SERVICE OFFICERS' RETIRED PAY

HL Deb 15 December 1953 vol 185 cc71-124

2.49 p.m.

LORD JEFFREYS rose to move to resolve, That this House regrets the failure of Her Majesty's Government to meet the legitimate grievances of retired officers of Her Majesty's Forces regarding their rates of retired pay, and in particular the complaint of those who retired under the provisions of the Royal Warrant and corresponding instruments of 1919, which laid down that the rates of retired pay should rise or fall to an extent not exceeding 20 per cent. according to the rise or fall in the cost of living; whereas in fact the rates of retired pay, after falling for some years, were in 1935 stabilised at 9½ per cent. below the basic rates of 1919, and no increase above those basic rates has been granted, in spite of the great rise in the cost of living and the fall in the value of money. The noble Lord said: My Lords, I rise to move the Motion standing in my name. When I refer to the Royal Warrant, I hope that I may be understood to mean also the corresponding instruments, such as Admiralty Fleet Orders, Air Ministry Orders and so forth. And as I shall be speaking somewhat strongly on this matter, may I once more disclaim any personal interest in it, and state that I am not affected in any way whatsoever by the Royal Warrant of 1919, and that I shall plead only the case of my less fortunate brother officers who are so affected.

I propose to concentrate on the case of those who retired under the 1919 code, not because I do not sympathise with those who retired under other codes (particularly those who retired before 1914, practically all of whom are now well over eighty years of age and existing on exiguous pensions), but because I believe that those who retired under the provisions of the Warrants of 1919 have an unanswerable case, and that the contract made with them has been broken by those in authority. Paragraph I of the Royal Warrant of 1919 reads as follows: The rate will be subject after five years to revision either upwards or downwards"— I ask your Lordships particularly to note the words "upwards or downwards"— to an extent not exceeding 20 per cent. according as the cost of living rises or falls. After the 1st July, 1924, a further revision may take place every three years. The Treasury have in the past claimed that the word "may" in the phrase "may take place every three years," gives them an option to disregard the very definite statement "the rate will be subject …to revision," which comes earlier. I believe that that wretched argument has now been dropped, if only in view of the fact that the Naval Order and the Air Force Order used the words "shall" and "will," and not the word "may," when stating identical terms for all three Services. In any case, can there be any doubt in any reasonable person's mind as to the meaning of that Warrant? I would emphasise that these Warrants and Orders are Royal Orders, made in the Sovereign's name by responsible Ministers, and that they guarantee the terms stated to those affected by them.

My Lords, next I come to what actually happened. From 1919 to 1922 the cost of living rose, but quite correctly, according to the Warrant, the period being less than five years, the rise was not taken into account. But after this the cost of living fell steadily for a number of years; and from 1924 onwards, retired pay under those Warrants was reduced accordingly—and there was no "may" about it. It was reduced until, in 1933, it had been reduced to 11 per cent. below the basic rates of 1919. Then, in 1934, came a slight rise in the cost of living figure, and further rises appeared probable. Such rises would, under the Warrant, have involved corresponding rises in the rates of retired pay, and quite improperly, as we contend, the Treasury decided to consolidate and stabilise (those were the words used by them) the rates of retired pay at 9½ per cent. below the basic rates of 1919. Through the mouth of my noble and gallant friend the Minister of Defence, who is not in his place to-day, the Treasury stated in your Lordships' House in June of this year, that this stabilisation was welcomed by the officers concerned. My Lords, it was nothing of the kind. The arrangement was unilateral; those concerned were never consulted. Most of them knew nothing whatever about it until it was published in Service Orders, and they universally considered the matter to be a bit of sharp practice against themselves. I well remember coming back from India at the end of that year and meeting some of my old friends who had retired in recent years, and I remember how angry and furious they were at this Treasury reduction, as they considered it—and as indeed it was—in their rates of retired pay.

Before considering the numbers affected I would emphasise that in the first instance it is not an increase that is asked for; what is sought is the restoration of what was unjustly taken away at the time of the 1935 stabilisation. After that restoration has been made, the further claim is made for an addition, as promised in the Royal Warrant, of up to 20 per cent. on account of the rise in the cost of living. That restoration and those additions are claimed as of right, and not as a favour, in contrast to any other form of pension where we could ask for additions only as a matter of grace and favour. In this case we have got it in writing, signed by responsible Ministers on behalf of the Crown, and we claim it as a right; and it is so claimed by all officers who retired under the codes of 1919.

As to the numbers affected by this stabilisation and by the reductions, in June, 1952, in another place Mr. Birch said that about 17,100 officers' retired pay was affected by the stabilisation. This, no doubt, would include those who received increases under the Pensions Increase Acts, the maximum increase being 10 per cent. for those in receipt of the lowest rates of retired pay, and no increase being paid to those in receipt of more than £787 10s. a year. How that curious figure was arrived at, I do not pretend to know, but those who are in receipt of over £787 10s. a year received no increase of any kind. It would also include those whose retired pay was increased on account of their being recalled for war. These latter increases, I would point out, were earned by extra service and were not restorations of what had been taken away. But allowing that some have received increases of sorts and that rely the Treasury can state the numbers, with accuracy, there must be several thousand still suffering cuts in varying degrees. Mr. Birch also said recently that 335 officers were still suffering the full 9½ per cent. cut. As the noble and gallant Earl the Minister of Defence said, some six months or mere ago, that there were 359 such officers, it would appear that some twenty-four have died since then; and if a fair settlement is delayed very much longer, probably a good many more gallant ex-officers will die without having justice done to them. That may or may not be satisfactory to the Treasury; but it must be remembered that these are elderly men, and their numbers must get less year by year.

Now a word about the cost of doing justice to these officers. Without knowing the exact numbers affected, this is, of course, difficult to compute. It has been put at £210,000 per annum—presumably for restoring the 9½ per cent. cut to those who have had no restoration. But what is that? What is even £1 million or £l½ million, which might be required for the complete implementation of the Warrant, out of a total Government expenditure which is considerably in excess of £4,000 million? And is not the amount gained by the Government by means of the cuts since 1935 well in excess of the amount now required to restore the retired pay to its original value? The Treasury argue that to restore the 9½ per cent. reduction to officers would cause a general demand by ex-civil servants and others for increases of pensions and salaries. I think that, when they make a statement of that kind, they should give particulars of what implications are involved, and of what salaries they say would, or might, have to be increased.

Whilst having every sympathy with legitimate grievances of civil servants, I would point out that their pensions are on a totally different footing from those of officers. An officer's retired pay is governed by a Royal Order laying down clearly what he is entitled to according to his rank and length of service. These Royal Orders or Warrants are signed by the appropriate Minister, and until 1935 such a thing as going back on them had never been known. They are, in fact, contracts between the Crown and the officers. A civil servant's pension is not laid down by any such Royal Order or Warrant, and no such contract is made with him. Moreover, a civil servant's pension is calculated in a totally different manner. On the one hand, he receives a basic pension, and, in addition to that, he gets a bonus pension. It was only the bonus pension, not the basic pension, that was subject to the cost-of-living sliding scale and which was stabilised in 1935 at 9½ per cent, below its par value—and that, I would point out, makes a very considerable difference—whereas the Service ex-officer gets only the one basic pension, the whole of which was subject to the cost-of-living sliding scale and to the 9½ per cent stabilisation.

I should like to give an instance of how that works. A civil servant drawing a salary of £1,200 per annum in March, 1920, could retire in that year on a basic pension, not subject to the cost-of-living sliding scale or to stabilisation by means of the 9½ per cent. cut, of £600 a year. In addition to that, he would get a bonus pension, which was subject to the cost-of-living scale and to stabilisation, of £204. As well as both of those, he would get a lump sum gratuity of £2,412. After stabilisation, he had his basic £600 per annum untouched; his bonus pension of £204 per annum had 9½ per cent. deducted, leaving him £185—and, of course, he still had left the lump sum of £2,412. On the other hand, an officer retiring in 1920 on a pension of £600 per annum, had that £600—and nothing more. He got no bonus, no lump sum, and he drew his £600, less 9½ per cent. That is to say, he drew a total of £543 per annum. Would the Treasury venture to contend that those two systems are comparable, or that the civil servant is treated exactly like the officer? That is what some of their spokesmen have said. I do not think it can be maintained for one minute.

One more point I would venture to make. Civil Service pensions are based on Civil Service pay. There have been several rises in Civil Service pay in these last years since 1919, and each rise has meant increased pensions. I am told that there has been a rise quite lately, but I may be misinformed as to that. But it is a very different state of affairs from that which prevails in Her Majesty's three Armed Services. Whilst I do not like invidious comparisons, I would further say that a civil servant serves under far more settled conditions than does an officer. Normally, the civil servant has a settled home; he leads a regular life; he can arrange with some certainty for the education of his children. Normally, he can live with his family. An officer can seldom have a settled home, and must often be separated from his wife and family. He must face danger; he must face discomfort; he must face bad climates. And he has the disadvantage—for it is a disadvantage when he goes into civil employment of any kind—of being liable to recall in case of emergency or war. Those are some of the differences between the conditions of officers and civil servants.

Then the Pensions Increase Acts give no increase to senior retired officers on the higher rates; nor, indeed, do they give any increase to senior retired civil servants on the higher rates—who number, I am told, about 5 per cent. of the total of the retired civil servants. But the result is that those who are the oldest in years, those who have served the longest—and they must have served a very long time to get the higher rates of pension—and those who have borne by far the heaviest weight of responsibility, get no increase, though they duly suffered the 9½ per cent. reduction. What, anyhow, is the present buying power of pensions, as compared with their face value? Take, for example, a high pension, the pension of a senior officer retired under 1919 terms—let us say the pension of a Rear Admiral or a Major-General, one of those pensions which the Treasury say cannot be increased—they say these individuals are far too prosperous and highly paid, and they do not need any increase. The nominal £1,000 a year which these distinguished officers would earn has 9½ per cent. deducted, which leaves £905 per annum. From this the Treasury do not omit to deduct income tax. The purchasing power of money has fallen very much—I suppose it would not be far wrong to say that it has fallen by something like one-third—and that, with income tax, does not make a pension of £905 per anum seem a very high one or one of undue riches.

Another Treasury argument is that no new pension code can be retrospective. But the stabilisation of 1935 was retrospective, and retrospective for some sixteen years. What is sauce for the Treasury goose must evidently not be taken as sauce for the officer gander. The fact of the matter is that in the view of the Treasury, officers just do not matter. They are unorganised, so they are electorally unimportant, and there is no expectation of any further economic contribution from them. It is no doubt unfortunate that the example of their treatment is deterring many of the younger generation from coming forward for Regular commissions, but that, the Treasury may say, is a matter for the Service Departments and does not concern them. We claim for these officers, as a right, the full pension stated in the codes of 1919 under which they retired and which constitute an under-taking and a promise to such officers. I wonder what would be said and done if a public corporation—say, a bank or an insurance company—had undertaken such a liability for services rendered or fees paid and then failed to carry out that undertaking and was sued in the courts. Perhaps some noble and learned Lord will tell us what the finding of the court might be in such a case. But, whatsoever it might be, there is no doubt of what would be the verdict of public opinion in such a case.

Finally, I would say that if money must be saved, let it be saved on Ministries, on controls, on requisitioned land and houses, perhaps by declining increases in salaries, wages and expenses—we have a pretty good example this week of demands for very high increases by Government-employed people. Such increases are seldom refused, however excessive they may be. In this connection I would venture to ask how many wage and salary earners are receiving, like these old officers, less than the rates of 1919. I plead for justice for these retired officers and for the fulfilment by the State of their contract with them. And if the reply is, "We cannot afford it," then I would say that whatever else we may afford or may not afford, we certainly cannot afford to break faith with this loyal and faithful body of old servants of the Crown. I beg to move.

Moved to resolve, That this House regrets the failure of Her Majesty's Government to meet the legitimate grievances of retired officers of Her Majesty's Forces regarding their rates of retired pay, and in particular the complaint of those who retired under the provisions of the Royal Warrant and corresponding instruments of 1919, which laid down that the rates of retired pay should rise or fall to an extent not exceeding 20 per cent. according to the rise or fall in the cost of living whereas in fact the rates of retired pay, after falling for some years, were in 1935 stabilised at 9½ per cent. below the basic rates of 1919, and no increase above those basic rates has been granted, in spite of the great rise in the cost of living and the fall in the value of money.— (Lord Jeffreys.)

3.14 p.m.

THE EARL OF CORK AND ORRERY

My Lords, I rise to support to the best of my ability the noble Lord who has just addressed the House. I suppose that, like him, I can say I have no financial interest in the matter. I am a half-pay officer and my half-pay will not increase and, I trust, will not decline. Having, through no virtue of my own, a seat in this House. I consider it my duty to do all I can to support the just claims of officers who are no longer in the Services, and to that end the few remaining years of my life have been devoted. Alter the full exposition of the case given by the noble Lord, there is no need for any more remarks on that subject. The few remarks which I wish to address to your Lordships will be devoted almost entirely to the Government announcement of recent date. I suppose that I should say straight away that I think this is a subject on which septuagenarians and octogenarians have every right to speak without having any Bible-style remarks directed at them, such as "Sit down, thou bald-head.'

The officers who are suffering now, particularly those classes of officer to which I am going to refer, are our near contemporaries. We served with them. They are a little younger than those of my own age. We know something about the large number of officers who were "axed" after the First World War. They were fine officers, but they were "axed" by the Geddes "Axe" or other weapons of that sort and were thrown upon the country to compete with those who had returned to civil life. We also know something of the difficulties of the younger generation in the demobilisation after the last war, though we had learned by experience and conditions were very different.

In reply to a Question which I put on this subject the noble and gallant Earl the Minister of Defence said (OFFICIAL REPORT, Vol. 184 (No. 6), col. 299): As regards those few remaining pensioners whose retired pay was stabilised in 1935 at 9½ per cent. below the 1919 rates …Her Majesty's Government will, as stated …on June 17,"— Note that date, my Lords— continue their search for a fair solution.…However, I hope to make a statement on this subject in a week's time. That caused all hopes to rise—a statement in a week's time, after a search of five months for a fair solution. Then our hopes were dashed to the ground, because we were told (OFFICIAL REPORT, Vol. 184 (No. 9), col. 478): While the Government recognise the hardship which …the pre-war stabilisation has created …it would not be possible to treat this problem as a special case at a time when so many other demands are pressing. A fair solution was promised, but no solution at all was given. Then what is to happen? Is the unfair position to go on—a position acknowledged by the Government to be an unfair one? It is no possible comfort to these old officers to be told, as they have been told by the Government, that the best thing they can do is to stop inflation. What effect can this small expenditure of money have upon stopping inflation? These officers will be all but dead by the time any effect can be felt.

On Tuesday last, in answer to a Question I put, I was told that the increase in current wages received by industrial workers this year bears no direct relation to the pensions of those officers already retired, and offers no logical ground for an increase in retired pay for those officers who left the Services between 1919 and 1935. There may be no logical ground for an increase but, as the question of inflation has been raised, surely if claims for money come under that head, there is a more or less direct connection between the two. Nor do I consider it fair to use words about bearing these burdens and not pressing for increased pensions, and then to turn round and say that the industrial workers have earned these increases. I am not trying to enter into any dispute about anything that is happening at the present moment; I am talking generally. The industrial workers have not earned these increases. They have not increased production and have not worked longer hours. And their leaders are perfectly clear and honest on the subject that their demands are made on the ground of increases in the cost of living. That, surely, affects everybody equally in the country. These claims are being made, and I cannot help thinking that if the Government persist now in what is admitted to be an injustice, and will not make any concession to these poor officers, then they are straining at a gnat, and swallowing a camel, or being strong to the weak, and weak to the strong.

This is alluded to as a special case. There is no special case about it. Here you are compelling these ex-servants of the country to live at 9½per cent. below what was given in 1919. During the quarter of a century that has elapsed the value of the pound has gone down by more than 50 per cent. I can give your Lordships an example of the difference made by taking into account the cost of living. This morning I received a letter from a major who was wounded in the South African war, and retired. What do your Lordships think is the princely pension received by that major, who is now eighty-six? Since that time he has had £10 a month. I know the figures are correct, because he has sent me his correspondence with Lloyds Bank on the subject. That man of eighty-six, living on that pension, must be a poor example to boys living in the neighbourhood, and to the fathers, who may well say: "Look at poor old Major So-and-so, living in that little hovel; my boys shall not go into the Services." There is no getting away from that aspect of it.

When the announcement was made in your Lordships' House by the noble Marquess the Leader of the House, the noble Earl, Lord Winterton, a supporter, in principle, said (OFFICIAL REPORT, Vol. 184 (No. 9), col. 479): I feel, that in view of the general economic situation, there is considerable strength in the argument which my noble friend the Leader of the House has used."— that is, that the country cannot afford this expenditure. With that expression many would agree, and I would myself, if it were said merely as a prelude to declaring that, in the interests of the nation as a whole, no more claims for increased wages or anything else would be considered until the financial horizon was clear. But we know that that is not to be. In a leading Sunday newspaper, one of the reasons for the attitude of the railwaymen at the present moment was said to be "the bitterness and the frustration felt in the rank and file." Do not your Lordships think there is bitterness and frustration among those officers who have been victimised in the way that has been described? And do you not think there is bitterness and frustration among their families to see them treated like that, and among those who have relations in the Services or who are interested in the Services? In the recent debate on this subject, the noble and learned Earl who leads the Opposition (I am sorry he is not here) made some kindly remarks, for which we are grateful. I cannot see what is to be gained, two years after the Labour Party went out of office, by taunting them with the fact that they did not make any increase during the time when they were in office. We are now living in 1953. I would remind your Lordships, as regards the noble and learned Earl, that there is joy in heaven over one sinner that repenteth. I trust that the noble Lord in charge of the Motion will divide the House, and that all his followers will go into the Division Lobby, with the great majority of Peers, who I am sure sympathise with the Motion, and thus prove that they are among the just men who need no repentance.

3.26 p.m.

LORD BALFOUR OF INCHRYE

My Lords, I am sure your Lordships will feel indebted to the noble Lord, Lord Jeffreys, who has once more championed in your Lordships' House the cause of these officers, continuing the work that other noble Lords here and Members in another place have been carrying on for so many years to try to remedy this injustice. To me, one of the tragedies of this case is that, as time passes, the numbers affected are steadily reduced by the course of nature, and that the injustice felt remains. There are, as I think, quite rightly, strong feelings here and elsewhere on this position. But I should be less than frank if I did not make my own position clear. So far as I am concerned, this is no revolt against a Government which I support: it is rather, to me, the presentation of a case which seems to many of us in both Houses of Parliament, and in the constituencies, after many debates, to remain unanswered fully by Her Majesty's Government to the satisfaction of reasonable men.

I have no doubt that when the Minister comes to reply he well resist the claim put forward by my noble friend Lord Jeffreys that there is a contractual right. It would not be right far me to argue in detail whether there is, or is not, a right to claim in law, because I am not competent to do so. My sentiment, like that of many of your Lordships, is on the side of the noble Lord, Lord Jeffreys; but whether legally my sentiment could be borne out is something about which I am not competent to express a view. To me, this is an appeal to authority for reconsideration. The authority is the Government of the day, of whatever complexion that Government may be. The Government have all the power, and in this case I think the Government enjoy the support of most noble Lords Who are in favour of the Motion before us to-day. Those of us who appeal to the Government for reconsideration of this case would never wish to see the position of Her Majesty's Government jeopardised or threatened by this particular issue.

We hear from the Press and from other sources reports that in the Committee Rooms in another place this issue has been debated, and that Ministers feel so strongly that they have said that if they are pressed too far by their own supporters, they will have to reconsider their own Ministerial positions. If that be true, it means that the Ministers feel that this is an issue on which they must stand firm, and, if pressed too far, they will have to treat it as a vote of confidence in their administration. The noble Lord, Lord Jeffreys, will decide whether or not he wishes to divide the House upon this Motion. The noble and gallant Earl, Lord Cork, said that he hoped he would. I say, frankly, to your Lordships that I hope the noble Lord will not divide the House, because I believe it would do little good to the cause which we are debating to-day and which many of us wish to see advanced. In this House we cannot by our votes upset Governments, whereas adverse votes in another place can. Nevertheless, I submit to your Lordships that on an issue which becomes one of confidence in the administration of Ministers on public affairs, the supporters of the Government, here and elsewhere—and, incidentally, I think they include many of the officers themselves—would not wish to see the Government beaten or so diminished in authority that they were unable to carry on the government of the country in great national and international issues which transcend this one in importance.

The purpose of the debate to-day, as I see it, is to get some advance from Her Majesty's Government from the position that has hitherto ruled. Therefore my approach is not to argue this question of contractual right or otherwise, because I guess that Her Majesty's Ministers will take the view that they must deny the contractual right. I will repeat that my only inclination is towards the noble Lord, Lord Jeffreys, but my wish is to see the Ministers come some way towards us who support this Motion, without any form of direct conflict between the supporters and the Administration. Therefore my approach is for a fresh consideration of this issue and a re-examination of certain aspects.

The Government base their decision mainly on the view that a concession on the retired pay of these officers would necessarily, or equitably, involve a number of concessions to other retired officers or retired members of public services. That is their main ground for resistance. Those grounds have been stated often in your Lordships' House and elsewhere, but I think the time has now come when it is reasonable to ask the Government to elaborate those effects beyond mere assertions of fact. It is important that it should be clearly and precisely established what these implications are, and what sums of money are involved. I sincerely hope that the Minister who represents the Treasury, the Paymaster General, will be able to-day to meet my wish and perhaps the wish of other noble Lords in the House, and translate this general assertion, made in the past, into something more specific. To me, the reverse seems the position in equity—that civil servants have had increases, to which I do not object but which I think in fairness justify a concession to these particular officers.

I wish to ask the Government one question, and if they can give a helpful answer I shall feel that we have come some small but definite way in the direction of meeting the case so forcibly, eloquently and logically put by the noble Lord, Lord Jeffreys. My question to the Government is this: Would the Government undertake, when they are in a position to consider any amelioration of hardship, the remedying of what are felt to be injustices—and here I would make the particular point that I am not making it difficult for the Government; I am not asking the Government to say that they admit injustices—and the relief of burdens, to give a high priority of consideration to the case of these 1919 officers? If they will go that far, it means that this subject is, as it were, going up in the queue for consideration by Her Majesty's Government when they feel able to make some advance in the way of remedying injustices, the lightening of burdens or the amelioration of hardship.

THE EARL OF CORK AND ORRERY

May I ask the noble Lord a question? Will he put in a time limit?

LORD BALFOUR OF INCHRYE

The noble and gallant Earl asks if I would put in a time limit. I would say that only those who are responsible for the Government have the knowledge of the financial position of the country and when any form of relief can be given. The formula which I have been bold enough to read out to your Lordships covers a pretty wide field, and I think it must be left to the Executive to say when any form of relief can be given. If the Government would say "Yes" to that particular question, I should feel that the debate had been worth while, that the noble Lord, Lord Jeffreys, had achieved a step forward and that the Government had indicated fresh willingness to reexamine, as circumstances change. Beyond that, I do not think one can ask the Government to go if one wishes to carry the Government with one and continue, as it were, in partnership. I do not wish to see any basic difference between Government supporters and the Government on this issue, and therefore I have in my few remarks studiously avoided debating this question of whether or not there is a right, debating the merits or demerits of the details in question. My purpose is only to express a hope that Her Majesty's Government will make some slight advance in the way I have indicated to meet this very just case which we have debated to-day.

3.37 p.m.

LORD TEVIOT

My Lords, I am glad to be able to be here to-day to support my noble friend Lord Jeffreys in this Motion. I shall speak particularly about a body of which your Lordships are all aware, and to which some of you belong, the Old Contemptibles. Your Lordships will all remember what that phrase meant, and what it entailed in the early days of 1914. The noble Lord who moved this Motion was also an Old Contemptible. Who were these men? Some of them were voluntary Regular soldiers, some were in the Reserve, and others went in to fill the gaps which were soon made after the first encounter with the Germans. Like some of your Lordships, I am very proud to have been one of them.

So far as pensions are concerned, I am not implicated, so I can speak with complete freedom. I never thought that I should have such a difficult task, but I should be wanting in my duty to my old comrades if I did not speak frankly on this subject as I see it. Most of us Old Contemptibles are dead, and the rest are dying off pretty fast. Only yesterday I had from my local Old Contemptibles' Association an intimation that one of our most distinguished members had passed away. From what I know of the last few years of his life, his situation had been very straitened, and I think he suffered a good deal from want of a good many things. He was a former colonel, highly distinguished and decorated.

There are one or two things like that in the country which I want the Government to realise. We have these Old Contemptibles' associations, and I will tell your Lordships something of my own experience in that direction. My own association used to assemble once a year in the local park, to march, with band playing to the war memorial. It was not far, but the General who commanded us cannot now make the distance, and the year before last I had to take the parade. Last year, it was decided that very few of us would be able to make the distance, and so we now march from the market square, which is about 200 yards, instead of from the local park. I instance that because it shows how rapidly these old men are dying off. I want that to be realised very clearly by your Lordships during the few remarks which I propose to make now.

We have been told by my noble friend who moved this Motion so eloquently and so clearly that if what we ask for is granted it will mean that a great many other people will want to "chip in" on the idea. I say to your Lordships, here and now, that no section of civilians comes into the same category as that of these men of whom I am speaking. These men voluntarily went out to serve their country, before there was any conscription or anything of that sort; and they must not be mixed up with the civilian population in any way whatever. I take a very strong view on that matter. I never thought that a contract such as that entered into with regard to these men would be repudiated—for that is how I see it—by a Government of this country. That is how I see the matter, and at this moment it is certainly the case; there is no question about it.

Introduce the legal aspect if you like, and argue from the legal point of view; but, as the noble Lord has told us quite definitely, the terms of the Royal Warrant are perfectly clear, and those terms have most certainly been broken. If it were a business which was concerned and such a thing had happened, we should have the courts full of lawyers arguing the case as to whether the company in question was justified in doing what it did. Some such action might still, indeed, be taken with regard to these ex-officers. Under the 1947 Act an action can be brought against the Crown; and if we were organised and had the money available, that is a possibility which might well eventuate, unless the Government think again. Indeed, l cannot believe that the Government will not think again on this matter, for if they do not it will leave a record in our history that we do not deserve. Two hundred thousand pounds per annum, my Lords—and a rapidly dwindling liability: that is the nature of the problem. Some of the men of whom I am speaking can look forward to very few more years: put it at ten years, and all of us will be gone. And yet we talk of spending £50 million on the roads and on various other projects costing equally enormous amounts.

I am amazed and much distressed to see this. I cannot believe that further consideration will not bring a different view. What has already been said in another place by the Prime Minister, and what the noble Marquess the Leader of this House had said on more than one occasion, seemed to suggest that neither of them liked doing it, but they said it was a necessity. If they do not like doing it, why do it? I do not believe it is fundamentally necessary to the maintaining of our economic situation. I have tried to find legitimate reasons for this action, and I can find none. I make the strongest appeal to the noble Marquess the Leader of this House to use all his great influence to have this deplorable decision altered and give justice to these fast-disappearing gallant ex-officers.

3.46 p.m.

LORD NATHAN

My Lords, the noble Lord, Lord Jeffreys, has spoken warmly to this Motion, and no one, least of all myself, with my knowledge of, and acquaintance with, many senior officers whom I hold in high regard, can fail to have been touched by what he said as to the situation of a number of these senior officers. I am not concerned today to discuss in this House what the legal situation may be—as to whether or not there has been a breach of what Lord Jeffreys referred to, if not in terms then in substance, as a "contractual obligation." That is a very nice legal point for the constitutional lawyer. But it is clear that there are a considerable number of these officers who, justly or unjustly, labour under a sense of dire grievance. Nor would I suggest for a moment that one should not and does not feel great sympathy with them in the situation in which they find themselves.

This matter has been under discussion for many years. I remember being approached on the subject almost twenty years ago when I was a Member of another place. I see from his affirmative nod of the head that the noble Lord, Lord Balfour of Inchrye, shares that recollection: it is not a new problem; it is a problem which has been with us for a very long time; and it is still unsolved. The main question, as it seems to me, which we have to consider is this: Is this a particular instance of a general problem, or is it a special case? Lord Jeffreys, and I think probably Lord Balfour of Inchrye also, and certainly Lord Teviot, would say that it is a special case. There are others who would suggest that it is a particular instance of a general problem—the general problem to which reference has already been made: the pensions payable to former civil servants, for instance, and to other public officials, whether in the armed Services or not.

I was much interested in the suggestion made by Lord Balfour, that, if and when the Government come to consider the question of burdens and the relief of pensioners, they should give a priority, as I understand the noble Lord, to the position of these officers. I would go further. I think the Government have a duty in this matter, and that they should appoint a Select Committee—a Select Committee which should explore the general question, which should inquire into the whole position of public servants, including, of course, these officers to whom the Motion relates, the whole position of those public servants who have retired on pension and who are hit by the rise in the cost of living. It is a suggestion which I make on behalf of noble Lords upon these Benches, that a Select Committee should be appointed to inquire into the whole question to which that raised by the noble Lord, Lord Jeffreys, is so closely related.

3.51 p.m.

LORD THURLOW

My Lords, I should again like to rise in support of the noble Lord, Lord Jeffreys, from the point of view of a serving member of the Forces, not because anyone now serving is affected by the pay code under discussion, but, as the noble Lord, Lord Jeffreys, and the noble and gallant Earl, Lord Cork, have said, because of the deplorable effect on the people from whom we expect the greatest possible support in encouraging the right type of young man to make the Services his career. Retired officers are now actively dissuading their young friends and relatives from joining the Forces, so bitter is their resentment and, I believe, so deep their suspicion of further acts of meanness in the future. They say, "If the Government can do this to those whose pensions are tied, or were tied, to the cost of living, what can they not do to those who have no such contracts? Why take up an often dangerous, and almost always uncomfortable, career, with very unstable conditions, if at the end of it, and regardless of the success of its course, one is not assured of earning a pension on which one can exist when incapable of further employment—and all this at a period when so many interesting and better paid professions are open?" That is what these retired officers are saying at a time when, probably, as never before in peace time, the Forces are in so great a need of every possible encouragement.

3.53 p.m.

LORD WINSTER

My Lords, I feel that it is a great tribute to our Parliamentary institutions that the case of a small body of men, I believe 359 in number, who can have no possible political influence as a body, should be fought so gallantly, as a matter of justice, here in your Lordships' House by the noble and gallant Earl, Lord Cork and Orrery, and by the noble Lord, Lord Jeffrey's and in another place by Sir Edward Keeling and those who have acted with him, who certainly can have been actuated by no thoughts of personal advantage in taking up the stand which they have done. I repeat therefore that in face of such an instance of this we may feel proud of our Parliamentary institutions.

I am particularly concerned with tine small body of 359 officers to whom reference has been made. Even if we extend that figure to the larger number of some 17,000 which has been thrown out, the number is still very small indeed. I find great difficulty in getting at the figures involved in this matter. It seems to me that there are many misapprehensions about them, and I have no doubt that I am guilty of sonic of them. I understand, however, that Mr. Nigel Birch has said that all officers stabilised at 9½ per cent. below 1919 receive over £600 a year. I, at any rate,, am informed, upon what I believe to be quite good authority, that there are a great number of officers who are receiving less than £400 a year; that many of these officers are receiving as little as £298 a year—in fact, I have had quoted to me one man whose rate is £140 a year. I am sure that it would be a great help to us if the Paymaster General, in his reply, could clear up these ambiguities about the figures involved and give us really factual figures upon which we can rely.

Although Mr. Birch has said that these officers receive over £600 a year retired pay, I understand that the maximum retired pay of a colonel is £787 10s. 0d. a year and, to come to the next lower rank of lieutenant-colonel, his maximum retired pay is £583 14s. 6d. a year. It would therefore appear, if those figures are correct, that all Mr. Birch's officers are colonels, and that there can be none below that rank. I ask, in particular, for these figures to be established upon a firm basis, because to my mind it is adding insult to injury to suggest that officers are getting more retired pay than they actually do.

There is another thing that is very much in my mind. Who are the people who would come into the picture if what I believe to be the just demands of the 359 people were met? Who are these people who will, somehow, come into the picture if that small body who were told that their pensions were linked to the cost of living are considered? Those who loyally accepted a cut in their pensions on cost-of-living grounds naturally believed that the cuts would be restored if the cost of living rose. The noble Lord, Lord Balfour of Inchrye, very properly, I think, expressed some doubts as to the exact meaning in law of that Warrant, but one thing that was never in the minds of the officers in question was the legal issue. They do not think in those terms. They expect to be believed by those whom they lead when they say something, and when they are told something by the Government, they expect to believe that also. Therefore, it is no wonder that they feel they have been the victims of a shabby trick, and that the Government ought to keep faith. Men who have held the King's Commission are expected to uphold very high standards of honour in their lives, and, in return, they should be treated honourably by the Government.

The Government claim, in extenuation of their refusal to honour the 1919 undertaking (and may I say that that undertaking was given particularly to the Navy, as may be seen if one looks at the Jerram Report), that other classes of State servants are involved, and that officers are not a class apart. But, my Lords, the exact contrary is the case: a class apart is exactly what officers of the Services are. For instance, retired Naval officers have a lifelong Liability to re-employment in case of war or emergency; and I believe the same to be true, to some extent if not to the full extent, of officers of the Army and the Air Force. That is a liability from which Civil Servants are completely exempt. This liability is a permanent disability to retired naval officers. Extraordinary though it may seem, before 1914 a retired lieutenant-commander received more than his serving pay; but to-day he cannot live on his retired pay, and consequently he has to do his best to seek civilian employment. Employers do not like to give important and responsible jobs to men with an outside liability, who may be called up and leave a most important post vacant at a day or two's notice. Again, if a retired officer, seeking to establish himself in business, commutes part of his pension and shortly thereafter is called up, under this liability of which I have spoken that man may be ruined financially. In fact, I have heard of cases where literally that has happened.

My Lords, an officer's retired pay is part pension and part retaining fee. Even so, the retired pay is generally well below Civil Service rates. There is an old motto, that "the devil looks after his own." All I know is that the maximum pension which a former First Sea Lord can receive is £2,000 a year, whereas a former Secretary of the Admiralty can receive £2,500 a year. That is how the Treasury hold the balance between officers and civil servants. It seems to me that Service pensions are less than half Civil Service rates, or that the Treasury are bilking on the retaining fee and expecting retired officers to accept a lifelong liability in return for nothing in the shape of money. Look how the Treasury work these things out. Officers' pay and retired pay were raised in 1919 but they had been stagnant for a very long time. A Naval lieutenant's pay had not been raised for seventy-nine years, and an Admiral's pay had not been raised since the Battle of Waterloo.

The matter that we are debating to-day is not a question of a claim; it is a question of the Government's keeping its word to those who were told in 1919 that their pensions would vary with the cost of living. This is not a claim at all; it is only a demand that the Government should keep its word and act honourably and straightforwardly towards these officers to whom it said these things. The Treasury whittled away the 1919 increases, on the plea that the cost of living was falling as against 1914; but when the cost of living showed signs of rising, they hastily stabilised these pensions at 9½ per cent. below 1919. It is an interesting commentary upon this action that two years after the Government of Mr. Baldwin (as he then was) did this, Mr. Baldwin doubled the pay of the Prime Minister. The actual terms mentioned in 1919 were. that there would be revision after five years either upwards or downwards according as the cost of living rises or falls. With great respect to the noble Lord, Lord Balfour of Inchrye, I am a little puzzled to know how there can be two legal interpretations of what I should have thought was a perfectly clear and definite undertaking. Supposing the officers affected by that stabilisation in 1935 got back the 9½ per cent. cut for which we are asking to-day, and supposing that to that restoration were added an increase in their pension of 20 per cent., making 29½ per cent. in all, they would still be getting only 50 per cent. above 1914, although since 1914 the cost of living has trebled. Even with a 29½ per cent. increase they would still be doing very badly, according to the figures of the cost of living.

Among his other shining qualities, the Prime Minister is a master of special pleading, but it was really no excuse for him to say, on behalf of the Government, when this matter was recently raised in another place, that the Labour Party did nothing in this matter when they were in office. Two wrongs do not make a right, and if, as he seems to think, it is right for him to refuse this demand, then it was equally right for the Labour Party to resist it; and consequently on that score his gibe falls to the ground. It is impossible to run a Government by saying that you need not do anything because some other people did not do anything. We did not say, for instance, that we would not have a National Health Service because no other Government had started a Health Service. The Prime Minister was very angry at what took place in that debate, and I am not surprised, because the truth often stings.

It is said that the Treasury cannot afford the £200,000 required to do justice to this wasting number of very old officers. That is exactly the same as a man saying, "I cannot pay my old debts because I have contracted new debts"; it is really saying, "I cannot bilk new dependents, many of whom have rendered good service to the State, but I can and will bilk old dependants, who have rendered great service to the State." Cannot afford, indeed! What about the Judges' (Remuneration) Bill, to give the Judges another £3,000 a year? I do Oat begrudge that. I merely say that it is absurd for the Government to suggest that it cannot afford to do justice to one party of men while it grants a gratuitous benefit to another. We were told to-day, I think by the noble Lord, Lord Jeffreys, that a Rear-Admiral—and a man does not become a Rear-Admiral without it having rendered great service to the State; it is a difficult series of hurdles that he jumps before reaching that rank—would receive a pension of £905 a year, Jess income tax. Yet to-day, Members of Parliament (again I do not say that they are wrong) are complaining that £1,000 a year, less income tax but with many allowances and privileges, is an impossible sum to live upon. The State cannot afford £200,000 a year! How can that statement hold water, in view of the facts and figures which I have quoted?

Who are these mythical millions whose claims will have to be granted if justice is done to these officers?—for, as I have said, this is not a claim, it is a demand for justice. If other claims are equally just, they also ought to be granted. It is a most novel principle for the Government to say that it cannot do justice to a few because it would involve doing justice to many. If the claims are just, then they should be met. To my mind, the Government's action in this matter is neither just nor wise. The demand is that the Government should keep its word to those who were told in 1919 that their pensions would vary with the cost of living. There is no need to grant the claims of those to whom no such undertaking was ever given—to suggest that is a complete non sequitur. Because men who were given a promise by the Government are now asking that that promise should be fulfilled is no reason for saying that the claim of other people, who had no undertaking from the Government, should he granted. Ministers boast, I see, that this is a tough Government. That may be a good thing in many directions. But I do not call defaulting on an undertaking being "tough"—I call it by quite another word.

I have two brief words to say, in conclusion. I have seen in the Press—I have not heard it stated anywhere, though I have heard comments about it—that the Minister of Defence is not in agreement with the Govemment decision on this matter. In my view, it is very wrong indeed to put any such stories or rumours afloat. The Minister of Defence is bound by the doctrine of Cabinet responsibility, and at that the matter should be left. It is, to my mind, utterly wrong, either in this case or in any others, to single out an individual member of the Cabinet and to insinuate that he is not in accordance with the Cabinet decision. I think that should be reprobated very strongly. The last thing I want to say is this. The ultimate responsibility in this matter rests, of course, with the Prime Minister. Now the Prime Minister has said many fine things about officers of the Services. He has paid glowing tributes to them, in speech and in written words. I hope very much that he will reconsider this matter because I should regret it deeply if, in the future, his name were to be associated with what I regard as one of the meanest acts of parsimony ever perpetrated at the expense of retired officers.

4.14 p.m.

LORD SALTOUN

My Lords, with the exception of my noble friend Lord Thurlow, everyone who has spoken so far in this debate has made a plea for compassion in respect of the position of the officers for whom they are pleading. I shall do nothing of the kind. With your Lordships' permission, I will for a few minutes consider the position of Her Majesty's Government in this matter; and that alone. First, I would touch upon the point which was raised by the noble Lord, Lord Winster, a few moments ago. The point was that shortly after this business took wind recently there appeared in the Press—I think it was on December 1—reports upon this matter. I saw in The Scotsman of December 1 a headline: 1919 Officers' Pensions Lowest £787 10s. a year. I have not seen any modification of that statement, and I submit that a statement so made is liable to lead to the withdrawal of a great deal of public sympathy from the case we are arguing today. When I saw it, I knew that it could not be untrue. In fact I murmured to myself, in the words of the rhyme, Must public servants learn to weave From truth a fabric to deceive. I tried to discover where the catch lay. I think we have got it from the records of another place of December 8. We learn that of the 16,550 officers suffering in some degree from the 1935 stabilisation, only 359—and those in the higher income groups—are suffering the full cut; and to those alone the original statement referred. Of the whole group, the lowest normal scale of retired pay is £140 a year, and there are officers who are receiving even less than that. I believe that to be the truth of the matter, and that is what the public should have learned on December 1. If I am wrong in that suggestion, I have no doubt that the noble Earl who is to reply to this debate will correct me.

The Government have resisted a return to the state of things which existed before the stabilisation of 1935 on two grounds, so far as I have seen; and on two grounds only. The first is that the benefits are contractual. The second is that any concession in this matter now will lead to other claims. The nature of the contract was set out on June 17 and November 17 of this year by the noble and gallant Earl, the Minister of Defence. On June 17 he told us how the pensions on the 1919 scale fell and fell with the decline in the cost of living, and how in 1935, in response to pressure from pensioners, officers' pensions were stabilised. Again, on November 17 he explained, in answer to a question by the noble and gallant Earl, Lord Cork and Orrery, that (OFFICIAL REPORT, Vol. 184 (No. 6), col. 299): Successive Governments have consistently maintained the principle that these superannuation benefits are contractual and cannot, without injustice to other persons living on fixed incomes, be increased save in exceptional circumstances. That was a considered statement in answer to a Question of which the Government had notice. As I say, it was made on November 17. Now I do not know whether the noble Lord, Lord Balfour of Inchrye, has been to a fortuneteller in Bond Street, or whether he has any advance information of any kind; but he has suggested that the noble Earl, Lord Selkirk, in his reply to this debate, is going to say that there is no contract. It will be interesting to hear the Government reply on that point. If to-day, in answer to Lord Jeffreys, it is said that there is no contract, and the noble and gallant Earl, Lord Cork and Orrery, puts down the same Question in January next, will be told again that there is a contract, and that successive Governments have consistently maintained the principle that these benefits are contractual? Your Lordships are dealing every day with contracts of one kind or another, and most of your Lordships have pretty good experience of the law and of the custom that governs these contracts. Let us, therefore, examine this contract in the light of your Lordships' experience.

The Government's position is that the sliding scale contract was altered in 1935 by mutual consent to a fixed income contract, and that it cannot be varied without injustice to other fixed income groups. Now I do not deny that in 1935 the Government probably received many letters asking for a cessation of the cuts, the continual cuts, due to the sliding scale and the continual fall in the cost of living. Your Lordships must remember that local retail markets are insensitive to an immediate response to variations in the national and general retail market, and there is not the smallest doubt that there was a good deal of real hardship behind the complaints received. I will go further and admit that possibly amongst these complaints were some requests for stabilisation. But these requests were probably made by men who had little idea of what stabilisation would mean, and a general contract of this kind cannot be broken merely because some complain of the less pleasant consequences of the contract. As my noble friend Lord Jeffreys has said, the retired officers were not consulted: they were simply informed that stabilisation had been carried out. Many of them protested vigorously. Few of them kept copies of their letters, but I have managed to obtain a copy of one such letter, and I will venture to read it to your Lordships. It is dated July 3, 1935, and is addressed to the Secretary of the Admiralty. It is as follows: Sir, I beg to acknowledge the receipt of circular letter L.P. No. 8, dated June, 1935, which states that my retired pay shall be consolidated at approximately 9½ per cent. below the standard rates. I wish to point out that when I retired in January, 1923, I accepted a definite offer—namely, that a portion of my retired pay would vary as the cost of living. May I be informed whether the effect of your letter is to indicate that His Majesty's Government are breaking the contract they made with me when I retired? If my surmise is correct I wish to protest against such a breach of faith. The fact that I am momentarily £2 0s. 5d. better off per annum has in my view no bearing on the case. Will any noble Lord dissent from any single phrase in that letter? It describes the situation exactly. It is possible that the Government may say that they cannot deal with individuals in these matters; that they have to take the sense of the group I do not see why they cannot deal with individuals; it would be perfectly possible. Officers could be left to choose whether they accept stabilisation or leave it alone. If that had been done—and that would have been the honest thing to do—there would have been no question to debate this afternoon.

LORD JEFFREYS

And if the terms of stabilisation had been stated.

LORD SALTOUN

And if the terms had been stated, and accepted. If that had been done, the whole thing would have been settled. The truth is that, whatever the Government may say on that point, there is no group, and there never has been a group, with which the Government could negotiate. I would ask Her Majesty's Government whether they really want such a group. Let them look across the Channel and reflect. Do they want a trade union of officers with whom to negotiate? I do not think they can possibly want that, but until that exists these contracts cannot be treated as group contracts. They are individual contracts; and the Government are in the position of having broken them and, despite the protests of those affected, by unilateral act, of having substituted others on a fixed income basis which have proved more beneficial to the Government. Then the other day they came to your Lordships' House and said that because these are fixed income contracts, they cannot consider them. They ally them by unilateral action to other fixed income groups and are not going to consider the matter at all.

Let me deal with the argument that it would cause trouble with other groups. In the first place, I say that the implementation of a broken contract is not a concession, and nothing is more likely to provoke other claims than a statement of the kind made by the Government: that other claims would result from a concession here. It assures other claimants that they would be justified in advance by the Government in making claims. The public have been misled by the publication of that truth about the incomes of some officers affected, to which I and the noble Lord, Lord Winster, drew your Lordships' attention. I think the Government and the Press between them have managed to make this question far worse than it was when it was first raised by the pensioners. That has been done by the Government themselves, and by the Press, not by the pensioners.

Let us have a little common sense in this matter. Whatever we do, claims will be put forward. As we know, they are being put forward now. The only effect of this act of justice, which will honour the old contract by which I hold that the Government are bound, will be that it will he an additional small and feeble argument in the negotiations that ensue. It will not have any effect on the final solution. When we are on the verge of a railway strike on the question of whether the latest concession shall be 4s. or 15 per cent., there is too British an air about saying that because we are never going to make any concessions we cannot do something which is clearly honest in this case. If your Lordships divide on this matter, I shall not challenge a Division. I hold the Government Whip sufficiently for that. It did not affect my vote on television. But if the House divides against the Government, I shall go into the Lobby for the implementation of what l hold to be a broken contract.

4.28 p.m.

LORD SCHUSTER

My Lords, your Lordships may well think that at this hour and after the lucid and persuasive speech of my noble friend Lord Jeffreys (I almost called him my noble and learned friend, after the way he stated his case), I am not going to trouble you with further argument. There are only two things I would say and it will take only a sentence or two in which to say them. First, I am clad that the tall: which we had on the last occasion about the difference between the meanings of "shall" and "will," which has been used outside your Lordships' House—the argument was a juggling with words which could have no other meaning—has been put aside for ever and there has been no argument on that interpretation to-day. The noble Lord, Lord Winster, asks how anyone could argue about the meaning of the contract, so-called, but I think that what my noble friend Lord Balfour of Inchrye had in mind was not the meaning of the contract, which is perfectly clear, but what are the legal consequences which follow from the words of the contract—a very different matter.

My second point is in a sense personal. I am a Civil Service pensioner, and if the Government were to say that they will increase my pension I should regard it as a gracious and a kindly act and would put my pride in my pocket along with the proceeds of the increase, and go away happy. But to suppose that my plea for compassionate increase stands on the same footing as the claim put forward now by these retired officers is fantastic. Such an idea could never cross the mind of anybody who had any sort of interest in the matter. I am receiving far less than in my optimistic days I thought I should receive when I came to receive a pension, because since then we have fought a big, victorious but disastrous war, and we have had six years of Labour Government. Those circumstances, of course, are the same for all people who have pensions. Nobody ever promised me that I should receive 9 per cent., 10 per cent., or any other percentage on what was attributable to me under the Superannuation Acts.

I believe that not only the noble and gallant Field-Marshal who, as a rule, replies to these debates, but the Government as a whole, are anxious to grant this request, but they have frightened themselves into believing that they cannot do it by bugbears which they have manufactured themselves, or which someone has manufactured for them. All this talk about lots of other claims is nonsense. Our case is this—and I say "our case," because, after all, I have worked on this question and thought about it so much that it has come to be as if my own—that a definite promise was given by His Majesty's Government in a certain year to the officers concerned, and that pledge has been broken. I do not stop to argue whether that constituted a contract. It constituted, to my mind, and to the mind of every person who has lived long years in the Civil Service, something much higher than a contract—namely, a pledge of public faith. It is only lately, to my shame, that I have heard like suggestions coming from various Government circles that public faith can be broken because it does not suit the Government to keep it. That is a fatal doctrine: fatal to the Government, and fatal to the Government Service. It is far more fatal than the breach of any contract that can be pursued in a court of law, whether in a High Court or a county court.

I must say that some of the arguments I have heard in support of the opposite view I should very much hesitate to address to any court, for fear of what the judge might say. There are very similar cases. It is a pledge that has been broken. I do not go into questions of hardship, or questions of distinction between civil servants and other kinds of servants of the Crown. I stand merely on this: that at a certain date, without any consent of the people concerned, and after many of them had altered their view and their actions by reason of the pledge, that pledge was broken. That is quite enough for me. That, to my mind, disposes of the whole case. I have listened with great delight and pleasure to what many other noble Lords have said on the subject, as they have elaborated it and pointed out the great consequences which arise from that breach of faith. This is a pledge, and in its keeping by the Government, whatever Government may be in power, all our people, whether they are previous servants of the State, as I am, or persons who are interested in the State because they are subjects of the Queen and responsible for their votes, whoever they may be, have a definite and intransient interest. When that principle is departed from, then I think there is an end, not only of our public faith as between man and man, but of our position in the world.

4.35 p.m.

LORD AILWYN

My Lords, I cannot feel that any words of mine can add much of value to the eloquence, earnestness and persuasive power of the speeches already made in support of this Motion. However, I wish in a few words to identify myself whole-heartedly with my noble friend Lord Jeffreys in the powerful case which he has made out, and to add my plea for a reconsideration by Her Majesty's Government of the wholly deplorable decision announced three weeks ago. I should have thought that, from the point of view alone of the new officer entries to the fighting Services, Her Majesty's Government might have been wise to have treated the matter of pensions and retired pay with a broader and more sympathetic understanding. My information, for what it is worth, is that neither in quality nor in quantity is the present intake entirely satisfactory, and that this state of affairs is directly traceable, at least in a large part, to the dissatisfaction felt about this matter of retired pay, and to apprehension of future prospects.

It should be clearly understood—and to stress this point is my main reason for intervening in the debate—that the Motion before the House asks for no favours, for no preferential treatment, nor the establishment of any precedent. It asks clearly and categorically for the fulfilment of a pledge—or rather, it regrets the failure of Her Majesty's Government to honour a solemn pledge made, in particular, in respect of a small and diminishing number of retired elderly officers, the majority of whom have taken part in at least two wars, and who to-day exist on pensions at 9½ per cent. below the 1919 level. Her Majesty's Government are, in effect, being asked at the eleventh hour to keep faith. That is the issue. It is as simple and clear cut as that. If my noble friend Lord Jeffreys, in default of a satisfactory reply from the Government, decides to divide the House, I shall certainly support him.

4.38 p.m.

VISCOUNT GOSCHEN

My Lords, this is not the first time I have had to speak on this sort of subject. I whole-heartedly support my noble friend Lord Jeffreys on his Motion. I do not altogether agree with my noble friend Lord Ailwyn, who has just spoken, about the present-day officers being bad, because I do not believe they are—I think they are jolly good, and they have done a jolly good job of work. Surely, this is not a question of pensions, but a question of the breaking of a contract. One reads in one's daily newspapers of girls who have been to Cyprus, whose contracts haw been broken, and who have been awarded damages for it. These wretched officers who retired under the 1919 Warrant did not receive any damages.

I have here the name of an officer (I will not quote it) who comes from the Home Guard battalion which I have the honour to command—and which, incidentally, is your Lordships' Home Guard battalion, and in case of emergency we will do our best for you—and the name of a further officer. They served in the First World War, and are both in the category which my noble friend Lord Jeffreys has described. There has not been any complaint from them. But in other walks of life contracts are broken, and immediately there is a claim of some sort, and possibly a strike. I feel that these officers have put up with a great deal. I could, if necessary, add hundreds of names to these of these two officers. These two men served in the First World War, one as a doctor and the other as an ordinary officer. They served also in the last World War, with their pensions still 9½ per cent. below the 1919 level. I think they did a jolly good job of work, and I feel that we should support the noble Lord's Motion.

4.40 p.m.

LORD GIFFORD

My Lords, I have little to add to this debate, and in the normal way, as everything has been said so well by previous speakers, I might have withdrawn my name from the list. But I regard this as no ordinary Motion. It relates to an injustice to a small body of elderly and now defenceless people—not, indeed, defenceless in 1914 to 1918, when they did a magnificent job. Therefore, I say that, even though one repeats the things that have been said before, every voice in this House should be raised on their behalf.

I have tried to look at this affair in the way I should look at it as chairman of a board of directors dealing with a pensions scheme in a company which I had the honour to control. Suppose some question came up for a review of our pension scheme, and we had with us a company lawyer who said: "Well, now, there may be a contractual obligation here for these pensions to rise with the cost of living but it is not at all clear, and I think that perhaps in a court of law we might well get away with it." What should we say? Of course, we should say, "It is obvious that the previous board of directors, twenty years ago, intended, when this scheme was inaugurated, that the pensions should depend upon and rise with, the cost of living, and we shall honour it." Perhaps the company lawyer might say: "You realise, gentlemen, that if you take this view it may be that it will cause claims for increases in pensions from Company XYZ"—another company in the group. What would our answer be? I think our answer would be, "That is a matter which must be dealt with as and when it arises; but it does not affect the case which we are considering to-day, on which we should morally interpret this pension scheme as being one where the pension depends upon the cost of living."

It has always been the custom of our democratic Parliamentary system that an injustice to anybody, however humble—possibly one single citizen of this country—should be brought out in the open in the House and the more humble and defenceless a citizen the more incumbent upon us it is to see that justice is done. Therefore, those of us who believe that these officers have been let down should speak out fearlessly. Surely it is significant that no fewer than sixteen Peers, not only from the Services, but from many walks of life and of different Parties, have spoken unanimously in the same vein. I hope that the Government will take notice of this strong and influential expression of opinion. If they do not, it is our duty to go on crying out loud. We appreciate the wonderful work which the noble Lord, Lord Jeffreys, has done in this matter, and I am sure that he will not let it drop until these 336 officers, or such of them as are still alive, obtain justice. Any time that the noble Lord raises this matter I shall be glad and proud to support him.

4.46 p.m.

VISCOUNT SIMON

My Lords, I have listened throughout this debate with increasing anxiety. Nobody believes more profoundly than I do in the essential attachment of the British people to fair play, and unless some quite convincing answer can be made which shows that all that has been said is wrong and ill-founded, I am coming to the conclusion that this question really does raise, as my noble friend Lord Schuster, says, a question of good faith. That is the most serious question that can ever be raised in connection with the administration of our country. I heard my noble friend Lord Jeffreys speak of a contractual claim, and one or two other noble Lords have referred to that. I find myself in complete agreement with what was said just now by Lord Schuster.

The issue here goes far beyond any question of whether or not there is a contract. It seems to me that the essential issue—on which I should like to hear the Government answer—is an issue of good faith. Did the assurance and the invitation which was given to these men necessarily imply a pledge? If so, I cannot brine myself to believe that a Government in which I have every confidence takes the attitude: "It is true it was a pledge, but we will not carry it out". That is a quite impossible assumption to make, and I therefore venture to ask the noble Earl, Lord Selkirk, who I understand is to explain the Government's answer (and it is high time that we heard what it is) whether he admits that there is involved here a question of public faith. If so, the question of whether or not there is a good answer in law to a claim which might be made by some aggrieved officer who asks for the pension to which he believes he is entitled is quite irrelevant.

The issue is an issue which goes far deeper than that. The issue is whether, in the government of this country, we are going to observe public faith. I cannot believe that the people to whom these offers were made, and who acted upon them, examined them like so many sea lawyers, arguing exactly what the effect would be and what their rights would be in a court of law. That is not the question at all. The whole subject disturbs me profoundly, because it strikes at the root of one of the fundamental convictions of every decent citizen. If there is involved in this question what the noble Lord, Lord Schuster, has called the question of good faith, legal considerations matter nothing. I cannot believe that the argument which will be advanced in answer to this claim is that to grant it would produce serious claims by other people. Suppose that I promise my gardener that the wage I pay him shall go up or down with the cost of living. If, after the cost of living has gone down, I say to him, "I have stabilised your wages" and he reminds me of my original bargain with him, it is no answer for me to say to him "My good man, what will happen if I keep my promise? The cock, the housemaid and the whole lot will all want wage increases, as well." This argument, I say, is no answer and every honest man knows that it is no answer.

I am quite certain that the Government of this country desire to do what is honest and fair, and I would defend them against all critics from the charge that they did not desire so to do. But I am most deeply concerned lest the conclusion hitherto announced n this matter should have been arrived at from considerations which are not really the considerations which should govern it. I cannot conclude without repeating to myself two lines written by Clough—in parody, if you like, of the Ten Commandments. The lines run like this: Thou shalt not steal—an empty feat When 'tis so lucrative to cheat.

4.52 p.m.

LORD CALVERLEY

My Lords, I have intervened in such a debate as this on several occasions previously, and I do not apologise for supporting the noble Lord who has introduced this Motion. Another reason for my intervention is that I saw the other day in a Conservative paper which claims to circulate "'twixt Trent and Tweed" a statement that Lord Jeffreys was pleading specially for officers who have £14 a week. Well, my Lords, whether it is £14 a week (and there may be one or two who do receive that amount) or not. I should not like this country to make invidious distinctions which tend only to breed hatred and malice. By warrant and by understanding, an officer is given a pension for services which he has rendered to his country; and I think we have got to honour the bill. When the Labour Party were in office I told them the same story, and I wish to emphasise it here to-day.

We have tried to do justice with that section of men whom we call "other ranks." When I was returned to Parliament in 1929 I was inundated with letters, and my time was very much taken up, on this subject. I gave my time very gladly to men who had served in the 1914–18 war. Those men had no pension because when they left the Service they never contemplated that they would at some later date suffer from that new engine of warfare which was introduced in that war—gas. But the older those men got, the more they were incapacitated, because of the state of their heart and lungs, for what they wanted to do, which was a good day's work. I went to see the then Minister of Pensions, Mr. Frederick Roberts, who took a great interest in the matter. We kept at him. At that time the law was that no pension could be reviewed after ten years. He eventually saw the fairness of the plea that these men had a right to bare justice. He went to the proper quarter and the Royal Warrant was duly altered. I believe it still remains as it was after that alteration, and that men can apply for their pensions to be reviewed after ten years.

Personally, I do not like comparisons. I well remember, very long ago, a Liberal Member of Parliament—I was then a fervid disciple of the Liberal Party—who said that £500 a year was sufficient pay for any man. This, I must say, seemed a lot of money to me, with twenty-five shillings a week. Later that Member was made a Cabinet Minister and received £2,000 a year. He resigned in 1914, and owing to the fact that his standard of living had gone up while receiving this higher rate of pay he found it difficult, he said, to live on the lower rate as he had done while he was an engineer. When I try to enter into the life of some of these officers I can understand that it is hardly possible for some of them, even if they do get £14 a week, to keep up their former standard in education and other things. On that ground alone—it is not a very high moral standard, but there is a certain ethical element in it—these gallant gentlemen who in 1914 I suppose had one "pip" should have their claim considered sympathetically. These young lieutenants—as many of them must have been in 1914—took the greatest risks: the mortality rate of second lieutenants in 1914–18 was greater than among other ranks because they were always in the forefront of the battle and not leading from behind.

A Government in 1935 presented those officers with whet I suppose the noble Marquess, Lord Reading, would call a fait accompli. They had a 9½ per cent. reduction on what had been stated in their terms of employment when they became officers. I cannot see how we can get behind that. I do not wish to emphasise the legal side, but I do wish to emphasise that, after thirty-four years, these gentlemen are a diminishing quantity, and, after thirty-four years, some of us feel that we should like a little more care and attention than we needed when we could run a hundred yards in fifteen seconds. They need the money even more to-day, after thirty-four years, than they did in, say, 1935. Some of us know something about the cost of living, but I am not going to refer to that. I do not like making comparisons.

I have spoken long enough, but I wanted to take part in this debate. I was permitted for nine-and-a-half years to be attached to Northern Command as an Army welfare officer, and it gave me an insight into the life and living conditions, not only of the officers but also of the other ranks. I should like Her Majesty's Government to take note of at least one positive suggestion from the Front Bench on this side of the House—and I cordially support it— that the Prime Minister, who also served in that war, when he resigned his seat in the Cabinet and went to France as a major, and who knows what he is talking about, ought to go and speak, if necessary, rudely (and he can be rude) to the Treasury and say: "You have got to reconsider this." If not, if the noble Earl, Lord Selkirk, wishes to take evasive action, I want him to get up and say: "We will appoint a Select Committee to reconsider this question and we shall not allow the attrition of death to solve the problem for us."

5.2 p.m.

VISCOUNT LONG

My Lords, I am sure that noble Lords in every quarter of the House owe the noble and gallant Lord, Lord Jeffreys, a great debt of gratitude for once again raising this important question in your Lordships' House. I speak to-night on behalf of many officers who live in my part of the world and who are suffering under this grievance or injustice, whichever you like to call it. I do not propose to detain your Lordships for more than a few moments. I hope that the noble Earl, Lord Selkirk, will deal with these points in reply. He has a difficult task and we, certainly I, offer him our sympathy, for he is himself a distinguished officer and must know full well what the feeling is at the present moment in many divisions up and down the land.

It does not do Her Majesty's Government much good when these 359 officers read different figures given by different Ministers of Her Majesty's Government. Many figures have been quoted, but I have yet another figure, that I do not think has yet been quoted. It comes from the Daily Telegraph of December 1 and states: "Officer pensions average £950 per annum." That is another figure that has been published, and it was given by a responsible Minister of Her Majesty's Government in an Answer to a Question in another place. I hope that, when the noble Earl replies, he will have assured himself from the Treasury, or from wherever it may be, that he has been given the correct figures, because if these figures are not correct to-night one cannot tell the damage that will be done in the country, for I venture to suggest that this debate will receive tremendous publicity.

Your Lordships have listened to some of the finest speeches I have heard on this question from the noble Lord, Lord Jeffreys, who introduced the Motion, the noble and learned Viscount, Lord Simon, the noble Lord, Lord Balfour of Inchrye, and many others. I hope that Her Majesty's Government and the noble Earl in his reply will take your Lordships into the picture. I agree with the noble Lord, Lord Schuster, and the noble and learned Viscount, Lord Simon, when they ask what on earth other groups have to do with this particular question. If they have, I hope the noble Earl, Lord Selkirk, will tell us. But, above all, I hope we shall not go into the Division Lobby. I should not be afraid to go into it if I thought it was going to do any good to the cause that we have so much at heart, the helping of these officers. But I hope we shall not divide. On the other hand, however, I hope that the noble Earl will consider seriously what the noble Lord, Lord Balfour of Inchrye, has said, and the suggestion that he has made. I conclude by reminding your Lordships that every year we celebrate a service to commemorate two world wars. We end that service by saying: "We will remember them." I venture to suggest that for many years that has been a mockery of these officers. I hope now that Her Majesty's Government will remember them.

5.7 p.m.

THE PAYMASTER GENERAL (THE EARL OF SELKIRK)

My Lords, my first task is to express the regret of my noble and gallant friend Lord Alexander of Tunis, who is away in Paris at a N.A.T.O. meeting, that he cannot be here. This has been, if I may say so, a most unusual debate because it has been an attack from all sides of the House, not particularly on the Government, not on any Government, not indeed on any Chancellor of the Exchequer, but virtually on a Department; and, in particular on a decision made by Mr. Ramsay MacDonald when he was Prime Minister of the National Government in 1932. What is interesting is that I find a former member of that Cabinet, the noble and learned Viscount, Lord Simon, raising doubts as to what has happened.

I am not really interested in defending Mr. Ramsay MacDonald, but I think that in fairness to the House—and I may be rather long on this—an explanation is needed. Frankly, I think that a considerable explanation is needed. I have not interrupted noble Lords, but a considerable number of very wild statements on the facts have been made. Moreover, the matter is somewhat complicated. The Motion of the noble Lord, Lord Jeffrey's, mentions three things. First of all, let me take the word "legitimate," which indicates a breach of faith. I hope to show your Lordships that there is no breach of faith at all in this matter. Secondly, it deals with the question of stabilisation. I hope to show your Lordships that that was not only right in principle but was, in fact, not unpopular to those immediately concerned at the time. Thirdly, the Motion deals with the question of the relationship of this claim to other factors.

To anyone listening to this debate it is pretty obvious that the implications which arise are fairly wide. The noble Lord, Lord Winster, for instance, mentioned that other just claims should be granted. When you come to social justice and try to grant all just claims, there is really no limit to where you might go. The noble Lord, Lord Thurlow, I thought, made an excellent speech, a typical example of brevity and clarity which this House enormously enjoys. But he mentioned the whole question of Service pay and retired pay generally, which is very much outside the point which my noble friend Lord Jeffreys is making.

I should like to say one thing personally to Lord Jeffreys. The noble Lord has pleaded this matter with great sincerity and feeling. He is, of course, speaking of the 1914 war. I come of a generation which knew not the Somme or Passchendaele, hut I was old enough to learn or to know of some of the echoes of those events, and I assure him that there is no generation which holds in such high regard those who took their part in the burdens and dangers of those days as my generation which, with the exception perhaps of aircrew, has not been called upon to bear any burdens or dangers of that character. I should like also to say one thing to the noble Lord, Lord Nathan, who spoke from the Front Opposition Bench. He suggested that a Select Committee should deal with this matter. Of course, the real basis of the trouble here is inflation. Inflation is a malady of the worst character. I do not suggest that the Labour Government wanted inflation. What I do suggest is that they were not prepared to make the sacrifices necessary to stop it. That is the trouble. To stop inflation and to maintain a level standard is a very difficult thing indeed, and, quite frankly, I see no point in having a Select Committee on inflation. What we want to do is to try to avoid anything of that sort.

I have to examine the actions of Governments over the last thirty years, because I find that when Mr. Lloyd George introduced his Pensions Increase Bill in 1920, and when Mr. Ramsay MacDonald introduced another Bill of that character in 1924, precisely the same arguments and complaints as have been used to-day were used with regard to pre-1914 pensions. I am interested to find that when the Labour Government came into power they wanted to abolish the Means Test, but they found that they were quite unable to do so. I say that to show that in point of fact this situation is not absolutely new. After the 1914–18 war a new pay code was introduced. I am going to suggest to your Lordships that even a superficial reading of that will show, first, that it was introduced specifically to deal with the high cost of living then prevailing; secondly, that there was power of revision; and thirdly, that events showed that it was withdrawn because it was not wanted—it was withdrawn after the Royal Commission, under Lord Tomlin, had said that the further continuance of a parallel system in the Civil Service was open to objection for a number of reasons, and the decision to abolish the system was applied to all Services of the Crown.

The 1919 code was introduced by Royal Prerogative. I am informed that in the Navy it is called an Order in Council, in the Army a Royal Warrant, and in the Air Force an Order. I am afraid that I shall just have to read from these documents, and your Lordships can judge—because this is where it should be judged—whether or not you think this is a breach of faith. This is what the relevant paragraph in the Order in Council for the Navy said: The rates of full pay, unemployed pay, half-pay, allowances and gratuities, authorised under these regulations to be subject to review on or after 1st July, 1924. That is the only part I can find in that particular document which has any relevance; that is the governing passage there. The Army Order says this—and perhaps I may here finish what the noble Lord said: The new rates…are granted in consideration of the present high cost of living and the rates of pay, half-pay and retired pay will be subject after five years to revision either upwards or downwards to an extent not exceeding 20 per cent. as the cost of living rises or falls. After the 1st July, 1924, a further revision may take place every three years. I should have said that that quite clearly shows the prospect of revision.

The Air Force document is even more specific. In paragraph 7 of Order 1003 of 1919, one finds these words: The new rates of pay and pensions have been drawn up in the light of the present high cost of living"— the documents keep referring to the high cost of living— and it has therefore been decided that 20 per cent. of the rates should be regarded as detachable and liable to alteration either upwards or downwards according as the cost of living rises or falls. In paragraph (9) (c) the Order goes on to say: No officer shall be entitled to claim hereafter any pay, pension or other advantage conferred by any provision in this scheme in the event of any such provision being at any time added to, varied or cancelled. It must be clearly understood that while every consideration will be given to the reasonable and legitimate interests of individuals, it will be competent for the Air Council at any time to modify the administrative regulations under which the emoluments of the Royal Air Force are drawn. I should have thought that, beyond peradventure, the power of revision was very clearly set out in all those instruments, and I think it is a fair reading of the situation in 1919–20 to say that those in charge were in great difficulty, because in the past five years the cost of living had doubled and they thought it necessary to introduce special provisions. The method adopted in the Civil Service was by way of bonus, whereas in the Army Service it was done by variation of the top 20 per cent. of pension which, as the Air Ministry Order says, was "detachable." That really is the way to go about it. The noble Lord, Lord Jeffreys, was really comparing things as between the Services. That is a difficult thing to do.

LORD SALTOUN

Does the noble Earl say that the subsequent revisions after 1924 were not influenced by the 20 per cent, at all, but were absolute revisions and not related to the cost of living?

THE EARL OF SELKIRK

I am not saying that at all. I am coming to that in a moment, and I shall explain in detail, when it was brought to an end quite definitely. August, 1932, was the date when this system of relating it to the cost of living was dropped. I shall show, in point of fact, that ample warning was given to that effect. What I wish to emphasise is this: that if this variation had not been introduced to meet the cost of living, then almost certainly the rates of retired pay in 1919 would have been set at a lower level. I take as my authority for that what was said in the May Report in 1931, in which this whole question was examined—namely: We cannot overlook the fact that speaking generally the present basis of pay…was fixed in 1919 or 1920 when, following the victory of the Great War, exaggerated notions were held of the future prosperity of this country. The point is that the cost of living fell steadily until 1933. It is interesting, perhaps, to consider that it fell somewhere approaching 50 per cent.—that is, taking it from the highest point in 1920 to the lowest point in 1933. If we were to compare figures relating to to-day, we should see that since 1945 there has been a rise in the retail prices of something approaching 50 per cent., so we are living in circumstances which are very different. In 1924, there was a cut of 5½ per cent.; further cuts were made, of ½ per cent. in 1927; 1 per cent. in 1930. And the total cut became 8 per cent. in 1931. The point which I think the noble Lord is making is that these figures were a smaller reduction than could have been carried out according to the mathematical formula—

LORD JEFFREYS

Did not the rates fall at one time by 11 per cent.?

THE EARL OF SELKIRK

The noble Lord is quite right. I am being very slow, but I think it is important that this matter should be dealt with carefully. I am not trying to hurry. Then, as the noble Lord will remember, in 1931 there came the economic crisis; and, as a result, under the May Report a further reduction was made bringing the cuts to 11 per cent., when the mathematical formula would still have permitted 11½ per cent. It is important in this respect to remember what the May Committee said about the cut which they recommended. They said that they regarded the readjustments imposed on pay and pensions not as sacrifices necessitated by national financial stringency but as readjustments necessary to establish fair relativities over the field of Government and local authority servants and wage earners generally. I recall that to show that that cut was not made on grounds of financial stringency, but with a view to establishing fair relativities as such.

On August 3, 1932, the Government announced their decision, following the recommendation of the Tomlin Report, to stabilise the pay of the Armed Services and the Civil Service. The stabilisation or consolidation was strongly recommended to this Committee by the Whitley Council of the Civil Service. That stabilisation was carried out in three stages. For officers, the first stage—that was from 1932—was a stabilisation of the cut for two years at 11 per cent. In April, 1934, the reduction was abated to 10 per cent., and in the following year, on 1st July, the rates were stabilised at 9½ per cent. below the levels of 1919. I should like to emphasise this. It has sometimes beer said that notices in this matter were sent out in a peremptory fashion. I have here a notice which was sent out as far back as 1932. I should like to draw the attention particularly of Lord Saltoun to this. This matter could have been raised years ago when Parliament, it is fair to say, could have made itself felt. There is not the slightest evidence that Parliament objected in any way that measure of consolidation at that time. It is no business of mine to defend the late Mr. Ramsay MacDonald and his Government, but those are the facts of history. They show that this matter was not raised in Parliament at the time and that on the whole this stabilisation was favourably received.

In this connection, one must remember the situation which existed in the early 1930's. Prices had been going down steadily. Who knew what was going to happen in the future? May I for a moment pause to deal with the details of just how that figure of 9½ per cent. was reached. The index figure, in fact, stood at 140, and the full effect of the mathematical formula would have been a cut of 12½ per cent. In fact they took a bogus figure of 155—that was more favourable to the officers— and on that the formula would have given a cut of 10 per cent. As the officers were already suffering a 10 per cent. cut the final rate was fixed at 9½ per cent. The implementation of this decision was delayed for reasons of cost "until the national finances permit." The Government decided that they wanted a delay for twelve months. That: shows it was neither a cheap nor in any way an easy method of passing the whole thing off.

The noble Lord who moved this Motion has emphasised that the civil servants are on a different footing. If I may say so, it has been the policy of Governments for a very long time to put the Civil Service and Service pensioners on broadly the same footing. But it is impossible to compare them exactly. There are hundreds of circumstances which are different on both sides. It is very easy to twist circumstances either one way or the other. What I can say is that, by and large. Civil Service pensioners were treated in the same way after the 1914–18 war as Service pensioners. They were subject to the same kind of variation, and I am told that by I the year 1928 there had been sixteen adjustments to their salaries. Your Lordships can imagine how popular that would be, as most of those adjustments were necessarily in a downwards direction. The Tomlin Commission reported that in a space of twelve months, during which the cost of living had fallen 15 per cent., there had been reductions of salaries among the civil servants amounting to £5 million—that is to say, 8 per cent. of the total remuneration of the civil servants concerned. I mention that only to emphasise that the purpose of this is to keep the Civil Service in line. But there are many differences, as I have said. For instance, at that time, an officer could retire after fifteen years, whereas no civil servant got a pension until he was over sixty years of age. And there are many other differences of that character which make it impossible to put the two on entirely the same basis.

It has been suggested that these officers were never properly consulted. I say that they were warned in 1932 what the position was, and in the Service Departments are people whose specific job it is to look after the interests of those existing pensioners. It is their job very much more than it is the job of the National Whitley Council to look after the interests of existing Civil Service pensioners, whom they do not in fact represent at all. It is not common for people to be, still less to say that they are, content with their rate of pension. It is quite outside the Treasury experience ever to get a letter of thanks in this regard. But looking at it from a purely negative angle, there is very little doubt that the sliding scale system was unpopular and gave rise to a great deal of discontent. There is negative evidence in this sense: that Parliamentary Questions after stabilisation fell right away. Without trying to put it too high, I think it is fair to say that that action at that time was an improvement and was generally recognised as such by all concerned. This at least is true. I have done my best to ascertain the facts and it seems that no one raised any question about this stabilisation, so far as I am aware, for the eight years from 1935 until the latter part of 1943.

LORD SALTOUN

I beg the noble Earl's pardon, but the letter which I read was dated 1935.

THE EARL OF SELKIRK

I appreciate that there may have been letters written at that time, but I am not aware that any matter connected with this question was raised in Parliament. Obviously, I have not been able to trace every pensioner's letter to the Admiralty, the War Office or the Air Ministry at that time. But, as I have indicated, by and large, there was no broad Parliamentary pressure up to that time. I am sorry that the noble and gallant Lord, Lord Chatfield, is not here. I see that he has called this settlement a "smart financial deal." Of course he was First Sea Lord, and so was a consenting party. He must have given his assent when the Orders went out from the Board of Admiralty at that time dealing with this matter.

One further point. There is some evidence that the Service Departments would have been disturbed if the consolidation made at that time to Civil Service pensions had not been extended to retired officers. It has been suggested that there is in the Treasury someone deeply versed in magic, someone with devilish foresight who could foretell the future and see what was going to happen: that this person could see what was going to happen to the rates of money, could foresee the events which we are talking about. In August, 1932, six months after Hitler burnt the Reichstag, who could foretell that there was going, to be rearmament, that there was going to be a war, and that in 1945 there was going to be a Socialist Government in this country? My Lords, it is quite incredible that anyone at that date could have foreseen the series of events that were going to take place. I do not think it is possible to say that if there had been rearmament, necessarily there would be inflation. That, again, is the sort of fact that we are inclined to understand more in post-war years than we were in prewar years. I have said that people were able, at the time the decision was made, to object if they did not like it.

Whatever the exact number of officers—I am not to be drawn on figures, but the number still on the 9½ per cent. cut is somewhere between 300 and 400; and there are some Indian Army officers concerned as well—I can say that none of these officers concerned joined under the 1919 code. They joined under the code which existed before 1919, so that in any case the 1919 code is an advance on the conditions under which they joined. Further, no one who entered under the 1919 scheme has suffered any reduction in the initial award of pension; and in some cases they have had increases. I suggest that everybody who entered while the 1919 code was in force has a pension now under the 1945 scheme. I cannot say absolutely, but I am pretty certain that that would be the case

VISCOUNT GOSCHEN

May I ask the noble Earl what was the average life in action of those pensioned under the 1919 code?

THE EARL OF SELKIRK

I cannot say without notice.

VISCOUNT GOSCHEN

I think I can possibly tell your Lordships.

THE EARL OF SELKIRK

I shall be glad if the noble Viscount will do so.

VISCOUNT GOSCHEN

It was about fifteen days.

THE EARL OF SELKIRK

During the debate no one has mentioned a word about the improvements in conditions for pensioners during the war and since. It is a pity that this aspect has been missed out, because it is a relevant factor in the matter. I will mention these only briefly. Since 1945, all officers retired are retired under a new code and the qualifying period was changed from fifteen to twenty years. The pensions of those who retired under previous codes were further improved under the Acts of 1944, 1947 and 1952. The real gravamen of this charge is that there are some people who have not received anything at all since the 1935 stabilisation. The figures which answer that have been published and your Lordships know them. I need not go into them again. Virtually, nobody receiving under £400 a year has not received the full amount, except for about £1 on average, which was receivable under the 1919 code. That amount tapers off and, according to the figures I have here, disappears altogether at £787 10s.0d.

I should like to move now to the question of principle. There are two ways of altering a pension scheme—either by having a sliding scale, based on the cost of living, or by adapting the system to meet hardship. Except for a short period after the First World War, it has been the invariable and unbroken practice of every Government to base all pensions on a cash figure calculated on service and rank, and to modify it only in clear cases of hardship. This is what was done in 1920, and it applies not only to Service officers and civil servants, but to the whole range of traces and professions, such as firemen, police, teachers, nurses and others in similar categories. Let me give one or two quotations to show how fully this principle has been carried out. First of all, I should like to quote Sir John Anderson, now Lord Waverley, speaking on the Second Reading of the Pensions Increase Act, 1944 He said this: Nor, I suggest, is this a time for departing, in such a matter, from the basic principle that financial assistance given ex gratia, not as a right, must he concentrated on cases of real and proved need. Mr. Pethick-Lawrence, now Lord Pethick-Lawrence, speaking on the Committee stage of the same Bill, said: There are large numbers of people…like employees of private concerns, who get no increases to meet their responsibilities, and others, who are all going to be taxed, in effect, to meet this concession. I am not prepared to push the ceiling up to the sky…I support the argument, within limits, for not raising the ceiling any further. Then Mr. Glenvil Hall, speaking on the 1947 Act, said: Neither, measure"— that is, neither the 1944 nor the l947 Act— attempts to alter the general structure of the superannuation code. Increases in pension rates have been given and are justified on the basis of the substantial rise in the cost of living which has taken place as a result of the war and the hardship caused to those on relatively small pensions. Speaking on the Second Reading of the Pensions Increase Bill last year, Mr. Boyd-Carpenter said very much the same thing.

The reason why we have taken this line is not because it is a fad of the Government; it is because the cost to the Government otherwise would be very heavy, and it is obvious that such a cost would have to be covered by taxation. Those who fall into the full rate of income tax would lose as much as the benefit they are seeking to gain. If we had salaries and pensions geared to the cost of living, that would tend more and more to defeat its own object by adding force to any inflationary element which might exist in the economy. Finally, in a heavily taxed State, such as we are to-day, one of the central problems is to avoid the constant and repeated danger that the less well-to-do will be taxed for the benefit of the more well-to-do.

I should like to apply this to what is happening at the present time. I think it is generally agreed that one of the Government's greatest achievements has been to level off the rise in the cost of living. In order to maintain that, there is no shadow of doubt that we shall have to make sacrifices, and no one is likely to gain more by maintaining a steady level of prices than the officers who are immediately concerned in this debate. In the last Budget we took 6d. off the income tax. That meant a relief to these officers of the same order as the benefit given by the pension increases under the Act of 1952. To-day, we are in a very difficult budgetary position. The Government have to consider many claims, and there are others with fixed incomes before the war who are equally badly off. Therefore, it is difficult at the present time to restore a cut of 9½ per cent. which would mean giving a senior officer, perhaps £133 a year, when the maximum given under the Act of 1952 to an officer in much less favourable circumstances is one-fifth of that.

I should like to outline what the Government have sought to do for ex-Service men. There is no doubt that we should all have liked to do more, but I would remind the House that pensions to widows of officers have been increased by sometimes as much as 100 per cent. The means test has been abolished and for the first time in history ordinary pensions have been introduced for the widows of long-service men. There have been increases in certain circumstances in the pay of retired Regular officers in the lower ranges. There has been an increase in the basic rate of war-disabled pensions which I believe is the biggest increase ever made. I should further like to point out that the reduction in taxation since the Government have been in power means that a retired officer with £600 a year has a rebate of about £35 if single. £29 if married. A retired officer with £1,000 a year has a rebate of £53. I think it is a pity that the noble Lord. Lord Jeffreys, should say that it is the view of anybody that officers do not matter. I should also mention that there has been an increased use of retired officers in Government service. Perhaps that does not affect the older officers, but it does affect those of middle age.

We have had a good many debates recently which have turned at the end on the question of increased Government expenditure. We had one on smoke pollution; we had one on increased fuel efficiency: and we had one on increased allowances for the Merchant Service. These, of course, are all important matters. If it is the will of Parliament that the Government should spend more money, then eventually they will find a Government which will spend more money; I do not want there to be any illusions about that. If pressure is brought to spend money, then it will be spent; but the only way in which more money can be spent is by taking it from the taxpayer. I feel that those who press for relief in these things must give full weight to that type of consideration. This has been a hard decision for the Government, because they recognise the immense service that these retired officers have given to their country. It has been hard because of the marked fall in the value of money, and the increased cost of living which this country has experienced since the war. The Government recognise completely that these men are worthy of the fullest regard, and deserve the greatest consideration of the country. They are willing to undertake that, when they are in a position to consider any amelioration of hardship, and of remedying what some officers feel to be injustices, and to relieve burdens, they will give a high priority to the consideration of the cases which the noble Lord has in mind. I hope that, in these circumstances, the noble Lord will be able to withdraw his Motion.

LORD WINSTER

My Lords, before the noble Earl sits down, would he kindly clear my mind upon one point?—and I ask this merely for information. I understood the noble Earl to say that for a certain number of years the Government adopted the procedure of regulating retired pay in accordance with the rise and fall of the cost of living, and then at a certain date they abandoned that procedure, stabilised pensions, and said that in future retired pay would have nothing to do with the rise and fall in the cost of living. The question I should like to ask is this. Does the noble Earl feel that to adopt a new procedure in regard to officers who would be affected by it after that date absolves the Government of a breach of faith to officers to whom a pledge was given before that date? I hope I have made the point clear.

THE EARL OF SELKIRK

I have tied to follow the noble Lord. I hoped I had explained the point. What the noble Lord says is quite true. For a period the Government had a sliding scale. Then, in 1932, they terminated that arrangement. I read out the articles concerned, and I thought that all the articles from the three Services quite clearly left the right of revision there. May I give a simple example? Suppose I am going to employ someone at £500 a year: if I am going to increase that salary I do not need to put in a "subject to revision." But if I employ someone at £500 a year, and say, "subject to revision," then the implication is clear.

LORD WINSTER

My point was whether the adoption of a new procedure justifies the Government in the abrogation of an undertaking given under the, old procedure.

LORD SALTOUN

That was just the point which I made. Was the subjection to revision tied to the cost of living, or was the final one an absolute one?

THE EARL OF SELKIRK

I have not quite got the noble Lord's point. He asks whether the final revision was tied to the cost of living. I showed at some length that it was connected with the cost of living considerably to the advantage of the officers concerned in 1935, in the sense that it was tied to the cost of living until that date, or at least, roughly adhered to. In point of fact, it worked out at a figure which was considerably above the cost of living as operating that date.

5.45 p.m.

LORD JEFFREYS

My Lords, I can only say, in the first place, that the reply of the noble Earl has been to me, and I am sure to many other noble Lords, profoundly disappointing. I should like to touch on a few of the points he has made. He repeated, in spite of what I said, that the stabilisation was not unpopular. I repeat that it was terribly unpopular. I agree that a few ex-officers may have said they were sick of variations of their pension, but they certainly did not contemplate that the pension would be stabilised at well below the par value. The noble Earl said, also, that officers were consulted, and agreed to it. They certainly were not consulted; the great majority of them knew nothing about it. I believe he said, too, that the stabilisation in 1935 was at a higher level than the cost of living justified If so, it was only, on his own showing, when he was questioned, about 1 per cent.

THE EARL OF SELKIRK

Three per cent.

LORD JEFFREYS

With great respect, my recollection is that it was by one per cent. The cut could have been 10 or 11 per cent., and it was actually 9½ per cent. Is that not correct? The fact was that the bottom of the fall in the cost of living had been reached, and the cost of living was beginning to rise. We all know how it has risen since, and what has been the fate of these people whose pensions were stabilised. The noble Earl then mentioned that Parliament did not object. In 1935 I was not in Parliament, and I do not know what happened, but I think the noble Earl also said—I say this only in mild correction—that the matter was never raised until 1943 or 1944. I can only say that I raised the matter myself in another place, certainly in 1942, and think in 1941. Then the noble Earl talked about the increases given to officers under the Pensions Increase Act. Increases were given to some very low pensioners, but I would remind the noble Earl that the increases given were a percentage of their reduced pensions as stabilised in 1935, and not an increase of the full pension to which they were entitled under the 1919 Code; and I repeat what I said in my original speech, that civil servants had increases as a percentage of their full basic pension.

The noble Earl then mentioned the question of the rightness or wrongness of pensions fluctuating with the cost of living—I believe he said it was wrong that they should. All the fluctuation so far has been downwards, and the Government deliberately decided in 1919 that this fluctuation with the cost of living was a correct principle. That was decided by the Government of that day, and it seems odd that it should now be stated strongly that it is not a correct principle. I would remind the noble Earl that the person who signed the 1919 warrant was the present Prime Minister. If the noble Earl were to go to him and ask him whether he thought it was entirely wrong in 1919, I do not know what answer he would be likely to get. Actually, what happened, I believe, was that when it was convenient to the Treasury the cut was made.

The increase of pensions to officers' widows was also referred to by the noble Earl. Nobody is more grateful that that should have happened than I am, though it was not on a very generous scale. I often urged that increase in the other place. He also mentioned the increases to the war disabled. Both those increases were necessary, and public opinion strongly demanded them. The noble Earl further mentioned the improvement in Service conditions. Whether that is relevant, or not, I think it is questionable. I wonder whether the officers, let us say, who are now serving in the Suez Canal area would say that there was an improvement in Service conditions—no barracks, no messes, separation from their wives, who are not allowed to go there, and continuous separation from their families. I should say that Service conditions are far worse than they were before the war. Barracks have not been improved anywhere. They are as bad as they can be in many cases and nowhere worse than here in London. No, I do not agree that improvement in Service conditions has actually happened or that it has any relevance with regard to the question of whether these officers have or have not the right to their pensions. We contend that they have, and the Government pledged their word to the provisions of the Royal Warrant of 1919. The fact remains that the Royal Warrant, when convenient to the Treasury, was jettisoned, and that is about the length of it.

I have discussed with some of my noble friends whether or not I should ask leave to withdraw this Motion or whether I should divide the House. I started with the conclusion that if we were offered anything I would not divide the House. The noble Earl has offered a high priority for this matter. What that means I do not know, but I take it that that is an offer that it will be considered again and will be given a high priority. I confess I am extremely doubtful about this question of expense and extra taxation. The cost of fulfilling your bargain with these officers would be trifling when you consider that you are throwing money about to everybody who asks for it, and particularly those who ask for it with a threat, as is being done now outside. There are many expenses of government which could be and ought to be cut, and I think it is—I am sorry to use the expression—meanness on the part of the Government and the Treasury to select this small body of officers as the victims of their misplaced economy. Nevertheless, in the circumstances, and having said that, I ask leave to withdraw my Motion.

Motion, by leave, withdrawn.