OVERSEAS SERVICE PENSIONERS

HC Deb 20 December 1968 vol 775 cc1709-33

11.6 a.m.

Mr. John Tilney (Liverpool, Wavertree)

I am grateful for the chance of raising today two points which rightly concern those who, in the past, have served the Crown overseas. The first applies to the few who switched, at the request of the then Secretary of State for the Colonies, from direct to quasi-governmental service and are therefore now treated almost as second-class citizens. The second point concerns all who have served in developing countries of the Commonwealth and are anxious, especially if they live abroad, about their own future pensions and those of their widows.

They are also worried over the delay and expense of reclaiming Income Tax whether or not there is a double taxation agreement. The Minister will have noticed that 88 hon. Members have signed Motion No. 47 in my name and that of hon. Members on both sides of the House—

That this House, whilst welcoming the intention of Her Majesty's Government to introduce a Pensions (Increase) Bill in the present session of Parliament, urges that the opportunity be taken to include provision for payment of supplements to those overseas pensioners who were recruited on overseas terms of service for territories under the jurisdiction and control of the Secretary of State for the Colonies and were subject to Colonial Regulations, yet because their employment was of a quasi-governmental nature are not held to have served under the Government of an overseas territory, and are therefore denied a supplement, and widows of these officers are likewise penalised despite the fact that all contributions towards widows' pensions were paid into a scheme embracing all officers recruited from overseas. and that a further 57 have signed Motion No. 42 in the name of my hon. Friend the Member for Barry (Mr. Gower)— That this House calls upon Her Majesty's Government for early action to increase the pensions of those former colonial servants whose pensions have not benefited from increases granted by successive Pensions (Increase) Acts. However, my hon. Friend's Motion, which asks for early action to increase pensions of former colonial servants who have not benefited from the increases of successive Pensions (Increase) Acts can only apply, I believe to those who have retired since 1st April, 1964, or who live abroad. The United Kingdom Government have accepted responsibility for pensions paid by former British dependent territories and pay the same cost of living increase to retired pensioners and their widows after deducting any increases given by overseas Governments as they pay to retired United Kingdom civil servants, and they also make that payment when a Government such as Tanzania defaults. But some are still left out, and I appeal to the Minister to look again at the limited number, probably fewer than 200, who have a genuine grievance.

I am not dealing with those ex-colonial civil servants who have been recruited locally, nor with those who were directly recruited overseas by a local authority in the Colonies, with the possible exception of no more than eight people who received pensions in respect of their service with the Lagos Town Council, when that was part of the then Nigerian Government's Administration. I am appealing only for those recruited directly from overseas to become members of the then Colonial Service and who were promised that, as colonial institutions evolved and they took up quasi-governmental appointments, they would not have to suffer.

Those for whom I appeal served in such establishments as the Achimota College, the Nigerian Coal Corporation, or the Interterritorial Service of West Africa, which included the Institute of Trypanosomyassis, the Cocoa Research Institute in Ghana, and the Palm Oil Research Centre near Benin. These are the forgotten few. I asked on 16th December whether the Minister would tell me … the number of pensioners who were engaged from overseas and not locally and who are in receipt of pensions in respect of their service with quasi-Government bodies in the ex-colonial territories … and what estimate he has made of the cost of paying them supplements as laid down in the 1962 and 1965 Pensions (Increase) Acts. The Parliamentary Secretary said: I have not sufficient information on which to base reliable estimates of the numbers of these pensioners."—[OFFICIAL REPORT, 16th December, 1968; Vol. 774, c. 549.] As to the cost, he referred to a reply which he had given to my hon. Friend the Member for Essex, South-East (Mr. Braine)—who I am delighted to see here today, since he and I have had several campaigns about overseas civil pensioners over many years—and that answer was that the cost would be probably about £1 million. Why £1 million, if the Minister does not know the numbers? It might be £50,000 or much more than a £1 million. How can he make that calculation? After consulting the Overseas Service Pensioners Association, my guess that under 200 people are involved must, it seems to me, be as good a guess as his.

May I take the case of those who served the Nigeria Coal Corporation. I have here a photostat of a letter written on 10th December, 1952, to Mr. J. M. Moran, the colliery manager of Obwetti Mine, which encloses a memorandum. It is on this memorandum that I largely base my case and the case of similar organisations.

The memorandum says: With the formation of the Nigerian Coal Corporation it was reasonable for Government to expect that the majority of officers on the established staff of Government employed in the Colliery Department would be willing to accept transfer to the service of the Corporation. Officers accepting transfer to the Corporation will want to feel assured that their service with the Corporation will in no respects be less attractive than if they had remained in Government service. The Corporation has no intention of inviting officers to transfer to its service with the loss of any rights or benefits to which their service with Government entitles them, and the terms and conditions offered provide for service with the Corporation to be in no respect less favourable than it would be with Government in similar circumstances. Later, the memorandum says: The Corporation will preserve the personal right of each transferred officer to the continued enjoyment of salary rates not less favourable than those he would have enjoyed had he remained in the service of Government. Later still, it says: The Corporation also undertakes that in the event of its departing from Government principles relating to those conditions of employment it will, if requested so to do by any officer, seek the advice of the Government on what that officer's entitlement would be if he were still in Government employment and will apply to that officer conditions in that respect not less favourable than those he would have enjoyed had he remained in Government employment. Finally, it says: The Corporation will establish a Pensions Scheme modelled on that contained in the Pensions Ordinance, 1951. It is the intention of the Government to schedule the Coal Corporation under Regulation 8 of the Pensions Regulations made under that Ordinance in order to ensure that pensionable officers transferred to the service of the Coal Corporation will, on retirement in circumstances entitling them to a pension, receive the same benefits as those which they would have been awarded had their whole service been with the Government. I submit that nothing could be more explicit. If the Government defaulted on that, would they ever be believed again?

I accept that these people are getting their basic pensions, but those in Government service are getting supplements as well because of the failure of overseas Governments to pay cost of living increases. The British Government have taken action to give those who remained in Government service a supplement and have acknowledged responsibility for 95 per cent., perhaps even more, of the overseas civil servants. Why, then, are they penalising this 5 per cent.?

May I quote from the letter of 29th May, 1968, from the Ministry to Mr. Moran: For the purposes of the above-named acts your basic pension is considered to be the portion of your pension which is paid by the Federal Government of Nigeria only, as you cannot be certified as an 'overseas officer' under these acts for service which is not directly under an overseas Government, such as service with the Nigerian Coal Corporation. It is regretted, therefore, that the portion of your pension deriving from your service with the Nigerian Coal Corporation has to be excluded from the calculations to determine your eligibility to supplementary payments from United Kingdom funds under the above-mentioned acts. But even that is wrongly calculated. Mr. Moran receives £649 10s., of which £397 is paid by the Government, on which Her Majesty's Government pay increases, and £252 10s. from the Corporation, on which he receives no supplement. He had 173 months Government service and 46 months Corporation service. As his pension represents a fraction of final salary multiplied by total wages, ½ ⅞ ¾ of his pension arises from Government service, namely, £513 and only [...] from Corporation service, or £106 10s.

The final affront to honour was the letter which the Parliamentary Secretary wrote on 25th June this year. He explained: Mr. X alleges that the British Government is party to a broken promise but I cannot accept this. It is true that the Nigerian Coal Corporation promised officers when inviting them to transfer to its service in 1952 that their terms and conditions of service would be no less favourable than if they remained in Government service but, quite obviously, this promise can have no relevance to pension supplements which had not then been thought of by the British Government and were introduced in 1963 as direct payments from British funds. Are Her Majesty's Government really saying for the world to hear that whenever we promise that A will always have equal rights with B it must be understood that if circumstances change or if we have new ideas we will not keep that bargain? If they are really saying that, who will ever believe the word of the Government again?

But they have already accepted half of my case by giving full supplements to those who were recruited to Achimota College while it was a Government Department and the employees of the East Africa Railways and Harbours Administration are eligible for supplements and receive them. Why should not similar consideration be given to those who served in West Africa, who paid into the same widows' pension fund as members of Her Majesty's Overseas Civil Service and who, seeing that the widows of those who served in Ceylon now receive their pensions in depreciated rupees, are worried about their widows? They are particularly worried about what may hap- pen to their partial pensions should an overseas corporation default. If Her Majesty's Government refuse them supplements, will they repudiate the pensions, too?

I come to a marginal case, that of the Lagos Town Council. I am told that the Council operated as the only first-class township in Nigeria under the Township's Ordinance which, as required, was approved by the Secretory of State. Between 1916 and 1938 overseas staff were recruited by the Crown Agents and employed by the Council in posts declared pensionable by the Governor in Council, with the sanction of the Secretary of State. Their retirement pensions were payable by the Lagos Town Council in accordance with the Government's Pension Ordinance and they contributed to the Government's Widows' and Orphans' Pensions Scheme.

About six retired officers and two widows survive, and they are excluded from any supplement because the service has been held not to be with the Government. Yet the Lagos Town Council was not permitted to pay salaries over the Government scale, and the Chairman of the Council was the Commissioner of the Colony even as late as 1950. Would the Minister check that employees of the Dares-Salaam Municipality, who were engaged overseas, prior to it becoming a city council are eligible for supplements.

Do not these problems show that, unlike all other ex-Imperial Powers, we have followed the wrong system of making our ex-colonies however ill-developed some of them may still be, openly shoulder a burden of pensions paid overseas to their old masters? Of course, the majority of them accept it and are grateful for the contribution and service given to their countries in the past by these pensioners, but where there is still a democracy it is not easy to argue the case in annual budget sessions. Tanzania found this, and defaulted.

Her Majesty's Government in lieu of pensions are giving to ex-Tanzanian civil servants—not that they served a country of that name—what is called an ex-gratia loan advance. Yet Income Tax is demanded on it here. Pensions are paid by the developing countries of the Commonwealth because they are signed, on achieving independence, a public officers' agreement. Why not re-negotiate these bilateral treaties and reduce aid accordingly? It would merely be a book entry. It would cost no more than our present level of aid, of which it might represent about 5 per cent. There is no need for us to re-negotiate with the rich countries, but, once this was done, both the pensioners and their widows would feel safe, even with Her Majesty's present Government in office. I realise that, on my second point, it will take some time to discuss the matter with the countries concerned.

In a Written Answer to me on 27th November, the Minister responsible for the Civil Service said: … the intention is that the Bill"— that is, the proposed Pensions Increase Bill— should be enacted in time for the increases to pensioners or their dependents to be operative from 1st April next … "—[OFFICIAL REPORT. 27th November, 1968; Vol. 774, c. 117.] Thus, in connection with my first point, would the Minister see if this small body of people can be included in the Bill? It is a small and annually diminishing body who have served this country well. The hon. Member for West Ham, North (Mr. Arthur Lewis) may object to any action being taken which increases expenditure, even though it is morally right that we should do so. I cannot believe that Her Majesty's Government will take the same view and allow these men to be forgotten.

Several hon. Members

rose —

Mr. Speaker

Order. I remind the House that this debate must end at 12.15 p.m. I understand that the Front Bench speaker will intervene at 11.45 a.m. Mr. Clark.

11.23 a.m.

Mr. Henry Clark (Antrim, North)

My hon. Friend the Member for Liverpool, Wavertree (Mr. Tilney) always raises these matters in the clearest possible way. I agreed with every word he said, and I will not repeat the points he made. I wish to concentrate on the more general aspect of the subject.

If one looks at the level of Colonial salaries in the past 50 years, one sees that a district officer recruited in 1912 received £350 a year. When I was re- cruited in 1950, my salary was fixed at £550 a year. Despite the intermission of two great wars, inflation had not proceeded at a particularly high level between those years. But from 1950 onwards both inflation and the rate of handing over to self-government proceeded at a rate which could not possibly have been anticipated by those who signed agreements to undertake service with colonial governments.

When one hears the sort of cases which my hon. Friend the Member for Liverpool, Wavertree, has outlined, one must doubt whether the Colonial Offices' establishment officers who advised these people, and their successors under the Ministry of Overseas Development, appreciated the rate of devaluation that has gone on and both the speed and acceleration of speed of change which could not possibly have been anticipated even as late as 1955 and 1956.

The small number of people with whom we are now concerned must represent the most outstandingly unjust case of which the Overseas Pensioners Association knows. This Association is an admirable body of people who conduct their affairs in a quiet and sober manner. Nevertheless, they persuaded Sir James Robinson to sign individually 630 circulars to be sent to all hon. Members. That is a job which not many people would have undertaken lightly. They would certainly not have undertaken it unless they considered that the case was really worthwhile.

The case of the Neo-Government employees in West Africa is very serious indeed and I sincerely recommend the Minister to think again on this issue. I urge him to admit that perhaps we made a mistake and to tell the Treasury in no uncertain terms that they cannot use the old argument that a dangerous precedent might be created. It would be worth creating a precedent to set right one last sore thumb concerning colonial pensions, but few Colonies are left to which such a precedent might be extended.

My hon. Friend the Member for Liverpool, Wavertree raised the question of pseudo pensions being paid to Tanganyikan ex-civil servants. I agree that when the crisis came and Tanganyika defaulted the Minister stepped in speedily and there was not much delay before money was forthcoming. So far so good. But the fact remains that pensions today-are being paid in devalued £s. That does not particularly affect pensioners in this country—except that the £s in their pockets have been devalued—but it represents a drop of 14 per cent. in value in the pensions paid to those who are living in countries whose currencies have not been devalued. Tanzania has been able to maintain parity, although we have had to devalue by 14 per cent. If, as may occur in, say, 12 months, we devalue by a further 10 per cent., are these pensioners to be worse off by 24 per cent.?

I know of a few senior officers still living in Tanzania—we should congratulate them for having taken that course—who have spent their lives serving in that country and who are finding great personal difficulty because of their pensions having been reduced in value by this amount.

I took this matter up with the Minister in the summer and on 4th September he wrote to me saying: In making arrangements for loan advances payments it was clearly not possible to have all the payments made initially in Tanzania and in Tanzanian currency. That was an initial and emergency arrangement to deal with the sudden stoppage of payment by the Tanzanian Government. That was fair enough, but has the Minister now considered whether it is fair that this reduction in amount of pension continue? Should not we maintain the value of these pensions at the level that they would have been had the Tanzanian Government not defaulted?

The Minister went on in his letter to explain that Tanzanian residents involved in this matter do not have United Kingdom Income Tax deducted from their pensions. What a wonderful concession. However, a number of other Tanzanian pensioners living in other parts of the world and who do not even have bank accounts in this country still find that the Inland Revenue takes its pound of flesh before the meagre amounts which they receive are paid to them. Hardship is being caused. There is no question of the unjustness of the initial arrangements. If they are purely initial arrangements, the Minister can be forgiven, but he should put the matter right.

My next point may be slightly outside the general scope of the debate, but it is something to which I must refer. This is a question, not of British officers who have served overseas but of those who have served the British Government overseas. An old and trusted friend of mine writes: … I saw one Fadl Aassan Aulaqi who was formerly in the Aden Civil Service in which he served from 1955 to March, 1968. He was locally recruited and after Aden obtained its independence stayed on with the new South Yemen Government. In March this year he had his former British passport taken away and was given in place a South Yemen passport and told to leave the country at once. He accordingly sent his wife and five children back to the Northern part of South Yemen from which she came, and came over here to look for a job. … He has, of course, lost all his pension rights and in this respect is but one of many locally recruited Arabs who are in the same plight. I understand that H.M.G. has washed its hands of all responsibility for these servants of the Crown which, to say the least, seems iniquitous in view of the circumstances in which the control of power passed in Aden and South Arabia. Not only British officers, but others, gave outstanding service, particularly in Aden.

The locally recruited officers in Aden who served the Government through very difficult times and who saw in the latter years that their future would be difficult, and nevertheless stuck loyally by the Colonial Government. We promised, I am quite certain, that they would be properly looked after. What have they got? They come to this country seeking jobs. Their pensions rights at home are taken away. In this sort of case the Minister must take firm and quick action, even though we are having certain difficulties in our present negotiations with the South Yemen Government.

In the House and elsewhere we keep on talking of the country's moral obligation to give aid to developing countries. We are meeting the obligation to the tune of about £200 million a year, and frequently talk of ways and means, and of the desirability, of increasing that sum. Have we not an equal, if not greater, moral obligation to those men who carried out development in those countries long before mass international aid was ever heard of?

I entirely endorse what my hon. Friend has said and I suggest to the Minister that the Treasury should once and for all be tackled to take over these pensions and so free the ex-Colonial countries of this unpleasant burden. I should like to hear my hon. Friend the Member for Essex, South-East (Mr. Braine) tell us firmly that a Conservative Government will have no hesitation in telling the Treasury that it must take over the burden of overseas pensions.

11.34 p.m.

Mr. Arthur Lewis (West Ham, North)

The hon. Member for Liverpool, Wavertree (Mr. Tilney), with his usual courtesy, wrote to tell me that he would refer to me in this debate. I apologise to you, Mr. Speaker, to the House and to the hon. Gentleman that because of an urgent telephone call a few moments ago I was not in the Chamber when he referred to me. As a result, I now have to guess what he said and seek to deal with it.

The Order Paper shows that to his Motion No. 47 I put an Amendment. If both were to be adopted by the House, my Amendment would make no difference at all to his Motion, as it seeks only to draw attention to some five, six or seven other similar cases. If all these cases were to be dealt with, I hope that the Tory Opposition would not, as they do every day of the week, say that they would attack the Government for wasteful expenditure.

The principle of the hon. Gentleman's Motion is correct. All these people who are deserving of help ought to be helped. I want the Government to spend all they can on these well deserving people, and all others, such as the railway super-annuitants. I would like to see more Government expenditure on vehicles for the disabled and help for the old-age pensioners—

Mr. Speaker

Order. With respect, I think that we will keep to this present subject.

Mr. Lewis

I am trying to explain, Mr. Speaker, that while I am in favour of the hon. Gentleman's suggestion I see difficulties in operating it. If the Government were to implement his plea, and deal with all the other dozens of well deserving cases, there would be a very heavy bill. I must make it clear that I am not now singling out the hon. Gentleman's Motion—I have put down Amendments to other similar Motions on the Order Paper. I am only talking about the cost. For instance I should like to see the Government do something for the old-age pensioners whose television licences have gone up.

The hon. Member for Antrim, North (Mr. Henry Clark) hopes that if a Tory Government come back they will deal with this present matter as a moral obligation. I do not dissent but, unfortunately, Governments do break promises. That applies not only to this Government but to previous Governments. I recollect, Mr. Speaker, as you may do, the pledge made more than 20 years ago that post-war credits would be repaid after the war—

Mr. Speaker

Order. I have chosen the topic for debate, and the hon. Gentleman must keep to it.

Mr. Lewis

This is relevant to the discussion, Mr. Speaker. The hon. Gentleman referred to promises, and I am trying to explain the difficulties. He spoke of moral obligations and I agree that there are moral obligations, and I was using as an analogy the fact that though the parties which formed the Coalition during the War faithfully pledged themselves to repay post-war credits, once the war was over we have found that that obligation was not, and never has been met. You and I, Mr. Speaker will probably have long beards by the time that pledge is implemented.

On coming to power, Governments either forget promises or find that they cannot implement them. The hon. Member for Antrim, North expressed the hope that his Front Bench will pledge that if the Tories get back to power they will implement this present obligation, but I have been in the House long enough to know that what is said when in Opposition can be very different from what is said when in Government. I mean no disrespect to him when I say that the hon. Member for Essex, South-East (Mr. Braine) may give a pledge with no thought of seeking to mislead the House but speaking in all good faith, but what will probably happen is that if the party opposite comes to power they will say, "We did not know the facts.

The figures or the circumstances have changed so that we cannot now honour our pledge. We will do it one day—perhaps next year or the year after."

I am in favour of my right hon. Friend having a word with the Chancellor of the Exchequer in order that the money may be found to help all the well deserving cases mentioned in the hon. Gentleman's Motion and in all the other similar Motions. If he does that, I hope that the Tories will tell their leaders that they must stop this campaign about the Government's using money on wasteful things. This money must be found, and if it is the Tories must stop this attack upon the Government, who will be trying to do the right thing for the well-deserving cases which have been referred to.

11.40 a.m.

Mr. Bernard Braine (Essex, South-East)

As we shall be rising in a few hours, Mr. Speaker, and as this is the season of good will, I hope that I shall be in order if, on behalf of all hon. Members, I wish you and your staff an enjoyable Christmas and a restful Recess.

I am delighted that my hon. Friend has raised the subject of Colonial pensioners. He and I have had a long association, over many years, in dealing with the interests of the Overseas Civil Service. Over 14 years ago we saw the shape of things to come in the Commonwealth and led an agitation from the back benches for a reform of the structure of the then Colonial Service. The creation of Her Majesty's Overseas Civil Service went only half way to what we wanted.

The dilemma was that as Colonial Territories neared independence they needed, paradoxically, more expatriate advisers and help than they did before, and the problem was how to persuade them in a situation where they were working themselves out of one job to stay on and do another.

I remember saying in the House, as long as 10 years ago, that The colonial civil servant is much more than an ambassador for this country. He is forging the links in a chain of understanding, trust and friendship which alone can ensure that the Commonwealth, of which Britain is only a part, can endure. On the quality of their leadership, on the example they set and the confidence they inspire, will depend whether the new self-governing States of the Commonwealth decide to stay within the family circle."—[OFFICIAL REPORT, 21st January, 1958; Vol. 580, c. 967.] That is what we felt at the time. All the self-governing States created since then have in fact remained within the family circle. I therefore join with my hon. Friends in saying that this country, as well as the newly-independent countries of the Commonwealth, owe a great deal to the men about whom we are speaking.

I am aware of the argument that responsibility for the pensions of former servants of overseas Governments should, in logic and fairness, rest with their former employers and not with Her Majesty's Government. I also recognise that the vast majority of Commonwealth Governments have continued to honour their obligations to their former servants. But the right hon. Gentleman himself, from time to time, has expressed some doubt on the question whether this system is valid in present circumstances. On 26th July of this year he said: As to whether this is right or wrong in principle, it is very difficult to be certain. … I think that if we were starting anew to make a decision about what would be right most of us would take the view that we ought to follow the practice of other ex-colonial Powers and assume the pension burden ourselves."—[OFFICIAL REPORT, 26th July. 1968; Vol. 769, c. 1251.] He went on to explain that he had inherited a system that had been in existence for many years.

We should like to know what the right hon. Gentleman's further thinking on the subject is, and whether a current survey is being made of the whole overseas pension position, especially in relation to our aid programme. In the sense that all these men once served the Crown, and were recruited and trained in this country, there is at least an obligation upon us to see that they are treated in uniform fashion. After hearing the powerful speech deployed by my hon. Friend and Member for Liverpool, Wavertree (Mr. Tilney), supported by my hon. Friend the Member for Antrim, North (Mr. Henry Clark), I find it very difficult to see any justification for a situation in which certain categories of such pensioners are ineligible for supplements under the Pensions (Increase) Acts.

My hon. Friend mentioned a number of cases. He quoted the case of the former employees of the Nigerian Coal Corporation, the Achimota College and the Lagos Town Council. There may be many others. Perhaps the Minister will be able to tell us how many people are involved, and how widespread the problem is. My hon. Friend's examples were restricted almost wholly to West Africa.

My hon. Friend made the serious charge that in the case of the Nigerian Coal Corporation assurances were given to officers which have not been kept. My information is that the Corporation, when inviting officers to transfer to its service in 1952, promised them that their terms and conditions of service would be no less favourable than if they had remained in Government service. Yet this has not applied to the supplements to pensions for some years. I therefore ask the right hon. Gentleman whether the Government intend to honour this assurance by granting those who served the Corporation the full supplement in the coming Pensions (Increase) Bill. I also ask the Government whether they will make good any default by the Corporation as they would make good any default by an overseas Government.

I take the point raised by the hon. Member for West Ham, North (Mr. Arthur Lewis.) I shall not rise to his bait. All I say is that we are largely in the dark on this question, and it is difficult for us to take up a position until we have much more information. The purpose of my intervention therefore is to obtain as much information as I can from the right hon. Gentleman.

Mr. Arthur Lewis

Surely the hon. Member can go further than that. It is not a question of bait; it is a question of fact. The Tories are continually complaining that the Government are guilty of wasteful expenditure. All I am saying is that if the Minister gives way in this case, whatever expenditure is involved, may we have an assurance that the Tories will cease the practice of clamouring about wasteful Government expenditure? Whatever sum is given, it must be Government expenditure.

Mr. Braine

I shall not be drawn down that path. If I were so tempted you would quickly point out, Mr. Speaker, that we have only a limited time.

There are several ways in which this problem could be tackled. My hon. Friend asked whether we should consider dealing with the pensions of expatriate officers by taking the money involved into account when settling our aid programme. This is a large subject on its own, and I do not intend to pursue it now. But before any of us ask the right hon. Gentleman to enter into any further commitments involving expenditure, the House is entitled to know how many people are involved and, what estimate of cost the Government have formed in this regard. If the hon. Member had been in his place at Question Time during the last year he would have known that we have repeatedly pressed the Government to reveal their hand in this respect.

So I ask again, what estimate have the Government made of the total cost of granting supplements to overseas pensioners whose pensions are paid by overseas Governments but who are at present ineligible for supplement? In answer to my Question earlier this month the Parliamentary Secretary said that about 16,500 people were concerned. Is this the total figure? Are the Government satisfied that all the categories about whom we have spoken this morning are included in that figure?

I also press for an answer to my Question as to the number of overseas pensioners who were recruited by the Colonial Office or the Crown Agents who are ineligible for supplements under the Pensions (Increase) Acts. The Parliamentary Secretary answered me in this way: I have not sufficient information on which to base a reliable estimate."—[OFFICIAL REPORT, 5th December, 1968; Vol. 774, c. 548.] That is a far from satisfactory answer. I do not wish to detain the House, because this is an important subject and we are all anxious to hear what the Minister has to say. He has acquired—justly—a reputation for frank and fair speaking. We respect him for this. I therefore trust that he will be able to give us a very frank and clear answer.

11.51 a.m.

The Minister of Overseas Development (Mr. Reginald Prentice)

Mr. Speaker, may I begin—out of order—by following the hon. Member for Essex, South-East (Mr. Braine) in wishing you and the staff of the House all the very best for Christmas and the New Year.

I am very glad that we have had a debate on this subject this morning. We are talking about a group of people who performed a very considerable service, both to Britain and to the countries in which they were working. To say that, with all the emphasis at our command, is not in itself to be taken as an apology for colonialism. Many of us think that the colonial period was in many ways one of an unhealthy relationship between nations. I have always taken that view. During chat period many thousands of people, performing all kinds of jobs, rendered great service to the countries in which they were working and also to Britain. Therefore, the House is quite properly sensitive to the way in which we deal with these people, including the pensions for those who have retired or the pensions for the widows and dependants for those who have died.

The hon. Member for Liverpool, Wavertree (Mr. Tilney) speaks with a great deal of authority in this matter. He knows a great deal about it. He has an association, as Vice-President, with the Overseas Service Pensioners Association, and he brings a great deal of concern to this subject. I thank him for his courtesy in informing me of the main points he intended to raise in this debate. This gave me the chance to consider them with particular care.

The House knows that a Bill to increase pension supplements will shortly be laid before it. I confirm the Answer which was recently given by my right hon. Friend to the hon. Member for Wavertree, that the effective date for the increase in pension supplements will be 1st April, 1969. This applies to many categories of pensioners—people who gave service in Britain, as well as Overseas Service pensioners who qualify for supplements at present.

The hon. Gentleman was very persuasive in first concentrating his argument on a very small category of people. He was persuasive on the merits of the case. He said that these people had been recruited by the Secretary of State for the Colonies and later transferred to other bodies which were not directly part of the Government machine. The hon. Gentleman was persuasive in the sense that he was speaking about a small number of people and his proposal as it stood would therefore have only a small financial effect.

I have sympathy for the hon. Gentleman's case, but I have nothing more tangible than sympathy to offer him today. I am sorry about that. I feel slightly in the rô le of Ebenezer Scrooge at this time of year; and I do not like that.

I want to explain to the House why I think that I am bound to adhere to the line which was drawn originally by the Conservative Government in 1962 and followed by them and by the present Government ever since, the line being that only service under the Crown qualifies for pension supplements.

May I examine for a few moments exactly what happened to the officers who transferred to the Nigerian Coal Corporation. I take this example because the hon. Gentleman took it, and it is an example of a number of other cases. The officers concerned were first seconded to the Corporation. During the period of secondment, they were still employees of the Crown. I am advised that the period of secondment with the Corporation was for an initial period of two years. In the case of other bodies in West Africa and elsewhere, the period may have been different from two years, but I think that the procedure was followed in some such fashion.

During the period of secondment, these officers were offered a choice of transferring to the Corporation or of reverting to the service of the Crown. It is fair to say that they were encouraged to transfer, because this was the job they were doing and the job that everyone wished them to continue to do. Nevertheless, they had this choice. Anyone who exercised the choice of reverting to Crown service would be found suitable employment, if it were available; or, if not, there was the possibility of being retired prematurely on enhanced pension terms.

With that went the conditions the hon. Gentleman has quoted—that anyone who agreed to transfer to the Corporation would enjoy the same conditions he enjoyed in Crown service, that this would include entitlement to pension, and the pension scheme would be modelled on the pension scheme for Crown servants. All this is clear and not in dispute.

The example we are quoting is of something that happens fairly often throughout the world. It happens in this country. It happens, perhaps, when there is a takeover of a firm, or when a firm is nationalised, or when there is a change of employer. When people make a transfer from one employer to another, it is often a condition that they do not suffer loss of any benefits that they enjoy in their old employment.

From the date on which they have transferred surely the position is this. On the one hand, they will enjoy any new benefits that accrue to them from their new employer whether these arise in salary or in improvements in pension conditions, or whatever they may be. On the other hand, they will not enjoy any new benefits that have accrued in their old sphere of employment in which they are no longer working.

In other words, a man in choosing to make this transfer takes on a whole package of pros and cons of one employment as against the other. I repeat that he does not have a claim if some new benefit arises which he would have had in his old employment and which occurs after he has transferred. This applies to the pensions supplements introduced in 1962, several years after these officers transferred from Government service to the service of the Corporation.

Mr. Tilney

I am grateful to the Minister for explaining the position so clearly. However, it is terribly unfair, in that the Government-sponsored Corporation promised that if these officers transferred from the Government service to the Corporation they would be no worse off in future.

Mr. Henry Clark

The Minister has very eloquently quoted cases that occur in this country from time to time. Those employed in the business and private enterprise commercial world perhaps accept its cut and thrust and receive rather higher benefits. One of the reasons why people went into the Overseas Service was, above all else, that though in most cases the salary would be small their jobs and positions were thought to be secure. People accepted very low salaries mainly because the Government offered what everybody thought was security.

Mr. Speaker

Order. The hon. Gentleman can make only one speech.

Mr. Prentice

I think that I understand the points made by the hon. Members. I sympathise with them and see their validity, but I am bound to make the counter-argument that I made just now to try to convince them that the case of this small number of officers—the hon. Member for Liverpool, Wavertree estimated them at perhaps less than 200—is no different in essence from that of many others who worked in the colonies in all kinds of jobs.

Therefore, the real choice which faced the previous Government, and which faces the present Government and the House, is whether to draw the line where it is, and say that pension supplements are available for those who have been in Crown service or to have a much wider definition. Of course, the officers to whom the hon. Gentleman referred get a pension supplement for that period they spent in Crown service. The hon. Gentleman argued this morning for a very small category and said that he did not intend to extend it to others. But possibly he would do so in the future if this small category were included. If he did not, others would. There would be a powerful argument. For instance, if those who worked for the Nigerian Coal Corporation got pension supplements for the whole of their service in Nigeria, whether under the Crown or under the Corporation, what would be the case for refusing supplements to those who spent their whole career with the Corporation and were recruited directly by it? A man would say, "I did the same job as my colleague for the same pay and under the same conditions. Why does he get a pension supplement while I do not?"

If one extended it to the group of organisations defined by the hon. Gentleman, what about the much larger number of other bodies in the Commonwealth? If the Lagos Town Council, why not other municipalities all over the Commonwealth? If the Nigerian Coal Corporation, why not other statutory bodies dealing with mining, water supply, electricity or whatever it might be? This is how the figures of my hon. Friend the Parliamentary Secretary were reached. The hon. Gentleman referred to Questions about the numbers involved. His Question of 16th December asked whether we could show in table form the number of pensioners engaged overseas but not engaged locally. In other words the whole category of people to whom I have just referred who were working for local authorities or statutory undertakings, but were not directly under the Crown. He wanted details Colony by Colony. My hon. Friend said in reply that we did not have that information, which is the case. It is not our responsibility to have it. We do not accept the responsibility to pay pension supplements, and therefore we have not got it in this form. If we had given an answer it would have been a guess, and we were asked not for a guess but for precise information in table form.

In his Question of 5th December, the hon. Gentleman asked what estimate we had mad; of the cost of granting supplements. The estimate we gave was, "Probably about £1 million." It was based on a guess that probably about 5,000 people were involved, and we assumed a supplement averaging £200 a year for each. I think that the figure of about £1 million is, if anything, an underestimate rather than an overestimate. Even then, the argument would proceed to further categories. A large number of people worked as teachers, doctors, nurses and in many other capacities in the colonies. Many were recruited by missionary societies under all kinds of arrangements with the Governments in those territories. They gave service there, and might argue that they have as good a claim as other categories. Beyond that there are those who worked for private enterprise organisations. They may or may not be receiving a good pension from the firms who employed them but there are many thousands of them who gave service in those territories.

Therefore, the real question of policy is whether there should be a major extension to anyone who gave service in the territories or whether we should stick to the definition decided by the Government of which the hon. Member for Liverpool, Wavertree was a member, and draw the line as between those who served under the Crown and those who served in other capacities.

Mr. Tilney

I am not sure that the Government knew of the promises I have quoted when that line was drawn. Could the right hon. Gentleman say why he has accepted my argument already in the case of Achimota to those who were directly recruited as members of Her Majesty's Overseas Civil Service or the old Colonial Service and in the case of the East African Railways? Would he also comment on the Dar-es-Salaam municipality?

Mr. Prentice

In the case of Achimota, the people to whom we have agreed to pay pension supplements in full were compulsorily transferred without an option, and were given a specific guarantee related to that compulsory transfer in much more definite terms about future benefits than those the hon. Gentleman quoted in relation to the Nigerian Coal Corporation. I shall write to the hon. Gentleman about Dar-es-Salaam, as I have not got all the information he asked for with me. I shall also write to him about the personal position of Mr. Moran. He gave the House a certain amount of arithmetic, and it was one of those occasions when we wished we had a blackboard in the Chamber. I shall also write to him about the specific question of the eight pensioners in regard to the Lagos Town Council, not because I want to avoid such issues but because I do not want to take too long and on this occasion the House should deal with the main points of principle rather than too much detail.

My conclusion, therefore, is that there is a broad choice before us, as there always has been, and that it is right in the present circumstances to stick to the original definition. In view of the public expenditure and economic position this is not a time when we can extend the frontiers of our expenditure. I hope that I have shown that it would be a major extension and not the minor one the hon. Gentleman has said. I agree with my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) that hon. Members opposite have the endearing habit—I shall not put it more strongly, for one does not want to engage in too much controversy at Christmas—of suggesting more expenditure on everything in particular and less expenditure in general. They must occasionally be brought face to face with the need to do their sums on such issues.

Mr. Arthur Lewis

My right hon. Friend puts it more politely than I do. Is not the main plank of the Tories' alternative policy that they would cut Government expenditure?

Mr. Prentice

It is, and I assure my hon. Friend that I have made this point publicly many times much less politely than I do this morning.

The same broad arguments apply to what was said by the hon. Member for Antrim, North (Mr. Henry Clark) about people who were locally recruited to service in the colonies. The line taken by the previous Government and this Government is that the responsibility rests with the Government for whom they were working. If the British Government were to take over this liability, it would be a very large liability extending to many thousands of people all over the world. I have no means of assessing how many people would be involved. I do not think that this is something which, in financial terms, could be undertaken by this country at present, even if it were right in the past—and the then Conservative Government decided that it was not right.

Mr. Henry Clark

There seems to me to be a difference between whether one insists on pension increases and whether these people get no pension at all, as in Aden. We must use every means we have to ensure that the Southern Yemen Government take up these responsibilities.

Mr. Prentice

During the discussions which we had with the Southern Yemen Government some months ago, this was one of the points urged on them very strongly by the British representative. As the hon. Gentleman knows, they have repudiated this liability.

The other main issue raised by the hon. Members for Wavertree and Essex, South-East was one which we have debated before, particularly on 26th July, namely, whether there should be a transfer of responsibility for overseas pensions from overseas Governments to the British Government. I am now talking about basic pensions, and not the supplements. The hon. Member for Essex, South-East quoted what I said in our last debate on this matter. I accept that what he said was a fair statement of my view, and it remains my view. The arguments are very evenly balanced.

On the one hand, it is fair to argue that the officers concerned worked in and for a particular country and that their services benefited that country. On assuming independence, the new Government took over the assets and liabilities of the colonial ré gime, and the liabilities properly should include the payment of pensions to ex-colonial civil servants. That has been the position of successive British Governments, and it is the position of this Government. All that I was saying—and I have no reason to modify what I have said in the past—was that, looking back on the decisions made in the past, one wonders whether they were right. Other ex-colonial powers came to a different decision.

The arguments the other way are equally well known. There is a resentment about levying taxes on the people of a poor country struggling to develop itself in order to maintain the middle class British standards of life of people who have retired and are now living in this country.

Whatever the merits of past decisions, we now have to decide whether it would be beneficial to make a change. We must consider the effects of change. I do not think that there would be any real effect on the pensioners, except in one or two marginal cases, but, broadly speaking, as the hon. Member acknowledged, if there has been default, the British Government have taken care of the pensioners.

What is much more in my mind is the effect on the developing countries. I think it would distort the pattern of aid as between countries. About 20 per cent. of the pension burden which we would assume would be in relation to countries either getting no aid or very little aid from us, or only temporary aid—for example, Singapore, which is getting special aid in relation to the military withdrawal. If we took over the whole burden and took it off the aid programme, it would be not a book entry; it would be much more serious. But it might distort the pattern. We would have to consider whether we could make a straight transfer and take the money off capital aid which is in the form of loans. This would be equivalent to giving a grant which would be difficult.

If we took it off technical assistance, what sort of technical assistance? One could not send home students who were in the middle of their courses, and one would not want to withdraw technical assistance personnel during the term of their service. The practical problems are very considerable, and I am forced to the conclusion that, on balance, a change of this kind would be damaging to development and therefore would have adverse effects on the people in the countries which we are trying to assist through our aid programme.

Mr. Speaker

I remind the House that the debates are strictly timed. The debate which is about to take place will end at exactly 1 o'clock.