§ VISCOUNT ELIBANK also had the following Notice on the Paper: To ask His Majesty's Government, whether they 644 are aware of the great hardship now suffered by retired Army Officers, by reason of the fact that since their rates of pension were stabilized in 1935, no increases have been granted to them notwithstanding the fact that the index cost of living is to-day 45 per cent. higher than it was in 1935 and that incidental expenses of living have also risen proportionately; and whether they will accordingly consider an immediate revision of these pensions with a view to bringing them into fairer relation to the present-day cost of living; and to move for Papers.
§ The noble Viscount said: My Lords, I am sorry to inflict a second Resolution upon your Lordships to-day but as it refers to a Service matter I thought it just as well to put it down on the same day. Actually it refers to Army officers' pensions. 1 am raising this issue on behalf of a section of the community who have been very hard hit during the war. I want to put the case as briefly as possible and to do so I should like to refer shortly to what actually happened. In 1919, after the last war, the pay and pensions of Army officers were raised, subject to revision, on the 1st July, 1924. At the latter date it was arranged that a further revision might take place every three years in accordance with the rise or fall in the index cost of living. The point is that on the 1st July, 1924, pensions were cut by 5½ per cent. and by the 1st October, 1931—there had been no revision in the meantime—the pensions were cut by 11 per cent. No doubt that was due to some extent to the economic blizzard through which we were passing at the time. In 1935 the Government stabilized all pensions at 9½- per cent. lower than the 1919 rate on the assumption, presumably, that the index cost had reached stability. I do not understand why the Government should have believed that at that moment we had reached stability because all those who had not got their heads buried in the sand—and I hope His Majesty's Government at any rate behind the scenes had not got their heads buried in the sands—knew that Germany was rearming and that another war was bound to take place within another few years. Nobody knew exactly when it was going to take place. Some said 1939, others 1940 or 1941. But that it was going to take place everybody with any knowledge at all knew was a certainty. If that was the case, how was 645 it possible in 1935 to say that pensions should be stabilized? Obviously, if war was coming the cost of living was bound to rise. In 1938, I understand certain increases were made to officers' pensions, especially in the higher scales, but some of the ranks did not benefit by that at all.
§ But the real point is that since the stabilization of officers' pensions in 1935 the index cost of living has gone up by no less than 45 per cent. And not only has the index cost of living gone up, but the other ancillary costs of living have done so as well. Taxation has doubled, local rates have risen, medical fees have increased, the cost of medicines has increased, every kind of clothing. has increased in cost; in fact, one might say that in some cases the ancillary forms of living from which officers cannot escape have gone up, not by 45 per cent., but in many cases by 100 per cent. Yet in spite of this no steps have been taken, so far as I am aware—and I am going to ask my noble friend Lord Croft in his reply to tell me whether any steps are proposed—to meet these hard cases. The result is that many of these unfortunate retired officers are living in a state of great anxiety mentally, financially and otherwise, owing to their difficult financial conditions. Very few of them can obtain other employment. They are not like other people in the community who can obtain other employment. They have these fixed incomes and there they stay living always on a reduced scale.
§ I would like to add this. I am quite aware that if the officers' pensions are raised there may be, and probably will be, a demand for all civil servants' pensions to be raised, but I venture to suggest that His Majesty's Government have to face up to that situation and that it is now time the Treasury should admit that there has been inflation in the country. Wages have risen, the cost of goods has risen, the cost of everything has gone up. Consequently there has been a form of inflation going on the whole time. It has been going on for years, but more rapidly in the last two or three years, with the result that while many people are benefiting by higher wages the unfortunate pensioners are left as they were. I venture to suggest to the Treasury that, although this may be a big lump for them to swallow, they should swallow it. They 646 must admit this inflation, face up to the position and assist these pensioners by putting them on a proper living basis. That is my story and I venture to ask His Majesty's Government to do what they can to relieve these cases. I urge that it should not be taken up piecemeal and that the cases of all officers should not be dealt with, as has been suggested, by taking out necessitous cases and dealing with them more or less on a charity basis. The whole basis of Army officers' pensions should be reconsidered and reviewed and revised in the light of conditions which exist to-day and are likely to exist for a great many years to come. I beg to move.
§ LORD CROFT
My Lords, the rates of retired pay of officers of the Forces were stabilized in 1935 in common with the pay and pensions of Crown servants generally, at rates somewhat higher than would have been payable had the adjustment been strictly in accordance with the cost of living at that time. This settlement continued to be beneficial to retired officers until shortly after the outbreak of the present war. The Government have from time to time since the outbreak of the war had under consideration the position of retired officers in relation to the increase in the cost of living. Having regard to the large number of other persons who are dependent wholly or partly on fixed incomes, they have not hitherto felt justified in selecting retired officers for special relief at the expense of the community at large. Their policy of price fixing, rationing and food subsidies, undertaken at considerable expense from public funds, has prevented any considerable increase in the cost of living such as occurred during the last war and has afforded great relief to the whole class of persons living on fixed incomes.
They have, however, recently given this question further consideration, and, as announced by the Chancellor of the Exchequer on 3rd December last, they have come to the conclusion that some measure of relief is called for in those cases in which the war-time increase in the cost of living has resulted in really severe hardship. They are, accordingly, undertaking as expeditiously as possible the framing of special measures to this end, and particulars of their proposals will be announced at an early date. The position of Service officers on retired pay 647 has naturally come under review with that of State pensioners generally. I think I should call the noble Viscount's attention to an error in the figures in his question as it appeared on the Order Paper. The index cost of living to-day is not 45 per cent. higher than it was during 1935 when the fixed rate of pensions began. I think that misapprehension is probably due to the fact that the noble Viscount did not remember that the index figure in 1935 was 155. That makes the percentage increase now 30 per cent. and not 45 per cent.
I thank the noble Lord for his answer. He certainly has given encouragement, and we can only wait and see what the results will be. As to my error in stating the percentage, I would like to remark that the figure given by the noble Lord makes the 648 case a little better for the Government but does not make it much better for the officers. The rise is still 30 per cent., and if you take into consideration other expenditure which they have to incur, the increased cost they have to bear will work out somewhere around 45 to 50 per cent., or perhaps even more. However, I do not want to continue that argument. What I wish to do now is to thank the noble Lord for his answer and to say that I am glad to hear the Government are really looking into the question. I beg leave to withdraw my Motion.
§ Motion for Papers, by leave, withdrawn.