SUPERANNUATION BILL (Hansard, 9 July 1946)

LORD PAKENHAM

My Lords, I beg to move that this Bill be read a second time. I will not detain your Lordships for an undue length of time, but I feel that the House will wish me to make clear the main purport of this Bill. It was generally welcomed in another place, and following the precedent of the noble and learned Lord, the Lord Chancellor, in telling the House when a Bill is controversial and when it is not—which met with such acceptance—I can honestly say that in its present form the Bill is a non-controversial measure. I would only add that it does not purport to be a comprehensive review of the whole Civil Service superannuation position. The time for such a review will certainly come, but it will come a little later.

The purpose of this Bill is to amend the law governing retirement pensions and gratuities granted to civil servants under the Superannuation Acts. There are nine of these Acts still in operation, dating from 1834 to 1935. I do not claim to be a complete master of all those Acts, or indeed of any of them, but no doubt in the course of any debate that follows those of your Lordships who have specialized in this subject will throw additional light on them. Before explaining what the Bill proposes to do, what changes it makes, what reforms it introduces, I think it will be for the convenience of the House if I explain very briefly the present position.

We can divide civil servants into three categories. First of all, we have the established civil servant, who has been established all along. In general, the amount of his pension is one-eightieth of his average salary during the three years prior to 284 retirement for each year of service, subject to a maximum of forty-eightieths, together with a lump sum award of three times that amount. Mathematicians among you will at once grasp the significance of that formula, but I always like these scales to be put in the form of an illustration. Under the present position, the established civil servant who joins the Service at the age of 20, and retires at the age of 60, after forty years' service, will receive a pension of forty-eightieths of his final salary. Thus, if after forty years' service he is a £1,000 a year man he will receive a pension of £500 a year. That puts the matter in a fairly simple form. There is a lump sum award of three times the pension amount, and there is a gratuity payable to the legal personal representative of those who die in harness after not less than five years' service.

Secondly, we have the unestablished or unpensionable civil servant, a lorry driver, for instance, for whom provision is made for a retiring gratuity. Some of these unestablished civil servants, your Lordships will appreciate, are temporary, and some of them are akin to the industrial grades—as in the case of the example I have mentioned. The gratuity that the unestablished servant receives is at the rate of a week's pay for each year of service. Thus, a man with twenty-six years' service would receive a lump sum once and for all of half his total annual salary or pay at the time of his retirement. There is also the third case, which is rather important in our discussions this morning. That is the case of unestablished civil servants who become established—civil servants who join in an unestablished capacity, and become established. If such a person joined the Civil Service as an unestablished civil servant before 1935, when a rather important Act was passed, his unestablished service has hitherto counted for pension only at the discretion of the Treasury, that is, in special circumstances. On the other hand, if he joined since 1935, he has been allowed, up to the present, to reckon for pension one-half of his established service. A typical ilustration of this is the temporary clerk who becomes an established civil servant after being in the Service for some years. That is the position in principle, as it has been hitherto.

Now, very briefly, I will call attention to the provisions of this Bill. The provisions fall under two heads. First of all, 285 it is intended to introduce a revision of the superannuation code as part of the comprehensive plan for the reconstruction of the Civil Service in the post-war period. Under this heading, the urgency of the Bill is due to special circumstances arising out of the war. First of all the Government have decided—I am sure we will all agree very properly decided—to make a concession to ex-Service recruits to the Civil Service. I will explain in a moment what that concession amounts to. I call it a concession because I believe that is the correct term, but I think we should all regard it as their due and their proper right. Secondly—and still arising mainly from the war—we feel that it is necessary to make arrangements to facilitate the recruitment of men and women of middle age possessing special qualifications. I understand that an example of that is the kind of appointment which is being made to the Parliamentary Counsel's Office. I am sure we must all agree—whatever we think of the Bills that come before your Lordships' House—that the Parliamentary Counsel have a very busy time, and that some additional recruitment there is likely to be necessary.

So much for the provisions which arise from the war emergency. It is desirable also to remove certain anomalies and practical difficulties to which the operation of the present complicated superannuation code had given rise even before the war. In particular, I should like to call your Lordships' attention to the concession announced by the Chancellor of the Exchequer in another place on 28th May, under which what are called the Lytton and Southborough entrants to the established Civil Service are to be allowed to reckon for pension purposes one half of their unestablished service since the end of the 1914–1918 war. Those Lytton and Southborough entrants were people who came into the Civil Service in an unestablished capacity shortly after the 1914–1918 war and subsequently became established. A provision to cover their case and certain other analogous cases has been included in paragraph 3 of the Second Schedule in the Bill. Detailed arrangements are being investigated by the two sides of the Civil Service National Whitley Council. While on that subject, I may say that the Bill has been framed in consultation with the staff side of the Civil Service National Whitley Council, and generally it can be said it has their agreement, although there 286 are one or two points on which they would have liked it to go further.

I come now to the clauses. Clause I provides that recruits to the Civil Service may count service with the Armed Forces during the war of 1939–1945 for Civil Service superannuation purposes as if it had been continuous service in an unestablished capacity. Your Lordships will appreciate that wartime temporary civil servants retained in established posts will reckon their temporary service as to one-half for the purpose of Civil Service pensions, and it has been thought right to equate the position of the ex-Service recruit to that of the retained temporary civil servant. That is why there is this arrangement that half his period of war service will count for his Civil Service pension. I should explain that the period which will be counted as half for that purpose must be a period after he had reached the normal age of entering the Civil Service.

Clause 2 provides for a limited scheme, called "added years," for late entrants to the Civil Service. It gives effect to a recommendation by the Royal Commission on the Civil Service in 1929–1931 with regard to persons appointed to a limited number of posts which may require to be filled by appointment from outside the Service. The Commission recommended that power should be given to award superannuation on a special scale in their case, similar to that which applies, for example, to the Masters and other officers of the Supreme Court. The present clause gives effect to the recommendation of the Royal Commission. The provision is essentially one to assist in the recruitment of individuals with special qualifications to particular posts. But I do not want the House to think that it will be used in an indiscriminate manner. It will be used sparingly, and will be applied only in those cases where specialized experience derived outside the Service appears to be necessary.

Normally, the benefits of this clause will be applied to people of a minimum age of forty on recruitment, but in exceptional cases those who enter at thirty-five or later will come within its provisions. However, the actual period of service which will court for pension will not begin until one has reached the age of forty, even if one entered the Service, as in the case I have mentioned, at thirty-five. In summary effect, this clause 287 enables people of this kind—that is, those late entrants with special qualifications obtained outside the Service—to count every five years of their service as though they were eight years for the purposes of pension. So, in effect, those who enter the Civil Service in this special way at forty and complete twenty-five years' service, will be in the same position at the age of sixty-five for pension as someone who entered at twenty-five and completed forty years. The twenty-five years in this special case will count as equal, for pension purposes, to the forty years of the more normal entrant.

The remaining clauses I think can be dealt with quite briefly. Clause 3 provides for a number of minor amendments of the Superannuation Acts, of which the most important is the one I mentioned earlier. It is the one set out in the Schedule, which will enable the Lytton and Southborough entrants and analogous classes to be dealt with in the way I have described. Clause 4 provides for various modifications of the Superannuation Acts to meet war circumstances, mainly in the form of safeguarding the superannuation position of those who left the Civil Service for other forms of work of national importance during the war. I should say, of course, that the ordinary civil servant who joined up and was released in the ordinary fashion will not require this clause because his military pay will have been made up to the level of his Civil Service pay during the war and, therefore, his pension rights will have been preserved. This is to safeguard various categories of people who, although they did work of national importance during the war, and returned to the Civil Service after the war, would fall outside the pension arrangements at present. Clause 5 gives statutory authority for application to the Civil Service of the federated superannuation system for universities, the federated scheme for nurses and hospital officers and similar superannuation schemes. It gives statutory authority to a process of dovetailing these various schemes with the general superannuation arrangements which has long seemed to be necessary. Clause 6 extends somewhat the present arrangements for safeguarding the superannuation position of teachers who become civil servants. Clause 7 provides that the various regulations made by the Treasury 288 under the Bill shall be subject to scrutiny by Parliament under the negative resolution procedure and Clause 8 deals with expenses. The other two clauses I might describe as consequential.

I do not need to make any kind of appeal to your Lordships on behalf of this Bill, because I feel sure you will wish to give it a Second Reading. Every one in this House vies with everyone else, inside or outside the House, in paying tribute to the work of the Civil Service. I do not know whether it is an orthodox statement from the Government Bench, but I must say I feel the Civil Service to be underpaid. Whether or not the Civil Service is underpaid, I feel sure we must take every precaution possible to get the best people to join the Civil Service. We want people with specialized experience outside; we want to encourage those who have done good work in the Services, and generally speaking, I feel sure your Lordships will want to give this Bill a hearty welcome. I beg to move.

Moved, That the Bill be now read 2ª.—(Lord Pakenham.)

§ LORD LLEWELLIN

My Lords, when I started reading through this Bill I was reminded of an economical housewife going to her larder, realizing that she ought to give a treat to the family, and taking a little jam out of this jar and a little different jam out of that, and a sandwich filling out of another. It seems that the Government have done this for the family of civil servants, because there is an assortment of benefits which one sees as one reads through this Bill. Some of the provisions made in this Bill have been proved necessary over the course of years. Others quite frankly, as was said by the noble Lord who with such care introduced this Bill to the House, have been necessitated by the circumstances of the war. I am not sure—and this, of course, is quite in order from these Benches, whatever the noble Lord's remarks may have been—that in one or two cases the Government might not have been more generous than they have been. But in the main this is a good Bill and one that all of us should welcome. I heard the noble Lord who introduced the Bill say that in its present form it was a non-controversial measure. I can give him an assurance from those for whom I speak that there is nothing we shall attempt to do during its passage through 289 this House which will turn it into a controversial measure.

When one comes to look at Clause 1, that is obviously a good clause. It puts on the same footing those who served in the Forces as those who during the war were in the Civil Service. A lot of them perhaps did not come up to the medical requirements for service in the Forces and so joined the Civil Service. But there is no reason whatever why they should not eventually come along with the men who served in the Navy, the Army and the Royal Air Force for their eventual superannuation rights. I should like to draw attention to the words at the top of page 2 providing that war service shall "be treated as if it had been continuous service in an unestablished capacity." When I look at the provision in regard to teachers at the bottom of page 6, I see that the words used are "shall be treated as if it were service as a civil servant." I would like to know what is the distinction between those two sets of words. But, as I say, I think we can all welcome Clause 1.

Clause 2 is also quite clearly right. Some provision should be made for added years for the people who join the Civil Service in middle age, at the age of forty and upwards, because we shall still want to get them into the Service. I remember at the Ministry of Food we had a number who were experts on nutrition, very proper people to have in a Ministry of Food. If those men come in at a late age when they have had long experience in these problems they ought to have the added years for their pension, in order that the right people may be attracted into the Civil Service. The only thing I am doubtful about on Clause 2 is the provision that "No direction shall be given under this section in the case of a person who became a civil servant before the thirteenth day of May, nineteen hundred and forty-six." I know that is the day when this Bill was introduced, but I should like to ask what is the proper construction to be put on the words "became a civil servant." I carefully read the report of the proceedings in another place, and it was suggested by one honourable Member there, who has had the greatest experience in Civil Service staff matters, Mr. W. J. Brown, that it meant an established civil servant. But I did not notice that anybody on behalf of the Government did more than, as Hansard puts it, "nod assent."

290 If that is what it means it may be all right, but I think we ought to put the word "established" in each of subsections (1) (2) and (3) of this clause to make it quite certain, because a lot of people who have come into the Civil Service during the war have been employed as temporary civil servants. I should have thought they were civil servants, and I should have thought they would come under this. There should be power in exceptional cases for the Treasury to pick out the good man and give him the added years. This is important, because at this moment a number of people who have been serving in the Civil Service during the war years are wondering whether they will continue in the Service or whether they will go back to the teaching profession, to some business, or whatever it may be. If the Civil Service Commissioners pick out some and say they would like tin to stay, the added years for service may induce those people to remain. Those are cases which I should have thought the Government wanted to cover by this clause, and I think it is up to us to see that they have the power to do so.

I now come to Clause 4, and here again I think it is a clause that we can welcome. Not only do I welcome particularly the part dealing with the Lytton and Southborough entrants, but I also have some sympathy with the people with whom subsection (1) (d) will deal, namely, the young men who perhaps had only just gone into the Civil Service, who found that a lot of their contemporaries were taking a more active part in the war in the Navy, Army or Air Force, who asked their establishment officers for permission to go and to whom the establishment officers replied, knowing that they were pressing the Treasury for increases in establishment, "I cannot let you go." Those men, irked by being kept sitting in a Government Office, went and I am glad to think they are not going to be penalized for having shown the spirit that has made this country what it is and having gone off to do their jobs. When I was in the Government I was a great advocate of those people and I am glad to see that some of the seeds I then sowed are bearing fruit in this subsection.

Subsection (1) (e) is extraordinary. It provides as follows: In the case of a person who on or after the said date left his usual employment 291 through having for reasons of conscience refused to enter on service in the armed forces of the Crown or to continue in his usual employment, but later entered on such service or returned to employment in the civil service of the State, and was subsequently reinstated in his usual employment, for reckoning as aforesaid such service or employment before he was reinstated; I am not saying that a man who, for conscientious reasons, left his job should not be reinstated in it, but this means, as I understand it, that when he is reinstated, he is allowed to count for the purposes of superannuation those years when he was not doing the job that he objected to performing. He would surely be straining his conscience if he said, "Although I refused to serve in this job during the war, I can now reckon the two, three or four years when I was not doing it as service towards my pension. I would not do the job, but I am going to take the pension." If that is what this provision means, then I think it is a most extraordinary one, and perhaps we might look at it again it a later stage of this Bill. Subsection (3) of Clause 4, is oddly worded, but I see what it means. It looks as though, by this subsection, it is not the Peace Treaties or the Government as a whole, but the Treasury which is going to determine what is the end of the "war period".

As to Clause 5, if I understand this provision, for some time past the Government have apparently offended by making payments to certain superannuation schemes. The Controller and Auditor-General has found it out, and this Clause puts right what was a very proper thing to do in any event. Clause 6, as the noble Lord has told us, does away with an anomaly with regard to teachers, and it to be welcomed. I think this is a Bill which we can all of us thoroughly welcome. The noble Lord has commended it to the House, and the best commendation I can give from this side is to say that, with the possible exception of the small points I have mentioned, if we had been in office there is not the slightest doubt that we should have introduced a very similar Bill.