§ 3.50 p.m.
§ Debate resumed.
My Lords, I wish to say a few words on behalf of noble Lords on these Benches. I suppose that I ought to declare an interest, though a vicarious one. I have no pension, but I have a son and two grandsons who are looking forward some day to drawing pensions. I wish to add only one point to what the noble Lord, Lord Jeffreys, has said: and may I say that, as your Lordships know well, there could be nobody more competent or better qualified than the noble Lord to raise the point? Whenever I speak to young officers or any young National Service men advising them to become regular soldiers, I always receive the same answer—that the Service offers no financial future On which a man can live and bring up a family. It is a really important point, and I hope that the authorities will bear it in mind. When so many occupations in the country are being paid what is called a living wage it is a great misfortune that the Services of the Crown should have the reputation of giving to those who serve in them an inadequate pension.
§ 3.51 p.m.
§ LORD CHATFIELD
My Lords, I should like to support everything that the noble Lord, Lord Jeffreys, has said in moving his Motion to-day, and I should like to express to him on behalf, at any rate, of the Service to which I have the honour to belong, our deep appreciation and gratitude for what he has done, not only to-day but on previous occasions, to fight the battle of the old, retired officers, a battle which has already had some effect. I am sure, the noble Lord will realise that he has earned the deep gratitude of hundreds of retired officers and their wives and families. How sad it is that the noble Lord, Lord Jeffreys, should have to move such a motion to-day at all! How sad it is to think that in these days retired officers should have to group themselves together to form associations, such as the Officers' Association and the Officers' Pension Society, in order, in their own words,to ensure that officers' interests are not neglected by the State, as has been customary in the past"!Speaking as one who is not in receipt of a pension, and who therefore has no personal 1106 interest in the matter, I would ask: Is it not a blot on the administrative record of the country that old, loyal, State servants should have to create such societies in order to obtain justice for their brother officers?
I find deep feeling among retired officers and their families and, like many of your Lordships, I have had many pathetic letters from them, always couched in a reasonable tone and with an understanding of the country's financial difficulties. Such letters have expressions like this: "Is it just that the State should not carry out its 1919 contract?" Or another, from a wife: "One feels that one has been cheated." What we are up against to-day is not Governments or personalities, although the Governments of both Parties have so far been unable to accept the requests of the Services for justice to their retired officers. What we are up against is certain Whitehall principles which govern everybody who has to speak in their name, and it is about those principles that I should like to address your Lordships this afternoon. I am not going to follow the noble Lord, Lord Jeffreys, into the detail of these matters, because after his clear and admirable speech that is unnecessary.
The first phase to which I would refer is the fixing of the pension rate in 1919 at the 1914 rates of pay plus a 20 per cent. increase for the cost of living, to vary up and down with that cost of living, as has been said. It has been claimed that the 1914 rate was a fair basis. But I would call your Lordships' attention to a fact that may surprise you—namely, that the rates of emolument for Service officers in 1914 had not been changed for between eighty and a hundred years. Do your Lordships realise that it was not until 1840 that the Duke of Wellington set up a committee in order that he might represent to his then Majesty that the pay of lieutenants should be (as he called it) "substantially increased" to 10s. a day? His Majesty graciously approved that suggestion, and that 10s. a day remained as the pay of the lieutenant in the Navy until 1920, eighty years later. It may surprise your Lordships to know that the emolument of a Flag Officer in the Navy was settled in 1816 and, again, was not altered until 1920. It has been calculated that if the emoluments of the Services in the nineteenth century had 1107 been increased steadily, as time went on, in accordance with the cost of living, and the salaries, wages and everything else in civil life, the rates of pay for the Services in 1914 would have been nearly doubled. Your Lordships will see, therefore, that in 1919, when for the first time for almost a century the pay and pensions of officers were slightly increased, the lowest possible basis was taken on which to establish those new rates. Thereafter, as the noble Lord, Lord Jeffreys, has told your Lordships, up till about 1933 or 1934, the cost of living fell, and the pensions fell also.
The second phase to which I would refer is the 1935 phase, when, by what can only be called a smart financial deal, the pensions were fixed, at a time when the cost of living was almost at its lowest point for twenty years. And no longer were the pensions to be raised or lowered according to the cost of living figure. Possibly it was not obvious to the Government, or to those who were trying to hold the defences of the Services against the Government, that the cost of living was soon to rise steeply, or that a Second World War was coming which would increase the cost of living by 60 per cent. Fortunately for the taxpayer, the State is advised by a very astute and able Department. But there was no doubt, as the noble Lord, Lord Jeffreys, has said, that in 1935 the State started dealing again with the old retired officers on the principle of "Heads I win, tails you lose," and the retired officers have lost ever since. Was that a wise or a fair policy? Surely, when the cost of living soared, the State, as a model employer, should automatically have increased the pensions of the old officers who were so faithful and loyal and who had fought for their country and devoted their lives to its service. It should have happened automatically. The State should have looked back and said: "It is impossible to leave these old officers on their scales of pensions when the whole world is upside down and the cost of living has soared to mountainous heights." Is it not unbelievable that these retired officers should have been told that pensions, lower even than those at the 1919 rate, would remain so up to the present day because, as these men have been told in answer to 1108 their letters of protest, it would increase the cost of living and cause inflation to raise them? I notice that that has not been said about many other increases of a far greater and more expensive nature which have been made in recent years.
The third phase was the 1946 phase, when a new and better pension code was introduced. The State refused to apply it retrospectively to those who had retired before that year. Not to make that new rate of pension retrospective was to heap insult upon injury to the old 1919 type of officer. It was truly an act of great injustice to those pensioners. Can one imagine, for instance, a rise being made in the rate of old age pensions and it being made applicable only to the new aged and not to the old? But that is exactly what has happened in this case. Would there not have been an outcry throughout the country? Would such an Act ever have passed through Parliament? It is amazing that, with that example, the Government should still refuse the justice for which we have asked for so long.
The last phase was the 1951 phase, when a further increase of pensions was made for officers retiring after September, 1950. That, also, was made non-retrospective. The interesting point is that the reason which was given in 1950 for increasing the rate of pension which had already been increased in 1946 was that it was to stimulate recruiting. But why was it necessary to increase the rate of pension in order to stimulate recruiting? There can be only one reason—that the pension was not considered good enough by the ordinary man. So it was increased. Yet the old officers were left on the rates of thirty years before.
I should like to say a few words about what is called the non-retrospective principle. That brings in the objectionable principle which they have in the Treasury of "drawing the line." It is very necessary to draw the line on certain occasions, but it is wrong, unsafe and unjust to apply that principle to people's salaries in such a way as to create an unevenness and give a sense of unfairness to those to whom it is applied. I had a letter this morning from an officer in one of Her Majesty's Services, who writes: "I had to retire fifty-five days before the line was drawn. Consequently, for the rest of my life I receive £100 a year less 1109 than I should if the rule had been made a bit later. Not only that, but as I had to educate my children I had to commute £100 a year of my pension, and so I am £200 a year down on what I might have been." That is an example of the evils of non-retrospection. Another evil is the thoroughly wrong example the State gave to the country when in 1935,they made the new rates of pension retrospective to the officers who had retired before 1935. If the non-retrospective action had been carried out then, the officers who had retired before 1935 would have had their pensions left as they were or, the 1919 rate, plus the cost of living increase in accordance with their agreement. But on that occasion the State said: "No, we cannot afford to lose by non-retrospection. We can bring in that principle only when it is to the advantage of the State to do so." That is the only possible conclusion that any man can come to.
The noble Lord, Lord Jeffreys, stressed the point that the original agreement in 1919 included the word "will." The word "shall" was issued in Naval and Air Force orders. The Naval order used the word "will" when it first came out; the Air Force order was issued in 1924 with the word "will" and not "may," as was the Army order of 1931. As the noble Lord explained, the original order having stated that "pensions will be changed" according to the cost of living, showed that there was a definite contract with those officers that for the rest of their lives they would have their pensions raised or lowered with the cost of living. Therefore there has been a breach of contract. When the Parliamentary Secretary to the Ministry of Defence said in another place last November that the non-retrospective policy had been consistently followed, he uttered what would appear to most people, to put it mildly, to be a terminological inexactitude.
Now I want to say a word about the two excuses which have been made by successive Governments for not giving these increases in pensions. The first is the excuse that to increase retired officers' pensions would mean reconsidering other State pensions. The noble Lord, Lord Jeffreys, has already dealt with that matter but I should like to add this: it is absolutely unimaginable how the State is able to say that a cast-iron principle governing pensions, pay or anything else 1110 in a service like the Civil Service must apply also to all the fighting Services. That has always been one of the snags in Whitehall, as I know well. You cannot compare the two forms of living. The civil officer lives a steady life in the same area—probably in the same building—until he is sixty or sixty-five. Whether he is ill and whether he does his work well or not so well, there he remains, and he does not retire on his pension until he is sixty. He is able to educate his children and put money by and get everything finished before retiring. And when such a man retires he has money in the bank. Good luck to him! But how different is the Service officer's life—wandering about the world, never knowing three months ahead where he and his family will be, unable to buy a house, and then, perhaps, having to retire, as 50 per cent. or more do, before he is fifty. He has still to complete the education of his children out of his pension. As I have explained already, one officer has written to me to say that he had to commute his pension to complete the education of his children. It is no answer to say that it is impossible to do justice to retired officers because that would mean raising other pensions, any more than it would be relevant to say that it ought to be done because it has been done in the case of old-age, pensioners. The things are quite separate.
Then there was the statement made by the noble and gallant Earl, Lord Alexander, that the financial commitments which might well follow would prevent the Government from making any such payment retrospective. Here let me say that, if I criticise what the noble Earl says, none of my remarks could possibly have the slightest application to the noble Earl himself. As the noble Lord, Lord Ogmore, and the noble Lord, Lord Jeffreys, have said, he has the respect not only of this House but of every fighting man in the Services, because of his absolute sense of justice and fair play to those under his command. He has also their affection, I know. Therefore, if I criticise his statements it is because I know that he is not necessarily saying what he himself thinks is likely to happen. But is it reasonable to say that the country cannot at present afford to give a square deal to these old pensioners? I submit that it is not.
1111 I would call attention to two facts. The first is that the noble and gallant Earl, in his statement to the House, said that in view of the present financial situation the Government were unable to do anything in this matter. I would refer also to the speech made by his Under-Secretary, Mr. Nigel Birch, in another place on December 11, when he said that he could not hold out any substantial hope, despite what he described as a "weighty case." If there is a weighty case, as the Government have admitted, and if it is a fact that this" weighty case" cannot be met because of the financial position at the present time, then is not the question which I asked a pertinent one: can the State not afford to be just? It is simply that. The Government say, in effect, "We admit the justice of your claim; we realise you have a weighty and, indeed, unanswerable case, but we cannot afford what you ask." That is the argument so far. I ask your Lordships again, is that right, fair or just? And I ask again, can we not afford to be just?
I know that, as has been said, the recent increases in pensions for widows have given great satisfaction to many poor and miserably-paid widows. But as the noble Lord, Lord Jeffreys has said, it is only a step in the right direction: it is not more than that. After this belated but valuable action, it is, of course, difficult to expect at present everything that we should like to see done for the retired officer. It may be financially difficult at present to do all that ought to be done, but something, can be done, and something ought to be done immediately. The first thing to do, taking fully into consideration the fact that the nation is hard up, is to do immediate justice to the older pensioners—those who retired before 1946. This was a point which was made strongly by Lord Jeffreys. It could be done by increasing their meagre pensions to the 1946 rate. It was stated by the noble and gallant Earl's Under-Secretary in another place that the cost of doing this would be £370,000 for the first year, on a steadily diminishing basis. That is not a great sum to-day, but it would be sufficient to clear the national conscience in this matter. In any event, a great part of it would come back to the nation in income tax.
1112 The second step that can be taken is to accept the principle of raising all retired officers' pensions to the 1951 rate as soon as possible. It is not right to say that this cannot be done. If it is fair and right, if the principle upon which pensions are to be awarded in future is to be such as to give satisfaction, to bring in recruits and to encourage men to re-engage, then that principle should be adopted. Its acceptance would show honesty of purpose. The matter should not be left in the air. If the principle is right and just, it should be pressed in this House, and it should be accepted. I understand that the cost of carrying out this suggestion would be £2 million for the first year. Let me point out, however, that this item would vanish entirely within thirty years. The State has made a good deal of money out of retired officers in the past eighteen years; and in the opinion of these men, that money has been made unwisely and without any foundation of moral justice.
It is not being asked at present that the money which has been denied for so long should be paid. It might be thought that that would be a reasonable step, though it is probably impracticable at the moment. But the fact that so much has been withheld from these retired officers for so long is surely a very considerable factorin the scale of justice. Only public pressure will move the State when it digs itself in. I would urge your Lordships to use your great influence, individually and collectively, to insist that justice should be done, not only for its own sake but in the truest interests of the honour of the country.
§ 4.19 p.m.
My Lords as one who has retired from the Navy, without a pension—and certainly not having any intention of claiming one—and who is still on the Emergency List, I feel that I can support this Motion with all the strength at my command. I do not propose to weary your Lordships with the various details of pension increases, which have already been so well covered by previous speakers. I have little doubt that Her Majesty's Government are as anxious as your Lordships that all retired Service officers, and not just certain classes, should have a fair deal. On the one hand, however, I 1113 think there is before Her Majesty's Government the grim spectre of financial difficulty, while, on the other, there is a feeling that, if they accede to this claim, they may be jockeyed into a position in which they might be, shall I say, called upon to accede to somewhat similar claims from people and organisations in other walks of life. Surely these are two spectres which, at first sight, appear very much more formidable than they in fact are.
Let me deal for a moment with the first one, which is really, of course, the question of inflation. Surely the noble and gallant Earl who is to reply for Her Majesty's Government does not seriously contend that the payment of the full increase in pensions which has been suggested, which amounts to something like £2 million, would make any appreciable difference to the value of the pound and thereby cause inflation. In any case, as was pointed out by the noble arid gallant Lord, Lord Chatfield, this figure will be progressively reduced year by year, by death. This figure of £2 million is, of course, the cost of raising the retired pay of all officers of all three Services who retired before September 1, 1950, to the new rates of 1951, and I maintain that nothing less than full payment will bring justice to these retired officers. It has been suggested that a compromise might be made by raising the pensions of officers who retired after December, 1945 (which, of course, are governed by the 1946 code), and bringing them up to the 1951 level. This compromise would certainly be a welcome improvement; it would relieve a great deal of hardship which undoubtedly exists at present, although I do not think it would go far enough. The cost of this improvement, I understand, is in the neighbourhood of £370,000. Does the noble Earl who is going to reply really maintain that even that small figure would have any effect upon inflation, as in fact was mentioned by his representative in another place?
What about the second difficulty, or, as I should prefer to put it, the injustice, of trying to align Service retired pay with other State pensions? A number of noble Lords have already mentioned this point, but I want to emphasise it a little further, and perhaps in a little more detail. In the first place, the average State employee, as distinct from the Service officer, lives under very much more comfortable 1114 conditions: he is not moved about from place to place and from country to country as the Service officers are. The State employee, if he wishes to, is able to purchase a house on the instalment system, and to live in it, so that when he retires he has a comfortable home to retire to. Moreover, he probably has some savings behind him, but that is not so in the case of the Service officer. His family, perhaps, spend most of their lives living in rooms, often at exorbitant rentals: and in many cases he is faced with the upkeep ultimately of two homes. As a result, by the time he retires his savings are likely to be nil.
I am afraid that I cannot accept the arguments of Her Majesty's Government, which have been put forward in another place, that there is not much difference between Service retired pay and other State pensions. In fact, I say there is a very great difference indeed, and one. which ought to be recognised. I hope that those arguments will not be used today in your Lordships' House. It costs an officer who retires before a given date just as much to live as one who retires after that date. There is no justice in having three codes of retired pay for different retiring dates. The policy of successive Governments has been not to make the pay codes retrospective, but that does not apply to the stabilisation in 1935. That was applied not merely to all future retiring officers or to those who had retired a few months previously, but to all officers who came within the terms of the 1919 code—indeed, for a retrospective period of about sixteen years. I entirely fail to understand the arguments that have been put forward in another place on this matter. We all know that the voice of the Treasury must sometimes be harsh and insistent, but must it always be paramount? Surely some justice is due to these retiring officers. I would go so far as to say that if the country wishes to keep a high grade corps of officers, they must be fairly treated. I also suggest that Her Majesty's Government should realize that officers of the same rank and length of service ought to receive approximately the same rates of retirement pay, irrespective of the date of their retirement. I am sure that the noble and gallant Earl the Minister of Defence has every sympathy with the retired officer, and I hope that to-day he 1115 will accept the Motion which has been moved by the noble Lord, Lord Jeffreys.
§ 4.26 p.m.
§ LORD BALFOUR OF INCHRYE
My Lords, I should like to echo the gratitude which has been expressed, and which I am sure is shared by your Lordships in all quarters of the House, to the noble Lord, Lord Jeffreys, for again bringing up this subject to which he has devoted so much time and effort in another place. The issue to-day, I submit to your Lordships, is not as to the distressful plight of these officers. That has already been admitted by the Government spokesman in another place when he said [OFFICIAL REPORT, Commons, Vol. 509, Col. 1843]:I fully admit that these retired officers are in great difficulty.That is admitted The issue which we are considering to-day is: Will the Government help and, if so, to what extent? The noble and gallant Earl, Lord Alexander, is to wind up this debate, and I hope that from Her Majesty's Government's spokesman we can look forward to some advance on the stand and the arguments used on the last occasion when this matter was debated in another place, December 19. I hope, too, like the noble Lord, Lord Teynham, that the reasoning and the arguments of the Minister will be rather different from those which were deployed on that occasion. The Parliamentary Secretary to the Ministry of Defence, Mr. Birch, took his stand on arguments which will not bear close examination and which, indeed, are not difficult to demolish. I trust, therefore, that we shall not have a repetition of those arguments this afternoon.
I have carefully analysed the arguments on the stand of Her Majesty's Government, as evinced by the Parliamentary Secretary in another place. I have summarised those four arguments put forward on behalf of the Government. The first has been touched on already, the refusal based on the policy of successive Governments to apply retrospective improvements in retired codes. I am not going to re-argue the 1935 settlement, nor talk about its most unfortunate consequences—that has already been ably done by the noble Lord, Lord Jeffreys, and the noble and gallant Lord, Lord Chatfield—but I do argue as to whether it should continue 1116 as a standard of payment for retired officers.
Taking the cost of living figure as being 100 in 1914, in 1935 it was 153, and in 1952, 235. When confronted with these facts, the Government are rather inclined to say, "Well, you know, these officers are not really much worse off than civil servants who have retired." But stabilisation did not apply to the lower grades of the Civil Service. According to the Tomlin Report (with which some of your Lordships are no doubt familiar) although stabilisation applied to the higher grades of civil servants it did not apply to lower grades; and, on the 1950 code, the Parliamentary Secretary admitted that one of the purposes of that improved code was to look into the future, with the purpose of stimulating recruiting. But to succeed in the purpose of stimulating recruiting means not only that justice must be done for future retirements, but that justice must be done, and must seem to be done, to those past retirements with which we are dealing to-day.
The Parliamentary Secretary's next stand was when he said that the effects of inflation were "capricious." Then he proceeded to lump together Service and civil pensioners, annuitants and those who draw fixed interest incomes. He lumped them all together, saying that it was not possible for the Government to put these people back into the position they were in before, and that it would be invidious to select one class. My Lords, I have never heard a weaker argument than that. Surely the Government have as much responsibility towards those they employed during the best years of their lives as towards holders of Government bonds and Government stocks. Unlike those others whom the Parliamentary Secretary lumped together and then dumped, as it were, on the floor of another place, saying, "We cannot do much for them," these particular officers were State servants who were employed for a limited number of years of their lives. They did not get a guarantee of employment up to sixty, as do civil servants; very often these officers retired at fifty. And, as other noble Lords have said, the type of life those officers led was a very different and a much more dangerous one than that of those who are guaranteed State employment up to sixty.
1117 The third stand of the Parliamentary Secretary was when he said that all increased expenditure adds to the dangers of a renewal of inflation. I submit that that is a sledge-hammer argument to crack a very small nut. We know the policy of wage restraint followed by Her Majesty's Government. But miners, railway men, engineers, dockers and civil servants have all had and are having rises to meet the higher cost of living. The justice of their claims has been admitted by Her Majesty's Government; the rises have taken place with the approval of Her Majesty's Government. They have put hundreds of millions on to the wage bill. Quite rightly, these claims have been admitted. All this has increased the purchasing power of the nation. We are suggesting that to bring up the officers' scale to the 1951 level would cost approximately £2 million. Between 1949 and1951 the increase in the miners' pay bill was £40 million. This year, as compared with 1949, the wage bill will be up by approximately £80 million. The strength of those making these successful claims is such that no Government could possibly resist acknowledging the justice of those claims. The efforts of these men are needed in our national industrial life. They have strong organised bodies. They can, as it were, fend for themselves. It is the weak, the few and the old who have to look to their old employers whom they served faithfully, to sustain them and to help them in their cause.
Finally, the Parliamentary Secretary took his stand on that very trite general truism, that one concession loads to another, so that in the long run any concession will prejudice the conditions of those benefiting. That reminds me of the mother who is eating a nice chocolate cake. Her little child says, "Mother, may I have a slice?," and the mother replies, "No, you are really much better without it"—andgoes on eating it herself. I cannot remember that argument being used in regard to the claims of other classes of those on the State pay roll. There have been increases in pay for Members of Parliament; there have been increases in judges' pensions, and there have been concessions in regard to higher civil servants. Quite rightly, all their conditions have been improved. The truth is that those who are serving are 1118 assisted, those who will retire are assisted, but those who have retired, like these officers, are left out. Cannot we appeal to the Government not to forget the old horse put out to grass? He has rendered faithful service. There are not many of these men and they are not powerful; they have no great powerful union to force forward their case. They look to the country that they served, and not, I hope, without prospect that to-day their plea will be recognised by Her Majesty's Government, even at this late hour.
§ 4.35 p.m.
§ VISCOUNT BRIDGEMAN
My Lords, I must tell your Lordships at once that I am one of those who draw retired pay under the Royal Warrant of 1919, and therefore I must ask your Lordships' Indulgence if I speak on this Motion at all. But I can, I think, unreservedly support what my noble friend Lord Jeffreys has said about those officers who retired before the first war, and whose case he put with such force. I would rather talk about the matter in a more general way. My noble friend Lord Balfour of Inchrye, who has just sat down, has dealt fairly fully with the question of the inflationary effect of any move towards increasing pensions. There are one or two things to be said about that point. In the first place, that statement is always being made, and always has been made, just as is the statement that "England is going to the dogs"—as she always was. Some of your Lordships may have read recently Lord Haig's Diaries. If you have, you may have noticed that in 1919, when Lord Haig was fighting for disability pensions (not retired pay), it is recorded that Mr. Lloyd George said that he was confronted with difficulty: that memories were short and it might be difficult to get the disability pensions in the way he would like; that there was much unrest about, that miners were demanding an extra shilling, and that this was a bad time to go to the House and ask for a large sum of money. As the French say, "The more it changes, the more it is the same thing," and the less weight, therefore, can we attach to that particular argument.
The whole question is really one of degree. Of course, all the arguments against inflation, whether directed towards retired pay or anything else, are sound in themselves. That is quite clear. We 1119 know that any code of pay, whether for those serving or those who have retired, that is based on the cost of living, has its dangers—as we see in places like Australia. But there is another set of arguments. There is the argument that a pension is given in order that those people who have served the State shall not be in want when they have ceased to serve the State. The matter to which I think Government spokesmen have never given any clue in what they have said up to now is at what point the arguments in favour of increasing pensions outweigh the arguments for not causing inflation. After all, if one could imagine the horrible idea of the pound going the way of the mark, or even the way of the franc, one would see that there would come a time when a 1919 pension would not be sufficient to keep the pensioner alive, as presumably it was intended to do. Remember, we have not finished with inflation yet. No doubt we are getting the better of it, but we have not yet got the better of it, and inflation in some form may still go on.
So what do the Government really intend should happen? When the pensions cease to provide sustenance and life for those who are getting them, will the Government accept a Motion on the lines of that of my noble friend, or will they take the line that was followed in Germany after the first war, and in this country in the 18th century—namely, let the matter run, and let those starve who must? Or are we, in these days of the Welfare State, to say, "This is what the Assistance Board is for; and those who cannot afford to live in any other way must go to the Assistance Board and must spend the rest of their lives in an institution"? I think that if your Lordships will follow this matter to its logical conclusion you will see that we arrive at that point. We have been moving towards it steadily, and sooner or later we shall arrive there. It is with that background that we must consider the very forceful arguments that my noble friend has put up to-day, directed to the 1919 Warrant and the earlier Warrants.
But let us come back to this question of inflation. Of course it is undesirable that anyone should be paid money by the State for not doing any work, if in fact he is still capable of working for the State. 1120 And so we come back to the set of arguments which are brought forward to the effect that, because of the nature of the service, officers have to retire early, and therefore they cannot expect to get big pensions. That is begging a very big question, and begging a question that ought to be considered urgently. After all, no one disputes the fact that it is not now possible for an officer or other rank in the Forces to end his service in middle life, educate his children, and keep himself alive under proper conditions of living, if he does not succeed in getting work when he leaves the Service. We all know that. Yet we still have conditions in which this barrier, this distinction of treatment between Service men and the civil servants, persists. All the briefing which is done, instead of emphasising the community of those who serve Her Majesty, seems to emphasise the difference between those who put on uniform and those who do not—and that quite regardless of the state of affairs in which we live to-day, whereby there can be no operational division in war time between civilian and Service personnel. The existence of Civil Defence alone shows that quite plainly. But if we can get to a state of affairs in which anyone who enters Her Majesty's service—whether he enters the Armed Forces or enters the Civil Service in some form—can be assured of guaranteed work up to the pensionable age of sixty or sixty-five, if he wants it, then we shall have removed a great deal of this problem of pensions for the future.
There remain to deal with only those categories of officers and other ranks who are now too old to be re-employed. We have two problems. The first is that of accepting the proposition put forward by my noble friend Lord Jeffreys. Secondly, we have the problem of seeing what can be done to make this difficulty of pensions and early retirement one which will fall less hardly in the future, and so will not provoke a demand for adequate pensions to be given to those who have to retire before the normal retiring age of sixty or sixty-five. If my noble and gallant friend Lord Alexander can do anything to introduce a new outlook in Whitehall on this matter of giving guaranteed employment to officers of the Services up to the age of sixty or sixty-five, he will not merely have gone a long way to remove this trouble for the future 1121 but he will also have introduced confidence and hope into the minds of a great many of those still serving who have children to educate, and who are dreading the day when they may have to go out and look for a new job. They are dreading it because they fear that they will find that, through the service which they have given, their time has been spent in such a way that at the most critical period of their children's education they themselves are thrown on the world having had no opportunity of saving and so possessing little means of paying for it. So we see how important this question is. It has been truly said in this House before that it is important not merely from the point of view of the officers themselves but from the point of view of showing the Services as in attractive career for those who hope to join. So let us see whether as a result of this debate we can not only deal with the difficulty with which Lord Jeffreys' Motion is concerned but also see whether steps can be taken to remove that problem for the future.
§ 4.45 p.m.
My Lords, in addressing your Lordships in support of Lord Jeffreys' Motion I should point out that I myself am a serving officer, and therefore should eventually benefit by the later 1946 rates of pension. But I think it may be useful to your Lordships if I deal with one aspect of the case. Since the war I have been concerned to a very large extent with the training of young officers, and have observed the effect of various measures, both political and military, aimed to encourage the right type of young man to take a regular commission in the Army. The 1946 increases of pay and pensions were the largest of the inducements and were specifically referred to in the White Paper as such.
There is no doubt that the increase in pay and pensions did give a much-needed stimulus to the recruiting of young officers—and very necessary it was, not only for them but also, as the noble and gallant Lord, Lord Chatfield, says, for the middle-piece married officer, for whom it was essential in order to avoid complete insolvency. That was proved at the time by the examination of specimen budgets. Nevertheless, the omission of any consideration for those officers who had retired under the 1919 Code, many of them 1122 from families with long Service traditions, had the reverse effect. And these are the men, the older men, the parents and the relations, to whom we look to encourage the younger generation to carry on that tradition which is so important to our Services to-day. For we do need most urgently the right type of young officers, who have been brought up in those unselfish traditions of our Services. The calculated omission of fair treatment for surviving regulars, to whom the country owes so much, results in disillusion and bitterness which is reflected in the discouragement of their young relations and friends, when we should be able to look to them to be our greatest support. If the cost of living should again rise, why should they advise others to accept a repetition of the treatment which they themselves consider they have received?
If, however, the Government still feel unable to help this comparatively small number, I should like to see them give much more encouragement to, and sponsor, efforts to find suitable employment for these men—as has been mentioned by the noble Viscount, Lord Bridgeman. And I should like to see them continue to do this for those coming out of the Services at an age which is too late to allow them to start a new career at the bottom. There is already in existence in the Army—andI think to a smaller extent in the Navy—an admirable scheme for the employment of a small number of retired officers in clerical and sedentary jobs in Service Departments. I have heard nothing but praise for this scheme. The officers earn money to augment their pension during the difficult period, for many, when their children are still being educated, and their military superiors get the benefit of experienced assistants to provide continuity: they are not moved away just as soon as they get to know the job well. If this scheme could he enlarged, not only would it help those officers whose cases we consider to-day but it would remove the main deterrent against a regular career in the Forces—the fear of being thrown out at an early age—as well as show that the country is not prepared callously to abandon to abject poverty those who fought for her in the last two great wars. One small last point which may be of interest to your Lordships is that in the United States of America this problem has also 1123 arisen. It is interesting to note that in the last increase in pay and pensions, they, like ourselves, omitted the officers who had retired some time before. But now a Bill is in course of preparation which will increase pensions retrospectively for the same category of officers of whom we are thinking today. Therefore I hope that something may be done, too, for our retired officers.
§ 4.50 p.m.
§ LORD HAILEY
My Lords, I am sure there is no one in your Lordships' House who has not felt deeply moved by the speech of the noble Lord, Lord Jeffreys, and by his effective advocacy of the cause of the officers of the Armed Services. In the course of the subsequent discussion some comparisons have been made between the comparatively cloistered lives of civil officers and the hard and difficult lives of officers of the Armed Forces. Perhaps I may claim that not all the civil officers have shared in the cloistered life of Whitehall. There are in this country a large number of civil officers who have served abroad, in India and in the Colonies. I should like to say, on behalf of my friends in the Civil Service, that I think there is no one amongst them who does not recognise that a serious injustice has been done to ex-officers of the Armed Forces. If it were a case between having to put right the difficulties that have been felt by civil officers in regard to their pensions or the difficulties felt by officers of the Armed Forces, to which the noble Lord, Lord Jeffreys, has referred, I believe that all retired civil officers throughout the whole Commonwealth, whatever their service has been, would agree that the officers of the Armed Forces must have a prior claim. Here we have circumstances about which every civil officer would say that there has been an almost incredible breach of good faith.
We have the advantage to-day of knowing that these questions can be discussed, and are being discussed, in an atmosphere very different from that in which they would have been discussed many years ago, years which some of us can still remember. The course of recent years has completely altered the attitude in which these questions are now approached. There was a time when 1124 those who approached these questions did so with the assumption that the pay and pensions of the officers of the Armed Services must be based on the fact that these officers were generally recruited from a class which felt that they need not seek a place in the more competitive, and consequently more remunerative, spheres of the professions and commerce, and that many of the men who were recruited as officers felt that their qualifications were not such as would win them a place in these competitive spheres. That attitude has completely altered. If the State seeks to secure the services of officers who can fulfil the requirements of the present day it must offer them pay and pensions on a basis that bears a much closer relation to that which prevails in a competitive market.
I feel that I may be taking a somewhat unpopular attitude to-day if I say that there are certain questions of principle here which affect not only the officers of the Armed Services but also the officers of the Civil Service. These questions enlarge the field of discussion and possibly increase the potential cost of any improvement that may have to be considered, but I am bound to point out that there are questions of principle in regard to pensions which vitally affect the Civil Service. Whatever we may think of prior claims of the Armed Forces in this respect, the claims of the civil officers cannot be overlooked. The civil officers of approximately the same standing who served in the home or Colonial or Indian Services suffer equally from the rapid fall in the value of money. If I refer to this matter now, it is because one does not have too many opportunities of representing their case.
I felt obliged to make some reference to it during the debate which took place last July in your Lordships' House. I put forward some considerations bearing on the claims of the higher grade of pensioners in these particular Services. The question arose during the discussion of a Bill for the provision of small supplementary pensions, owing to the increase in the cost of living, to pensioners with personal incomes that did not exceed the range of £500 to £550 a year. The Bill was subsequently passed as the Pensions (Increase) Act, 1952. I pointed out then that there appeared to be no logical 1125 ground for limiting the small supplement—it was a very small one—to pensioners whose total income, including their pension, was not more than £550 with dependants and £425 without. If the disability from which they suffered arose from the fall in the value of money, that was a disability suffered equally by persons enjoying other scales of pension. I am bound to say that I did not receive a very encouraging reply from the noble Viscount. Lord Swinton, but I felt that perhaps his sense of obligation to the Treasury, for which he was answering, outweighed the natural humane impulse which I have seen him display as Minister in charge of other Departments of State.
The argument he then used was that, in the main, it was not reasonable to ask for an increase of pensions hitherto enjoyed by members of the Civil Service, as they represented the result of a contractual obligation on the part of the State as defined by law and that such a contract was equally binding on both parties. I should like to carry the logic of that argument, which is one likely to be used on other occasions, a little further. There is an element of implied contract in regard to both pay and pensions. The State has not used that argument when it has determined, as it has on several occasions, to increase the pay of its acting servants on account of the fall in the value of money. A notable instance of this, recently referred to in your Lordships' House, was in regard to the increase in the pay of civil servants in 1948, which had effect, I think, from 1945. One may well ask why, if the argument of contract is not used in the one case—namely, in the case of pay—it should be used in the case of pensions.
Of course, it is a mistake to rely on the argument of contract at all. The civil servants to whom I have referred have not interpreted their own relations with the State in terms of contract: they have regarded them as obligations of honour and good faith, which override all considerations of their own private convenience or personal gain. The true criterion to be employed in such cases—andit will apply equally, I think, to the Armed Services—is not a reference to contract at all. There is only one criterion which can be profitably employed, namely, will a concession made by the State to its former servants in respect of past service help to maintain 1126 its reputation as a considerate and conscientious employer and, consequently, enable it to recruit men of the type it requires—men whose own conception of duty will serve to maintain the traditions which have distinguished their predecessors in the past? That is the question. It is equally a question, on the other hand, whether the sight of its former servants living in financial conditions which compare so unfavourably with those of men who have held less responsible positions in industry, in commerce or in the professions, will prejudice the course of future recruitment. There is no doubt that that is the question as some of the major banks saw it when they recently gave a general increase to all their previous servants in view of the heavy fall in the value of money.
It is because the State must face this essential question that I and many others recommend that the whole subject of civil pensions, at all events, should be examined by a Commission competent to advise on issues of this nature. It is not merely the general principle which requires treatment at their hands, for the whole pensions system, as the noble Lord, Lord Ogmore said, is full of anomalies. As has so recently been pointed out, it is an anomaly that the pension of officers in the Home Services who received the recent increases of pay dating back to 1945 should benefit by sums which may amount to as much as £350 a year, or even £500 a year, over those received by officers who retired in the previous year. It is an anomaly that in recently granting the small supplementary pension to which I have referred, those persons who have used the exiguous savings of an official career for the purchase of an annuity should be penalised. It is an anomaly that some Colonies should have granted an increase of pensions to their former servants and that some should not have done so. It is an anomaly that the State should have made exceptional arrangements to pay, from the United Kingdom Treasury, the pensions of those who have held the post of Governor in the Colonies, but not of those who have held similar posts in India. In consequence, of course, the pensions of the latter are on a far smaller scale.
There are anomalies in the classification of healthy and unhealthy charges in the Colonies, for the classification is 1127 entirely out of date. It will surprise your Lordships to know that Kenya, even before the Mau Mau movement, was described as being "unhealthy." While we advocate the appointment of such a Commission as I have indicated, there is one observation that I should like to make. There are many former associates of my own, and servants of the Crown in whose interest I am now speaking, who are of a mature, and, it may be, a very mature, age. They might very well hope that the Report of such a Commission would be presented to the Government and that the Government would act on it before they themselves, at their mature age, pass into another life, where they will be equally indifferent either to the possibility of a generous gesture by the Government or to the certainty of increasing exactions by the tax collector.
§ 5.6 p.m.
My Lords, whatever cold water the noble and gallant Earl may be compelled to pour on our case to-day, I am bound to say that I am not without hope that this Government, which has already considered sympathetically other difficult matters, owing to his own representations, will take a new view of this matter. Our target is that the retired pay and pensions of all officers and their dependants of the Army, Navy and Air Force, should be brought up to those which the Government are compelled to offer to-day to attract young candidates to accept commissions. That seems to me to be a just claim, and I, for one, shall feel it my duty to take every opportunity that is offered to bring this matter, and what I believe to be its justice, before the notice of Parliament and of the public.
But the only thing I wish to say this afternoon is this. I hope that the Government will consider this matter and settle it soon. The whole point of the revised rates of pension and retired pay to-day is to attract young men into the Service to accept commissions as officers. But the cost of living, and the steady rise in the cost of living, is a matter which is so much before the public that it is in the minds of young men to-day. If this controversy is too prolonged, instead of looking forward, as the authorities hope they will do, they may cast their eyes back over their shoulders to the ruined 1128 social system behind them; and then, like Lot's wife, they will become immobile, and will not proceed in the direction in which it is hoped they will proceed. I therefore urge the Government, not only to consider this matter sympathetically but to consider it soon, because I feel that that is of the greatest importance. We do not wish this question to become aggravated any more: it is too deeply and painfully felt by the relatives of the young men whom we wish to bring forward to the good service of their country to-day.
§ 5.9 p.m.
§ LORD WINSTER
My Lords, some of the remarks made by the noble Lord, Lord Hailey, struck a responsive chord in my heart, because when the civil servants have been spoken of to-day reference has not been made to the officers of the Colonial Service. They suffer many of the disabilities which have been spoken of in connection with the officers of the Defence Forces. The civil servants have been spoken of to-day as people who work in the same office all their working lives, have one home, and so on, and live completely settled lives. That is not true of the officers of the Colonial Civil Service, who suffer many of the disabilities of being moved about and of having no permanent home and facilities for the education of their children, that officers of the Defence Forces also suffer. I remember that one of my civil servants came to me to ask whether I felt he was justified in sending his son to his old school on an overdraft. Very often the savings of a civil servant in the Colonies go in one year in bringing their children out for their holidays. I have been served so ably and so loyally by some of these men that I feel it would be ungrateful of me if I did not mention those facts.
I must at the outset of my remarks declare an interest in this matter. I am in receipt of a pension, but I will give an undertaking to the noble and gallant Earl that if, on behalf of the Government, he is able to accept what is in this Motion to-day, I will forgo any advantage which I might otherwise reap by his so doing. I am very glad that something has been done for the widows. Those who have interested themselves in their lot have not yet had time to look at the White Paper, and it may therefore be necessary to 1129 revert to that matter at a future date. But I do, indeed, rejoice that these most unfortunate ladies, who have suffered very bitterly indeed, have at long last had something done for them. What I always thought particularly mean about their pensions was that, small though those pensions were, these ladies had to undergo a means test before they could draw even that miserable pittance; and not only that, but they might have to re-establish their claim to it from time to time.
What I always find particularly unpleasant in these questions of officers' pay and pensions is that occasionally I get a slight smell of what I would call "blackmailing patriotism"—blackmailing those whose desire to serve their country outweighs their consideration of material things. But nowadays the weight of material things is making itself increasingly felt, and more and more we shall have to ask whether wives and mothers are going to urge their sons to go into professions which have brought them many anxieties and many real hardships.
The case has been so fully and ably argued by the noble Lord, Lord Jeffreys, and those who have assisted him in this debate, that there is little left to say, and I know that we are all waiting with impatience to hear what the noble and gallant Earl has to say in reply on behalf of the Government. But one or two things are very much in my mind. What moral justification can there possibly be for what I regard as a typical Treasury tricky device of having three different codes in these matters, and all these anomalies? I said "tricky device," and I hope the noble and gallant Earl will not take that phrase amiss, because honestly I think it is very unfair that he should have to answer this debate this afternoon. I think the reply ought to come from a representative of the Treasury. I shall not be putting any words into the noble Earl's mouth if I say that I believe he must have felt considerable force in many of the arguments which have been advanced to-day. Of course, under the doctrine of Ministerial responsibility he has to reply for the Government, whatever his own feelings in the matter may be, and that is no derogation of him at all. It would be an absurd state of affairs if a Minister resigned whenever he 1130 had a difference of opinion with his colleagues. Far better that he should stay where he is in this instance and, I hope, urge and use his influence in the direction in which we hope to see the Government move.
But with regard to this device of three different codes, shopkeepers do not vary their prices in accordance with them. Their prices remain the same. It is not that the Treasury—which contains, I understand, the intellectual cream of the Civil Service—is incapable of working out one perfectly simple, straightforward code in these matters. They have shown themselves capable of doing it in the case of the civil servants themselves. They worked out a very good code indeed for the widows of the Civil Service—not three codes, but no anomalies and a perfectly simple, straightforward code. Then again, I never heard such nonsense as dragging the economic position of the country into this matter. It would be just as sensible to say that by asking for this to be granted we were running the risk of bringing about an epidemic of influenza in the country. Fears of inflation, indeed! The other day the doctors received £40 million between them, and I heard nothing about inflation—that that could not be granted because of fears of inflation. Here we have sums involved which I understand, amount to under £2,500,000—a diminishing sum in any case—and we are told that it would be risking our whole economic position if this were to be granted. It is said that these claims cannot be considered in isolation from those of other State pensioners. Well, the civil servants' claims were considered in such isolation; and if there are other injustices and anomalies, why not put the whole lot right? The Treasury idea is to let a whole lot of anomalies and injustices grow up and then, when tackled about one of them, to say that you cannot remedy the one without remedying all the others, and that, of course, would be impossible. I think that is a very contemptible position to take up.
What a wonderful state of affairs it is when, after the Pensions (Increase) Acts of 1944 and 1947, some officers received less than they did, in 1919! How can such a state of affairs as that possibly be defended? The Government is supposed 1131 to represent public opinion in the country. Does anyone suppose that public opinion in this country wishes officers to suffer such an obvious injustice as that? Then there is this word-spinning about "may" and "shall" and "will." So far as I can make out, in the Treasury's eyes those words mean different things according to whether the cost of living is rising or falling. At any rate, as regards the Navy, the Admiralty managed to be completely clear and definite on that point because, as the noble and gallant Lord, Lord Chatfield, has said, they most specifically laid down that revision of the 1919 scales should take place periodically—I think every three years—and it is quite incredible that one of the fighting Services should differ in its view on that matter from either of the other two. The wisdom, foresight and fairness of providing for this triennial revision has been shown in the abnormal rise in the cost of living which has taken place. But all that hair-splitting about "may" and "will" and "shall" has this afternoon quite rightly been called a quibble, and it is a contemptible quibble as well.
It has also been demonstrated quite clearly in this debate that, in spite of what has been said, alterations in pay have been made in the past with retrospective effect. I am sure that the noble Lord, Lord Jeffreys, like other speakers and myself, resent having to beg in this way for what should be the clear rights of the officers of the three justly proud Services. Doctors, teachers, civil servants, all have their unions and their associations which can fight their case for them and protect their interests. I remember that even some of the more responsible Press organs raised their eyebrows over the rough way in which the senior civil servants pushed Mr. Attlee about when they were asking for rises in their pay. I am sure that the noble Earl who is going to reply realises all that is involved in this matter, and that he realises the real misery and wretchedness which because of these things is caused to people who have served their country. If he cannot give us a satisfactory reply this afternoon I hope, and indeed I feel sure, that he will represent to the Prime Minister the depth of feeling which is aroused by these injustices.
§ 5.21 p.m.
§ THE MINISTER OF DEFENCE (EARL ALEXANDER OF TUNIS)
My Lords, I have listened to the debate this afternoon with great interest and a lot of sympathy. We are grateful to the noble and gallant Lord, Lord Jeffreys, for having given us an opportunity of a full discussion on this matter of pensions, which is a very important one. I certainly appreciate very much the moderate and reasonable way in which he has presented his case.
There is no doubt at all that there is very strong feeling amongst retired officers on this question of pensions; and a discussion in your Lordships' House can do nothing but good, since it shows those concerned that their difficulties have been fully ventilated and that the Government are well aware of the various factors involved. The interest that I feel in this debate arises mainly from my position as Minister of Defence. Consequently, any well-founded grievance felt by those who have given a lifetime of service in the commissioned ranks of the Armed Forces is a matter of concern to me, since it must have some reaction on the morale and contentment of the officers now serving, and also on the future position of recruitment—a very important point which has been referred to by the noble Viscount, Lord Mersey, and by the noble Lord, Lord Saltoun. I have a more personal interest in this matter under debate. I have spent a great part of my life as a professional soldier, and many of the officers concerned are of my generation; some of them are comrades and old friends. There is no doubt, therefore, about my sympathy in this matter. I am also aware of the straitened circumstances in which some of these officers are now living. I can, therefore, declare an interest in this matter—but it is an interest which must compel me, as Minister of Defence, to examine the points made in this debate with the greatest care.
On July 21 of last year I received a deputation representing all the political Parties, as well as representatives of the Officers' Association and of the Officers' Pensions Society. That deputation was led by the noble Lord, Lord Ogmore. It made representations to me concerning many aspects of Service retired pay and pensions, among which were these grievances of those officers who retired between the wars on the 1919 retired pay basis. This question was brought 1133 forward prominently. One of the major questions raised by the deputation concerned the low rates of widows' pensions. Your Lordships will remember that just before Christmas there was an announcement that the Government were considering some increase on existing widows' pensions, and on pensions for future members of all ranks of the Forces. Lord Ogmore called attention to this White Paper which has just been published and which is at your Lordships' disposal to-day. I do not want to discuss the White Paper now, but the noble Lord asked a question which, I am glad to say, I can answer. He spoke about certain anomalies. Well, my Lords, paragraph (4) deals with the new family pensions scheme, which applies to all those serving since August 31, 1950. Paragraph (5) outlines and improves on the old scheme—that is, it deals with all who ceased to serve on or before August 31, 1950. I think I can say that this new scheme has been well received and welcomed, both in Parliament and in the country.
The other major matter urged by the deputation was that Service retired pay and pensions for officers should be brought into line with those under the new code introduced in September, 1950. I informed your Lordships on November 19 of last year that the Government were unable, in existing financial circumstances, to give the benefits of the 1950 code to officers and other ranks who left the Services before that date. I referred to the existing financial circumstances. The noble Lord, Lord Thurlow, has made a comparison between the United States' Service pensions and our own, but I do not think we can possibly compare the two. One is the richest country in the world; the other, if not downright poor, is not so rich. There is only one similarity between us. The United States, like ourselves, relate the scale of their pensions to their pay code for the Services—and we know how well the Americans can afford to pay their fighting men. It has always been the rule in the past that when new and improved emoluments are introduced for the Services they are not applied retrospectively; and it has always been the principle that the pensions of State servants are related to the emoluments they received during their full-time service. That is the principle which has always been accepted. 1134 Whether it is a good principle or a bad one is entirely a matter of opinion, but that is the principle. A very practical reason against retrospection is this: that if it had to operate every time improved emoluments were granted to the Services, the cost of retrospective application would be such that it would probably make it impossible to introduce such improvements in pay—and that would certainly not be in the interests of the Services.
Moreover, the Fighting Services cannot be considered by themselves in this context. Retrospection cannot be applied to the Forces without the contention being made that similar benefits should be given to civil servants, local government servants, teachers, and all those other vast numbers of employees whose pensions are modelled on those of Government servants. The noble Lord, Lord Teynham, spoke rather lightly this afternoon of £2 million, but in our present financial circumstances I myself could not speak lightly of £2 million. I wish I had an extra £2 million to spend on the equipment of my three Fighting Services. But I must remind your Lordships that the cost would be very much more than £2 million if we were to include all those classes I have just mentioned—the civil servants, the local government servants, teachers and soon. If we were to raise the pensions of all these classes of people, of course it would mean much more than £2 million. I hope that I have explained the reasons why the present Government cannot apply current rates of pensions retrospectively to those who have already left the Forces. In this respect they are only following the practice carried out by all recent Governments, of whatever political Party.
I should like to examine in more detail the case of those who retired between the wars and whose pensions were stabilised in 1935, for it is these gentlemen whose grievances are really at the heart of this debate. When the new pensions code was introduced in 1919, it was explained that 20 per cent. of the retired pay was attributable to the increased cost of living during the years of the First World War, and would therefore be subject to periodical revision, both upwards and downwards. At the time this seemed fair enough. After the promulgation of the 1919 code the cost of living still rose 1135 steadily, but by the time the first revision was made in 1924 the cost of living had fallen below the 1919 figure, and consequently the revision was downward. The same happened with subsequent revisions, and retired officers saw their pensions successively decreased at each revision.
In 1935, the Government of the day decided to stabilise these pensions by applying the principle which the Tomlin Commission had strongly urged in the case of the Civil Service, both high paid and low paid. This decision, I have always understood, was welcomed by the officers affected. Nor was the settlement really ungenerous. The 1935 cost of living would have justified a cut of more than 10 per cent., whereas the reduction made on the 1919 rates was 9½ per cent. —not much difference, I admit, but still it was a difference on the right side. So I think it unfair to say that the stabilisation of retired pay at a level of 9½ per cent. below the 1919 rate was "sharp practice," as is often alleged. It is true that, as events worked out, the cost of living did not continue to fall. On the contrary, after 1935, it increased. But who could have foreseen then what the future held for us—another world war, with all its terrible, disastrous effects on the cost of living? To be quite fair, I do not think that you can credit the Treasury with such accurate foresight as to have been able to see what the cost of living was likely to be.
I hope that I have shown your Lordships that the consolidation of pensions in 1935 was not the breach of faith which it is so often made out to be. The 1919 arrangement, with its fluctuations, was only an experiment, and it was not a success. At the time, it caused widespread dissatisfaction, and when the pension code for the Forces was again revised in 1945 it was abandoned, with general approval. I would remind your Lordships also that the majority of officers who retired between the wars have received increases in their retired pay under one or more of the three pension increase schemes, in 1944, 1947 and 1952. In this connection, I should like to quote some figures. I will quote them for the Army, because the Army are the greatest number and, therefore, are the majority 1136 affected. Out of 8,000 Army officers who were pensioned before the introduction of the later codes, 3,000 had their pensions re-assessed for service in the 1939–45 war and 2,800 have enjoyed virtually complete restoration of the 9½ per cent. cut as the result of the pension increase schemes. Two thousand have had the cut partially restored, which leaves fewer than 200 who have received nothing and who are still on the rates fixed in 1935. For all three Services, about 350 officers have received no benefit from either war service re-assessment or the pension increase schemes, and these 350 are really the people with whom we are all deeply concerned in this debate this afternoon.
The basis of the procedure adopted is that if an increase is justified, on account of the cost of living, for one class of State servants, it is justified for other classes who are similarly affected. It is for this reason, as I mentioned earlier, that the Government have to consider all State servants and not one class alone. This principle has been adopted, and many people do not agree with that. There is no reason at all why I should give your Lordships my own private opinion, but this is a rule which has always been accepted by Governments in the past: that, broadly, all State servants are treated equally and that one class cannot be singled out from another. That practice is fair on the surface, but of course there are arguments against it, as there are arguments for it. Furthermore, nearly all the younger officers who retired before the outbreak of hostilities in 1939 were recalled to the colours, and those officers have had their pre-war pensions re-assessed for their last war service. It is well-nigh impossible, I think, to take one particular class of pensioner servant, however deserving their case may be, and give them preferential treatment over other classes of pensioners who are placed in like financial circumstances.
§ LORD OGMORE
On this point, may I ask the noble and gallant Earl whether it is not a fact that the Civil Service have had three increases in their pay, and consequently in their pension, since September, 1948, and, if so, does not this dispose of his argument about no preferential treatment among the Services?
§ EARL ALEXANDER OF TUNIS
I have never had the honour of being a 1137 civil servant, so I do not know a great deal about their case. However, I think I am right in saying that they have not had an increase of pension. What they have had is three bonuses, which have been subject to tax.
§ LORD OGMORE
I am asking for information, because the information that I have is that they have had three increases of pay, and that pay carries pension rights. It may be that the information I have, from the Officers' Association and Officers' Pension Society, is incorrect, but I think that should be known, because it goes out very widely that the Civil Service have had three increases of pay since September, 1948.
§ EARL ALEXANDER OF TUNIS
I am afraid that I cannot inform the noble Lord further, because I am ignorant of the circumstances of the case. But I suppose it would not be wrong to say that Service officers at various times have also had an increase in pension due to war service. I think it is not unfair to say that an avalanche may well be started by the displacement of small boulders. I need hardly say that this may well add a burden to the Exchequer which would be quite unacceptable in its distinct financial circumstances. Nor would it be welcomed by that impressive body of public opinion in this country which is constantly urging the reduction of Government expenditure in the interests of ending the inflation which is at the very root of so many of our troubles in these post-war years. It would be wrong of me to hold out hopes to your Lordships that the Government will be able at the present time to meet the claims made on behalf of those retired officers.
I have attempted to show the serious repercussions which would or could follow from any measure to grant to these officers the rates of retired pay now current for present members of the Forces. I can, however, assure your Lordships that the case put so cogently in this House this afternoon will be most earnestly considered by Her Majesty's Government. I can also assure your Lordships that the whole question of retired officers' pay and pensions will be kept constantly under review and examination, 1138 and if and when it becomes possible to assist them financially, they may rest assured that they will not be forgotten.
§ LORD OGMORE
Before the noble Earl sits down—and this is a very important subject—may I ask one question? According to The noble Earl, 350 officers in all the Services are very badly affected indeed. As I understand it, they have had no increase at all. Three hundred and fifty is the hard core. Is that not right?
§ EARL ALEXANDER OF TUNIS
Three hundred and fifty-nine. There are 173 in the Navy, 178 in the Army, and 8 in the Royal Air Force.
§ LORD OGMORE
May I suggest to Her Majesty's Government that doing justice to 359 officers is not going to sink the United Kingdom, although it may be in the parlous state which the noble Earl has described? It is not going to affect the economy of the United Kingdom at all. I ask the Government whether, at all events, they will not do something for the 359 unfortunate officers to whom the noble Earl has referred.
§ EARL ALEXANDER OF TUNIS
I am obliged to the noble Lord for his observation of which I shall certainly take careful note.
§ LORD BALFOUR OF INCHRYE
May I ask the noble and gallant Earl one question, in order to get one matter quite clear? In his concluding remarks he said that Her Majesty's Government will keep this matter constantly under review. Does that mean that Her Majesty's Government are now going to conduct a review in this matter, or does it just mean that it is going to be there one day to be remedied if conditions so allow?
§ EARL ALEXANDER OF TUNIS
I can reply to the noble Lord quite clearly on that point. So far as I know there is no intention that an examination should be carried out. When I used this term, which was entirely my own, I meant that we will not forget those cases which are deserving of very careful study; and as long as I am here in my present job, I promise that I will watch the case as carefully as I can.
§ 5.43 p.m.
§ LORD JEFFREYS
My Lords, I am sure your Lordships will have heard with great interest the speech of the noble and gallant Earl who has just sat down. In the circumstances, I think that we shall at any rate have made a little progress if we are to understand, as I am sure we do understand from his last statement, that this matter will be kept constantly under the consideration of the Government. I cannot help thinking that if it is kept constantly under the consideration of the Government, they will realise the essential justice of dealing, not so much with the whole question of the £2 million involved in re-adjusting any pensions, but with adjusting legitimate grievances in regard to the 1919 Warrant pensions. I hope that we may look forward to this matter being taken into consideration and acted upon very soon indeed. In those circumstances, I beg leave to withdraw my Motion.
§ Motion, for Papers, by leave withdrawn.