HL Deb 06 April 1955 vol 192 cc333-92

3.22 p.m.

LORD JEFFREYS rose to move, That in view of the failure of Her Majesty's Government to give effect to the provisions of the Royal Warrant (and corresponding instruments) of 1919, under which provisions the rates of retired pay of officers were to be periodically revised, either upwards or downwards, to an extent not exceeding 20 per cent., according as the cost of living should rise or fall; and in view of the fact that in spite of the immense rise in the cost of living no increase above the basic rates of 1919 has been made, in the opinion of this House Her Majesty's Government should take steps to deal with this matter without further delay. The noble and gallant Lord said: My Lords, in moving the Motion standing in my name, I must first declare an interest. On previous occasions when I spoke on this subject I was under the impression that I myself, who retired in 1938 under the Special Warrant of that year, did not come under the 1919 Code. I now gather that the Warrant under which I retired does come under that Code, which must apply to more officers than I thought. Accordingly, I must declare an interest.

Next, I would explain that when I refer to the Royal Warrant of 1919 I mean to include also the corresponding Admiralty and Air Force instruments of that year. My Motion deals with the failure to give effect to the Royal Warrant and the corresponding instruments of 1919. I must say at once that those instruments are not, as is sometimes thought, mere departmental orders; they are Royal Orders made in the Sovereign's name by responsible Ministers, and they guarantee the terms stated to those affected by them. My contention is, therefore, that the Government are contractually bound to give effect to those terms and that the promise given to those officers under the terms of that Warrant has been broken. I am not speaking from any Party point of view. I believe that successive Governments have been entirely influenced by that intangible, inscrutable, and withal inflexible body, the Treasury.

I will briefly state the course of events After 1922 the cost of living fell steadily for a number of years, and from 1924 onwards retired pay under the 1919 Code was reduced accordingly—and quite properly—under the terms of the Warrant. In 1933 it had been reduced to 11 per cent. below the basic rates of 1919. In 1934 there came a slight rise in the cost of living and the Treasury, quite improperly, as we contend, then decided to "consolidate and stabilise" (those were the expressions used) the rates of retired pay at 9½ per cent. below the basic rates of 1919. For years after that, efforts were made in Parliament to get justice for those officers, and about a year ago the Government did nearly restore the 9½ per cent. by which the 1919 rates had been reduced—I say "nearly" because what was given was 10 per cent. on the net reduced rates. If 9½ per cent. is subtracted from 100, the result is 90½ and if 10 per cent. is added to 90½ the result is99½: so that the officers are still one-half of 1 per cent. short of the 1919 rates.

I wonder how many wage and salary earners, or indeed how many others of any description, are receiving now less than the rates of 1919, as are these old officers, survivors of a terrible and sanguinary war. I sometimes wonder whether that one-half per cent. was due merely to the Treasury instinct for pinching or whether they wanted to make out that it was not a restoration but a gift of 10 per cent. At any rate, it was certainly not generosity, but bare justice to the officers concerned. We contend now that the 1919 Code should be fully implemented by the addition to the rates of retired pay of the 20 per cent. authorised in that Warrant. In support of that claim I would say that, according to the Consumers' Expenditure Average Value Index, the cost of living has increased since 1935 by no less than 153 per cent., and since 1919 by 87.4 per cent.

As regards the effects of an addition of 20 per cent. to the 1919 rates, I would point out that in 1951 there was a new Royal Warrant which gave increased rates of retired pay to those officers who retired subsequently to the date of that Warrant. The addition of 20 per cent. to the 1919 rates would have the following effects. It would bring the total retired pay of the most junior officers—lieutenants in the Navy, captains and subalterns in the Army, and corresponding ranks in the Air Force—to some £40; per annum less than the 1951 new rates; it would bring the total retired pay of the next group, what one might call the middle group —lieutenant-commanders, commanders and captains in the Navy; majors, lieutenant-colonels and colonels in the Army—to from £40 to £85 more than the 1951 rates; it would bring the total retired pay of rear-admirals and major-generals to the same amount as the 1951 rates; it would bring the total retired pay of vice-admirals and lieutenant-generals to £40 per annum more than the 1951 rates; and it would bring the total retired pay of admirals and generals to £20 per annum less than the 1951 rates. But all those retiring under the 1951 Code are to get, in addition to retired pay, a grant on the termination of their service of a lump sum of £1,000. Is it unreasonable to ask that those who retired under the 1919 Code should get the benefit of the terms promised them—for they were promised—that is to say, an increase of up to 20 per cent. on the basic rates of that year?

The number of officers drawing retired pay under the 1919 Code was given by Mr. Birch in another place in December, 1953, as 16,500. But this is a diminishing number, for not a few die every year, and that number will certainly have decreased considerably since December, 1953. On March 10 of this year the Minister of Defence stated that the initial cost of granting a 20 per cent. increase on the rates of Service retired pay under the 1919 Code would be a little under £1 million per annum; but he added that this amount would diminsh by about £80,000 each year. What is £1 million, to do justice to old and faithful servants of the State, compared with a total expenditure of certainly over £4,500 million a year?—I do not know what the total expenditure will be in this year's Budget, but there is, I understand, a substantial Budget surplus. Millions of pounds are, in fact, being spent in all directions. Wages and salaries—even the pay of the Services—have all risen greatly. A deficit of over £400 million is, I understand, contemplated in respect of National Insurance in twenty-five years' time. There does not seem to be any reason for, or any steps being taken towards, real economy in other directions. Surely, if money must be saved, it can be saved in other directions than from the pensions of the officers who retired after the greatest of wars, and which are emphatically debts of honour.

It should not be forgotten that income tax is deducted from retired pay, which makes a considerable difference in the rates; nor that the value of money has greatly depreciated since 1919. It should be remembered, also, that there is strong feeling on this subject, amounting to a grievance, among retired officers, and that that feeling is doing no good to the Service, for the example of their elders and their treatment in this matter of retired pay is causing many desirable young men to refrain from applying for commissions. It should be remembered that the Secretary for War, in his 1953 Memorandum on the Army, stated that there was a shortage of candidates—"candidates of the right type," to use his words—for commissions in the Army. I imagine that that shortage still persists, and it is not a little due to the dissatisfaction of their elders on this subject of retired pay. What would be said of some public corporation, bank or insurance company which had undertaken such a liability towards its employees, or others, if it were to refuse to honour that liability? What would be the verdict of public opinion? And what, I wonder, would be the finding if such a corporation were sued in court?

I come now to the arguments raised by the Treasury at different times in support of their action as regards officers' retired pay under the 1919 Code. Some of these arguments may be brought out again to-day, but not one of them, I would say, has any substance in it. First, it has been said that stabilisation was not unpopular, and that even those affected wished for it. This is entirely incorrect. Stabilisation was unilateral. Those affected were not consulted or given any chance of expressing an opinion on the subject. I would say, without fear of contradiction, that when it was made clear that it was to be at 9½ per cent. below the basic rates, it was bitterly resented. I well remember coming back from India in the winter of 1935—I knew nothing about this matter beforehand—and meeting some of my friends who had retired and who were complaining bitterly that their pensions had been reduced. If there was feeling about the variation of the rates, it was feeling against the continual fall in those rates. No one expected that when they might have begun to rise they would be stabilised, as they were, at 9½ per cent. below the basic rates. In support of what I have just said, I would quote a letter which has been put into my hands, written to the Admiralty at that time by a retired naval officer. It runs 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. That, I think, gives a fair idea of how officers regarded this reduction when it was first made.

Next there is the argument that any increase would cause a general demand by ex-civil servants and other pensioners for increases of pension. I would say at once that there can be no comparison between officers and civil servants—I believe that is really admitted now—either as regards conditions of service or methods of reckoning pensions. These are questions into which I am quite prepared to go in detail if my statement is refuted or queried. It is now generally admitted that there is no analogy between the two sets of conditions, And as regards other pensioners, not civil servants, it should be remembered that The 1919 Code was a definite Royal agreement, made by the Minister in the Sovereign's name, whereby the officers were promised certain terms, and that other pensioners have not got such an agreement. There is also the argument that stabilisation for the Civil Service was recommended by the Whitley Council of the Civil Service But the Whitley Council have nothing whatever to do with officers, and, as I have stated, there is no comparison between the conditions of officers and civil servants.

Next, there is the argument that no alteration in the pensions codes can be retrospective, and that pensions, once awarded, should not be changed in either direction. But the stabilisation of 1953 was retrospective—retrospective for some sixteen years—and the principle of no alteration of rates has been broken quite frequently, not only in the downward movement of rates in the 'twenties and early 'thirties, but also in the case of pensions in the lower income groups, where cost of living increases have been given under the Pensions (Increase) Acts. It has been recently stated by a Government spokesman in another place that the Pensions Code of 1919 was no more a contract between the Government and the officers than was the stabilisation of 1935, as both were imposed—that was the expression used—on the officers by the Government. "Imposed" the stabilisation most certainly was. But the Code of 1919 was the promise of the Crown made through responsible Ministers.

I would next draw attention to certain mis-statements in Command Paper 9092, which tried to put the best complexion on the Government action. That Command Paper stated that the Government accepted the recommendation of the Royal Commission in respect of civil servants, and a similar recommendation made by the May Committee in respect of Forces' officers that these pensions should be stabilised, whereas in fact paragraph 114 of the May Report says what appears to me to be quite the opposite, namely: We think it not inequitable that as from a date as soon as possible after July 1, 1931, the rate of deduction should be based on the average cost of living over a period of six months before that date, and that it should thereafter be subject to more frequent review. Then, paragraph 173 says: We have already recommended an acceleration of the cost of living adjustment on pay and on existing pensions and a similar adjustment should be made on future pensions.


May I interrupt my noble friend for a moment? He has read two paragraphs from the May Committee Report. If he has not a copy of the Report with him, perhaps I could read paragraph 174. That says: Apart from this change"— that is the change which my noble friend read out— we think that the pensions scheme for officers of the three Services calls for reconsideration.


Reconsideration, very likely; but it does not say in those words that it should not be based on the average cost of living. It does not contradict what the Committee said in paragraph 114. So far as the May Committee is concerned, those are hardly recommendations in favour of what has been—I will not say anything about the future—Government policy.

Finally, there is the argument used on various occasions, and in another place in a recent debate, to the effect that it was decided to abolish the 1919 Code on the grounds that it was unsound that the remuneration of Crown servants should vary directly with the cost of living, and, further, that the system of variable awards was tried for a short time, was found to be unsatisfactory and was finally abandoned in 1935, after it had been tried for a good many years and always in a downward direction. Who decided to abolish the 1919 Code? The answer is, the Treasury, presumably because it was inconvenient to them. This decision was quite regardless of their obligations to the officers concerned.

Now I am going to assert, on the contrary, that, far from being unsound, the system under which the rates were to vary upwards or downwards according to the rise or fall in the cost of living was a fundamentally sound one, and that the Minister who was responsible for the Royal Warrant of 1919 foresaw, when others possibly did not, the instability and variations of the cost of living in the near future, and that that Minister did not, without due consideration, affix his signature to that Warrant. The signature in question is "Winston Spencer Churchill," and I confidently maintain that, far from being unsound, the policy of the 1919 Code which he then initiated was, like many other of his actions, to which great tributes have been paid, and deservedly paid, in your Lordships' House today, wise and foreseeing in a very high high degree. I wonder whether my noble friend who is to reply has ever inquired of the outgoing Prime Minister whether he considers that the Warrant which he signed in 1919 was unsound and likely to prove unsatisfactory in practice. If he did make such an inquiry, I wonder what reply he received.

I have, I think, dealt with all the arguments which have been used in the past on behalf of the, to my mind, indefensible policy of the Treasury with regard to the 1919 Code. I do not know whether we shall hear any fresh arguments to-day. However that may be, I once more plead for justice—it is nothing short of it—for these retired officers, and for the fulfilment by the State of its contract with them. In my submission, these retired officers have a right to the full benefit of the terms—and I hope they will get it—of the 1919 Code. I am going to conclude by asking for consideration, not as a right but as an act of grace, of the cases of the few surviving officers of the Navy, Army and Indian Army—there are none of the Royal Air Force, because it did not exist in those days—who retired finally prior to 1914. I am informed that there are about 50 of these who have received no increases under pensions increase schemes, and whose minimum age is nearer ninety than eighty. I ask that consideration be given to their cases, and that it be borne in mind that their pensions were granted when the £ was a golden sovereign and not the depreciated paper £ of to-day, and when income tax was in the neighbourhood of 3s. in the £ or less. I beg to move.

Moved, That in view of the failure of Her Majesty's Government to give effect to the provisions of the Royal Warrant (and corresponding instruments) of 1919, under which provisions the rates of retired pay of officers were to be periodically revised, either upwards or downwards, to an extent not exceeding 20 per cent., according as the cost of living should rise or fall; and in view of the fact that in spite of the immense rise in the cost of living no increase above the basic rates of 1919 has been made, in the opinion of this House Her Majesty's Government should take steps to deal with this matter without further delay.—(Lord Jeffreys.)

3.48 p.m.


My Lords, I beg to support the noble and gallant Lord, Lord Jeffreys, in the powerful case he has put to your Lordships to-day. As we all know, he has taken a great interest in this subject for years past, and has been a steady and powerful advocate of the interests of these gallant retired officers of the various Services. I am speaking personally to-day, because there is no Party line on this question—in fact, it never has been a Party question. The noble Lord, in a sense, has kept it out of Party. On July 21, 1952, I led an all-Party deputation to the noble and gallant Earl, Lord Alexander of Tunis, who was then Minister of Defence, and that delegation was composed not only of Members of all Parties, but of Members of both Houses and representatives of the officers' associations concerned with this issue.

In 1946, the Labour Government did a great deal to assist the pensioners and those who had retired, but this particular problem was still unsolved at that time. We urged upon the then Minister of Defence not only the solution of this problem but the solution of a number of others. We urged, for example, the necessity for reforms in pensions to officers' dependants, to the widows and children of deceased officers. We pointed out at that time that a captain's widow received only £50 a year basic pension. There was also a humiliating means test for those ladies. We had heartrending tales told us by women in this country and abroad who, in many cases, were living on a miserable pittance.

On November 19, 1952, in reply to a Question by me, the noble Earl, Lord Alexander of Tunis, rejected any increase in the pension of those who retired before September 1, 1950, but promised consideration of the other questions. He was as good as his word, because on December 16, 1952, again in reply to a Question by me, after, I am told, some forceful and soldierly language by the noble and gallant Earl the Field Marshal, the Chancellor of the Exchequer and the Treasury were impressed by the arguments—or the language—and they improved materially, the lot of the dependants. The basic pension of a captain's widow went up to £110 a year, which was more than double what it was before. The means test was abolished, and certain other requirements also were abolished.

We thought, and we said at that time, that the Government were coming along in the right direction, and they had certainly made a great step forward so far as the dependants were concerned; but we were not able at that time to obtain from the Government any promise whatsoever that they would do justice to the retired officers themselves. The case for the retired officers has been very ably put to-day, if I may say so, by the noble and gallant Lord, Lord Jeffreys. There is no need for me to reiterate the case that he has put, or to elaborate it. I merely say this: that in the last three years, as we all knew, there has been a constant rise in the cost of living. This problem is an ever-pressing one. It is not one which is getting better; in fact, it seems the whole time to be getting worse. I think noble Lords might direct their attention to an inquiry as to why the Government, who were very willing indeed to listen to reason over the dependants of dead warriors, were not prepared to do so in the case of the living warriors, those who retired before December 19, 1945.

While the first case was an excellent one, it seemed to me that the second one was an equally good one. Why did the Government listen to one and not to the other? I suggest that the reason for it is that the Treasury and the Government are advised that it is no longer a case of human need; it is no longer a human problem. It is a Principle, with a capital "P," which is at stake. The old soldiers, the retired officers, are a Problem, again with a capital "P." The desire is not to make them a Precedent, once more with a capital "P." The old soldier, the retired officer, has to eat; he has to clothe himself and house himself, and clothe, house and feed his dependants, even if he is a Principle, a Problem and a Precedent. It is true that "old soldiers never die," but these old soldiers are fading away as rapidly as they can. If it is the Government's policy that they should fade away, and the problem with them, then all I can say is that it is a highly discreditable one.

The Government are firmly of the opinion that pensions should not be adjusted to meet changes in circumstances which arise after retirement, as the noble and gallant Lord, Lord Jeffreys, has told us. On what basis they rule that, it is difficult to understand. So far as I am aware, no one else in the country is bound by it, and it would certainly be rejected as being entirely impracticable if anybody suggested it. For example, employees of all kinds, whether retired or not, are constantly affected by the rise in the cost of living, and their pensions or emoluments are increased from time to time. Certainly my own employees have never suggested to me that I should use any other basis for their reward and emolument than the cost of living. They always come along when they want a rise, which they do at fairly frequent intervals, and say: "The cost of living has gone up. We can no longer live on our salary. We want an increase," and usually one has to give it.

Then again it is the case with old age pensioners and Members of Parliament. It seems that only these old retired officers and Peers of Parliament are exempt from the general rule; that they are not affected by a rise in the cost of living, the retired officers getting only what they got very many years ago and the Peers not getting anything at all. I understand that the point of the argument used by the Treasury and the Government is that the cost of increases—


Is the noble Lord suggesting that there is a difference between the attitude of this Government and that of the late Government? He keeps saying "the Government," but his Government took exactly the same view.


Our Government did a considerable amount in 1946. They did not deal with this particular problem because, for one thing, the circumstances were not the same then. The cost of living was not so high then as it is now. The increasing cost of living has brought this matter constantly to the forefront. As I say, there were a number of problems which were dealt with by the Government of the day, some in 1946 by the late Government and some in 1952 by this Government; but this problem has never been tackled by either Government. If the Labour Government were in, I should say to them exactly what I am saying now; but, as they are not in, I cannot say it to them. I can say it only to the Government that are in. I am trying to find out in my own mind why there is this difference of attitude between the treatment of the dependants and the treatment of the retired officers.

I have already explained that there is this, as I think, entirely illogical rule, that pensions should not be adjusted to meet changes in circumstances when every other emolument is. There is also the contention (both these things were said in another place by the Minister dealing with the matter, so it is not imaginary on my part) that the cost of the increases would have to be borne, in part, by others on small fixed incomes. Of course they would, in part—but so will everything else. It is quite true, as all your Lordships know, that the burden for such persons on small fixed incomes is a hard one: they are subject to constantly increasing rises in expenditure, and they have no increases in income to meet these rises. But why pick on old soldiers? This applies to all increases in expenditure—the increase required to make the H-bomb; to provide new and elaborate quarters for ambassadors in foreign capitals with unpronounceable names; for aircraft carriers, which some of your Lordships seem to think are obsolete; and for a new and expensive fighter aircraft which cannot fire its guns without hitting its own petrol tanks. All these things, and many million more items of expenditure, necessary and unnecessary—and most of them are necessary in these days—will affect the standard of living and the taxation of those living on fixed incomes. But that is not an argument for saying that the retired officers should not be given any more. It may be a good argument for saying that the Government should substantially reduce taxation. But why start on the retired officers? Why not start on some of these very big items which might (I do not know) be possible of reduction?

The Government make play with the argument that the 1935 agreement declaring stabilisation was popular, or at any rate not unpopular. I think that this is dubious. In fact, the noble Lord, Lord Jeffreys has gone a good deal further. He says that that is completely untrue; that in fact it was highly unpopular with the officers of the day; and he quoted a letter from a retired officer who charges the Government in so many words with having betrayed their trust to him. In any case, I should imagine that in those days, taking the climate of opinion, many officers did not query the suggestion made to them because they thought that they were being patriotic. People in many walks of life—Ministers, civil servants, teachers and so on—were having cuts in pensions and in pay, and the retired officers probably thought that they were being patriotic. For, as we know, there is no more patriotic section of the public than the Service people, who would be only too anxious to help in that way. But they did not anticipate that they would be the only ones whose patriotic gesture would continue to operate through all these years when the need for it had gone.

Secondly, in many cases, they may not have understood the ramifications of the subject—it is a highly complicated subject, as any noble Lord who has made a study of it knows. In fact, to set the Government of the day, the Treasury and the financial Departments, against the retired officers is rather like putting Dodson and Fogg against Colonel Newcome, with the same result. Just imagine the effect on a retired officer when, in present circumstances, he sees practically everyone who is in a position to obtain an increase in his or her emoluments getting such an increase, while he is still reduced to this very low figure, based on a standard of living and of expenditure many years old.

On the Order Paper to-day there appears an Amendment to the Motion to be moved by the noble Earl, Lord Munster. I would say that this is a classic example of "new think" and "double talk"—to use the words of 1984. It exhorts us (that is your Lordships) to exhort them to keep something under review, well knowing that they have no intention of taking our advice or of taking any action whatever. I should much have preferred the Government to come along, as they always have done in the past, with a speech extolling the work of the retired officers, saying what fine fellows they were, but that they—the Government—could not do anything; and then to sit down. That at least would be honest. But to lead anybody to vote (because I hope this matter will be pressed to a Division) for the Government Amendment, expressed in the way it is, is, I think, to do nothing but mislead the House; and, as I have already said, is a classic example of "new think" and "double talk."

As I say, I hope that the noble Lord, Lord Jeffreys, will press this matter to a Division if no satisfactory answer is forthcoming. I speak personally, because there is no Party issue involved, but I feel that it is a matter upon which those who feel strongly should register their vote. I hope that the situation which arose in the course of the passage of the Road Traffic Bill will not be adopted to-day. Your Lordships may remember that after opening shots, a brisk engagement appeared to be imminent, but at the first signs of retaliation by the Government certain noble Lords opposite, some with Naval connections, struck their colours and sank beneath the waves, unhonoured but not unmourned. To-day, I trust that the noble Lord, Lord Jeffreys, who is a Guardsman, will not submit to any such humiliating fate.

4.5 p.m.


My Lords, I rise with great pleasure to support the Motion moved by the noble and gallant Lord, Lord Jeffreys. I think I shall be able to put my argument briefly, particularly in view of the large number of speakers who are to follow. The issue before your Lordships lies really in a narrow historical compass. Historically, the position is that a system of pensions for the Forces, related to the cost of living, was introduced in 1919. The cost of living proceeded to fall until 1933, and during all that time the system was used to reduce the pensions payable. Then the cost of living proceeded to rise in 1934 and 1935, in which year the Government of the day completely abolished the system—I think they may have been looking forward and visualising what was to happen in 1936, 1937, 1938, and so on—and stabilised the pensions. Frankly, that does not look to me a very good action on the part of the Government, who are the uncontrolled employers, not subject to any legal liabilities, of Her Majesty's Forces. The defence put up by the Government for rejecting this Motion and for putting forward an Amendment, consists really of two arguments. The first is a reference in the proposed Amendment to be moved by the noble Earl, Lord Munster—


I have not moved it yet. The noble Lord is criticising the Amendment. He has not the least idea what I am going to say on it.


No; but I am allowed to have read it, am I not? I have read it with great care, and I have also read that, wonderful Treasury document called Command Paper 9092, upon which it is largely based. This is a perfectly wonderful Paper from which I shall enjoy quoting. One argument that I imagine the noble Earl will use is itself in this printed Paper, and it is that the rates of pension have in fact been raised by 10 per cent. We all know that broadly, but not perhaps completely, that restores the 1919 level; in fact, so far as possible it does what the Government can do to abolish altogether the system of relating pensions to cost of living, and to regard it as never having existed. That is in accord with what I say is their second argument, which is most clearly expressed in this Command Paper—namely, that any system of varying pensions by relation to the cost of living is wrong in principle and ought to be abandoned.

If one looks at the Paper one sees, in paragraph 41, that the 1919 system is admitted as possibly suitable for the abnormal circumstances of the period following World War I, but is considered clearly unsuited for any other circumstances, and certainly for circumstances as exceptionally abnormal as those following World War II. I should like to ask three questions on that statement in Command Paper 9092, and I hope the noble Earl will answer them all for me. First, are not the consequences of World War II as abnormal as, or even more abnormal than, those of World War I, the difference being that in the second case we have had a continuous and rapid rise of prices and inflation of the cost of living? It is just as bad as, and in some ways much worse than, what happened after the First World War. Let us hope that Her Majesty's Government will altogether abolish this continuous rise in prices and destruction of the value of money.

My second question is: if the view of Her Majesty's Government is as stated in this document, that pensions once fixed should be kept fixed forever, why do they not apply that to all other pensions? Why not apply it to pensions under the National Insurance Act, which I am delighted to think the Government have just raised simply and wholly on account of the cost of living? National Insurance pensions were raised also, I would point out, without regard to poverty or any form of means test, so as to be sufficient by themselves for subsistence. Why did Her Majesty's Government do that? Why should those pensions be adjustable to the cost of living when pensions given to people who have earned them by serving Her Majesty in the fighting Forces are not adjustable, whatever happens to the cost of living? One further question: Why not apply the same principle to pensions in the universities? I do not think the noble Earl will have heard of this, but I hope he will take the opportunity to be informed—


if I may interrupt the noble Lord, may I point out that we are discussing here one point, officers' pensions. I hoped the noble Lord was not going to bring in the question of other pensions and other, quite different, services, because that is a subject on which a large number of noble Lords would have wished to speak.


I am not asking Her Majesty's Government to do anything about these other systems of pensions; but when you defend what is now being done in regard to the Forces, it is an absolutely legitimate argument to ask why you do not apply the same rules to the Forces as you apply in other directions. I will go on to speak of the universities, because the pensions given there are for service. They are not directly controlled by the Government, but when, quite recently owing to inflation, the value of the pensions earned by retired professors (as well as retired colonels) had diminished owing to inflation, Her Majesty's Government were very sympathetic, and, in fact, gave an additional grant which could be used by the universities to raise those pensions. Colonels are almost as deserving people as professors.

My third question is: why have Her Majesty's Government recognised the need for increasing the pensions of people who retire now, while giving nothing to those who retired in the past? I know that the answer is that they have to raise the pensions of people who are now entering the Services, or those already in, because not sufficient people would join unless reasonable remuneration was offered. The point which I want to bring home to Her Majesty's Government is that pensions are part of remuneration. I suggest that to remunerate the Forces by fixed pensions and then to let money value depreciate is to be a very bad employer. Historically it is on record that one of the Tudor Sovereigns, Henry VIII, having to employ forces in Northern Ireland, arranged to mint a large number of bad coins which were to be sent to Ireland to pay the troops, with a note made in the Council of the day, by the Treasury, that as soon as the troops had been paid—but not before—the value of those coins should be cried down. I am not saying that Her Majesty's Government are acting exactly like Henry VIII, but they are doing something which is in some ways not much more admirable.

I hope I shall not get the noble Earl on his feet again when I say that this problem of the Forces, which is the only one with which I am asking the Government to deal, applies to many others. Her Majesty's Government have been forced, by persuasion and a certain amount of pressure, to do something for retired civil servants. I hope they will find themselves going on to do more for retired civil servants, but I am not asking the noble Earl to speak about them now. This problem applies to all sorts of people. The inflation that is causing the trouble may not be within the control of Her Majesty's Government. Every time a trade union or an employers' association puts up the money price for doing exactly the same work as before, it does a hardship to the unfortunate pensioner who is living upon a rigidly fixed pension such as the Government allow. Though Her Majesty's Government may not be able to stop that happening, I want to call attention to a fact which the whole country should realise: that every time wages go up for doing no more work than was done before or producing nothing better than before, this hardship arises. Though Her Majesty's Government may be unable to prevent it, I beg that, to the extent of their power, they should offset that hardship for all people if they can but, above all, for those who served the country in Her Majesty's Forces in the past and are now living on rigidly fixed pensions.

Her Majesty's Government, when they look at paragraph 46 of Command Paper 9092, will realise that there is here an evil crying for a remedy. That paragraph states: The fact is that at one time pensions and retired pay fell as the cost of living did, but have retrained fixed while it has risen, and risen fairly considerably. I should like to know who was the Treasury official who put in the word "fairly." That is a fairly magnificent admission that there is here a real evil. I beg Her Majesty's Government to do something more than is indicated in the Amendment. I rather hoped the noble Earl would not move his Amendment but would accept this Motion. The noble Earl has not told me his intention, but I beg him to be much more forthcoming than that Amendment. I will end with three points: pensions for Service are part of remuneration; Her Majesty's Government should be a good employer, and they should find a way to do much better in the way of Forces pensions than they have done hitherto.

4.20 p.m.


My Lords, I have spoken before in your Lordships' House on this subject and I am not prepared to make the same speech again. I have, however, just one or two quite simple questions which I hope the noble Earl who is going to move the Amendment will be able to answer. Before putting them, I should like to congratulate my noble friend Lord Jeffreys on the admirable and very clear way he has put his case—with which I entirely agree. My first question is: Does the noble Earl, Lord Munster, agree that the 1919 Code did exist? I should like to know that. We presume that that Code did exist. In the Amendment upon which the noble Earl is going to speak reference is made to quite a number of matters. I hope that I shall not get into trouble for referring to them now. The noble Earl has not yet spoken, and I am allowed to speak only once, so I cannot speak after he has spoken. I would therefore ask him this very pertinent question. In the Amendment he suggests that the House should recognise the action taken by the Government in March, 1954. He also makes reference to what took place in 1935 and to the pensions increase scheme of 1952. Do those provisions definitely carry out the very solemn Code which was entered into in 1919? If the noble Earl can assure me that they do, then I shall be prepared to vote for the Government. If that is not so, I shall go into the Lobby against the Government.

4.22 p.m.

THE EARL OF MUNSTER had given notice of an Amendment to the Motion, To leave out all the words after "That," and insert "this House, recognising the action taken in the matter of the retired pay of officers by Her Majesty's government in March, 1954, to ensure to all officers in receipt of retired pay at the consolidated rates introduced in 1935 an increase of 10 per cent.; and noting the additional assistance made available to retired officers of limited means under the pensions increase scheme of 1952; resolves that Her Majesty's Government should continue to keep under review the needs of these officers." The noble Earl said: My Lords, once again my noble and gallant friend Lord Jeffreys has seen fit to call your Lordships' attention to the subject of officers' pensions, and I certainly appreciate, as much as other noble Lords, the moderate way in which he presented his case. I hope that I shall be able to reply in the same moderate but, nevertheless, firm fashion. It is, I think, unnecessary for me to remind this House that the subject which we are now discussing is extremely complicated, and before I come to moving the Amendment which stands in my name, I shall find it necessary to move somewhat outside the terms of the noble and gallant Lord's Motion in order to present all the facts of the case.

If I should delay the House for an undue time, I trust that I may have your Lordships' attention and your indulgence. Perhaps it would be suitable that I should answer various questions which have been addressed to me by the four noble Lords who have spoken. The noble Lord, Lord Jeffreys, was good enough to inform me that he intended to ask about retired Army officers who are still receiving retired pay at the rates which prevailed before 1919. My noble and gallant friend, I think, made one mistake here. Every officer who is in receipt of retired pay, whether under the 1919 Code or the Codes of earlier date, is eligible for the hardship increases of pension under the various increase schemes, provided, of course, that on every occasion he satisfies the condition as to age and income. I have no doubt that the great majority could automatically satisfy the condition as to age.

The officers who are surviving today on the pre-1914 rates must be those officers who did not earn any re-assessment of their retired pay through service in the First World War. It is thought—though I would not for one moment say that my figures are necessarily correct—that they number twenty-six. As I say, that figure may be subject to correction. It is, moreover, believed that all those twenty-six officers have sufficient means, as they have not yet applied for the benefits which have been provided under the pensions increase schemes. Of this figure of twenty-six, I understand that thirteen are cases of early voluntary retirement, two are insane and six are cases of officers retired with a disability not necessarily due to service; and the remainder retired on superannuation or received their award in other special circumstances. It is known that sixteen of these officers retired before they reached the age of forty, and five retired before they reached the age of thirty. It is a very difficult problem to ascertain the number of officers who are drawing pensions under pre-1914 rates. That is all the information I have so far been able to extract. I will certainly convey to my right honourable friend the Secretary of State for War the views which the noble and gallant Lord has put forward in the discussion this afternoon.


May I interrupt the noble Earl for one moment? With regard to the pre-1914 officers, I merely asked that, as an act of grace, they should be considered: I did not make any claim at all. But I do make a claim as regards the 1919 officers.


I fully realise that the noble and gallant Lord asked that the position of the officers to whom he has referred should be considered. I am perfectly prepared to put that view to my right honourable friend.

The noble and gallant Lord then proceeded to draw your Lordships' attention to paragraph 26 of the White Paper, where the impression—I agree with him—was inadvertently given that the May Committee recommended specifically that the cost of living system for retired officers should be abolished. Frankly, I do not believe that the mistake is really of any significance whatsoever. For throughout the Report, if your Lordships will read it, it can be observed that the May Committee were critical of the system of variations which took place in accordance with the changes in the cost of living, and I really think that no objective reader could avoid coming to the conclusion that, taking the Report as a whole, the May Committee, in fact, did recommend reconsideration of the pensions schemes for all officers of the three Services.

I pass from that to deal with the point which was made by the noble Lord, Lord Beveridge. He, as I understood him, referred to the pension increases given under the National Insurance Acts, and he endeavoured to draw a parallel between them and retired public service pensions. The noble Lord knows far better than I do that the two are completely separate, and that it is not possible in any way to liken one to another. Public service pensions, being occupational pensions, are fundamentally different from national retirement and war disability pensions. They are based, as the noble Lord well knows, on length of service and rank, or pay on retirement, they may be larger or smaller than National Insurance pensions. If I were to accept the noble Lord's argument, it would mean at once a radical alteration in the principles on which public service pensions are based.


About time, too!


Would the noble Earl agree that the basis of the National Insurance pensions is that they are contributory, contributions being paid in respect of employment?


I am coming to that point now. I was going to say—and the noble Lord is well aware of this as, indeed, other noble Lords are as well—that pensions given under the National Insurance Acts are shortly to be increased, but the increase in the basic rate is accompanied by larger weekly contributions to the insurance Fund. Increases have been given to public service pensioners, which includes retired officers, but no retired officer has been asked to make any contribution whatever to a pension fund at any time during the whole course of his service. The noble Lord, with his wide and intimate knowledge of this question, will see how fundamentally different are the two forms of pensions, and I feel certain that on reflecting upon the matter again, he will agree with me that it would be wrong to try to equate the two.


My Lords, may I ask why it would be wrong? I am an absolute ignoramus in this field, but I should have thought it the sensible thing to do. If there is a constantly rising or falling standard of living, why is it utterly wrong to make a pension have some relation to it?


I am coming to the point the noble Lord has raised. The point I am making is whether it is possible to liken the pensions under the National Insurance scheme and those given to retired officers of the Armed Services. Since we last debated this subject, in December, 1953, Her Majesty's Government have published a White Paper on retired pay and pensions. In spite of the scorn which the noble Lord, Lord Beveridge, poured on that White Paper, we had certainly hoped that it would have removed the widespread misunderstandings, as well as giving a full explanation of the policy which successive Governments have followed in this matter.

First, I will deal with the main part of the noble Lord's Motion concerning the provisions of the 1919 Code which enabled periodical revisions of pensions to be made in accordance with a sliding scale. Your Lordships know that this matter has been discussed many times, but even so, even to the extent of wearying your Lordships, who have heard all the arguments before, I must deal with the matter afresh. My noble friend's Motion, whilst omitting all mention of improvements in retired pay which have taken place in recent years, condemns the Government for having failed to give effect to the Royal Warrant of 1919. My noble friend will appreciate as well as I do, however, that that Warrant no longer exists, having been amended by new ones made in 1931, 1932 and 1935, and finally being superseded altogether. Therefore, it is quite impracticable for this or any other Government to give effect to an instrument which is no longer operating.


My Lords, the noble Earl is evidently not aware of what I think every old soldier and old sailor is aware, that the Warrant under which an officer retires cannot be cancelled so far as he is concerned. A new Warrant may bind those who have not yet retired, but that is quite a different thing.


I am coming to all those questions. What I am saying is that the Code of 1919 is no longer in existence. The Motion of my noble friend implies that no increase has been given whatever above the basic rates of 1919. As my noble friend rightly pointed out, those rates were stabilised in 1935. Since that date, increases have been given to all officers who draw pensions under those stabilised rates. Where officers qualify for assistance under hardship schemes the additions have brought their pensions, I think, well above, but certainly above, the basic 1919 rates. But what I imagine the noble Lord really asks is that Her Majesty's Government should reintroduce the provisions of the 1919 Code and abolish the other Royal Warrants which affected retired officers who drew pensions under the original Warrant.


My Lords, I am not asking the noble Earl to reintroduce; I am asking him to give effect, so far as officers who come under it are concerned, to the Warrant of 1919, which should never have been altered.


That may be; but, if the noble Lord will forgive me, the Warrant of 1919 no longer exists, and the Government cannot implement the provisions of a Warrant which does not exist and which has been superseded by others. That is why I say that my noble friend is asking the Government to reintroduce the 1919 Code and to abolish the other Royal Warrants which have affected officers who retired under the stabilised Code.


My Lords, may I ask the noble Earl this historic question? He stresses the fact that the Code of 1919 has been abolished: will he agree that it was abolished by the Government just after two years of rising prices indicated to the Government that it might be awkward for them?


It is difficult to carry on an argument with constant interruptions, but let me point out that what the noble Lord has just said is entirely wrong. The matter was decided in 1932 and the new pensions code was stabilised in 1935. However, I shall come to that in due course.


My Lords, could the noble Earl say how long the 1919 Code was in existence? Up to what date was it operative for officers?


Up to 1935, when it was superseded by the new Code. I thought I must direct my noble friend's attention to the terms of his Motion. Be that as it may, I feel that I should now explain in full the effects of the 1919 Code, which provided for retired pay to be calculated on rank or age and length of service, with maximum rates for each rank. It also provided, as my noble friend is aware—and in this it was unique among retired pay codes in this country —that the high rates then introduced should be regarded as attributable to the high cost of living and, therefore, that they should be subject to revision either upwards or downwards, taking into account the variation in the cost of living. I do not think it has been mentioned this afternoon that that Code applied equally to pay and half-pay, as well as to pensions; but, as we know, it has long been withdrawn and a new Code substituted.

Amongst other things, the Code provided that the first review of rates should take place in 1924 and that subsequent revisions could be made at three-yearly intervals. Each of these revisions was to apply to retired pay already in issue under the Code, as well as to that of officers retiring after the revision, and a formula was worked out for that purpose, the effect of which is to be seen from Appendix II of the White Paper. When the first revision came to be made in 1924, the cost of living had fallen from 107½ per cent. above the 1914 level to 69 per cent. above the 1914 level; and according to the formula a reduction of 7 per cent. in retired pay would have been appropriate. But in actual fact the reduction was fixed at 5½ per cent. In 1927, when the next review took place, a further cut of one half of 1 per cent. was made, and an additional cut of 1 per cent. occurred in the year 1930. The formula at Appendix II of the White Paper shows that a total reduction of 8 per cent. would have been justified, whereas, in fact, the figure was fixed at 7 per cent. The position was specially reviewed in July, 1931, when the cost of living had dropped to 45 per cent. above 1914. On this occasion a deduction of 11½ per cent. could have been made, but the actual cut was 8 per cent.

In the autumn of 1931 the nation was faced with a serious financial crisis, as your Lordships may remember, and a strict application of the sliding scale formula for retired officers was made; accordingly, the rate of reduction was increased to 11 per cent., and the Royal Warrant of that year shortened the period of time between each revision. In 1932 the Government of the day decided to abandon this completely unique system, whereby both pay and pensions for officers varied with the upward or downward trend in the cost of living, but the final consolidation was not effected until July 1, 1935, at a level of 9½ per cent. below the 1919 rate. In the meantime, retired pay was temporarily stabilised at 11 per cent. below the 1919 figures, although here again, under the formula, further deductions ought to have been made. Let me here emphasise that on the cost of living figure for 1935 a cut of 12½ per cent. would have been justified, which, but for the alterations (made from time to time in the retired pay code) would have operated ever since. Thus, when stabilisation was introduced, pensioners benefited by 3 per cent., and that ran for a number of years; that is to say, these retired officers were given something greater than that to which they were entitled under the formula which my noble and gallant friend is so anxious to see strictly adhered to.

I have tried to give your Lordships a simplified and, I trust, accurate account of what could have occurred and what did happen. But, whichever view may be held by noble Lords, it is obvious that the Governments throughout those years leaned well on the side of generosity and, as I have said, gave to pensioners larger pensions than those to which they were entitled. It might well be thought that this very action was in itself a breach of the 1919 Code, but I can trace no record of complaints from retired officers—indeed, if anybody had the right to complain it might well have been the British taxpayer. It was only after the cost of living had moved in the opposite direction that successive Governments were accused of "breaking faith"—if I may say so with respect, an unhappy expression used by my noble and gallant friend in this House on December 15, 1953.

Here I should like to give the House some details about pensions, quoting cases in point: it is rather going into detail, but I feel it is important that the House should realise what has happened since 1935. I take the case of a married man who is a retired captain, over sixty years of age, with no private income whatsoever. His stabilised pension in 1935 amounted to £272 per annum, instead of the £300 which he would have received at the full 1919 rate. That officer to-day is receiving an additional £60 a year under the 1944 and 1947 schemes. That gives him a pension of £332 per annum. Then the 1952 hardship scheme came along, and here this officer receives an additional £26 per annum, making his pension to-day £358 per annum. That is an increase of nearly 20 per cent. on the maximum 1919 rates, and of over 30 per cent. on the stabilised rate of 1935. Let me give your Lordships one other account, of a married officer of the rank of captain, over sixty years of age, who, let us say, has £200 a year of his own. He received the pension of £272 per annum at the stabilised rate in 1935. He now receives a 10 per cent. increase under the 1944 and 1947 schemes, which gives him £299 per annum. But, in addition, he will receive under the 1952 scheme, with its higher income limits, a further sum of £26, giving him a total pension to-day of £325 per annum. That is an increase of 20 per cent. on the 1935 stabilised rate, and an 8 per cent. increase on the 1919 rate. I could go on for a long time quoting these cases to your Lordships. Officers with smaller pensions and with little or no private means have got even higher percentage increases than the captains whose cases I have quoted.

From time to time allegations have been made that retired officers knew nothing of the decision of 1932 and were not even notified of it. A notice was prepared in similar terms to an Army Council Instruction, and it was sent in October and November, 1932, with pension vouchers, to all retired officers. If those officers received the pension vouchers, then they also received the notice. Some 11,000 copies were printed and dispatched to Army officers; over 7,000 were sent to officers of the Royal Navy, and some 600 were dispatched to the Royal Air Force. Officers must have known and appreciated the effect of the decision which was reached in 1932. I have no doubt that all retired officers received this circular, in precisely the same way in which they received a circular at a later date informing them of the successive hardship schemes under which they were entitled to apply. They read that circular, because one in five have, in fact, asked for an increase under the hardship scheme.

So far as my research has gone—and I have endeavoured to go into this matter in great detail it appears that the Government's decision to stabilise pensions was not resented. Indeed, I believe, with respect to my noble and gallant friend, that the sliding scale was just as unpopular with pensions as it was with pay, and possibly many officers who had incurred commitments required to know what their permanent pensions would be. I make that point for this reason: that I can find no record whatever of any discussion or question at that time in Parliament, the one place where it would have been appropriate for complaints to aired. Let me remind noble Lords again that the decision to stabilise pensions was made at a time when the cost of living was still falling. I ask myself, and I ask your Lordships, what foundation is there for the complaint that this was a cunning and sly move by a parsimonious and far-sighted Treasury to freeze pensions when the cost of living began to rise in 1935? In fact, like all other important decisions, this one was made by the Government of the day, and not by a Department.

It is, as I think noble Lords are well aware, a fundamental principle of public service pensions that they are based on length of service and pay or rank on retirement, and that once they have been awarded they are not normally changed in the light of events after retirement. There have, however, been two grounds for exceptions which Governments, including the late Government of which the noble Lord, Lord Ogmore, was a member, have recognised. The first was on grounds of hardship and applies to officers retiring under all past codes. The second recognised the officers affected by stabilisation in 1932 and 1935 as an exceptional class for whom, as things have turned out, some special action might be justified.

The first exception, that on grounds of hardship, gave to those too old or unfit to earn a livelihood, and whose total incomes were limited, a measure of assistance by means of an addition to their basic pension and, as will be seen from paragraph 40 of the White Paper, this was not ungenerous. The second, to meet a feeling of injustice arising from the fact that many were receiving pensions at rates lower than had at one time been in force, gave to all those officers with small pensions and who retired under the 1919 Code assistance of up to 10 per cent. on their stabilised pensions. In 1954, this additional 10 per cent. increase, which was previously given only on pensions of up to £400 a year, was given to all officers who had not previously received it. As was said by my noble and gallant friend, that virtually restored the 1919 Code of pensions. Her Majesty's Government then hoped that the sense of injustice which these officers had rightly or wrongly felt would have been removed, once and for all. But this was not to be. Although, as I have said, no demand was made for restoration until some years after the stabilisation plan had operated, the noble and gallant Lord now asks once again that all the provisions of the defunct and unique code of 1919 should be restored in full.

One of the points made today, and which is frequently made, is that it would not cost a large sum of money. Surely, this argument is based on a false assumption, for could special treatment merely be limited to former officers of the Armed Forces? Even if Her Majesty's Government should feel able to meet this request, my noble and gallant friend would still be dissatisfied, for the Society of which he is President has now demanded that retired pay for all officers who retired before September 1, 1950, should be raised to current rates.


May I remind my noble friend that that is not part of my argument, and that is not part of my Motion at all?


I think it is only fair that I should draw the attention of your Lordships to the fact that whenever an improvement has been made by Her Majesty's Government to give retired officers an increase in their basic pensions, or to restore a 10 per cent. cut of former years, they have invariably asked for additions. I should like to continue this argument, because it is relevant. My noble and gallant friend will realise, as well as anyone else, that the qualifying rules and regulations, as well as the rates for pensions in force to-day, have all been changed. The minimum period of service for retired pay to-day is twenty years, and any officer who retired under the 1919 code with less than twenty years' service would cease to draw any pension whatsoever if he were re-assessed on the post-war code. Some 3,500 retired officers would then be struck off retired pay completely. Does that really represent a solution to this problem? Both the exceptions which I have mentioned earlier have rightly been made to meet special circumstances, but it would be fundamentally wrong to vary the whole structure of pensions after they had been awarded. I venture to think that neither this nor any other Government could agree to this suggestion. In point of fact, the late Labour Government did not agree to it either. It was, indeed, the conclusion that such variation was not merely unsatisfactory, but was also wrong, that led to its withdrawal after the experience gained between 1919 and 1932.

I hope that noble Lords will have read the White Paper with the care and attention it deserves. Your Lordships will have observed that there are two matters of some importance which emerge from that document. First, it will be noted that every Government since 1920—and they were Governments of vastly different political persuasions—has followed exactly the same policy in not giving assistance to all public service pensioners irrespective of need, but, in fact, giving it instead where it was most needed to relieve real hardship. That is the first point. The second point is this. In the lifetime of each Government since 1944 a new pensions increase scheme affecting officers' pensions has in fact been introduced. Successive Governments have, therefore, kept under review the needs of retired officers, and measures to relieve real hardship were introduced in 1944, 1947 and again in 1952. Furthermore, it is worth remembering—and I do not apologise in any way for bringing this to your Lordships' attention again—that retired officers are not the only people living on fixed incomes. There are a large number of people in this country living on such incomes, fixed at a time when money was worth more than it is to-day, people for whom little can be done by way of direct assistance. The fact that retired officers, as distinct from this great mass of the fixed income groups, have been singled out for a pensions increase should never be forgotten. But to expand it further would mean asking many others with limited incomes to shoulder further burdens for the benefit of these retired officers.


May I, once again, interrupt my noble friend? Possibly he forgets that those other people with limited incomes, of whom he speaks, have not been promised, as were the retired officers under the Warrant of 1919, that their incomes would rise, as well as fall, with the cost of living.


My Lords, I do not want to weary the House with deploying my arguments all over again, but my noble and gallant friend will realise, first, that the 1919 Code sliding scale does not now exist; secondly, that the basic pension for all officers under the 1919 Code has, in fact, been restored; and that that has all been done in the lifetime of the late Government and the present Government as well.

The best and surest method to assist all those people who are living on fixed incomes, whether they are retired officers or others, is to maintain sound financial and economic policies so as to achieve stability in the value of money. It is perhaps some measure of the Government's success that the cost of living has risen by little more than 5 per cent. since the last "hardship" increase for retired officers was put into effect nearly three years ago. Here let me reply to the noble Lord, Lord Ogmore, to remind him that the rise in the index of retail figures from June, 1947, to October, 1951, was 29 per cent. From October, 1951, to February, 1955, the rise has been 13 per cent. Let me also remind the noble Lord, in passing, that the last measure of any sort which was given for officers who were already retired was given by the former Administration under the Warrant of 1947. Her Majesty's present Government gave something in 1952 and they have given something else in 1954.

I turn now to deal with the Amendment which stands in my name. I do not want to repeat any of the observations I made at the beginning of my remarks. My Amendment falls into two parts. First, it asks the House to recognise the action taken by Her Majesty's Government last year in restoring to all officers who had not previously received it an increase of 10 per cent. on their stabilised pensions. This action virtually restored the deduction of 9½ per cent. at which final consolidation took place in 1935; and, in fact, it meets my noble and gallant friend's long-standing request. Secondly, the Amendment asks the House to note the "additional assistance made available to retired officers of limited means under the pensions increase scheme of 1952." That scheme concentrated on giving relief on grounds of hardship and where it was most required. That seems to me to be a most desirable object. Broadly speaking, it gives to retired officers over sixty years of age, or who are incapacitated, and who have retired under all Codes an addition to their pensions where their incomes do not exceed £654 a year, if they are married, or £529 a year, if they are single. Noble Lords will probably know that this 1952 scheme, although an entirely separate measure, operates in addition to the 1944, 1947 and 1954 schemes. Finally, my Amendment asks the House to resolve that Her Majesty's Government should continue to keep under review the needs of officers who have retired from the three Services and draw pensions under old codes.

I humbly apologise for delaying the House for so long, but the whole subject is of importance and deserves a reply befitting the occasion. I have tried to set before your Lordships all the stark facts, however unpalatable they may be; but it does not alter one iota my feelings of sympathy, gratitude and respect towards these men who have stood their country in good stead. It is well that my noble and gallant friend, and others who will take part in this debate, should know that Her Majesty's Government do not intend, nor have they ever intended, to break faith with any retired officer. The help and assistance which we have given them during the last three years has done much to relieve hardship. It is clear proof that we have been vigilant and watchful in their interests. It is our intention to continue to treat them in a fair and equitable way. That, indeed, is the purpose of my Amendment. I fully recognise my noble and gallant friend's feelings towards these retired officers, and I also appreciate the reasons which prompted him to move his Motion. I trust that he will accept my reply and my Amend ment in the same spirit as that in which I have taken his words. I beg to move.


My Lords, before the noble Earl sits down may I have an answer to my question? I asked a very simple question: whether such measures as have been introduced since the 1919 Code came into operation have not, in effect, been detrimental to those officers who would have benefited had the 1919 Code continued. It is a simple question.


My Lords, I tried to compose my long observations to deal with the whole question of the 1919 Code and to reply by that method to the question which my noble friend asked me. If he has heard and appreciated the observations I have made, he will have seen that the 9½ per cent. cut in the 1919 Code has, in fact, been virtually restored. The 20 per cent. variation in an upward or downward trend in the cost of living has not been renewed, but there has taken place this variety of Warrants dealing with increases in pensions, hardship schemes of one sort or another, to all of which I have referred. As I have said, in every case the position of the officer retired under the stabilised Code of 1935 has certainly been improved since that date.


My Lords, I am most unwilling to ask any questions now, but there is one point that I must ask the noble Earl to make clear. He speaks as if, by this increase of 10 per cent., the 1919 scheme had been established, with its rates, and as if it had not varied. But is it not the case that during all the years between 1935 and 1954, when the 10 per cent. came back—or, at any rate, during all the later part of the time—people were receiving lower pensions than they would have received had there been no provision for adjusting pensions to cost of living?


If I understand the noble Lord correctly, what he is saying is this: that if the 1919 Code had remained in full operation and had not been stabilised in 1935, then from 1935 till 1952 officers drawing pay under the 1919 Code would have been better off during part at least of that period of time because they had this 20 per cent. fluctuation in the upward or downward trend in the cost of living. The answer to that is certainly in the affirmative.


How did it restore the 1919 provision?


My Lords, I went to some considerable length to try to explain to the House that the 1919 Code sliding scale was abolished in 1935. Therefore, what my noble friend is asking the House to do is to ask the Government to implement a provision of a Code which is no longer in existence. That provision was superseded by the one of 1935, when pensions were stabilised; and from that date, the pensions paid to officers were paid on the new stabilised Code. But I repeat, because I think that the noble Lord cannot have heard me, that there was no complaint whatever about the variation in the cost of living from 1932 until 1935 or 1936. It was only some time after the cost of living started to move in an upward direction that various vocal complaints were made about the new stabilised code.

Amendment moved—

Leave out all the words after "That," and insert "this House, recognising the action taken in the matter of the retired pay of officers by Her Majesty's Government in March 1954, to ensure to all officers in receipt of retired pay at the consolidated rates introduced in 1935 an increase of 10 per cent.; and noting the additional assistance made available to retired officers of limited means under the Pensions Increase Scheme of 1952; resolves that Her Majesty's Government should continue to keep under review the needs of these officers."—(The Earl of Munster.)

5.13 p.m.


My Lords, in rising to support the Motion, I do so in considerable trepidation, particularly after listening to the eloquent speeches which we have heard this afternoon. I also crave your Lordships' indulgence for one who is speaking for the first time in your Lordships' House. I believe that it is right to declare an interest, even though remote, and therefore I say that I myself draw a disability pension. That, I think, has no connection with the subject we are discussing to-day. I have a son-in-law who is a serving officer in Her Majesty's Regular Army and who is no doubt looking forward to the day when he will retire and draw a pension. I should also tell your Lordships that I am chairman of the Officers' Association, a position I have occupied for the past nine years. It has been my duty to urge the Officers' Association to try to put right these grievances. Your Lordships will remember that that Association was formed in 1921 by the late Field Marshal Earl Haig, with the idea of fostering and taking care of the interests of ex-officers of all three Services, their wives, their widows, their children and their dependants.

We must remember that ex-officers have no trade unions for collective bargaining; nor have they an appeal to the courts in matters concerning pensions: they rely entirely on fair treatment and a square deal from the State. I believe that all your Lordships will agree with me that there is a considerable element of doubt whether the officers who come under the 1919 Code have received a perfectly square deal and the fair treatment which they are entitled to expect from the State. Had they been given, in 1935, an option to continue on the sliding scale or to accept stabilisation, that would have been an entirely different matter: they could have made their own free choice and they then would have suffered the consequences willingly. But no; they were faced with a fait accompli, without a "By-your-leave." In my opinion, it was a unilateral and an arbitrary decision which broke the contract made with those officers in 1919.

I now wish to examine this question, of stabilisation and its implementation. Stabilisation of these pensions was decided on in 1932, but it is significant that it was not implemented until 1935. Let us examine what happened during that period, in particular, to the cost of living. In 1932 the cost of living was still falling; it continued to do so through 1933, when, it hit bottom, and in 1934 we saw the curve start upwards for the first time. That curve continued upwards through 1935 and, one might say, at accelerated pace from 1935 onwards.

Now I want to give your Lordships a small summary from the Survey of International Affairs for 1938, Volume 3, under the chapter entitled "The Rise in German Air Power." From that we find that during the debate on the British Air Estimates in 1933, Sir Winston Churchill referred to Germany's growing air power. In March, 1934, he returned to the subject, arguing that parity of air power was required. On July 30, 1934, Sir Winston Churchill stated that Germany's air power was then two-thirds that of the United Kingdom; that in 1935 it would be larger than that of the United Kingdom; and that in 1937 it would be twice as large. In March, 1935, when Sir John Simon (as he then was) visited Berlin, Hitler boasted that Germany had parity of air power with Britain. On May 22, 1935, the Secretary of State for Air announced that the Royal Air Force would be increased by the spring of 1937 by no fewer than 72 squadrons of first-line aircraft. That period saw the revival of the Luftwaffe under Hitler and Goering becoming apparent for the first time, and our own Royal Air Force being pressed to expand. I maintain that it must have been abundantly clear to the authorities at that date in 1935 that we, as a country, would be committed to large rearmament programme, with the consequent effects that that programme must have on the cost of living level. Yet that was the moment chosen to implement the stabilisation which destroyed the safeguard of those pensioners against a rise in the cost of living. Surely that was not the fair treatment which these pensioners were entitled to expect.

In July, 1952, the Minister of Defence, the noble and gallant Earl, Lord Alexander of Tunis, received a joint Parliamentary deputation on this question of Service pensions. In November, the noble and gallant Earl stated in your Lordships' House, in so many words, that in the then economic and financial position of the country the financial commitments involved by the pensions requests could not be undertaken. At that time the country's finances were at a very low ebb, and I could not help sympathising with the attitude of Her Majesty's Government. Since then, however, there has been a continuous improvement in the financial and other conditions of this country—so much so, indeed, that we find the Chancellor of the Exchequer faced to-day with what might be referred to as an embarrassingly large surplus of no less than £433 million. So poverty can no longer be claimed as the excuse for failure to meet these obligations.

We have heard that the total cost of restoring the 20 per cent. sliding scale would be less than £1 million a year— less than one four-hundredth of the budgetary surplus, or one four-thousandth of the total out-turn of the 1954–55 Budget. I do not want to dwell on the reinstatement of the 10 per cent. cut, but I feel that it was a great pity that, instead of basing the increase on the net reduced pension, pensions were not fully restored to the rates under the 1919 Code. It looked as though some sinister figure was trying to chisel off ½ per cent. and appear very magnanimous at the same time. In fact, it took the gilt off the gingerbread of what otherwise would have been received as a very generous offer and only added fuel to the fires of bitterness which were already burning. Perhaps I am being somewhat more out-spoken than is customary for one who is speaking for the first time in your Lordships' House, but I feel most strongly on this subject.

I feel that I must tell you of my conviction, from my contacts with pensioners, serving officers and the younger generation, of the infinite harm and disastrous effects of leaving State obligations unfulfilled. Pensioners say, "How can I encourage my son or my grandson to join the Services after the shabby treatment I have received at the hands of the State?" The younger generation, seeing that shabby treatment, say, "What inducement is there for me to follow in my father's footsteps?" The result is the loss of some of the finest officer material in this country, born and bred in the highest traditions of all three Services, which we can ill-afford to lose to-day—and all for a paltry sum which, I submit, is a debt that the State has failed to honour.

I will not keep your Lordships much longer, but I should like to refer to the statement made by the noble and gallant Earl, Lord Alexander of Tunis, on January 20, 1953, when he said in your Lord ships' House [OFFICIAL REPORT. Vol. 179, col. 1137]: 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, and if and when it becomes possible to assist them financially, they may rest assured that they will not be forgotten. Surely the moment has arrived when that assurance, if it meant anything at all, can and should be carried out.

5.25 p.m.


My Lords, I am delighted to be the first to congratulate my noble friend Lord Kindersley on his maiden speech in this House. I think none of your Lordships will quarrel with him for having put the case for this Motion so bluntly and so clearly. We all know that he has given a great deal of his time and care to ex-Service affairs, and in his speech he has shown his knowledge not merely of the details but also of the angle from which ex-Service people approach this problem. Noble Lords will welcome him here and will hope to hear him on many future occasions, not only on matters connected with Service and ex-Service affairs but also as his father's successor in the team of noble bankers to whom we have listened on so many occasions with so much profit. I had in mind to declare an interest because, until my noble friend Lord Munster sat down, I was firmly under the impression that I derived my rights to Army retired pay from the Royal Warrant of 1919. Now the noble Earl tells me that that is not so; so I suppose that I need declare no interest, and can say that my rights to an Army pension must be based on the Royal Warrant of 1946, which we are not discussing this afternoon.

This subject is a very difficult and thorny one, for a number of reasons, the first (and not least) being that, since we are discussing Royal Warrants, the Royal Prerogative is involved. Secondly, none of us is this afternoon complaining that Her Majesty's present Government have created the situation which we dislike; that was done by Governments long ago —in 1919 if you like; in 1931 and 1915. We are saying that the time has come to put an end to this state of affairs because it has in several directions a nuisance value quite out of proportion to the amount of money involved, as the noble Lord, Lord Kindersley said, or to the number of people involved. For in practice, leaving out the old people of the pre-1919 Warrant, I imagine that most of those who began to receive retired pay under the 1919 Warrant were, in fact, re-employed in the Second World War and therefore their entitlement to pension has improved. That is not the real point, as I shall try to show your Lordships.

There is another disadvantage about these frequent debates on officers' pensions: they might possibly give the impression, to those who have no detailed knowledge of the facts, that noble Lords, and perhaps other people, are more concerned with the affairs of ex-officers than with the affairs of former other ranks. It would be most misleading if that idea were entertained anywhere. As we all know, the fact is that the 1919 arrangements for pensions of ex-officers did include a special provision, namely, the sliding scale. That sliding scale, which was confined to the Warrant we are now discussing, is the cause of all the arguments that we have had since then; and this particular Royal Warrant and the cause of the relatively small number of officers concerned have become the battleground of opposing forces—forces which are opposing each other on principle. And, as my noble friend Lord Kindersley and other noble Lords have said, it is with principles that we are concerned this afternoon.

If the matter could have been settled by the detailed arguments to which we listened from the noble Earl, Lord Munster, I am sure that he would have convinced us all—or very nearly so. But to my mind the whole matter does not work quite that way. The facts of the case have been described by many people in many debates. They are that in 1919 a Royal Warrant was issued linking Service retired pay to the ascertained cost of living; that in 1935 other provisions were made by which that link with the cost of living was abolished, and that ever since then people have been saying that that act in 1935—or 1931, or whenever it was—constituted a breach of faith with the officers concerned.

A certain number of arguments have been advanced to the effect that it was not a breach of faith. Nevertheless, I do not think that any Government—either the present Government or any other—have yet been able to convince the people concerned that it was not a breach of faith; or that if, by chance, it was not, at any rate the Government of the day which took the step were not sailing far closer to the wind than they ever should have done when dealing with a body of people like ex-Service officers who have no representative body fighting their battles, which represents them in arguments with, let us say, their employers on occasions like these. We hear now that at the time it was thought that the arrangements which were made were not unpopular or were not inequitable. I hate these double negatives: they sound "phoney" to me, and in this particular case they always have done.

What I think is most important is that those who claim that an arrangement is satisfactory to the people affected, must have a care, seeing that there is no representative body, or negotiating body, which can speak for the people concerned. In dealing with N.A.L.G.O., or the Civil Service Clerical Association, or a dispute between trade unions and employing bodies, you are quite entitled, if you reach a settlement, to say that it is satisfactory, simply on the ground that it has been accepted by those people who were charged with the duty of representing employers and employed. But everyone knows that there is no such body representing these officers. It is also agreed, I think, by everyone that it would be a most undesirable thing if such a body were to exist. Therefore, I feel quite certain that, if there is a doubt whether there was bad faith in the past, the right thing now, whatever anyone else has done before, is to see that the causes for supposing there may have been bad faith are removed, and removed beyond all doubt and peradventure.

To come back to one of the main difficulties of this particular subject, I have always fancied that one of the reasons why such hard fights were made by successive Governments and their advisers against any changes in these arrangements was because of the idea that, if they made changes, they might have repercussions which would result in attempts to apply sliding scales connected with the cost of living to other sets of people. We have heard a good deal about the question of the cost of living, and we have heard a good deal of argument about the purposes of a pension. Whatever may be thought in Government Departments, I suppose that most people imagine that if a man has served his full time in one of the Services and has then retired—I am not talking a bout people who retired early—he can expect that his retired pay will be such as will enable him to live a modest existence for the rest of his time. Of course, there is a school of thought which will always say that, in these days of the Welfare State, if anyone cannot keep body and soul together, the Assistance Board should come along and make up his income. I do not think that that idea, applied to ex-Service people, would appeal to many noble Lords in this House.

We have also been told by the noble Earl, Lord Munster, that there is the hardship warrant which enables people to come back and prove hardship. Surely, taking the case broadly, one must suppose that when the cost of living moves very much out of line with people's pensions, something must be done every now and then to put pensions back into line with the cost of living. To take an extreme case, I wonder what would happen if the 1914 pound, if you like, became worth only sixpence, or like the French franc, instead of being worth six shillings? Should we allow pensions to remain at the original nominal sums and put everyone on to the Assistance Board? I do not know, and perhaps I am out of order in talking about that now. But I feel that we should not accept the argument that the retired pay of an officer who served his full time should bear no relation to what it costs to enable him to live and to keep body and soul together.

Equally, I am bound to say that it does not surprise me that, in the light of the experience they have now, Treasury spokesmen should say that the linking of the 1919 Warrant not merely to the general cost of living but to the ascertained Ministry of Labour Index was an unwise thing—perhaps it was not at the time; otherwise, as Lord Jeffreys has said, Mr. Churchill (as he then then was) would not have done it. Since then, we have had other experiences. I think anyone who knows anything about the Australian scene will realise the damaging effects that have resulted in Australia from linking the basic wage to the basic costs, and how necessary it became for an alteration to be made.

However that may be, I am making this point simply because I am most anxious—as, indeed, I suppose many noble Lords are—to see a settlement made. And I believe that in practice one of the straightest roads to making a settlement will be to get rid of the whole of the 1919 Warrant or its after-effects. Even if I accept Lord Munster's argument that the 1919 Warrant is dead, I suppose he will agree with me that the evil which Warrants do lives after them even if the good is interred with their bones. But we shall see. As I say, I hope very much that my noble friends in front of me will be able to make some arrangement which, while it avoids any serious repercussions (I do not mean imaginary repercussions in respect of other classes of pensioners), will, at any rate, do away with this longstanding grievance.

But if there is no wrong—and I think there is—certainly the present situation has the same effects as a wrong would have among people whom we all know (though perhaps "some of us say it as shouldn't") to be a most deserving class of the community. It really does not matter whether the brief says a wrong is or is not there. People think it is there. Therefore, I submit that the right thing to do is to remove it beyond all doubt; and I suggest that the right way to do it is to clean up the after-effects of all those Warrants and to put the few people still affected, those whose pensions have not been bettered by these Warrants, on the 1946 Warrant or, better still, on the 1951 Warrant. If we are told that that is a difficult task, all I can say is that it cannot be beyond the ingenuity of the advisers who gave the noble Earl his brief. I make that plea as seriously as I can, in the hope that we shall not go too closely into the rights and wrongs of this case, but really make up our minds that, if justice does not appear to be done, it is high time that it should be made to appear so, even if this Government have to repair the defects of Governments of the past.

5.41 p.m.


My Lords, many of the facts, figures and arguments that I was going to use have already been used by noble Lords who have spoken before me far more eloquently than I am likely to be able to do. Therefore, I am going to dwell on only one point, which has already been mentioned by the noble Lord, Lord Kindersley, in an excellent, well argued and forceful maiden speech upon which I should like to join the noble Viscount, Lord Bridgeman, in congratulating the noble Lord. The subject is recruitment. All this argument about pensions is very fine, but the fact of the matter is that this misunderstanding on the subject of pensions, the inequalities in pensions and the way in which older officers feel that they have been badly treated is fast drying up the fountain of recruit officers who should be coming into the Services and are now going into industry. The Services are becoming more and more technical, and therefore they have to compete more and more with industry in obtaining young men of character and intelligence. The actual pay which officers get cannot be compared in any way with the pay that individuals, if they have any intelligence at all, can obtain in civil life.

As the noble Lord, Lord Beveridge, said, pensions are part of emoluments. The amount of money which an officer would have to put by every year in his Service life in order to produce the pension which he receives nowadays if, for example, he is at lieutenant-colonel level, would be £800 to £1,000. That is a considerable figure and makes an officer's emoluments up to something like the level of civil industry. But if his pension is not going to keep level with the purchasing power of the pound, and as these retired officers grow older and by their increasing age become less able to obtain employment to bolster up their pensions, then I submit that the carrot of a pension which is held out in front of the nose of a prospective officer will cease to be a carrot at all. We need officers in the Services, and I submit to the Government that everything must be done to make officers feel that right up to the last day they live they will be treated properly by the Government in thankfulness for the services which they have given to the country.

5.46 p.m.


My Lords, I rise to support the motion of my noble and gallant friend, Lord Jeffreys. He is a difficult man to follow, and we have had a long debate and everything has been said so often that it is rather wearisome to have to repeat it. As regards the Amendment that has been pitchforked in, as I listened to the speech of the noble Earl and noted his oratory and the way he kept it up and warned and admonished people right and left with his finger, I was astonished; but I could not help thinking that two-thirds of his speech had nothing to do with the point raised in my noble friend's Motion. I was much amused because when the noble Lord, Lord Beveridge, rose and mentioned Civil Service pensions, he was called to order by the noble Earl, who afterwards in his own speech drifted away to refer to other people who were living on fixed incomes, which has nothing on earth to do with the Motion. I ask the House not to be led away by the noble Earl's idea of the value of the concessions made since the pensions were stabilised. Under the Pensions Act of 1952 an elderly single officer drawing £425 retired pay gross gets an additional £20 per annum—that is to say, if he has not accepted work which brings him in over £2 a week. That is not a big figure nowadays. Twenty pounds extra, provided an officer is not making more on his own than £2 a week, makes him worse off than a pensioner under the National Insurance Scheme, because he has to declare everything he has got and there is no means test for old age pensioners.

As for the sentence in the Amendment which reads: that Her Majesty's Government should continue to keep under review the needs of these officers I would say that if the Government think that that will be any comfort to officers and their friends, they are certainly mistaken. What it will do is to increase their exasperation. It seems rather an extraordinary thing that a Minister should rise from the Front Bench and exhort his colleagues to do their duty in looking after pensioners. Undoubtedly that is their duty. It sounded rather like Mr. Malenkov making his public confession before he was liquidated. I sincerely trust that the noble Earl is not going to be liquidated because, in spite of the arguments he has put forward, I have a great liking for him. The noble Earl's reply has been no better than the one given in answer to the Question my noble friend, Lord Jeffreys, asked some time ago, and gives no more satisfaction. On the last occasion, as the noble Earl will remember, we were promised that these things would be seen to, and that when the Government were in a position to do something, something would be done, et cetera, and that this matter would be given high priority. That was eighteen months ago, and what has happened since then?—absolutely nothing.


Oh, yes, there has.




Indeed, there has. I must interrupt the noble and gallant Earl. Of course, a great deal has happened since eighteen months ago. I feel that that is the trouble with many noble Lords who have spoken in this debate: they have not ascertained what has occurred. If the noble and gallant Earl had paid me the honour of listening to my speech with which I wearied the House for far too long, he would have realised what has happened.


I did listen to the speech of the noble Earl, or at least as much of it as I could assimilate at the time. I come back to the fact that the whole point of the Motion of my noble and gallant friend is the 1919 agreement and what has happened to it. I want to call the attention of your Lordships to two previous debates, one on a Motion by the noble Lord, Lord Schuster, in June, 1953, and another on the Motion of my noble and gallant friend, Lord Jeffreys, in December, 1953. The noble Lord, Lord Schuster, made two telling speeches in those debates. He arrived at the conclusion that a definite promise had been given by the Government to the officers concerned and that that promise had been broken. He went on to say [OFFICIAL REPORT, Vol. 185, col. 100]: 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. The late Lord Simon also spoke in that debate, and he said [col. 103]: I have listened throughout this debate with increasing anxiety. … I find myself in complete agreement with what was said just now by Lord Schuster. The issue is whether, in the Government of this country, we are going to observe public faith. He went on to say that, in his opinion, in a question of public faith legal considerations matter nothing. He wound up by saying, in reference to the argument put forward by the Government, that if they were to give these pensions they would open the door to a flood of other applications for increased pensions: This argument, I say, is no answer and every honest man knows that it is no answer. So we get a distinguished civil servant and a great lawyer coming to the conclusion that a breach of public faith has been committed. I have quoted from those two speeches, because neither of the persons who made them could be accused of being biased towards the Armed Forces, but were men who had had a wide experience of public affairs. That was their considered opinion.

In answer to a representation on this subject by letter to the Chancellor of the Exchequer, the Financial Secretary replied: It is a fundamental principle of the public service pensions that they are based on length of service and pay or rank on retirement, and once awarded they are not normally variable in the light of events after retirement. "Normally" as compared to what? When the pensions in 1919 were introduced, what were the conditions? We should look back, because they were abnormal conditions at that time. We had just finished a "war to end war." The League of Nations was coming into being, the Kellogg Pact and others were in gestation and were going to ensure the peace of the world. Our men were told that they were coming back to "a land fit for heroes to live in," and we were going to get a large indemnity from Germany—Germany was to be "squeezed till the pips squeak," in the elegant expression of the statesmen of that day. We were looking forward then to "a vista of peace and plenty." It was then that the 1919 Code of Pensions came into being.

In the early 'thirties things were not looking so well, and the most confirmed optimists were coming to believe that it was possible that we had not arrived at a period of perpetual peace. We then had to face a rise in the cost of living and a great rearmament scheme, which always involves financial difficulties. Although these pensions were not to be revised except under the rule, this appeared to have been a sufficient abnormality to authorise a departure from what is called the "fundamental principle", to reexamine the 1919 Pension Code, not, it will be observed, in the interests of the pensioners, but in order to save some few hundred thousand pounds and to dissociate officers' pensions from the cost of living. That, I think, is a fact which even the noble Earl, Lord Munster, cannot dispute.

Now, in 1955, ten years after the end of the Second World War, we find ourselves in an entirely different atmosphere. We have had the admission of the noble Earl that officers who lived through all those years without what they ought to have had—namely, the increase of pension owing to the 20 per cent. cost of living increase—would have been a lot better off if they had had it: and all those years they had to face without it were bitter and hard years. I apologise for my rather disjointed remarks, but I have cut most of the gems out of my speech in order to shorten it and not to keep your Lordships too long. I ask your Lordships to reject the Amendment and to accept the Motion of my noble and gallant friend Lord Jeffreys, and thus re-establish the reputation of this House as being the protector of State servants and of justice in dealing with them.

5.53 p.m.


My Lords, I rise to speak in support of the Motion of my noble and gallant friend Lord Jeffreys. Until I heard some of the arguments this afternoon, I should have disclaimed any personal interest in this matter, because I did not believe that I was affected in any way whatsoever by the Royal Warrant of 1919. But I must say that, having heard the debate to-day, I wonder whether anybody understands what the Royal Warrant of 1919 is. Thanks to my noble and gallant friend Lord Jeffreys, to the noble Lord, Lord Schuster, and other Members of your Lordships' House, and also to a large number of Members in another place, this subject is fairly well known throughout the country. The problem has been well presented, as is shown by the reports of various debates published in Hansard, which have recorded statements made over a period of years. There is no argument that is not fully known and appreciated by Members of your Lordships' House, and I do not want to weary your Lordships by repeating any of the old ones; I want merely to make two observations, and to leave it at that.

The problem I wish to speak of is one of which I know from my own personal experience. I have not seen mentioned anywhere the fact that at the end of the First World War a most difficult situation had arisen. The Services had expanded tenfold—and in the case of the Army even more than that; officers and Regular non-commissioned officers, and even men, had been given Regular commissions and had risen in time of war to positions that they could not have hoped to reach in peace. When peace came, the Army had to be reduced to peace-time dimensions, and this caused untold hardship. Speaking of my own Service, the Army, it was a common thing to find an officer who in war time had risen from the ranks, by merit, to the temporary rank of lieutenant-colonel having to revert to the rank of substantive lieutenant, dropping four grades and losing thereby the pay and possibilities of pension for himself or his widow, should she survive him.

It was a distressing problem, but there was an even more difficult one, because the older members of the Regular Army, if they stayed on, would block all promotion for these young men who had been trained during active hostilities. It became necessary, immediately after the war, to clear the ranks of the higher grade officers to make room for the promotion of these younger men. I can remember that special provision was made for these people in the way of attractive conditions of retirement, so that they could leave and have some security, in after-life. One of the principal provisions made was that pensions should go up in the event of the cost of living going up. Of course, it was an understood quid pro quo that they should go down if the cost of living went down.

I listened with great interest to the noble Earl, Lord Munster, and I was particularly interested in one thing he said. He said that the Government of 1932 passed a certain measure, and that we thought they were a parsimonious Government, whereas he thought well of the Government and considered that they acted generously. I ask your Lordships to consider the situation in 1931 and 1932 when pensions were stabilised. I was commanding a battalion at Shorncliffe, and that "generous" Government were recruiting unemployed men into the Army at 2s. a day, and carrying that penal regulation that anybody married "off the strength"—that was, under the age of twenty-six—would not receive marriage allowance or children's allowance. I do not think your Lordships realise many of the things that happened in the Army in that year. I had ten men who came from Lancashire. They each had one railway ticket given them by the Government, and each had to pay the fares for his wife and child; and their effects they brought down by train. They had to live on 14s. a week and a ration which was valued at 9¼d. a day. I can remember men who were married "off the strength" fainting on parade because they had had no breakfast. Then came the cuts that led to the incident in the Navy. I was doing an administrative staff job in Salisbury, and I was asked to investigate what would be the feelings of the men who were on higher pay if we cut them to 2s. a day. When we worked it out, it was cutting their pay by 28.8 per cent., when everybody else was being cut 10 per cent.

I know that there is an argument that at that time we could not afford to pay higher rates of pay. I should like to draw your Lordships' attention, however, to an article that appeared in the Economist this week—quoting from an article of March 31, 1855, dealing with the question of abolishing the purchase of commissions in the Army. It was headed, "Can we afford not to?" The article is interesting, because it said in its first paragraph: You must raise your rate of payment considerably; you must make up your mind to a vast increase of the retiring pension list. … We are not in the least dismayed by the amount of the annual sum which it would cost us to get back into a better system. We know the temper of the House of Commons—how lavish it is on some occasions; how niggardly it is on others; but we have never known it refuse to sanction a vote which the public service really required, or which was needed to meet the claims of clear justice and good sense. … If, at the recommendation of Parliament, we were to revise the system of purchase, we are confident that Parliament would never demur to the expenses entailed upon the country by carrying out that recommendation. To suppose the contrary is an insult to its good feeling and good sense … if you want a good article, you must pay for it—in some form or another. The country has no right to be served for nothing. The article finishes by saying: We can well afford it; we can not afford to grudge it; and it must be incurred. I beg to support the Motion standing in the name of the noble and gallant Lord, Lord Jeffreys.

6.7 p.m.


My Lords, the noble and gallant Lord, Lord Jeffreys, put his case most clearly, and there are not many new arguments that I can put forward. I make no apology for speaking and supporting him to-day, because I feel the subject is of great importance. The noble Lord, Lord Beveridge, said that the pension of an officer is an integral part of his terms of service. Of course that is true. A young officer who joined the Service knew this, and his parents knew it. That was one of the reasons why they advised him to take up a Service career in spite of the disadvantages of a somewhat shorter serving life than is usual in civilian employment. The disadvantage of having to retire perhaps ten years or more before his civilian colleague was outweighed by the certainty of an adequate pension. The officer knew that on retirement he would have a reasonable life. He could take up activities for the benefit of the community, most of them, of course, unpaid. Indeed, we have only to look around the countryside to see what fine work retired officers are doing in many walks of life, on the Bench, and so forth.

As noble Lords have said, this is not a political question, but I would remind noble Lords on this side of the House how many of our staunch supporters—chairmen of Conservative associations, and so forth—are the very officers we are trying to help today. The noble Lord, Lord Kindersley, in an excellent maiden speech, pointed to the effect that this question was having on young men in regard to taking commissions to-day. If a young man consults his parents, or perhaps an uncle who feels that he has not had a square deal from the country, it must influence him adversely from taking up a Service career. I should like at this point to interject a plea for certain officers who are suffering a special hardship, and one which is more aggravated than that of their colleagues—I refer to those who migrated to Canada after the First World War and who are now suffering from the effects of an adverse exchange rate on their pensions. I would ask whether Her Majesty's Government in conjunction with the Canadian Government, could not look once again into the case of these very few officers.

The noble Earl, Lord Munster, claims that the 1919 Warrant does not exist any more. Nevertheless, in 1919 a promise was made. Why was it made? It was made, quite rightly, because at that time the future was obscure. It was made at the end of a war when officers had suffered great hardships. I think in the case of the Army it would be fair to say that they suffered even greater hardships than they did in the last war. Certainly, the casualties were much greater. It was made in the day of the "Geddes Axe" when, as other speakers have said, many gallant officers who held high rank in the Army had to submit to early and unexpected retirement. Many of them, although not eligible for disability pensions, had their earning capacity impaired by the nervous strain of those years. I feel most strongly that Her Majesty's Government should think of the circumstances in which that 1919 Warrant was made, and should honour its provisions; or, if they cannot honour its provisions completely, they should follow the advice of the noble Viscount, Lord Bridgeman, and put these officers on to the 1946 Code or one of the later Codes.

6.12 p.m.


My Lords, I will not detain your Lordships for more than a moment. The arguments that I was going to use have been adequately expressed by the noble Viscount, Lord Bridgeman, and by the noble Lord, Lord Kindersley. I support this Motion, and nothing that has been said has caused me to alter my intention. Therefore, I shall not detain your Lordships with any further remarks.

6.13 p.m.


My Lords, with reference to the Amendment, may I, in the first place, join with other noble Lords in congratulating the noble Lord, Lord Kindersley, on his admirable maiden speech, and express the hope that we shall often hear him, especially in debates on Service matters. I must join issue with my noble friend Lord Munster as regards the abolition of the 1919 Code. If he had served as an officer in the Army for a considerable time, he would know that for an officer who retires under a certain Code, that Code can never be abolished; it goes on. For all those officers who retired under the 1919 Code until it was replaced by another Code, there is no question but that it did exist and it still does exist, although it has been replaced for all officers retiring in the future by another, and later, Code.

I repeat that these Warrants and Codes are entirely different from any form of departmental order. They are, for those who are concerned under them, Royal orders, conveyed by responsible Ministers. They cannot be altered by departmental order. They can be replaced for those who retire later, but that is an entirely different matter. I consider that the stabilisation of which there was a good deal of talk was not legitimate. It was flying in the face of the 1919 Code and of the promise that was made then. Of course, the reductions were legitimate, and were in accordance with the Code, but the stabilisation was not legitimate. When the cost of living varied, effect should have been given to the promise that pensions would rise or fall with the cost of living. Whilst I am on that subject I should like to quote one of the subsequent Warrants, which certainly did not cancel the Warrant of 1919, namely, the Warrant of 1931, making the periodical reduction which at that time was perfectly legitimate. I should like to quote certain words which occur at the foot of that Warrant, because I feel that they are appropriate when we are considering this matter. They are as follows: Except where otherwise provided nothing contained in this Our Warrant shall be held to deprive any officer, soldier or other person who retired from Our Service before the date of this Our Warrant of any pecuniary advantage of which he is already in enjoyment in virtue of such retirement."— that is, before the date of 1931. I read that to your Lordships only to show that at that time, at any rate, it was certainly not contemplated that the whole system was to be altered and that officers were in fact going to be deprived of certain benefits which they might have otherwise enjoyed. I would add that under subsequent Codes—at any rate so I am informed; I did not think it myself—officers who retired (for instance, under the Code of 1938) came under the provisions of the 1919 Warrant. I say that merely with reference to the confident assertion of my noble friend Lord Munster that that Warrant was completely abolished and had no further effect.

A good deal of the Amendment has very little to do with my Motion. I would repeat what I have said already in my original speech, namely, that the payment of a 10 per cent. increase on the net rates of payment, which did not even completely restore the 92½ per cent. deduction of 1919, was not an act of generosity which I think it is claimed to be, but was an act of the barest justice to the officers affected. Then, as regards the credit claimed for the additional assistance made available to retired officers under the Pensions Increase Scheme of 1952. I would say in the first place that it has nothing to do with my Motion, which deals only with the failure to give effect to the 1919 Code. Next, I would say that the treatment of officers under this Act was far from generous, for, in order to get an increase, it was necessary first, to pass a means test; and secondly, to be over sixty years of age; and the increase given was, to a married man, £26 per annum—depreciated paper pounds—and to a single man, £20 per annum. The same increase was given to other ranks, and whilst £26 per annum was possibly not unreasonable for some of them, it was certainly not over-generous for the officers concerned.

The only part of the Amendment which has any direct relation to my Motion is the last part, which resolves that Her Majesty's Government should continue to keep under review the needs of these officers. I suppose the phrase "these officers" refers to all officers. As it reads, it refers only to those who received an increase under the pensions increase Scheme of 1952. I presume it is intended to refer to all officers. Assuming that it means the officers who retired under the 1919 Code, what is its value? It commits the Government to absolutely nothing, and it means that the same failure to implement the 1919 Code may go on indefinitely. I believe we have an unanswerable case that a promise was made to these officers. I have explained that it was made by a very responsible Minister, who meant what he said and who did not sign things which he did not believe, and I consider that that promise ought to be given effect to. I still hope that the Government will see their way to deal adequately with it. I hope that my noble friend the Leader of the House is going to give us some hope that something will be done. Failing that, I shall, with very great regret, be obliged to consider dividing the House.

6.22 p.m.


My Lords, I rise with some trepidation to offer some observations to your Lordships on this subject. If I may go back a little into my earlier life, I was during the First World War a very junior subaltern in a battalion of the Grenadier Guards commanded by the noble Lord, Lord Jeffreys, and I had for him at that time that awe, compounded of respect and affection, which I think was common to all the officers and men of that battalion. I must confess that, even after so many years have passed, that awe still persists. I should not, in any case, propose to go in great detail over the ground which he has so admirably covered, because the main points which he raised in his speech have already been dealt with by my noble friend Lord Munster, in a speech which I am sure noble Lords will all agree, whether they accepted it or not, was a full account of the position which lee up to where we are now. Indeed, my noble friend has left me very little to say.

There are, however, just a few considerations which perhaps have not yet been sufficiently emphasised, and which I ought to bring before your Lordships in connection with this debate. The problem of the retired officer is, of course, not a new one to any of us; we have discussed it quite often even during the period that I have been in your Lordships' House, and I think it has never failed to touch all our hearts. This afternoon the noble Lord, Lord Jeffreys, and many others have spoken with sincerity and deep feeling about the difficulties which face these officers at the present time. I would in particular, if I may, instance the speech of my noble friend Lord Kindersley, who made such an admirable entry into our debates. I should not presume, nor should I wish, to dissent from anything those noble Lords have said as to the difficulties and problems with which retired officers are to-day faced. We all know of cases within our own experience which illustrate the troubles that afflict them. But I feel it would be only right for me to re-emphasise what has already been said by my noble friend Lord Munster— namely, that there are wider aspects which I think, perhaps naturally, have not been adequately brought into the account this afternoon. They were hardly mentioned by Lord Jeffreys himself and by most of those who followed him, yet I feel it would be wrong if we ignored them.

First and foremost, I believe that it would be a mistake—indeed, I believe that it would be even wrong—to talk as if this were a problem that affects only retired officers. It is in fact a problem of the widest possible character. The hard truth is, as Lord Beveridge very rightly said, with all his ability, that we live in times when the pound buys less than it used to buy. That is the truth which has been forcibly brought to the notice of successive Governments, of every political colour, since the beginning of the century. This debate is not the occasion to go into the reasons for this: as your Lordships know, they are many and varied.

In some respects they are not unconnected with the steady rise in the standard of living of the working people of this country, which is in itself such a satisfactory feature of our time. But, of course, this change in the value of money weighs heavily, to a greater or lesser degree, on all those who have fixed incomes, not only on retired officers but on all those, to whatever section of the community they belong, who live on fixed incomes. We all know these people, living perhaps on fixed pensions, as many of them do, or on annuities which they may have purchased, or on small legacies that may have been left to them, which were expected to ensure for them a certain standard of living but now do not. We all know the straits in which these people are put. We know how they have to sell loved homes and to move into smaller ones; how they are unable to give their children the education which they themselves had. We all know the grievous sacrifices that fixed-income people have to make every day of their lives: they are some of the most poignant tragedies of our time.

It may be said by those who make a differentiation between officers and these other people that, while everything that I have said is undoubtedly true, yet the officers are in a different category. But, my Lords, is it in fact possible to draw such a sharp differentiation as some noble Lords seem to do between those who belong to one profession and those who belong to another? Is it possible to argue that if two people were awarded the same pension in 1935, a pension calculated according to the circumstances of that time, one, the officer, should be regarded later as hit harder by the variation in the value of money than the other who did not happen to be an officer? I should have thought that that was an argument with which most of us have sympathy but which could be carried too far.

I know that I may be told that these officers to whom the Motion relates, and for whose difficulties we all have the deepest sympathy, have served in the Armed Forces of the Crown and have risked their lives in the service of their country. That is, of course, perfectly true. I may be told that for that reason alone they are not to be compared with these other people to whom I have referred. My Lords, I think that would have been a valid argument before the two world wars, but I do not believe that it has quite the same validity now. After all, in these days of total war everyone—except of course those who receive special exemption, who are not a very large number—serves his country.

We all know innumerable examples, in both world wars, of men in comfortable jobs at home, with heavy commitments in civil life—perhaps with wives and young children for whom they have been unable yet to make proper provision—who have left them all and gone out to fight for their country. Many have been killed; many more have been wounded; and yet more, many of whom are now advanced in years, are, as a result of the changed conditions of our time, in exactly the same position as these retired officers. Many of them have not had the advantage of the assistance which successive Governments have given to officers to enable them to meet difficulties with which they are faced. Whether one regards that assistance as adequate or not, other people have had nothing to meet that position.

I feel that it is not correct to speak, as do some noble Lords, as if this were a problem affecting only retired officers. That suggestion should not be allowed to pass without some answer. If there is any noble Lord who feels that this is not a matter for him, that he is not concerned with these wider issues, which are a matter for Her Majesty's Government, I would reply, with very real deference, that it would not be right for anyone in this House, whoever he might be (and I hope there are no such noble Lords) to adopt such a detached attitude. It may be that some of us in this House, as a result of having spent our lives in a particular branch of public service, may have direct sympathies already strongly engaged in a particular direction. That is very natural and part of the loyalty of the human mind: it is an admirable and estimable quality. But all noble Lords who sit in this House, not only those of us who happen to be members of Her Majesty's Government, are Lords of Parliament. It is our responsibility, whether we sit on the Front or the Back Benches. We have a duty to look at these problems in full perspective and to take into account all these wider considerations which have to be weighed by Her Majesty's Government in coming to their decision.

We have particularly, in this case, to consider all the ramifications and repercussions which are inseparable from any step which any one Government can take on so thorny a question, considerations which inevitably make the issue an immeasurably wider one than has been suggested by any speaker this afternoon.


May I interrupt to ask my noble friend, if we are going to take in wider situation, should not we consider the point that at present one of the greatest difficulties is to obtain serving officers in any of the three Services, a point made by my noble friend?


If the noble Lord would allow me to finish my argument it would perhaps be better. I will go on to say that the capacity to face the full facts of the position (and this particular subject is one where this observation is particularly applicable) is, in my own view, the sole justification for our existence here, the sole justification for our claim to be regarded as a Council of State. If we refuse to look at these wider implications we are not doing our job. Yet, whatever may be said by Lord Winterton, these full implications have not been faced by the majority of speakers today. There appears to be everywhere a tacit assumption that this issue could be divorced from all others and treated as something completely apart. Yet it cannot be so divorced. I am afraid that there are noble Lords who, either deliberately or—much more likely—subsconciously, have avoided these wider aspects because it does not suit them, in the position they are taking over this particular problem, to look at the hard facts. There are hard facts. I have tried to bring in the wider ramifications but in our heart of hearts we all know the facts to be true.

In saying this I am not in the least trying to rebut, or even to belittle, the grounds which have been urged today. I am merely attempting to bring to your Lordships' notice how very complicated and difficult this problem is, and to emphasise that it is a problem the full implications of which have to be faced not only by Her Majesty's Government but by every noble Lord. As has, I think, been clearly shown in the Amendment of Her Majesty's Government which it is my duty, with the noble Earl, Lord Munster, to commend to your House, the present Government, like Governments which preceded them, have already taken certain steps designed to alleviate the difficulties of these retired officers. First, we have extended to all officers in receipt of retired pay the increase of 10 per cent. on consolidated rates which we introduced in 1935. Secondly, we have made available the additional assistance to retired officers with limited means under the pensions increase scheme of 1952. The noble Lord, Lord Jeffreys, said that it was only paper money, only depreciated money. Well, everything is paper money now, and everything has depreciated. Even had he stuck to the 1919 Warrant the money paid under that would have been exactly the same kind of money as is paid under this scheme.

The noble Lord, Lord Jeffreys, said, with the support of other noble Lords, that the Royal Warrant of 1919 could not be abolished—I believe that I am interpreting him correctly.


I said that the Royal Warrant of 1919 could not be abolished for those who retired under its provisions.


I accept that amendment. I think technically the answer is that the noble Lord is quite correct. The Warrant goes on, but it is not inviolable in its terms.


I could not agree there. As my noble friend knows, I was brought up as a Regular soldier, and from my earliest days I have always been told that a Royal Warrant could not be changed for those who came under its provisions. It can be changed for people who retire subsequently but for those who come under its provisions it represents a promise to them.


It is not for me to dispute with the noble Lord, but I made inquiries before making this statement and that is the expert opinion I have received: that the actual details of the Warrant are not inviolable but can be modified. In fact, the cost of living part was modified by the act of stabilisation in 1935. I am not arguing whether what was done was right or wrong, but am trying merely to state the facts. I believe that to be the absolutely correct position, though I am quite certain that, however long I went on, I should not convince the noble Lord, and I do not propose to try any longer to do so. I really repeat what has been said by the noble Earl, Lord Munster, that, whether that be true or untrue—and this has not been disputed to-day—the vast majority of retired officers on the smaller pensions—though not all—are nearly as well off as the result of actions of successive Governments during the last few years as they would have been under the Royal Warrant of 1919.

I come now to the latter part of the Government Amendment in which the noble Lord, Lord Jeffreys, is, naturally, mostly interested. I would add that, as our Amendment states, we are very ready to keep under review the needs of these officers. And, of course, I mean, as the noble Lord, Lord Jeffreys, assumed, not merely the old officers who came under the pensions increase scheme but all retired officers. In that respect the Amendment means what it says, and not what I believe the noble Lord, Lord Ogmore, tried to make it mean—that we were going to do nothing at all. We really shall seriously examine their situation, in the light of changed circum stances, to see whether there is anything further we can do to help. It is not true, as has been suggested this afternoon, that nothing has been done to help. There is a sort of suggestion made that nothing has been done since 1919. That is not true. Now, we are ready to consider the situation, and to see whether there is anything further that we can do.

I would further assure my noble friend that I will personally bring to the notice of the new Prime Minister who has taken over to-day—he has hardly yet entered the doors of No. 10 Downing Street—all that has been said this afternoon; and it is worth bringing to his notice, because I think some very valuable suggestions have been, made. In particular, I thought that some very constructive proposals were made in the speech of the noble Viscount, Lord Bridgeman. In the light of that assurance—and I am sure Lord Jeffreys will believe me when I say that I really mean it—I hope that, whilst of course he must reserve the right to raise the matter again at any moment he chooses, he will be willing to accept the Amendment, which, I can tell the House, has been tabled by the Government in full realisation of the position to which his Motion very properly draws attention.


May I ask the noble Marquess, before he sits down, whether he would go so far as to say this? I understood him to say that the question would be kept under review. Would he say that it will be kept under review with sympathy? I think something

Resolved in the Affirmative, and Amendment agreed to accordingly.
Motion, as amended, agreed to.

thing more than merely keeping under review is wanted, and if he will give us such an assurance, one might consider—


I should be quite willing to say "keep under review with sympathy and understanding." I do not want the noble Lord to read into that more than I say. And I should be misleading him and the House if I said more. I am ready to use those words, if they will give the noble Lord the feeling—which is true—that the Government are really anxious to help.

Amendment, by leave, withdrawn.

Amendment moved—

Leave out all the words after "That," and insert "this House, recognising the action taken in the matter of the Retired Pay of Officers by Her Majesty's Government in March, 1954, to ensure to all officers in receipt of retired pay at the consolidated rates introduced in 1935 an increase of 10 per cent.; and noting the additional assistance made available to retired officers of limited means under the Pensions Increase Scheme of 1952; resolves that Her Majesty's Government should continue to keep under review with sympathy and understanding the needs of these officers."—(The Earl of Munster.)

On Question, Whether the Amendment shall be agreed to?

Their Lordships divided:—

Contents, 21; Not-Contents, 18.

Kilmuir, V. (L. Chancellor.) St. Aldwyn, E. Fairfax of Cameron, L.
Gridley, L.
Salisbury, M. (Lord President.) Swinton, V. Hampton, L.
Woolton, V. Hawke, L.
Buckinghamshire, E. Hindlip, L.
Fortescue, E. [Teller.] Carrington, L. Howard of Glossop, L.
Munster, E. Chesham, L. Mancroft, L.
Onslow, E. [Teller.] De L'Isle and Dudley, L. Rochdale, L.
Waleran, L.
Cork and Orrery, E. Dorchester, L. Leconfield, L.
Glasgow, E. Haden-Guest, L. [Teller.] Mathers, L.
Selborne, E. Hankey, L. Rathcavan, L.
Hardinge of Penshurst, L. Shepherd, L.
Goschen, V. [Teller.] Jeffreys, L. Silkin, L.
Thurso, V. Kindersley, L. Strabolgi, L.
Teviot, L.