HL Deb 19 April 1955 vol 192 cc406-13

2.50 p.m.

Order of the Day for the Second Reading read.


My Lords, it is a happy chance that the first Bill that I have to introduce to your Lordships' House as Secretary of State for Commonwealth Relations deals with the affairs of those who in their lifetime have served the Commonwealth so well. The Bill, I am afraid, is inevitably complex. I am by no means sure that I have fully understood the whole of it in the short time that I have been at the office; nevertheless, I will try to simplify it as far as I can.

The number of pensioners affected by the Bill is some 23,000. The amount of the pensions which would be paid out annually is some £5.8 million for Indian pensions, and £370,000 for pensions in Pakistan. When the Bill is passed, as we hope, Her Majesty's Government will control Indian pensions as from April 1, 1955, and Pakistan pensions as soon as final agreement is reached with the Pakistan Government. The broad effect of the Bill, as I see it, is that pensioners outside India, and pensioners outside Pakistan when agreement is reached, will enjoy all the benefits which have already been granted, and the future payment of pensions will therefore be a full obligation which is laid directly upon the Government of the United Kingdom. That is an arrangement which I feel will satisfy pensioners and which will be convenient to all the Governments concerned.

The precise definition of the pensions to be transferred is pensions of all persons who have served the Crown in India which on March 31, 1955, are being paid by the Commonwealth Relations Office, by the High Commissioner for India or by paymasters accounting to either, and of Europeans which are being paid by paymasters accounting to the Government of India. So far as Pakistan is concerned the Government have agreed in principle, but negotiations are not yet concluded, and therefore I am afraid I cannot to-day give the date when the transfer will take place.


Would the noble Earl say how many persons are concerned?


The number of pensioners concerned in this Bill is 23,000, taking India and Pakistan together—I could find separate figures if the noble and learned Earl would like them. But pensions paid in India, Pakistan, Aden or Burma are not being transferred, nor are pensions which are the liability of the Government of Burma.

I do not think your Lordships would wish to be worried this afternoon with the complicated financial arangements which have led up to this agreement on terms of transfer—they are to be found in the First Schedule to the Bill. I will try to give your Lordships just the salient points. Following Independence, the Government of India purchased annuities to the value of £168 million out of which their sterling pensionary commitments have been met. The purchase that was made was out of sterling which was at that time standing to India's account, and the annuities appear as part of the National Debt. The balance of debt outstanding at March 31st of this year was £129 million. At the takeover, the United Kingdom will pay to the Government of India two capital sums. One is of £40 million, which represents the difference between the capital value of the Indian annuities unpaid (that is, the £129 million which I have just mentioned) and the estimated capital cost of the pensions, which is £88 million. That is how the sum of £40 million, which will be repaid to the Government of India, is arrived at. There is one other capital sum which will be paid—namely, £6 million in respect of income tax on pensions, which under this arrangement the Indian Government will forgo. These arrangements are acceptable to the Government of India and to the Chancellor of the Exchequer, and I hope that your Lordships will think that they are, on the whole, a convenient and sensible arrangement.

I have sought to give to your Lordships the number of pensioners affected and the amount of the anual payments which will be made in respect of India and Pakistan, and I have indicated that, while those arrangements are to begin at once with India, in regard to Pakistan we do not yet know the date of transfer, although Pakistan have agreed in principle to adopt the procedure under this Bill. This problem, as I have inherited it, has been an outstanding issue for a long time and it is one which your Lordships will probably be glad to see settled. The process was begun when the Government of noble Lords opposite was in power, and we are really completing it on the same main lines which they laid down. I hope your Lordships will be willing to accept this as a practical and sensible solution to a problem which has been outstanding for too long. I beg to move.

Moved, That the Bill be now read 2a.—(The Earl of Home.)

2.55 p.m.


My Lords, I rise to say a few words, and the first word I should like to say is to congratulate the noble Earl opposite on the honours which, not unexpectedly to any of us who have heard his performances in this House, have come to him, and to wish him all good luck in the great offices which he has inherited—so far as it is consistent with one's Parliamentary duties to wish good luck, at a time like this, to any member of the other side. But, saving all just exceptions, I wish him all possible good luck.

I certainly hope that this Bill will be saved from the bonfire, because I believe it to be a good and thoroughly sensible Bill. There are concerned 23,000 persons. Are they all the persons concerned? Are there any others left outstanding? This question was asked in another place, and I do not think that any clear answer was given to it. I should like to know, if it is convenient to the noble Earl to tell me, whether this cleans up the problem so far as India, in the modern connotation of the word, is concerned. It it does, I think the Government are greatly to be congratulated. The wheels of government grind somewhat slowly. It is the fact that the proposals in the plan started in the lifetime of our Government, but it is surely right that pensioners who have done their service in India and now find themselves living over here should be able to look to our Government to see that they get their pensions, instead of having all the complication of corresponding overseas with India about these pensions. It has been suggested that there may be some disputed cases, where there is a question as to whether or not a man is entitled to a pension and what the amount of the pension should be. I feel that it would be desirable, if possible, that those questions, too, should be dealt with over here, and that there should not have to be litigation over these matters with the Indian authorities.

With regard to Pakistan, I hope very much that the arrangements which are now under way will be satisfactorily brought to a conclusion on the same lines as those for India. If I understand it aright, the Bill contains power, if and when such agreements are concluded, for them to be given statutory effect by Order in Council, on the same lines as the Indian provisions. With regard to Burma, it is apparently impossible to come to any such arrangement. I should like to ask the noble Earl whether there is any prospect of similar negotiations with Burma being brought to fruition, because, obviously, if that could be done, it would be desirable.

My Lords, we shall certainly do everything we can to collaborate with the Government in seeing that this Bill, notwithstanding all the vicissitudes of fortune at times like these, finds its way on to the Statute Book as an elementary act of justice to those people who rendered such splendid service to us in the old days in India.

2.59 p.m.


My Lords, I wish to begin by repeating the congratulations which the noble and learned Earl has given to the noble Earl, Lord Home, on the happy augury of the fact that the first Bill he is introducing in his present office is one which not only is acceptable to the two Governments concerned but, I should like to add, will be heartily welcomed by the pensioned officers on whose behalf I speak; for I am, of course, one of their number. It is a measure for which pensioners of the services in India, Pakistan and Burma have been pressing for many years. If I may speak not so much from the point of the two Governments, but from the point of view of the pensioners, I would say that those who drew their pensions from India and Pakistan (I will leave Burma out of account for the moment) have not been anxious for the security of their pensions because, under the arrangements made in 1948, the British Treasury were actually in possession of a sum representing the capitalised value of the pensions.

The difficulty was that when arrangements were made, in 1948, a concession was given to the Government of India enabling it to retain the control and the actual disbursement of the pensions. I will not complain that the Government of India misused that power. I desire to to say little more on that subject, save that, for various reasons, we have been continually pressing that the Legislature should apply a remedy to what we considered to be a mistaken concession on the part of the Treasury. That has now been remedied by the present Bill, and I wish to say nothing, either as regards the length of the negotiations or otherwise, which would detract from the general air of satisfaction that we feel that the Bill has now come forward. I shall confine myself to one consideration. It is a consideration which applies to the somewhat technical decision made by the British Treasury in 1948. Whether or not it was constitutional or justifiable or logical to hand over to the Indian Government control of pensionary conditions that had been laid down by the Secretary of State, who was himself under the control of Parliament, is a question which we do not now desire to argue, for the Bill has put it out of consideration; but that decision did actually show a certain lack of foresight on the part of the Treasury. The handing over to the Indian Government of control of the pensionary conditions enabled it to impose income tax on the sterling pensions which it otherwise could not have done. In consequence, the British taxpayer to-day has to find something like £6,400,000 for payment to the Governments of India and Pakistan in order to reimburse to them the cost of giving up that source of taxable income.

I come now to the question of the Burma pensioners. Burma had no sterling balances on which to draw for the purpose of purchasing these annuities, to use the technical term; consequently, it has been impossible for Her Majesty's Government to extend the scope of the present Bill to Burma. For this reason, pensioners who draw their pensions from Burma now depend on payments derived, directly or indirectly, from Burma itself. I do not wish to suggest that Her Majesty's Government have in any way disregarded their obligations or responsibilities towards pensioners from Burma—indeed, the whole course taken by Her Majesty's Government in regard to the pensions of the ex-servants of India, Pakistan and Burma shows that they have been alive to those obligations; and on behalf of the pensioners I wish to pay tribute to them for the action they have taken in various directions. We had a direct declaration from Her Majesty's Government in 1946 in regard to their sense of obligation towards pensioners from Burma. The exact words used were (OFFICIAL REPORT, Commons, Vol. 418, col. 523): It is the intention of my noble Friend that those officers who had been appointed by the Secretary of State and who elected to serve on in Burma after separation"— that is to say, the separation from India in 1937— shall receive no less generous treatment in regard to service conditions generally than their fellow officers in India. Moreover, as this Bill shows, Her Majesty's Government have extended to officers from Burma the system of compensation given to Indian officers for any loss to which they may be put by the imposition of Indian or Burma income tax. We feel assured—and pensioners are themselves assured—of the good faith and good will of Her Majesty's Government in this respect. But Burma is now a completely foreign country. Some aspects of her financial circumstances have caused, and are continuing to cause, grave concern to those who receive their pensions from that source. I do not think that is merely envy on the part of Burma pensioners for the security which Indian and Pakistan pensioners have obtained from previous Acts and the present Bill; it is a feeling of genuine concern on their part. They ask (I think with some justification) that Her Majesty's Government should now take this opportunity of formally repeating the assurance given in 1946, when, of course, the circumstances were different, and let it be known that any shortcomings in the payment of pensions from Burma will receive the consideration of Her Majesty's Government, who are fully aware of their obligations in this regard.

It was suggested in another place, and has also been suggested in the Press, that the present Bill will be effective in giving an increase of pensions to India pensioners generally. That is neither the case nor the intention; and it would therefore be beyond the scope of the present discussion if I were to raise that issue here. I wish merely to make it clear that the associations who represent this large number of pensioners will not cease to press Her Majesty's Government to give consideration to the case of pensioners who are suffering from the great fall in the value of money. And we do so particularly in the interests of those pensioners who, through no fault of their own, had their careers cut short in 1947 and who, in consequence, have to depend on the very reduced scale of pensions available to them.

3.10 p.m.


My Lords, I should like to thank the noble and learned Earl, Lord Jowitt, and the noble Lord, Lord Hailey, for the kindly welcome which they have extended to me. Necessarily one feels a sense of inadequacy on taking on a job with such scope as that of Commonwealth Secretary, but I am surrounded with much experience and much good will upon which, if I may, I will draw from both sides of the House; and in that way I hope to fill the office.

The noble and learned Earl, Lord Jowitt asked me two questions. First, he asked whether anyone is really left out and is not covered by the Bill. The answer is, I think, that everyone who was a servant of the Crown or of the Provincial Governments in India is included in the Bill. There are, in fact, some exceptions, those of Indians in certain Colonies—Kenya and Somaliland, for example—in which the paymaster is accountable to the Government of India. Other exceptions are those who served in the former Princely States, such as Hyderabad and Mysore. The first category consists of Indians in a subordinate class who have no claim on Her Majesty's Government. Pensioners in the second category did not serve the Crown and the Secretary of State for India. So it will be realised, I think, that by and large the answer to the noble and learned Earl's questions is "Yes." Secondly, he asked me whether questions in dispute could now be taken over by Her Majesty's Government. There are some rather difficult questions involved here, and I should not like to give the noble and learned Earl a hasty answer. However, I think it is true to say that in cases that are now being decided an anticipatory pension is being paid by the Government of India. After this date any dispute as to the amount of pension paid by Her Majesty's Government will be the responsibility of the United Kingdom Government to settle.

The noble Lord, Lord Hailey, of course speaks with immense personal experience. He has given to the Bill his blessing, for which I am indeed grateful He has raised, in particular, the question of Burma. The assurances which we have obtained from the Government of Burma were, as he accurately said, enshrined in the Treaty of 1947. The Government of Burma then undertook to pay the pensions to which pensioners were entitled under the existing rules, and we have confidence that the Government of Burma will fulfil their undertaking and will carry out their part of the bargain. I would only say in general that I think that all over the world wherever the pensioners may be, they can have faith that the British Government, of whatever complexion it may be, will look after their interests should they fall on evil times. Therefore I hope that your Lordships will give this Bill a Second Reading.

On Question, Bill read 2a; and committed to a Committee of the Whole House.