EMOLUMENTS OF RESERVE OFFICERS. (Hansard, 11 May 1903)

§ LORD ROSMEAD
, who had given notice to draw the attention of His Majesty's Government to the discrepancy in the financial treatment of the two classes of Reserve officers called up for service during the late war, and to move to resolve that, in the opinion of this House, the emoluments received by the senior (pensioned) officers of the Reserve in respect of services rendered during recent mobilisation compare most unfavourably with those of the junior officers who had retired with gratuities; and that the consequent grievances of the senior (pensioned) officers should be favourably considered by His Majesty's Government, with a view to removing the disparity complained of said: My Lords, in rising to give your Lordships a brief explanation of a subject which I venture to think is of no little public importance, my object is to bring under the notice of His Majesty's Government the decided disparity of the treatment of the two classes of Reserve officers who were called up for service during the late war. Officers of the Army, as your Lordships are aware, are permitted, by paragraph 515, and the Articles referred to therein, of the Royal Warrant, to retire either on a pension, providing they have the qualifying service, or, if they prefer it, with a gratuity (or lump sum down), which gratuity is their undoubted property, earned by past service, and is in no way subject to any control whatever by His Majesty's Government. It is, in fact, a definite payment free from conditions, except that the officer accepting it is liable to be called up for service in case of national emergency. Those, on the other hand, who prefer to leave their capital in the hands of the Government, draw an annual income from it for their lives in the form of a pension.
These alternative methods of procedure are clearly laid down by the terms of the Royal Warrant, and, accordingly, some retiring officers select the one, and some the other. In the ordinary course no question would arise; an officer having made his choice is prepared to 278 stand by it. But, my Lords, it has been found that when the national emergency arose, as it did during the late war in South Africa when so many of the Reserve officers were called up for service, the authorities suspended the pensions of those officers who had retired on a pension, thereby depriving them of the benefit of their pension, whereas those officers who had retired with gratuities continued to enjoy the benefits of such gratuities, and thus received the full pay of their rank without any deductions whatever during mobilisation. Moreover, I would point out that the officers who retired with gratuities are further entitled to qualify for higher rates of gratuity, and in many cases have thus received various sums. It appears to me that when paragraph 601a of the Royal Warrant was framed it must have been overlooked that, under the amended warrant, the pension of £250 after twenty-three years service was abolished, and consequently, as no increase is provided for, the words of paragraph 601a are as regards the majors and senior captains without any meaning.
In order that your Lordships may fully appreciate how the application of the rules in force financially affect the two classes of Reserve officers, I will venture to quote an example. A junior major retires with a gratuity of £1,600, and has, say, sixteen years' service. This officer receives during two years mobilised service full pay at the rate of £300 a year, amounting for the two years to £600; further than this, he adds two years to his previously completed sixteen years service, giving him a total of eighteen years, consequently qualifying him for the higher gratuity of £2,000. He accordingly receives the difference, viz: £400, and his total receipts amount to £1,000. On the other hand, a senior major, who retired with say twenty or more years service upon a pension of £200 a year, receives during a similar period of mobilisation, only the difference between his pension of £200 and consolidated pay at £350, equal for two years to £300 in all. There is thus, as your Lordships will perceive, a balance of £700 in favour of the junior officer, and a consequent hardship to the senior. I trust your Lordships will recognise the manifest injustice of this procedure, and 279 it is with that object I have ventured to make these remarks on the subject which stands in my name on the Paper.

§ THE UNDER SECRETARY OF STATE FOR WAR (The Earl of HARDWICKE)
My Lords, the noble Lord who has put this Motion on the Paper seems to be under some misapprehension as to the regulations with reference to retiring officers. He has suggested to the House that an officer has the choice of accepting a lump sum as a gratuity on retirement, or a pension of so much a year. That is not the system at present in force, or, as far as I am aware, that has been in force in the past. The old Regulations enabled an officer on retirement after twelve years service to receive a gratuity of £1,200. If he had served fifteen years he was entitled to a gratuity of, I think, £1,600, and, if he had served eighteen years, of £2,000. In 1887 those Regulations were somewhat modified, and officers who had served fifteen years became entitled to a retiring pension of £120 a year. In 1889 a further alteration was made, and gratuities to officers were abolished altogether. Therefore the system at present in force is that an officer after fifteen years service receives a pension of £120 a year, and after twenty years service a pension of £200 a year. Therefore the grievances and the inequalities that have arisen, and to which the noble Lord called attention, owing to the re-employment of officers in the late war, are not likely to recur, inasmuch as the gratuities have been abolished. I do not wish for a moment to deny that grievances and inequalities have existed and do exist at the present moment; that is to say, that officers who have served in South Africa have, as the noble Lord pointed out, received for 280 two years extra service a gratuity of £400 owing to their having been on the gratuity basis in the past, and that senior officers have served a similar period and have not been enabled to increase their pension. That I admit. But the real grievance to which I understand the noble Lord called attention is that an officer serving in South Africa who was previously drawing a pension was not allowed to draw his pension while he was serving, whilst no actuarial deduction was made from the pay of the officer who previously received a gratuity. It is the case that in past years, when an officer who had received a gratuity of £1,200, £1,600, or £2,000 as the case may be, was re-employed, an actuarial deduction was made on that sum of money; but when the noble Marquess was Secretary of State for War at the commencement of the war, he thought actuarial deduction was not altogether fair. In explaining in the House of Commons the reasons that had influenced the Secretary of State in foregoing the actuarial deduction, Mr. Wyndham said— The gratuity is always much less than the actuarial value of the retired pay given for the same service, but the more practical point is that the gratuity is actually given as a lump sum and is not as a rule, in the officer's possession when he is called upon to return to service, so that a deduction from full pay would in that case be a real hardship on the officer. Consequently no deduction was made. I cannot admit that the officers who were in receipt of pensions had any grievance, because they knew when they received their pensions that they would have to forego them in the event of their being re-employed. That is laid down in the Regulations. At the same time, I admit that grievances have arisen in exceptional cases. Not every officer who has been re-employed has a grievance, but there are special cases in which the Secretary of State for War thinks that some redress may be necessary. For that reason my right hon. friend has recently appointed a Committee which is inquiring into the whole subject; and if, on the report of that Committee, he is able to see his way to put forward proposals for the consideration of the Treasury, he will do so. In these circumstances I hope the noble Lord will not feel it necessary to press the Motion.

§ EARL CARRINGTON
Are those officers who were granted gratuities under the old system placed on the pension list now, or are they on the old footing?

§ THE EARL OF HARDWICKE
On the old footing.

§ EARL CARRINGTON
The old system will be continued till they die out?

§ THE EARL OF HARDWICKE
Exactly.

§ LORD ROSMEAD
After the remarks of the noble Earl the Under Secretary I beg leave to withdraw my Motion.