§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Varley.]
§ 4.1 p.m.
§ Mr. John Boyd-Carpenter (Kingston-upon-Thames)
This is the first occasion on which I have sought your permission, Mr. Speaker, to raise on the Adjournment a matter within the responsibility of a Department of which, for some years, I had the honour of being the head. I want, therefore, at the beginning to say that in raising what I regard as an issue of major public importance within the responsibility of that Department I am very anxious not even to appear to criticise the staff of that Department.
I know that, especially on the war pensions side, the staff discharge their difficult and multifarious duties in a humane and civilised way, and I have often thought that the way in which they handle war pension problems might well be the prototype from which could be developed social administrative techniques which could be spread into the civil field—above all, perhaps, for the long-term disabled and sick.
What I have sought permission to raise on the Adjournment is not that; it is a decision of the Government—I suspect that it is a decision of the Government as a whole—which I regard, using as moderate language as I can, as callous, indefensible and dishonourable. I refer to the decision to reduce—in effect, by one-seventh—the war pensions paid to war pensioners in all countries abroad except the small minority which devalued with us. I shall try to put the case as quickly as possible, because I want to leave the Minister as much time as possible to reply.
The decision is an astonishing one. I wonder what would have been the response of the House to any Minister who had said that pensions paid at home were to be reduced by one-seventh from 21st-22nd November last. I doubt whether that Minister would have lasted for 24 hours. I should have thought that the same indignation which I would have felt in those circumstances ought to be felt by all hon. Members when a 904 similar cut is imposed, on war pensioners of all people, who happen to reside abroad.
I am certain that the right hon. Lady, the Minister, must have intensely disliked this decision. Had she thought fit to follow the example of her predecessor, who refused to remain responsible for decisions which she disliked, hon. Members on both sides of the House would have felt a great deal of sympathy for her.
This matter arises, of course, from devaluation. Last November, the Government took a step which some of them described as a defeat and others as a giant stride to Socialism, and devalued the £ thus automatically reducing the value abroad of payments in sterling except in that minority of countries where devaluation on the lines of our own was carried out simultaneously. There is no dispute that to maintain the purchasing power of those pensions at their level before 21st November, it is necessary to increase them in terms of sterling by 14.3 per cent. or one-seventh. Similar steps are being taken by the Government in respect of certain other categories and I thought that they would be taken above all in the case of war pensioners.
The Parliamentary Secretary will recall that I asked a Question before Christmas about what it would cost to increase pensions sufficiently to compensate pensioners for the cut which was being imposed upon them. I was told that it would be, provided that it were kept to them, no more than £750,000 a year. Of course war pension payments have this peculiarity, that, because the pensioners are getting older, this figure, unlike other figures of public expenditure, automatically diminishes with the years.
Nothing was done, so on 29th January, I asked a Question of the right hon. Lady:… whether she will now adjust the payments made to war disability pensioners resident overseas so as to restore the value of their pensions in terms of the local currency of the places in which they reside to the level at which it was prior to the devaluation of the £ sterling.The right hon. Lady replied:No, Sir. War pensions are payable abroad in sterling and there is no power to vary them upwards or downwards in accordance with changes in the relative value of the local currency. As the right hon. Gentleman 905 knows, the War Pensioners Welfare Service is there to help any pensioner who may experience hardship."—[OFFICIAL REPORT, 29th January, 1968; Vol. 757, c. 861.]The first half of that Answer is disingenuous. The right hon. Lady and the House know that one can alter war pensions by Royal Warrant without any Parliamentary procedure and hardly any delay. I do not think that the Parliamentary Secretary will say that there would be any technical difficulty in his right hon. Friend today making a submission to Her Majesty for an amendment to the Royal Warrant to increase these pensions by 14.3 per cent.
She also referred to the War Pensioners Welfare Service, for which I have the greatest regard. But that cannot operate as effectively abroad, where it has no offices or bases, on the whole, as it can and does most effectively in this country. I believe that only in Dublin and Ottawa does the right hon. Lady have art office, and that in all other countries where British war pensioners live, the work is done for her Department most admirably by the local administration. For example, the Government of the Union of South Africa do this in Pretoria; they give a fine example, and most helpful to British war pensioners. I am sure, therefore, that the Service will do its best, but I do not think that the House can take that as anything like equivalent to a restoration of the value of the pension.
What is hardship in this context? For any disabled man, generally an ageing man, to have his pension cut by one-seventh at a time of rising prices is surely hardship in itself. If the right hon. Lady meant that hardship in that sense would be relieved by the welfare service, why not take the perfectly simple step of increasing the pension and saving everyone trouble? If, on the other hand, she meant—as I think she did—something a good deal less, that is no answer to my complaint on 29th January which caused me to give notice of my intention to seek this debate. Why not make this provision by Royal Warrant now?
I will put the arguments quickly. First, it has always been accepted that this country has the highest obligation of all to those who were injured in its service. We are dealing with people who were 906 young, fit men when they went into this service and who, as a result of that service, in some cases came out so mutilated that most of the joy of life had gone from them, or who, in the majority of cases, were able to lead normal lives but with a handicap, a disability and sometimes with constant pain. We have said that such people who incurred such injuries in the service of this country, indeed in saving the life and freedom of this country, were entitled to the highest consideration from the country which they helped to save. That is why Governments of all kinds have said that we gave priority to war pensioners. What does priority mean in this context other than doing what I am asking the hon. Member to do?
War pensions have in many ways been treated differently from other pensions—not as income in the ordinary sense but as compensation for physical disability, quite apart from its effect on earning capacity. That is why they have been given unique treatment in not being regarded as income at all for Income Tax purposes. That is why, when they are drawn in this country, they are altogether free of British Income Tax—for the double reason that this is not income in the ordinary sense but compensation for physical injury, and that these pensions are thought of as being in such a special position that it would be wrong and oppressive to tax them at all. We are talking about this kind of payment, which has always been treated on that basis and regarded as entitled to special treatment.
War pensioners abroad fall, in my experience of the Department, broadly into two categories. There are those whose homes were abroad before the war in which they came to fight, and who came to fight here, as volunteers coming across the world to help this country in its extremity. They range from the young Americans who joined the Eagle Squadron and who performed such prodigies of valour in 1940 to people from villages in West Africa or remote towns in the West Indies who volunteered to join the British forces to help us in our hour of strife and danger. In addition, there were those of British origin, resident abroad, perhaps working in business in South America, subject to no compulsion to come here, who came 907 across the world to fight for us and, having fought for us, went back to the countries from which they had come. The other category includes those who have since emigrated. In some cases they have emigrated because the nature of their disability make our climate particularly difficult for them—for example those with chest complaints resulting from gas attacks in the First World War—while others, possibly because of their disabilities, have sought a different opportunity of life in another country.
These are the two categories, both of whom are receiving this cut and will continue to receive this cut unless, even now, we can press the Government to take action to restore their pension to its previous value. I ask the House to reflect on the effect of this cut abroad, in the places where these people live. It will be seen in New York offices and West African villages alike that this great country is apparently going back on its obligations, and quite suddenly imposing a cut on people for whom it has long admitted an obligation. There is not only the effect on these individuals but on their friends and relations, and it is not a nice effect for anyone in this House or in the country to contemplate.
We come to the question which the hon. Gentleman will no doubt pose; can we afford it? Can we separate it from the other cases and claims? I am an old Treasury Minister and I tend to look on proposals for public expenditure with an eye lacking in enthusiasm. But here we are talking of a diminishing figure of £¾ milion a year, and against the background of a Vote on Account for public expenditure rising this year by £1,000 million.
I agree that in this case we are talking of overseas expenditure across the exchanges, but this is a question of priorities. Earlier this week, I saw in the Press an announcement of an interest-free loan of £½ million to Indonesia. There are, no doubt, good intentions behind that, but if we really are in such difficulties with our balance of payments that we cannot even maintain—never mind, improve—the pensions we pay to people abroad who have served us, I would not have thought that we could afford to make an interest-free loan to Indonesia, a country which—one re- 908 calls it without ill-feeling, but it is the fact—has only recently caused us very great trouble and some loss of life, and a country which, when it was properly managed by the Dutch, was highly prosperous through its own natural resources and did not need outside aid. Can the Parliamentary Secretary justify saying that we cannot afford to make up this money for our own people but can, even this week, find an interest-free loan—no one knows when or if it will be repaid—to Indonesia?
Another aspect is that of setting a precedent. These are not the only payments made abroad, and I put it to the hon. Gentleman that some of them are being increased. I am delighted to understand that pensions payable to the Gurkhas are being increased and perhaps the Parliamentary Secretary can confirm it. This is the Service pension paid to the Gurkhas—those splendid troops to whow we owe much. I do not grudge them a penny of it. But does that increase apply also to war disability pensions, or is it just their Service pension?
Again, we are increasing the allowances at present paid to those now serving in our Forces abroad. I do not object to that—indeed, as the father of a serving soldier, I suppose I have an interest in the opposite direction. The fact remains that we are increasing their allowances. We are increasing the allowances paid to our diplomatic representatives abroad to make up for devaluation.
All these things are no doubt sensible and right but, if they are being done, as I know they are, it knocks the bottom out of the argument that we cannot pay an increase to war pensioners because that would set a precedent and be an unfortunate example. The fact is that it is being done at the moment, and rightly so, for those in the present service of the Crown—and done also, I have no doubt, because the Government know that if it were not done they would find themselves in a great deal of trouble.
But does not that lead one overwhelmingly to the view that if we do that to those at present in our Service, knowing that there would be a great deal of trouble if it were not done, but have not done it for those who are not in a position to make trouble, who have 909 no connections here, no organisation here, who are no longer in this country's service and who, from the Government's point of view are completely helpless: this is particularly shameful. The very fact that they can do nothing to embarrass the Government or make things more difficult for them ought to be a most powerful argument for the Government to be generous in their case.
I feel very strongly about this matter. The maintenance of the full value of our war pensions to our pensioners abroad is a matter of honour for this country, and of justice. Fortunately, in financial terms, the amount involved is so small that no Minister can say that our national economy would be over strained by acting as I suggest. I therefore hope that the hon. Gentleman will give himself the pleasure—for such I am sure it would be—of doing the right thing, and of saying that a draft Warrant will be submitted forthwith to Her Majesty to right this wrong.
§ 4.20 p.m.
§ The Joint Parliamentary Secretary to the Ministry of Social Security (Mr. Charles Loughlin)
I begin by paying tribute to the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), not merely for the way in which he has presented his case in a cogent and forthright manner—that is something we have come to expect from him—but for the work he did as Minister in the old Ministry of Pensions and National Insurance, and in particular the work he did on behalf of war pensioners.
As one now associated with the Ministry, I was grateful that he saw fit in his opening remarks to pay tribute to the staff in the Department who administer war pensions.
I assure the right hon. Gentleman and the House that my right hon. Friend and I are very concerned to look after the best interests of war pensioners as far as is humanly possible. We approach this problem in a desire to look after them in the way they deserve to be looked after. That approach we intend to continue.
As the right hon. Gentleman said, this debate is about the personal financial effects on pensioners overseas living in countries which have not devalued in consequence of the devaluation of the 910 pound sterling. Broadly, war pensioners living abroad in those countries which did not so devalue have in effect a pension cut of 14.3 per cent. The right hon. Gentleman claimed that it would be practicable to restore the value of the pensions to war pensioners only. In saying that, he advanced the argument that this would cost £750,000. It is true that it would cost that amount; that is the amount we stated in response to his Question. It is also true that £750,000 would be a diminishing amount because war pensions gradually tail off by virtue of age and dying.
I am not so sure whether the right hon. Gentleman's sanguine approach to the containment of this exercise would be correct. I doubt very much whether the position could be held at the point of merely restoring the war pensioners' cut. I want to be careful about what I say because I should not like anyone, whether a war pensioner or anyone in the community, to misconstrue a single word that I utter. I am vitally concerned that we should give war pensioners the maximum we can afford. When I said that we would merely restore the cuts I did not mean it in the sense in which it might be construed.
There are many pensioner recipients of sterling abroad. Although I do not want to talk about police, civil servants, teachers and others, I want the right hon. Gentleman to recognise that there are two sections of pensioners who are of great significance. There are the National Insurance pensioners and the Industrial Injuries pensioners as well. It is pertinent to the argument that once we made a concession in one field, it would be inevitable that pressures and demand would grow for the extension of the concession to the National Insurance pensions and the Industrial Injuries pensioners as well.
§ Mr. Boyd-Carpenter
Would not that argument apply equally to the already existing differential over Income Tax? Yet Income Tax has always been imposed on retirement pensions, and no difficulty has ever arisen in connection with that.
§ Mr. Loughlin
I hope that the right hon. Gentleman will not intervene again. He knows that when there is plenty of time I never refuse to yield. He spoke for over 20 minutes. I have 10 minutes in which to reply.
911 I do not think that that is a fair analogy, because three separate sets of pensioners are affected by what I expected the right hon. Gentleman to describe as a conscious act of the Government. If the cut were restored to one section, the demand would inevitably grow and would cost about £¾ million straightaway.
Twenty-one thousand, six hundred war pensions—17,000 disablement pensions and about 4,000 war widows' pensions—are affected. I accept that there are the three categories of pensioners involved as outlined by the right hon. Gentleman. I want to make it clear that the overwhelming majority of the 26,000 war pensioners living abroad are persons who have emigrated from Britain taking their pensions with them. Almost all of them were resident in this country and are native to this country. Although I accept in toto that they responded to the call in the country's hour of need, I want to make the clear distinction that we are not dealing with people who volunteered from other countries, because, with only a few exceptions, the volunteers from the Commonwealth and other countries were embodied in their own forces in about 1941, and, in consequence, have been assimilated in their own countries' systems of compensatory payments.
I want to change the format of my speech, because I want to put clearly on record how we intend to deal with this problem. I take it out of context solely because of the time. It was not fair of the right hon. Gentleman to write down the welfare services we have in other countries. We have made our agents fully aware of what we want them to do. The organisations in this country and elsewhere which are representative of ex-Service personnel are fully aware of what 912 we intend to do. We intend to ensure that wherever possible the welfare services make certain that no hardship accrues to any of our pensioners who are caught on the question of devaluation.
By far the greater proportion of war pensioners have disabilities below 30 per cent. I accept that war pensioners whose pension constitutes the greater proportion of their income will be terrifically hurt by this cut. I give the assurance that these are precisely the people we will try to look after to ensure that they are not hurt too much.
The question whether there can be different rates of pensions for different countries is very difficult and cannot be glossed over. Pensions are expressed in sterling. If there were a differential rate for various countries, and if those rates in certain instances were higher than rates paid to pensioners in this country, although we might get over the initial stages within a short time we should be faced with the demand, "If you can pay high rates of pension to people resident in Canada and the United States, why should not you pay the same rates to us, because some of us actually pay taxation in Britain to make up for the pensions?"
On the question of upward adjustment of rates in countries where devaluation has not taken place, do we reduce the rates in countries like New Zealand where devaluation has been greater than that here? There are all sorts of factors which interfere with the true value of the pensions—
§ The Question having been proposed after Four o'clock and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
§ Adjourned at twenty-nine minutes to Five o'clock.