LOCAL GOVERNMENT AND OTHER OFFICERS' SUPERANNUATION BILL. (Hansard, 6 July 1922)

THE EARL OF STRAFFORD
My Lords, I beg to move that this Bill be now read a second time. The Bill has had what I may call, I think, the benevolent cooperation of the Minister of Health in another place and, though examined in great detail in Committee, has not met with any serious opposition in any quarter. It must be conceded that a properly devised scheme of superannuation is of advantage to any service both for the employer and the employed. Railway companies, insurance companies, and other great industrial undertakings have found that superannuation schemes for their staff are of great advantage.
As long ago as 1859 a superannuation scheme was devised for the Civil Service. At various subsequent dates the police, poor law officers, school teachers, and asylum officers have all been provided with superannuation schemes. But up to the present no comprehensive scheme has been devised for local government officers, although, in certain cases, local authorities have obtained powers by means of Private Bill legislation to adopt superannuation schemes. Speaking generally, however, local authorities have no such power, and the result is that many anomalous positions are created. To quote but two cases, officials appointed by a board of guardians to collect the poor rate are entitled to superannuation allowance; whereas those appointed by a local authority to collect the district rates have no superannuation allowance. School teachers are entitled to pensions; whereas the clerks of the education department have no such right.
The matter has had the attention of the Government for many years and, if your Lordships will permit me, I should like to quote from the reply of the President of the Local Government Board to a deputation which attended on him in 1914 from the National Association of Local Government Officers, because what he stated therein practically applies at the present time. He said: The present position with respect to superannuation for officers of local governing authorities is one of much confusion. Some places have local Acts and have established superannuation schemes, and others have not. Those that have established such schemes have not created them 296 on necessarily uniform lines. With regard to the general legislation, Parliament has dealt with some classes of officers, and has left other classes of officers, whose claims are difficult to distinguish from the others, quite untouched. Those men who are serving in any capacity in a police force are assured of a pension; if they are poor-law officers, asylum officers, school teachers, they have prospects of superannuation, and it is difficult to distinguish these classes in which Parliament has already taken action from those with which it has omitted to deal. If it is right that officers of a certain class should have the advantage of superannuation in one town, it is difficult to understand why officers engaged in the same work in a town four or five miles away should not have the same right; and if it is right for those officers to enjoy the benefit of superannuation schemes established by Parliament, it is hard indeed to understand why the same principle should not apply to the rest. Difficulties necessarily occur from this state of confusion. Officers feel aggrieved when they are engaged in similar work to friends and colleagues, and yet have no prospect for their declining years which those friends and colleagues enjoy; and when an officer transfers from one place to another he may forfeit expectations for his later years which he previously enjoyed, and restriction is placed upon officers who have shown capacity in one service to move to another. A capable man in the poor law service or asylum service cannot be moved by the local authority to some other service on account of the difficulty of continuing his pension rights. Furthermore, the effect upon the efficiency of local government is necessarily considerable if men are continued in office not because they are still capable of performing their duties satisfactorily but because the local authorities to whom they have given many years of good service are not hard hearted enough to turn them adrift in old age without making provision for them. Shortly after that interview the great war supervened, and nothing was done until the year 1918.
Then, the Government, still being of opinion that, this question demanded investigation, appointed a Departmental Committee to enquire into the whole matter. That Committee stated that— It is undoubtedly desirable that a scheme of superannuation should be introduced, and the fact that there is no such scheme in general application at present points rather to the difficulties of framing one than to any doubts of its desirability. An acceptable scheme of superannuation tends to safeguard efficiency. By this means the persons employed are relieved of anxieties for their future when advancing years or failing health may deprive them of the power to work. The employer, on the other hand, secures a more contented staff, unburdened by the presence of aged or infirm members retained out of compassion, who although they can no longer discharge adequately the duties of their offices, remain to block the promotion of younger men and to lower the quality of the whole service. This is no imaginary picture. Numerous instances have been cited, in which local authorities, out of regard for long and faithful service, 297 have continued to employ persons who are unfit by reason of old age or infirmity to carry on their duties efficiently. Some continue to do their work, though not as it should be done. Some virtually do no work at all though retaining titular posts and drawing their salaries. Others have been appointed to consultative posts at a reduced salary not always with advantage to the service, by which roundabout means some of the difficulties have been obviated which a superannuation scheme would have removed. It is to remedy this existing state of things that this Bill has been introduced, but it has been recognised that however desirable the object to be attained may be any result which might add to the burden of the already overwhelmed ratepayer must be very carefully applied.
I do not think that this Bill, if consideration is taken for the increase of efficiency, will throw any additional charge upon the ratepayer. However, the Bill is entirely permissive. There is no obligation on any authority to adopt it, and it is contributory. If your Lordships refer to Clause 2 you will see that the Bill cannot apply to a local authority unless (1) a resolution adopting it is passed by a majority of two-thirds of the members present and voting; (2) a month's notice of the meeting is given to each member; (3) an actuarial estimate of the cost of adoption accompanies the notice; (4) the resolution is confirmed after an interval of not less than one month; and (5) the resolution is approved by the Minister of Health. It is recognised that the incidence of rates varies so much in different districts that the application of the Bill should be left to the discretion of the local authorities.
There are thirty-one clauses in the Bill, but your Lordships need not be apprehensive that I propose to take you through all of them. I propose to call your attention to some of the principal clauses only. Clause 4 limits the application of the Act to local authorities who employ not fewer than fifty officers and servants. Under Clause 5 combination of local authorities is permitted. Clause 7 provides for the situation of an officer or servant leaving the service of one authority and entering the service of another authority, both of whom may have adopted the Act. Clause 15 establishes the principle that a contribution of 5 per cent, shall be made by officers and servants together with an equivalent contribution by the local authority. Clause 19 provides for a quinquennial valuation of the fund to be 298 set up, and deals with how the deficiency or the surplus is to be treated. I hope I have sufficiently indicated the general provisions to your Lordships, and that the Bill will commend itself as an attempt to remedy anomalies of long standing, and one that will stimulate efficiency in a great branch of the public service. I beg to move.

§ LORD STRACHIE
My Lords, on behalf of the County Councils' Association I should like to say that we support the principle of the Bill introduced by the noble Earl, especially because it is permissive and is not obligatory on any local authority; but it will be my duty, on behalf of the association, to move certain Amendments to Clause 4. We do not think that it is right that the whole of the temporary bonus should be applied towards superannuation. In our opinion only that part of the bonus which is made permanent should be taken into consideration when superannuation is fixed. As to Clause 5, authorising the combination of local authorities, we believe there ought to be power given to enlarge the combination of the various authorities; otherwise, difficulties might arise. With respect to Clause 11, dealing with the return of contributions in certain cases, we think that discretion ought to be allowed in this matter to local authorities. Those are the principal Amendments that it will be my duty to move in Committee, but there may be one or two others. I thought that perhaps the noble Karl would like to have notice of the intention to move certain Amendments.

§ EARL STANHOPE
My Lords, I rise with some hesitation with regard to this Bill, because it was only delivered to your Lordships yesterday morning, and my noble friend opposite has told us that it contains thirty-one clauses. Obviously it is by no means a simple Bill. I think that few of your Lordships are averse from pensions, and I imagine that practically every member of the House has a pensions list on which appear the names of those who have served him for a number of years. In very few cases are such pensions upon a contributory basis. But it is one thing to be generous with our own money, and another to be generous with the money that belongs to others. This Bill imposes 299 on local authorities the obligation of paying superannuation allowance to all their officers and servants at a rate, roughly, of one-sixtieth of their salary for every year of service. Only one-half of that superannuation allowance is to be contributed by the officers and servants concerned, and I rather hoped that the noble Earl, in moving the Second Reading, would have assured the House that the five per cent. deducted from salaries and wages would be sufficient to pay half the cost of the superannuation scheme, including the cost of running it.
Consider for a moment what this superannuation scheme means to the country. There are a large number of officers and servants of local authorities, and every one of them under this Bill becomes entitled to expect a superannuation allowance. That superannuation allowance, except in so far as they pay for it as a deduction from wages, is to be found from local rates. Is this a moment to add further burdens on local authorities, and on those who pay rates? I submit that the officers and servants of local authorities are, as a rule, better paid than those who have equal qualifications and ability in other services. You are asking every one, down to the very poor, to contribute out of rates to superannuation allowance for those whom I may describe as their more fortunate brethren.
Under this Bill the Minister of Health is constantly called in to settle questions and draw up rules. For instance, in Clause 2 you will see that the resolution to come in under the scheme has to be approved by the Minister of Health. If the Minister of Health is going to do his duty properly, as he will, he will look into the question as to whether the resolution fulfils the various conditions imposed. And the scheme can be adopted if two-thirds of the members of the local authority present at a meeting vote in favour of it. That is not the same thing as two-thirds of the members of a local authority. It is two-thirds of those present and voting, which is a different thing. Then, in Clause 5 the Minister is to approve the combination of local authorities where it is desired to make such combination, and in Clause 8 he has to make rules for the transfer of employees from one authority to another. In Clause 16 the Minister is to prescribe how capital sums shall be payable to officers or servants under the provisions of the Bill, and he appears also to have duties placed upon him under Clause 19.
300 It is all very well for us to ask the Government to reduce the number of people in Government Departments if at the same time we place further burdens on those Departments and expect a reduced staff to carry them out. I am not accused, as a rule, of being friendly to the Government, but I do not think it fair to any Government Department to place additional duties upon it and then expect it to cut down its staff. It is true that local authorities have the option of taking on this additional charge, and that they may refuse to do so. But every one of your Lordships knows that the pressure that will be brought to bear by officers and servants of local authorities will be considerable. Few of the general public realise the enormous number of municipal employees in this country. What it really comes to is this: that where a local authority adopts this scheme they are going to increase their expenditure by five per cent., possibly more.
I submit that a Bill of this importance requires careful consideration. As I have said, it was only delivered to your Lordships yesterday morning, and I imagine there are not many members who have had an opportunity of reading it. It is obvious from the number present in the House that your Lordships did not realise its importance, and in those circumstances it would be advisable to adjourn the debate until there has been an opportunity more fully to consider so important a Bill. I propose, therefore, at the request of several noble Lords, to move that the debate be now adjourned.

THE EARL OF CRAWFORD
May I appeal to the noble Earl not to make his Motion until my noble friend Lord Onslow has made his statement on behalf of the Government?

§ EARL STANHOPE
Certainly.

THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF HEALTH (THE EARL OF ONSLOW)
My Lords, I need not trouble your Lordships with a long statement as the ground has been well covered by the noble Earl in moving the Second Reading. He referred to the Departmental Committee which reported in July, 1919, and said that the Committee was in favour of a universal compulsory scheme of superannuation. Since that Committee reported a number of local authorities have 301 obtained Superannuation Acts, and a number of private Bills containing superannuation schemes have been promoted during the present session. These local schemes, although they follow generally on the lines of the Report of the Departmental Committee, differ materially in some respects both from the recommendations of the Committee and from each other.
But it is clear, from the number of applications and the number of private Bills promoted, that there is a demand on the part of many local authorities for superannuation schemes, and there are obvious disadvantages in any new schemes submitted not conforming to some general standard such as was recommended by the Committee. The difficulty of securing uniformity becomes greater as each new local Bill is placed on the Statute Book. Assuming that the principle of a universal scheme is accepted, but that, for the present, such scheme is not practicable having regard to the financial position both local and national, the need for a uniform scheme seems of immediate importance, and for this reason it appears to the Government there would be a distinct advantage in the passage of the present Bill. That is the attitude of the Government. If drastic Amendments were made to the Bill in Committee we should, naturally, have to reconsider our attitude.

§ EARL STANHOPE
My Lords, I beg to move that the debate be now adjourned.