HC Deb 25 March 1965 vol 709 cc1060-4

7.36 a.m.

Mr. H. Hynd (Accrington)

I wish to change the subject, and I hope that I am in order in doing so, because I have waited all night to bring before the House the subject of a Motion which has been on the Notice Paper since the beginning of this Parliament, namely, That this House notes with regret that the Pensions (Increase) Acts do not provide for railway superannuitants whose pensions fail to match rises in the cost of living, and urges Her Majesty's Government to rectify this anomaly in future legislation. That Motion has been signed by no fewer than 111 hon. Members from both sides of the House, showing the large amount of support that it has in the House. Therefore, I think it very important that we should devote a little time to dealing with it.

I hope that the Select Committee on Procedure will take serious notice of what has been happening in the House over the last 24 hours, so that it can make arrangements in future for us to debate important subjects like this under more sensible conditions.

The last time that I raised this matter in the House was nearly five years ago, on the day when, by a coincidence, I became a superannuitant, but I hasten to say not a railway superannuitant, and, therefore, I have no interest to declare, beyond the fact that I have the honour of being the honorary president of the British Railways Superannuitants' Federation, a body created by about 30,000 railway superannuitants to try to get justice in this matter.

Incidentally, all these people were contributors to superannuation funds. They paid their contributions, a percentage of their salaries, in the hope of getting a reasonable pension. Indeed, it was a reasonable pension as these pensions went at the time it was received, but, as we all know, the value of the £ has deteriorated drastically over the last few years. For example, the £ of 1951 had fallen to 13s. 9d. in December, 1963. To take another example, in April of last year it required 34s. 1d. to buy the amount of goods bought by a £ in 1947–48.

Everyone recognises the difficulty. There is great sympathy for these people not only from the 111 hon. Members who have signed the Motion, but from the Minister, and from the Railways Board. I am glad that the hon. Lady the Member for Tynemouth (Dame Irene Ward) is present, because she will probably refer to a letter from the Railways Board expressing sympathy with this case. The hon. Lady has been a very faithful fighter in this matter. This is entirely non-political. It is something which urgently needs attention by whichever Government happen to be in power, and up to the present not sufficient has been done.

I say that not sufficient has been done, because something has been done. There have been five different increases following the Pensions (Increase) Acts. Those Acts give supplements to pensions of civil servants, local government officers, teachers, members of the police and the fire brigade, and all sorts of public servants, including even people like the staff of the Raw Cotton Commission.

Unfortunately, the railway salaried staff have been considered not to be public servants. [An HON. MEMBER: "Hear, hear."] Someone says, "Hear, hear". I hope that that does not mean that he agrees that they should not be regarded as public servants. What is a public servant? By our legislation we have created so-called public corporations—the nationalised industries—and the theory is that as they are outside complete Government control their employees are not directly public servants.

But in some of these industries—for example, the gas and electricity industries—the superannuitants have been able to get supplements nearly equivalent to those of civil servants and others who get supplements under the Pensions (Increase) Acts. Their supplements broadly follow the increases given by those Acts, and they are paid not from the superannuation funds, but from revenue.

The last time this matter was debated the hon. Member for Henley (Mr. Hay), who was then Parliamentary Secretary to the Ministry of Transport, said that railway salaried employees were not employees of the British Transport Commission but that the Commission had inherited them from the old companies. He was misinformed about that. There may have been a few still existing from the old companies, but most of them have now retired from the Commission, which is now the British Railways Board. So that argument falls to the ground. They are people who retired after contributing to superannuation funds, but the value of their pensions has fallen considerably. That is why they are in their present difficulty.

They are grateful for increases which have been given, but they are much below those given under the Pensions (increase) Acts, and the pensions which they would be getting if they retired now. Let me give two examples. A stationmaster who retired in 1955 and who now is over 70 years of age would be getting an additional supplement. He will now be getting a pension of £350, including the additional supplement in respect of those over the age of 70, whereas if he retired now his pension would be £480. A clerk in similar circumstances would be getting £250, whereas if he retired now he would be getting £320. There is a considerable difference between those two amounts, and the figures I have given illustrate how necessary it is for some supplement to be given.

The question is: who will give the supplement? In the past the Ministry has always said that it is not its responsibility; it is the responsibility of what is now the British Railways Board. The Board, on the other hand, says that as it is in financial difficulties it cannot do anything without the consent and financial support of the Minister of Transport. The employees seem to fall between the two.

Let us examine the matter and see whose responsibility it is. In reply to a Question I asked on 10th February, the Minister of Transport told me that it would cost about £1 million to bring these pensions up to the level of the Pensions (Increase) Acts, and the line has always been that it is impossible to pay this money because the railways are in deficit at the present time.

But despite being in deficit, the railways have paid wage increases and my suggestion is that just as they had to find money from somewhere to pay wage increases, they should be able to find money to pay the necessary supplements for the pensions of retired staff.

If we are to take the criterion that there must be profitability before proper pensions are paid, what becomes of all these other classes of public servants I have mentioned, the firemen, the police, the teachers and the Cotton Commission staff? They are paid the increases, and I suggest that the same principle should be the basis on which railway pensions are paid.

I did mention the gas and electricity boards, which I think are the closest analogy to the Railways Board, and the fact that the means have been found to pay extra to their retired employees nearly equivalent to the Pensions (Increase) Acts is, I think, the best argument for doing something similar for the railways.

I notice in a Written Answer given on 24th March that there has been a serious deficiency in the pension fund of B.O.A.C. and that means have been found for dealing with that. Parts of that Answer reads: a scheme has been agreed with the trustees whereby part of this liability will be liquidated out of interest earnings in excess of the valuation rate and the balance by annual payments over 30 years to 31st March, 1992. Whatever method is adopted, I suggest that it is high time that something was done. The moneys of the railway superannuation funds are not invested outside, as is the money of most superannuation funds. These moneys remain for the benefit of the Railways Board, and in other words it is like a cheap loan for them. They show in their books the sum of £150 million for which they allocate 4 per cent. interest. That means that, in fact, the Railways Board has the benefit of an investment of £150 million at 4 per cent. interest, which is, of course, below the market rate at which they could borrow.

By showing something nearer the market rate—say, another 1 or 2 per cent.—the Board could go a long way towards providing the money for the settlement I have suggested. In fact, in 1958, the Select Committee on the Nationalised Industries drew attention to this point and recommended that this rate of interest should be carefully examined.

I suggest that the Minister cannot evade responsibility in this matter. The Minister should give his consent to the Railways Board to pay the proper rate of pension and make up the old pensions to something like the amount we recognise for other public servants. As it seems likely that we are going to have a further Pensions (Increase) Act in the very near future, I hope that that Act will include a Clause to bring in railway superannuitants.