PENSIONS (INCREASE) BILL. (Hansard, 23 March 1954)

§ THE EARL OF SELKIRK

My Lords, this Bill is introduced to implement the statement of policy contained in the White Paper (Cmd. 9092) on the retired pay 618 and pensions of former forces' officers and civil servants affected by the stabilisation and consolidation in 1932 to 1935. So far as retired officers are concerned, this policy will be implemented by prerogative instrument, and no legislation is required. The position is, however, different in the case of civil servants, and in order to place them in the same general position it is necessary that action should be taken by legislation: that is the object of this Bill. In form, it is an amendment of Section 2 of the Pensions (Increase) Act, 1944, as amended by the Act of 1947. That section provided for a special scheme of increase applicable only to certain Civil Service pensions. These Acts authorised increases of 10 per cent. on original pensions up to £400, 7½ per cent. between £400 and £600, 5 per cent. between £600 and £750, and no increase over £787 10s. The 1944 and 1947 Acts also contained a provision for a general hardship scheme which remains entirely unaffected by the present Bill, as also does the Pensions (Increase) Act, 1952. The broad effect of this Bill will be to remove the limit of £787 10s. on pensions up to which increase can be given and to give a flat rate of 10 per cent. increase on all pensions concerned, to the extent that they have not already got as much, or more, under the 1944 and 1947 Acts to which I have already referred.

What this Bill does is accordingly fairly simple. On the other hand, the background leading up to it is of considerable complexity. It is, however, set out as clearly as it is possible to set it out in the White Paper, paragraphs 8 to 25, to which I have already referred, and there is no need for me to expound it again now. The Bill will not, of course, put every individual Civil Service pensioner concerned in exactly the same position as the corresponding officer of the Forces, because civil servants, unlike Forces' officers, do not get flat rate pensions but pensions based on their pay at or near retirement. In consequence, some civil servants had cuts greater than 9½ per cent—indeed, in some cases they were as high as 24 per cent. The Government are, however, following the precedent set by tie Coalition Government in 1944, and by the Labour Government in 1947, in applying the same flat rate increase to civil servants as is being applied to Forces' officers.

619 The Bill is confined in its effect and applies only to those civil servants who retired after February 21, 1922; that is, the date on which the system of variation of Civil Service pensions with the cost of living was first introduced. Moreover, it does not apply to any pension based on actual pay received on or after April 1, 1947, or on average pay over a period beginning on or after April 1, 1946. The Bill, which will have effect from April 1 next, is likely to affect about 3,000 people and will probably cost about £60,000 a year. It has, as I have said, a limited purpose, to meet circumstances which are special and peculiar. It is a modest attempt to meet what I know is a deep sense of grievance which a number of Crown servants feel because the stabilisation and consolidation in 1932 to 1935 turned out unfortunately for them, and I ask the House to give it a Second Reading.

§ THE EARL OF LUCAN

My Lords, may I congratulate the noble Earl on his lucid explanation of the purposes of this Bill, and also on his discretion in refraining from going too deeply into the background which, as he says, is exceedingly complicated. We on this side of the House welcome this Bill as an instalment of justice within a strictly limited field. Although it does not remove all sense of grievance among pensioners from Government service, it does remove on one section of the front that sense of 620 grievance, and I think we can congratulate the pensioners concerned on having been able to prevail upon the Government to remove this sense of grievance. Reading the White Paper, up to the end of paragraph 45, out of 50 paragraphs, it is clear that Her Majesty's Government were firmly fixed in their intention not to give way on this matter. The arguments are all there and the Government's determination is all there. However in the last five paragraphs the story has a happy ending, and I think we can all welcome the Bill and give it a Second Reading.