ARMED FORCES AND HIGHER CIVIL SERVICE (PAY) (Hansard, 28 January 1966)

§ Sir T. Beamish
On a point of order. Judging from the array on the Treasury Bench, a very important statement is about to be made. Today, a Friday, is a private members' day, and in all the 21 years that I have been in the House I never recollect an important Government statement being made on a Friday such as this.
In view of the fact that everybody knows that the information which will be given has been available the whole week, and has been delayed only to suit the Government's own purposes, is there no protection which back benchers have in these circumstances?

§ Mr. Raphael Tuck
Never on a Friday!

§ Mr. Speaker
Order. That is not only not a point of order for me, but also is itself taking away private Members' time.

§ Mr. Brown
I thought that the hon. and gallant Member for Lewes (Sir T. Beamish) would join us in singing, "Oh what a beautiful morning, oh what a lovely day".
552 With your permission, Mr. Speaker, and that of the House, I should like to make a statement about the pay of the Armed Forces and of the Higher Civil Service.
As I informed the House on 25th November, 1965, the Government asked the National Board for Prices and Incomes to advise them whether the pay increases likely to result from the application of the Grigg formula to the pay of the Armed Forces, and the pay increases recommended by the Standing Advisory Committee on the pay of the Higher Civil Service, were consistent with the considerations in Part I of the White Paper on Prices and Incomes Policy.
The Board has now reported on these issues and copies of the Reports are available in the Vote Office. The Board has recommended, in both cases, that the increases should be paid in full from the due dates; and the Government have decided to accept this recommendation.
In the case of the Armed Forces, the increase is 12½ per cent. on their total emoluments, and it will be paid from 1st April, 1966. As the House will be aware, under the Grigg review system, the Armed Forces have not had a pay increase since April, 1964, so that the average annual rate of increase is just over 6 per cent. The National Board for Prices and Incomes has said that an increase of this size is consistent with incomes policy for three main reasons: because of the recruitment and re-engagement needs of the Forces; because of the special conditions under which Service men are employed, including their inability to negotiate changes in pay; and particularly because of the long-standing commitment to the existing system of reviewing and adjusting pay.
In the case of the Higher Civil Service, the average increase is about 6 per cent. and it will be paid from 1st September, 1965. The Higher Civil Service has also not had a pay increase for about two years before that date, so that the annual rate of increase in their case will be about 3 per cent. This is within the incomes policy norm, and the National Board for Prices and Incomes has said that it will contribute to the need to balance above-average increases in income with increases below it. In the case of one grade only, that of Under-Secretary, the increase will be above the 553 norm; and the Board has said that this is justified by the need to improve the salary structure in order that the Civil Service may compete fairly for its share of recruits of the necessary quality.
The Government accept the conclusions of the National Board for Prices and Incomes that the proposed pay increases are consistent with the Government's incomes policy; and, as I have said, these increases will be paid in full from the due dates.

§ Mr. Ronald Bell
Is it not the case that the biennial review under the Grigg formula is related to the increase in civil earnings which has already taken place during the previous two years? Accordingly, was not the reference of this matter to the Prices and Incomes Board a piece of mere window-dressing by the Government to placate the trade unions, which were already up to two years ahead?
Was not this matter quite irrelevant to the White Paper on Prices and Incomes Policy? And may I express to the First Secretary the hope that this will be the last occasion on which the Government will seek to shuffle off what is their responsibility, and theirs alone, on to a body that had no conceivable relevance to a decision of this kind?

§ Mr. Brown
I should have thought that even the hon. Gentleman could have done better than that. But may I make it clear, first, that the reference will prove to be invaluable in having established the basis on which claims of this kind and settlements of this kind have to be judged before they are accepted, and will, I hope, be taken note of by everyone who has to do with wage claims and wage and salary fixing.
Whatever the hon. Member may think about this matter, I am quite sure that soldiers, sailors and airmen will know the difference in the treatment they have got from us this time from that which they got from the hon. Gentleman's Government in 1962, when that Government shuffled out of their clear moral obligation.

§ Mr. Hugh Fraser
I might congratulate the right hon. Gentleman on having seen that the Grigg promises were fulfilled, but in Chapter 4 of the Report it is suggested by Mr. Aubrey Jones and his Board that the Government should think again on 554 the principle of Grigg. It is very important that the right hon. Gentleman should as soon as possible give the House an assurance that the Grigg system will be maintained, because without this the Armed Forces cannot get their due, because they have no representation in the unions. I hope that the First Secretary can say here and now that the Government will go on supporting the principle of Grigg, whatever the Prices and Incomes Board may say.

§ Mr. Brown
I obviously cannot say that the Grigg system will remain unchanged for ever. What was essential was to operate it on this occasion so that there was no idea that we had changed the rules in midstream, as it were. But we now have plenty of time, before the next review is due, to consider what changes, if any, need to be made in the way in which the Grigg formula works or is applied. The Government will do that. What I will give to the members of the Armed Forces is a categorical assurance that if any changes are to be made we shall find ways and means of seeing that we hear views on them, and ensure that whatever changes are made will give them "a fair do" at the end of the day.

§ Captain W. Elliot
The Minister has stated that one of the considerations which influenced the Board was recruiting. It seems to establish a new principle if the Prices and Incomes Board is now to consider such questions. Can the right hon. Gentleman say whom the Board interviewed, and whether it thoroughly explored the question of the effect of salaries on recruiting? And was it satisfied that those were the right people to do this?

§ Mr. Brown
The Board must have seen the right people because it has got—even if the hon. and gallant Member finds it difficult to say so—the right result; and the privates and sergeants and other members of the Services will not have as much difficulty as has the hon. and gallant Member in seeing that the need for recruiting is a relevant matter in deciding incomes decisions.
The hon. and gallant Member has said that it is a new principle, which only shows that he has not read the White Paper on Prices and Incomes Policy, Command 2639, published in April, 1965, because it is clearly set out there that one 555 of the criteria which may justify an increase in wages or salaries above the norm is the need to attract people to and keep them in the jobs one is talking about. This is a principle which the Board takes into account in every case. It is a principle which we expect employers and trade unions to take into account. It is no new principle. The Board has applied the criteria in this case, and this is one of the grounds on which it found an increase which otherwise would be above the norm to be justified.

§ Mr. Lubbock
The First Secretary has said, if I may paraphrase him, that these two Reports give guidance for the future. Can he say in what circumstances in future increases of less than the norm, such as this award to the Higher Civil Service, will be referred by the Government to the Prices and Incomes Board? Is he aware that in many other professions and occupations there are difficulties in recruitment, and lack of bargaining power on the part of the employees concerned? Will he assure them that increases above the norm will be permitted in those occupations?

§ Mr. Brown
What I said was that this is one of the criteria set out in the White Paper in any such case. If I were asked to consider a reference by any party and decided to make a reference it would be on the merits of the case as they appeared to me. The Board considered the sort of criteria, of which this is one. I accept that it is not the only one. Obviously, I cannot peer into the future and decide, here and now, which cases one would either accept or refer, but I repeat that all cases will be considered on their merits, and we will use the agreed procedure under the Prices and Incomes Policy in deciding in which cases references should be made.

Mr. Fletcher-Cooke
Can the First Secretary say what the annual rate for the top civil servants will be, and how it compares with the salaries of Her Majesty's judges?

§ Mr. G. Brown
I could not, without notice, answer the hon. and learned Gentleman's question in that form, but I will answer it either by writing to 556 him or by answering a Question if he puts one down. The hon. and learned Gentleman will find a good many of the figures—I do not have the judges' comparisons—in the Report of the Board.

§ Mr. Ronald Bell
Will the right hon. Gentleman confirm that what he has referred to as an increase of 6 per cent. per annum for the Armed Forces merely reflects what has already taken place in the past few years in the incomes of civilian wage-earners on which it is based—since the last review in 1964—and that, therefore, this is, in fact, without relevance to Part I of the White Paper on Prices and Incomes Policy? Will he say whether in future we are to have the Prices and Incomes Board used for such matters as advising the Government on recruitment to and re-engagement in the Armed Forces?
Further, will he say whether there is any truth in the rumour, which is very current, that the Government, in their advice or evidence to the Prices and Incomes Board, requested it to diminish the increase in the case of the higher ranks in the Services; and, if so, whether the Board is the right sort of body to decide on differentials of pay in the Armed Forces of the Crown?

§ Mr. Brown
The hon. Gentleman really is having difficulty this morning. His last question referred to what he called a rumour. Obviously, I cannot deal with the rumours that he hears. I do not know where he hears them, but I would certainly be fully occupied if I had to spend time dealing with them. I know nothing at all of the hon. Gentleman's rumour.
The hon. Member also asked whether this increase did not just reflect what has happened in the last two years. If that were true it must have been true in 1962 as well as now, and at that date the then Government did not accept the finding, and did not pay. What the 6 per cent. represents is the needs of the Forces at this moment as determined by the Grigg formula, and the decision of the Government to pay it represents the Government's view of the requirements of the Forces and on prices and incomes policy as at this time. That is why we are paying it in full.
The hon. Gentleman's other question—I am not sure that I quite recall it—

§ Mr. Ronald Bell
The right hon. Gentleman has not answered the other two questions, so I do not know why he has bothered about the third. But the third was whether he proposed to use the Prices and Incomes Board in future for this sort of purpose, such as recruitment to the Armed Forces.

§ Mr. Brown
in view of the courteous invitation the hon. Gentleman gives, the right thing for me would be to sit down but, in deference to the rest of the House, I will answer. Where these matters, of which this is one, affecting prices and incomes policy, and the effect of particular decisions, seem to the Government to be worthy of consideration by the instrument which this House has set up for that purpose, against a policy which this House and the country has accepted for that purpose, we will, of course, use it for that purpose.

§ Mr. Speaker
Order. We must go on to today's business.