HC Deb 19 February 1973 vol 851 cc18-22
30. Mr. Dalyell

asked the Minister for the Civil Service if he will make a statement about his discussions with the Society of Civil Servants about Civil Service pay.

31. Mr Greville Janner

asked the Minister for the Civil Service how many representations he has received in 1973 concerning the pay of civil servants.

34. Mr. Barnes

asked the Minister for the Civil Service what requests he has received for a meeting from the staff side of the Civil Service National Whitley Council.

The Parliamentary Secretary to the Civil Service Department (Mr. Kenneth Baker)

My right hon. Friend the Prime Minister met a deputation from the staff side of the Civil Service National Whitley Council, including a representative of the Society of Civil Servants, on 8th January. There was a full discussion of the pay situation and my right hon. Friend said he would be glad to meet the staff side again when the second stage of the programme for controlling inflation had been announced.

Mr. Dalyell

In the meantime, what is the Government's attitude towards Priestley and the Pay Research Unit?

Mr. Baker

The position of the Government on Priestley has been made clear. On the first occasion when we were engaged in negotiations with the national staff side on resuming office in March 1971 we made a declaration to the staff side, which was accepted, to the effect that the Government endorsed the Priestley principles, subject to any requirements of overriding national policy of general application.

Mr. Janner

Is the hon. Gentleman aware of the deep sense of injustice felt by most civil servants regarding their level of pay? What does he propose to do about it now?

Mr. Baker

No Minister could be more aware of this than I. I certainly accept that there is an element of catching up. The Civil Service is not unique in this. Many pay claims being mooted at the moment involve an element of catching up. The Government have laid down an overriding national policy and it would be appropriate for the Civil Service to follow that policy.

Mr. Barnes

Does the Minister not agree that the Civil Service has a special case on the grounds of fair comparison with comparable work outside? Does he not further agree that there its case is a special one, which ought to be considered by the Pay Board at the earliest possible opportunity?

Mr. Baker

In our negotiations with the staff side we have said that after the application of phase 2 on 1st April, when the Civil Service will receive £1 plus 4 per cent.—which is about 7½ per cent. to 8 per cent—if any anomalies still exist, and they may well exist, we will refer those anomalies and discrepancies to the Pay Board to consider in the light of phase 3.

Mr. Tom King

Is there not some evidence, on this question of catching up, that there are other industries which could ask to catch up with the Civil Service in such matters as holidays, leave—[Interruption.] This is a serious point and it demonstrates the difficulty of catching up. Does not the Civil Service have certain benefits, including security of employment, which other industries do not have?

Mr. Baker

My hon. Friend is right. As I said earlier, catching up is not limited solely to problems in the special case of the Civil Service; it is a factor in many pay claims.

Mr. Sheldon

Is the hon. Gentleman not aware that there is one unique characteristic about the Civil Service pay claim, namely, that it is not only two years since civil servants had their pay increased but that that increase was then limited by the n-1 theory which was current at that time? Is the Minister further aware that as a result of this they have suffered nearly a 20 per cent. increase in the cost of living but have received only what was then a 7½ per cent. increase? Does he realise that they have suffered as a result of this large reduction in their standard of living? When this policy comes to an end or when the next phase comes into being, what assurance will he give to those who retired during this period to make sure that they do not lose part of their retirement pension?

Mr. Baker

The group that is due for pay research in January of this year started its two-year cycle with an increase of about 11 per cent. two years ago. There was an interim increase in January last year of about 7½ per cent. to 8 per cent. That is the full picture. I am concerned about the problem of the pensioners. We are discussing it with the staff side at the moment. Those who have become pensioners since 1st January will be affected by phases 1 or 2. It is a difficult problem to resolve. The previous Government tinkered with pay research every year when they were in office, but did not resolve the problem of the pensioners. We are looking at it again to see whether anything can be done.

35. Mr. David Mitchell

asked the Minister for the Civil Service whether he will give an assurance that Government employees whose pension is linked to retiring salary and who are due to retire during phase 1 and 2 of the drive against inflation will not suffer a loss of pension.

Mr. Kenneth Baker

As I have said during the Committee stage of the Counter-Inflation Bill, we shall be discussing this very difficult problem with the National Staff Side to see whether an equitable solution can be found.

Mr. Mitchell

Is my hon. Friend aware that there is widespread concern about this matter on both sides of the House? Does he agree that it is important to make sure that there is a fair and just solution, so that the men do not suffer for many years afterwards from a temporary freeze controlling income?

Mr. Baker

Yes. This is a very difficult problem. I can reassure Civil Service pensioners in general by saying that those who have retired before 31st December last year will not be affected by phases 1 or 2. The problem arises with those who became pensioners as from 1st January. As I have said earlier, this question is being discussed with the national staff side. We are seeking a solution, but I do not want to mislead the House into believing that there is an easy answer.

Mr. Milne

When the Minister examines the question of Civil Service pensions, will he look into the background of rising food prices, highlighted by the figures which were presented last Friday? Will he bear in mind that there will be a wide discrepancy between pension payments and food prices despite phases 1 and 2?

Mr. Baker

The hon. Gentleman is slightly confused. The annual increases in Civil Service pensions which take place each December take into account the factors with which he is concerned. The Question relates to those who have become pensioners since 1st January.

Mr. McLaren

Surely it would be monstrously unfair if a person's permanent pension were to be affected by the temporary wage freeze?

Mr. Baker

I will certainly bear the views of my hon. Friend in mind.

Mr. Guy Barnett

The Minister repeatedly refers to this as being a difficult problem. Is it such a difficult problem? Is it not possible to base the pension of a civil servant who retired this year on the salary that a civil servant would have received had the Pay Resarch Unit recommendation been followed?

Mr. Baker

I would remind the hon. Gentleman that the previous Government tinkered with pay research each year and affected pensions. A leading member of that Government was the right hon. Member for Sowerby (Mr. Houghton). If there had been an easy answer I am sure that the right hon. Gentleman, who knows as much about Civil Service matters as anyone in this House, would have found it.