PENSIONS (INCREASE) BILL. (Hansard, 6 February 1947)

§ THE SECRETARY OF STATE FOR INDIA AND BURMA (LORD PETHICK-LAWRENCE)
My Lords, in moving the Second Reading of this Bill, I would begin by remarking that pensions increase has a long history, but I do not propose to go further back than the Pensions (Increase) Act of 1944, which it is the object of this Bill to replace. That Act was designed, in the words of the then Chancellor of the Exchequer (Sir John Anderson), to concentrate attention on cases of really great hardship, and therefore it operated, in the main, to provide increases in the lower ranges of pensions of a variety of State and municipal servants. Retired members of the Armed Forces were not specifically included in the measure, but the provisions of the Act were applied by the Royal Prerogative to members of The Forces on retired pay. This arrangement applied not only to the increases under Section 1, but also to the increases provided under a further scheme included in the Act which was applicable only to certain retired civil servants.
The 1944 Act was a temporary measure expiring on December 31, 1945. When the Labour Government came into office in the summer of 1945 they had no opportunity to consider the Act in detail before it was due to expire, and it was, in any event, rather soon after the conclusion of hostilities to be considering a permanent measure to take the place of the 1944 Act. Accordingly, provision was made in the Expiring Laws Continuance Act to continue the Act until March 31, 1947. The results of the Government's review of the 1944 Act are embodied in the present Bill. It has taken a little time to prepare, but it must be remembered that this question of pensions increase is a complicated one affecting the pensions not only of civil servants, but also those of the teachers, police, firemen and local government officers, and there have been a number of various interests to be consulted.
The principal effect of the present Bill is to raise certain of the rates of pension increase, and to increase the limits of pension and of total means to which they 459 may apply. These increases under Section 1 of the 1944 Act were restricted to such amount as might bring the total income of the pensioner and his wife, after disregard of the first £52 per annum of income other than pension, up to £300 per annum, or to £225 per annum for the single pensioner without dependants. This Bill raises this limit to £450 per annum or to £350 per annum for the single pensioner without dependants. The Bill also amends the alternative scheme for civil servants and, under Royal Prerogative, for Service officers so as to provide some extension of the scale of increase under Section 2 of the 1944 Act.
The proposals in Clause 1 will mean considerable improvements for the pensioners, taking together the increases under the Act and the similar increases to be granted under the Prerogative instrument to Service pensioners. The total cost of pensions increases will be nearly double, and will amount in the immediate future to about £12,000,000 per annum, of which about £2,500,000 will fall on the rates. I do not think your Lordships will wish to be troubled with other clauses of the Bill at this stage. With these remarks I commend this Bill to you as one designed to meet the post-war difficulties of a very deserving class of the population. I beg to move that the Bill be now read a second time.

§ VISCOUNT SWINTON
My Lords, your Lordships will be grateful to the Secretary of State for the clear exposition which he has given of this Bill. We should probably all agree that a Bill of this kind is right and necessary. The Act of 1944 recognized the case of pensioners who were in need—I emphasize the words "in need" The test of means which applied in the 1944 Act is, of course, also continued in this Act, and both pieces of legislation are designed to meet cases of real need and hardship. It is reasonable that those cases should be related, broadly speaking, to the cost of living of the people, but, particularly when one is dealing with this class of pension [...] can one lay down a strictly mathematical rule and say that what is technically known as the Cost of Living Index Figure should necessarily govern the rate of increase? There are expenses falling 460 upon these retired persons by virtue of long service which are not governed by the mere cost of living items. Therefore, I feel sure your Lordships will accept this Bill in principle and, indeed, will probably not cavil at its terms. Perhaps this would not be the appropriate assembly in which to do so.
At the same time I think it is fair to say that the financial position of this country does not get noticeably better, and an addition of £12,000,000, whether it falls upon the rates or the taxes—and the great bulk of this is going to fall on the taxes—is no inconsiderable sum which should just be voted sub silentio. Nor can I altogether forbear to contrast the care—I do not dissent from it—with which His Majesty's Government look after and seek not only to maintain but also to increase the incomes of this rentier class of retired public servants, be they national or municipal, with their determination, at the same time, to reduce the incomes of other rentier classes, many of them most deserving people with at least as small—and maybe smaller—means than the people whom we are benefiting under this Bill.
While supporting this Bill, as I do—because, whatever may be said about its precise terms, by and large I accept and I think the House will accept the principle that if we can possibly afford it we should give this increase to pensioners of the public service in real need—I cannot understand how His Majesty's Ministers can come forward and commend a measure of this kind, saying that the people with small incomes are suffering gravely by the increased cost of living, and indeed also by the heightened taxation, while at the same time hundreds of thousands of people are, by Government action, to have their incomes reduced. I trust that when we have to consider these matters the Government will not be unmindful of the direct effect of the proposals which they now commend and which I think we shall accept, and that in logic and in fairness they will try to do like justice to equally deserving classes of the community.

LORD GIFFORD
My Lords, I am raising a matter this afternoon in respect of which the noble Lord, the Secretary of State, has had notice. I am aware that the Bill before your Lordships' House 461 this afternoon has to do with civil pensions, but I understand that the provisions of this Bill have been considered by the Treasury in drawing up the regulations for retired pay and pensions for the Forces. Indeed, that was confirmed by the Secretary of State when he said that these regulations could be extended by Royal Prerogative to the Services. I think it is right that I should say that, although I am a retired officer, I was "axed" from the Navy in the dim and distant past after the First World War; therefore I am not personally affected in any way.
The matter which I wish to bring before your Lordships, and which was originally raised I think in a letter to The Times by a retired naval officer, is concerned with the differentiation between the officer and the other rank or rating—it applies, I believe, to all the Services and not only to the Navy—in assessing post-war pensions. The fact is that, a pensioner from the lower deck with at least six months' war service has his original pension re-calculated at the new rates, and to this is added an increase for the war years while a pensioner, so that actually a man with war service receives a higher pension to-day than a man taking a pension in the future. Retired officers, on the other hand, who were reemployed during the war, get a small increase for their war service, which is added to their retired pay at the old rates. There two added together come to less than the new rates. Therefore, this is a case where the officer, in relation to the lower deck man, is badly treated. That is entirely wrong.
I am not going into details—I do not think that this is the time or place to do so—but it does seem to me that this is an instance where everything is being done for the man on the lower rungs of the ladder, and the man higher up is being less generously treated. I do not think that this is a political matter, but I do consider that it is another example of the levelling down process rather beloved by noble Lords on the opposite Benches. Naval officers, as indeed officers in the other Services, have passed through a gruelling war. They have had tremendous responsibility—they have certainly had greater responsibility and much more to bear than have men on the lower deck—and I think that they 462 should be at least equally well treated. There is another point I would mention. It is quite rightly considered in these days that many of the officers in the Services should come from the ranks. Surely it is no encouragement to a man to take a Commission if he knows that when the time comes to receive a pension he will be less generously treated than the man on the lower deck. I apologize if this is not the time or place to raise this matter, but the Second Reading of this Bill seemed to me to provide the only opportunity for doing so. I. hope that this matter may be looked into.

§ LORD PETHICK-LAWRENCE
My Lords, with regard to the interesting speech made by the noble Lord, Lord Gifford, he was good enough to acquaint: me in advance of his intention to raise this point this afternoon. Therefore I have had the matter examined, and the advice which I have received is that the point raised is quite outside the scope of this Bill. This Bill does not in any way affect the question which the noble Lord has put forward. My noble friend the First Lord of the Admiralty, who saw the letter in The Times to which the noble Lord referred, informs me that he will write to the noble Lord and deal with the question at issue. It really does not enter into this Bill in any way.

LORD GIFFORD
I thank the Secretary of State.

§ LORD PETHICK-LAWRENCE
There is just one other thing which I might say. I thank the noble Viscount opposite for his approval of the Bill as a whole. I observed a reference made to another measure which may be coming before your Lordships later on in the Session. I should like to make one small point quite clear. Although the noble Viscount did not say so exactly, I think that he was under the impression that this Bill imposed a charge upon public funds of £12,000,000 a year more than is being imposed at the present time. He probably got that impression from what I said.

§ VISCOUNT SWINTON
I thought that was what you meant.

§ LORD PETHICK-LAWRENCE
No. I will explain precisely what the position is. Your Lordships will understand that this Bill is a substitute for the Act of 1944. 463 The 1944 Act imposed an additional charge on public funds of £6,000,000 or thereabouts. This Bill is not an amendment of the Act of 1944; it is a substitute. Therefore this Bill doubles the amount and, taken as an increase on what existed before 1944, it involves an additional charge of £12,000,000; it does not, however, involve an additional charge of £12,000,000 on what we have been paying since the 1944 Act was passed but only of about half that amount. I thought I ought to make that point clear, and I hope that I have succeeded in conveying the actual facts to your Lordships.