SUPERANNUATION (MISCELLANEOUS PROVISION) BILL. (Hansard, 4 May 1948)

THE CHANCELLOR OF THE DUCHY OF LANCASTER (LORD PAKENHAM)
My Lords, this Bill is a very modest measure, and I am sure your Lordships will welcome its objective, which is to remove various anomalies in the pensions codes for civil servants, local government employees and teachers. In spite of rather full discussion which took place in another place regarding this measure, I think it may be fairly called a non-controversial one, although there is one point in Clause 1 on which some differences of opinion may be found to exist. I assure your Lordships that I have not brought any weapon to bludgeon you into submission; I believe that you will desire to give the Bill a Second Reading. At any rate, there were no Divisions during any stage of the proceedings in another place, and the Bill, in essence, was welcomed from all sides.
605 The most important proposal is contained in Clause 1. This makes it possible to count for superannuation purposes any period of compulsory military service which interrupts the ordinary duties of civil servants, pensionable local authority employees and pensionable teachers. It continues in this respect the war-time practice. Clause 2 should do much to facilitate interchange of staff in suitable cases between civil servants, local government staffs, and the teaching profession, and between this employment and employment such as service with a public board. At present, one of the barriers to such interchange is the matter of the pensions of those who transfer from one service to another. This clause provides for wide powers to devise new arrangements which will both preserve all previous pension rights and simplify the administrative machinery, so that (to take a typical case) instead of two pensions being paid from two sources, a single payment will be made by the employer in whose service the individual is at the time of his retirement. This pension will be based on the total length of pensionable service throughout the individual's career and on his salary at the time of retirement, and will be calculated under the pension code of the employer at retirement.
By Clause 3 the opportunity is taken to make rules regarding the superannuation rights of approved society employees who are displaced from their present employment as a result of the National Insurance Act. These arrangements have been made in agreement with representatives of the societies and of the employees.
Clause 4 deals with some hard cases which moved the tender heart of the Treasury to compassion—there appears to be some scepticism as to whether the heart of the Treasury can be tender. In case that scepticism is widespread, perhaps I may read your Lordships a few lines of verse which I found on the Treasury file: When lovely woman stoops to folly, And finds too late that men betray, Their Lordships "— that is, the Lords of the Treasury— share her melancholy, And offer leave (but without pay). They'd deprecate her resignation, And probe with tact to find the cause; Suspend with nice discrimination The Superannuation Laws. 606 Now your Lordships know what they do at the Treasury, in the intervals of more important work!
Clause 5 remedies a hardship which would otherwise fall on certain civil pensioners of the Governments of India and Pakistan. The Government of India gave these pensioners, mostly residing in the United Kingdom, the benefit of the Pensions (Increase) Act of 1944, but neither they nor the new Dominion Governments have similarly applied the Pensions (Increase) Act of 1947. We feel that these people are indistinguishable in status and social need from United Kingdom civil servants; that they should share in the modest improvement in pension given by the 1947 Act, and that the cost should fall on the United Kingdom Exchequer.
Clause 6 provides that local government staff who lose their jobs as a result of such events as the reduction of the capital investment programme shall not be disqualified from receiving a pension when they reach retiring age simply because, as a result of this, they have not served the minimum qualifying period necessary to get a pension. Clause 7 and other clauses deal with various residual matters. There are many complicated points of detail which may be raised, possibly to-day or on the Committee stage; but I hope that from what I have said, your Lordships will feel that you can give this Bill a Second Reading. I beg to move that the Bill be read a Second time.

§ LORD TWEEDSMUIR
My Lords, I think every member of your Lordships' House will join me in welcoming back the noble Lord, Lord Pakenham. I was fascinated by what he said at the beginning of his speech about the Treasury being tender-hearted. I have never heard it suggested before that the Treasury had a heart at all. As the noble Lord says, this is by no means an easy Bill. It can be really understood only if read in conjunction with the numerous Acts of Parliament to which it refers. It will affect the lives and careers of a substantial number of citizens, and it will remedy certain matters which have now become anomalies. Many of those who will benefit are now at the beginning of their careers, and it will be forty years before they reap their pensions. Let us hope that 607 money will buy more then than it does now.
The matter of these pensions is an important item in national life. I think that the prospect of an adequate pension is probably a greater consideration to a citizen in choosing a career than any other factor. The noble Lord extracted various exhibits from the verbal jungle of this Bill. I personally welcome Clause 2, which allows for the interchange of public servants from one employment to another without prejudice to their pension rights. I am sure all sides of the House will welcome the provision for rules to be made to supplement the pensions of those who have served His Majesty in India and Pakistan, and who are due to receive pensions chargeable upon the revenues of those countries. They are people who have served the King in difficult and onerous, and often dangerous, conditions, and who, with numberless others, past and present, whose names will not reach history books, have done so much to build and maintain the prestige of this country.
I have one or two points of criticism. I think we all agree that fairness in the calculation of pensions is vitally necessary. I am raising this particular point, and I hope the noble Lord will deal with it when he replies—otherwise, perhaps, we may return to it on Committee stage—because it is not always easy to be scrupulously fair in this matter. Many people join the public service at different ages and so reach the pension age at different times. I would draw the attention of the House to Clause 1, which deals with the reckoning of the period of National Service towards a pension for the employees of local government, civil servants and teachers. The civil servant may pass his qualifying examination before he does his period of National Service, and his period of National Service will then count towards a pension. It is possible for a local government employee to be established in his employment by the time he is eighteen, and so he, too, can count his year towards his ultimate pension.
It is virtually impossible, however, for a teacher to be registered on a contributory basis by that time. Before he can become a teacher, he must go through a teaching college or a university. He must do his year of National Service before 608 that, and therefore he goes through these three stages: his year of National Service, his career at the university and, subsequently, his career as a teacher. Only then does he pass the starting gate of pensionable time. In fact, he is not launched upon his pensionable career until his early twenties. If, however, he were found unfit for National Service, he would be able to start one year earlier. To my mind, that creates a most undesirable distinction. It means that the teacher who is fit and healthy and has to do his year of National Service, does it with a slight sense of grievance vis-à-vis those who are not fit. I labour this point because we have suffered from a grievous shortage of trained teachers, and we are likely to do so into the foreseeable future. If we are to secure the right type of teacher in adequate numbers we must be able to offer them suitable inducement.
My next point is on Clause 3, which deals with the position of those who once worked for the approved societies and are now becoming civil servants. A well-known Cabinet Minister and week-end speaker made an interesting speech last week-end, in the course of which he said that there were a great many difficulties in applying nationalisation that were not apparent in the years when nationalisation was conceived. I think everybody will agree that when a substantial number of citizens have the circumstances of their employment changed by nationalisation, their pension rights must be safeguarded, because their pension rights had a great deal to do with their original choice of career. The Coal Industry Nationalisation and the Electricity Acts provide for regulations to be made which will ensure that no one suffers as a result of the change from the old system to nationalisation, by the amendment, the revocation, the repeal or the winding-up of previous pensions schemes. However, there is no word in this Bill carrying that guarantee, and I am surprised that it is omitted. This matter was earnestly argued in another place, and the Parliamentary Secretary to the Ministry of National Insurance gave what amounted to a firm undertaking—that the people concerned would not suffer because those rights were not safeguarded by wording. I would be grateful if the noble Lord in his reply could repeat that assurance in his own words.
609 Lastly, I come to a smaller point. For those who are drafted into the work of the Civil Service and who feel themselves aggrieved, there is no alternative but expensive litigation. The Transport and the Electricity Acts made provision for the setting up of a Board of Referees to hear such cases, and to save such citizens expensive litigation. I believe there is a strong case for adding such a provision to this Bill. The fact that I am drawing attention to what I consider are its shortcomings does not detract from my warm support of the rest of the Bill. I understand from what has been said in another place that it is the precursor of a larger Bill of wider scope, some time in the future. It is a Bill which brings much-needed reforms which should not be further delayed, and it removes anomalies that should not be perpetuated. I give this Bill my warm support, and I am sure the majority of noble Lords on this side of the House will do the same.

LORD PAKENHAM
My Lords, I should like to express my gratitude to the noble Lord, Lord Tweedsmuir, for what he said about my return, and also to those who were kind enough to support him in that sentiment. On behalf of the Government I would also thank him for the much more important support of the Bill which he has demonstrated to the House. And perhaps I may also be permitted to say how clearly the noble Lord indicated his views. He raised three points and no doubt other points will be raised on the Committee stage. The noble Lord will perhaps like me to look into the last point he raised, his lesser point, between now and Committee stage. Of course, I shall be glad at any time to discuss this Bill in private with him and other noble Lords.
The first point upon which he placed his finger was the one to which I had referred in my opening remarks; but it was too much to hope that the noble Lord would not raise it. Therefore, this afternoon I will merely offer one or two observations regarding that point, and we can pursue it further on the Committee stage. The whole principle of Clause 1 of the Bill is as to when a man counts his compulsory National Service for superannuation purposes—whether he can be regarded as a civil servant, a local government official or a teacher before he 610 begins to do his service. The only point of difficulty which the noble Lord has brought out concerns the question as to who is and who is not to be regarded as possessing this qualification before he starts his National Service. In another place it was argued on behalf of the teachers that someone who was intending to be a teacher, but who had not in fact completed his training before being called up, should count his compulsory service for superannuation just as though he had completed his training. One can make out his case along those lines. After careful consideration, the Government have felt bound to reject that contention; at least, they have to inform your Lordships' House that they have not been convinced by it up to the present moment.
It would be difficult to introduce for teachers a special clause which did not apply to all local government officials and civil servants. And a far-reaching scheme of the latter kind would land us in many administrative complications and problems for which, in the view of the Government, no solution has yet been offered. My right honourable friend the Financial Secretary to the Treasury gave an assurance in another place on the Third Reading of the Bill that this particular point would be looked at again by the Government before the autumn, when a further Bill dealing with superannuation is in any case to be brought forward. I hope the House will feel that we are in this Bill doing all that is possible at this moment.
The noble Lord, Lord Tweedsmuir, then raised the question of the position of those who have been working in industries which come to be nationalised. He asked whether any pension rights that they have secured will be preserved and transferred. I think that was the point he had in mind; I have not been able to study that in advance, although the noble Lord was good enough to mention it to me just now. The answer that I can give him, on my understanding of the matter—I am sure that it is correct, so far as it goes—is that such pension rights will be preserved and transferred, if the Coal Board (to take one example) agree, if the job to which the man is going is pensionable. However, the noble Lord may wish further to explore that answer with me 611 before the next stage. At any rate, I can assure him on this point: that the formula which I have given him is correct, so far as my understanding at the moment goes, and I hope that it will afford him a measure of provisional satisfaction. I am grateful to the noble Lord for indicating his general support of the Bill. I hope that he and the rest of your Lordships' House will be prepared to give the Bill a Second Reading.