphrase some of my remarks, I pointed out that we did not want "pie in the sky" from the then Conservative Government but "pie on the plate" from a Labour Government for the "old sweats" who had served in the war and fair shares for the matelots as well as the admirals and captains after their full period of service for the State.

I want now to talk about the problem of other ranks' widows who receive no Service pensions at all. Generally speaking, all officers' widows are entitled to a Service pension, and have been for many years. It is, therefore, iniquitous that all ratings' widows do not have the same entitlement, and I hope that hon. Gentlemen opposite will support me in my pleas on this matter, even if they have been unable to support me in my earlier remarks.

This is obviously a pure class distinction; an example of one law for the rich, the officers, and another for the poor, relatively speaking, the ratings. Moreover, since 1958 other ranks' widows have been granted a Service pension. So we have the further iniquity that the widow of a man who died after a certain date gets a Service pension whereas the widow of another man, who died the day before, receives no such Service pension.

What has been the result in the past? A petty officer after 25 or more years' service to the State who was getting a paltry pension of less than 30s. a week could be pensioned on one day and die the next and all his 25 years' pension would be lost. Yet this pension was deferred pay, because it was always the argument of the Government and the Admiralty that the pay of the Navy and the other Services was low because of the pension.

What nonsense! What a position! Surely there is no question at all about it being high time that these two anomalous positions were cleared up and this multiplicity of basic schemes—and there are any number of them now; in terms of years, ratings and officers—completely scrubbed out and parity established.

Hon. Members opposite can call these remarks repetition if they wish. For my part, I would have thought that I have given enough information and material to enable any amount of articles to be written on these matters in newspapers, journals and magazines. A good journalist could work from the beginning and go right through to the end, and then start again. One can adduce arguments on these matters left, right and centre.

Finally, I make this appeal to the Minister on behalf of the Services and their families. For goodness sake let us realise that the time has come to scrub this outdated business and have parity.

7.29 p.m.

Captain W. Elliot

I do not know to what extent it would be in order for me to follow the remarks of the hon. and gallant Member for Kingston-upon-Hull, East (Commander Pursey). Although at times hon. Members have represented the case for groups of pensioners or widows of Service men, I bluntly reject the general proposition that any of my hon. Friends, when speaking about Service pensions and pensioners, has ever done more than represent the position from the general point of view of all pensioners. be they officers or men.

I suppose that I am right in assuming that the amount of money shown in Vote 9 does not include a sum which would bring parity to pensions. I should like to know, therefore, if the Minister could say how much it would cost, in a Supplementary Estimate, if parity were reached. I am prepared, whether I am an hon. Member of the Government or Opposition, to recognise the difficulties inherent in achieving parity in pensions. My hon. and gallant Friend the Member for Plymouth, Sutton (Mr. Ian Fraser) said that there were differences between Service pensioners and other groups in the population. I agree, but I am certain that those other groups would not agree with us. In other words, I am sure that apart from the cost not only for the Services but for everybody else the difficulties of confining it to the Services would be immense.

We have already discussed the earlier Vote on pay, and I now only want to try to relate this present discussion to the earlier Vote. As I mentioned then, we have this year the biennial review of the pay of the Services. The reason for that is that as wages and salaries outside the Services go up for various reasons, of which the cost of living is undoubtedly one, so the pay of those on the active list goes up by an approximately equivalent amount. The fact remains that pensioners suffer from increased costs of living just as much as do those on the active list.

As my hon. and gallant Friend said earlier, when, in the past, the pay of those on active service has been considered those people conducting the negotiations have had in mind only their own pay scales, and no regard has been paid to former colleagues who have left the Services. Those on Active service do not admit any responsibility for their colleagues, and I think that that is quite wrong, not only in the case of the fighting Services but in other cases, too. If one group of the community, whichever it is, scrapes the bottom of the barrel, and says, "We are now all right," we cannot produce the further enormous sums of money needed for other sections of the community. Those still serving cannot wash their hands of their former colleagues. They have not, of course, any direct power to do anything, but they have great influence, and should use it.

When new pay scales are negotiated for those on the active list, the Service pensioners should be considered at the same time. For instance, if the pay of those on the active list goes up by 5 per cent., consideration should then be given to the sum needed to put up the pay of the pensioners in the same way. It need not apply to all pensioners. It might not apply to those who had just left the active list, but it should apply at, say, 65 or 70—some age at which they feel the pinch as a result of inflation or because their pension, allotted under an earlier scheme does not afford them an adequate living.

If the Government should say, "We cannot give you more", the Services should consider raising that 5 per cent. for pensioners from the total sum allocated to those on the active list. If the 5 per cent. were given to pensioners aged 65 or 70, the cost might be 1 per cent. or even half of 1 per cent. of the award to the Services. I am sure that the Services would be willing to do this. It would be good from their point of view, because all retire eventually. It would avoid this trouble when both sides of the Chamber have to keep going, perhaps for years, at a Government with only a limited amount of money at their disposal, to get them to produce more money for pensioners, which in their hearts they would be only too glad to give but which it is not possible to produce because the barrel has been scraped by someone else—

Commander Pursey

I intervene only to be helpful, and in order to get this point clear. Up to now, the Pensions (Increase) Acts have increased everyone's pension from the age of 60. The hon. and gallant Gentleman has not got the right argument. The crux of the matter is—and I would not object to officers being included, who retire before the age of 60—that the ratings get no pensions increase for the 20 years between 40 and 60. Officers go at 45–15 years before the age of 60—and ratings go after 40 years. The trouble is the bracket below 60 which is not covered by any Pensions (Increase) Act at all. Once ratings are 60 they get all the increases, and are on parity with the present pension.

Captain Elliot

I shall not follow the hon. and gallant Gentleman in the intricacy of that calculation. I am quite prepared to accept what he says. I should say that no naval man who retires at the age of 40 has much difficulty in getting a job. Nevertheless, the hon. and gallant Gentleman may have a point there, and I would not rule it out. I am saying that as a result of the biennial review that takes place this year, Service pay will presumably go up by a certain percentage. As a result, those on pensions already at once begin to drop behind and, after a number of years, drop so far behind that hon. Members have to agitate very strongly until something is done about it. I want to avoid our getting into that position and I suggest that the Minister tells the Admiralty Board about this, and lets it think about it.

7.36 p.m.

Dame Joan Vickers

I have taken part in many pensions debates, and I would pay tribute to the hon. and learned Member for Northampton (Mr. Paget), who has done a tremendous amount of work in this respect, as has the hon. and gallant Member for Kingston upon Hull, East (Commander Pursey).

I should like to know, first, why there has been a cut in the amount of money shown under Subhead B (1)—pensions, rewards, etc. Perhaps we can be told whether the pensions are to be cut or the rewards to be less. It seems an unfortunate moment to make cuts.

I would also draw attention to the question of the commuting of pensions. It seems quite easy for an officer to commute a pension, but extremely difficult for a rating to do so. It is very often the case that a rating coming out of the Service is anxious to put down a deposit for a house, or he may want to get furniture for a house he already has. I have written time and time again to the various Ministers concerned and, as I say, I find that it is fairly easy for officers to commute pensions but practically impossible for ratings to do the same thing. When a rating comes out of the Service at about 40, and probably has a good job to go to, one thing that he needs is some cash to put down for a house—that is the usual need—or to furnish a house which he has probably let while overseas, when the furniture may have been badly used. I see no reason for this difference in the commuting of pensions.

How do the present pension rates in the Service—and I think particularly here of ratings—compare with those given to civilians? We should try to get these things in proportion. Are the Service pensions lagging behind in that rate of increase, or are they almost on parity with civilian pensions?

7.39 p.m.

Mr. J. P. W. Mallalieu

Perhaps I may at once deal with two of the matters mentioned by the hon. Lady the Member for Plymouth, Devonport (Dame Joan Vickers). She asks why we offer less money for pensions on this occasion, but the figure shown does not mean that the pension rates have been cut or that anyone is getting less. The figure is just an actuarial forecast of what will have to be spent, and it is usually fairly accurate. There is no difference in the amount of pension any individual pensioner receives.

We discussed the commutation of pensions in our debate on Thursday, when it was first raised. Clearly, it is something that must be looked at. It is a relic, it must be a relic, from the past, and I cannot see any excuse for it. Since that debate I have taken steps to see that the matter is pressed in the Department.

Those hon. Members who have spoken in this short debate, on a subject on which feelings are passionately held, have agreed on almost everything. They have agreed that in a very real sense this is related to manpower, for example. This is because if Service pensioners feel that they have had a raw deal they will be bad recruiters for the Service. That, quite apart from the humanitarian side of it, has given an urgency to what has been said today.

Hon. Members such as my hon. and gallant Friend the Member for Kingston upon Hull, East (Commander Pursey) have put the various points on which they feel most strongly—about the obsolescence, the tangles and the anomalies which are to be found in these Acts. I could not help agreeing wholeheartedly with my hon. and gallant Friend when he spoke about the ratings' widows who get no pension at all. I cannot see that this will be an easy position to defend for very much longer. The Committee will know that all these things are now once more being reviewed, and so they should be. The history of pensions goes back a long way. One Act has succeeded another, and as one Act succeeded another so anomalies have succeeded in quick succession.

It is essential that we should now really try to get these things right. I cannot make a promise about what the decisions will be when the review has been completed. I do not know whether parity will be achieved. I can, however, say what the cost of parity would be, in reply to the hon. and gallant Member for Carshalton (Captain W. Elliot). At a rough guess, at any rate, granting immediate parity for all three Services would cost about £25 million. If it were done for the rest of the public service, that would be a further £83 million. It is a sizable slice of money, as the hon. and gallant Gentleman will appreciate.

The points which have been made, not only in this brief debate, but in previous debates and in previous speeches on the subject of pensions, will be studied very closely by my right hon. Friend the Chancellor of the Duchy of Lancaster, who is charged with making this review. I hope that when the review comes out we shall be able to announce at least that some of the worst injustices have been removed.

Mr. Hay

The whole Committee will be very grateful to the Under-Secretary for what he has said. I rise not only to thank him, but also to say how pleased we were to hear that this review is taking place and to listen to the somewhat optimistic way, as I thought, in which the hon. Gentleman told us about it. I hope that the review will be speedy, because these issues have been bumbling around for quite a long time, as we know only too well. I hope that something can be done fairly soon to put this matter clear beyond any doubt.

Question put and agreed to.

Resolved, That a sum, not exceeding £22,324,000, be granted to Her Majesty, to defray the expense of non-effective services, which will come in course of payment during the year ending on the 31st day of March 1966.