§ 3.28 p.m.
§ Order of the Day for the Second Reading read.
§ THE LORD CHANCELLOR
My Lords, your Lordships may remember that on the Second Reading of the Pensions (Increase) Bill last July the noble Lord, Lord Silkin, asked me what the Government proposed to do about the pensions of members of the higher Judiciary for whom the Pensions (Increase) Bill made no provision. In reply I told the noble Lord that this was a matter to which the Government were giving careful consideration and that they intended to put proposals before Parliament in a later Session. This Bill is the result of that consideration, and I hope your Lordships will think that it honours in full measure the undertaking which I gave.
As I then said, in answer to the noble Lord, there has been no increase in the pensions of the higher Judiciary in England and Wales for some 134 years. In the year 1825 legislation was passed which abolished the sale of offices in the superior courts and fixed the pensions of the Judges of those courts at figures which have long been familiar to many of us, including the £3,500 which was until 1950 the pension payable to a High Court Judge on retirement after fifteen years' service on the Bench or earlier on account of permanent infirmity. Then in 1950 the Administration of Justice (Pensions) Act of that year introduced a scheme of widows' and children's pensions and lump sum benefits for members of the higher Judiciary on their retirement. 100 In return for benefits of this kind the Judges surrendered a quarter of the amount of their own pensions, so that these pensions themselves are now actually less than they were in 1825. For instance, the pension of a High Court Judge in England to-day, unless he opted out of the Act of 1950 as he was entitled to do, is £2,625 and not £3,500 a year.
The result of the recent increases in salary of members of the lower Judiciary—I repeat,"the lower Judiciary" whose pensions are linked to their current salaries, is that their maximum pension entitlements have increased to a point where they come near to, and in a few cases actually exceed, the pensions of the higher Judiciary. For, as your Lordships will remember, no increases were made in the Judges' pensions when their salaries were increased in 1954. In these circumstances I do not think anyone can deny that the time has now come for a review of the pensions of the higher Judiciary throughout the United Kingdom, and some, indeed, may say that such a review is overdue.
The Bill introduces some new features of considerable importance into the pensions structure of the higher Judiciary. Hitherto, as your Lordships know, these pensions have been payable at a flat rate and are earned, as I have said, on retirement after fifteen years' service or earlier because of ill-health. The Bill introduces for the first time a scheme of graduated pensions dependent on length of service. This has, of course, for long been the rule in the case of all other public service pensions, including those of members of the lower Judiciary.
The application of a scheme of this kind to the higher Judiciary was recommended by the St. Aldwyn Commission, presided over by the grandfather of my noble friend in 1913, and perhaps I may be allowed to quote to your Lordships some words from that Commission's Report. They said:We do not wish to see Judges appointed late in life, but it seems to us unfair to compel one who has been so appointed to serve, perhaps, for some years beyond a reasonable age for retirement before he can obtain any pension; unfair to the Lord Chancellor, to limit his choice of Judges to men below a certain age; and unfair to the tax payer that in this department of the State alone permanent infirmity should entitle a person, irrespective of his length of service, to the same pension as that to which he would have been entitled had 101 he served the full term. We think that Judges compelled to retire by ill-health or by the age limit should only receive pensions in proportion to the length of time they have served …What the Bill proposes is that the pensions of fudges appointed after it becomes law should be on a graduated scale starting with one-quarter of the Judge's last annual salary after five years' service or less and rising by equal annual increments of one-fortieth to a maximum of one-half of the salary after fiftteen years' service.
Perhaps I might give your Lordships some illustrations of the effect of this. The pension of a High Court Judge in England will be £2,000 a year for five years' service or less, rising thereafter by £200 a year to £4,000 a year at the maximum. The maximum pension of the Lord Chief Justice will be £5,000, and that of the Master of the Rolls or a Lord of Appeal in Ordinary £4,500. I am sure that your Lordships will agree that, having regard to the changes in the value of money and the incidence of taxation since 1825, these figures are no more than properly compatible with the importance of the office and of an independent Judiciary in a democratic State.
Lump sum payments and widows' and children's pensions under the Act of 1950 will, of course, continue to be payable as heretofore, but will be calculated by reference to the new pension scales. The graduated pension scheme will not apply to Judges who are in office at the time the Bill becomes law unless a Judge elects that they should do so, as he may well do in order to take advantage of the new right which is given him by Clause 2 (2) of the Bill to retire at 70 years of age, even though he may not have completed his fifteen years' service. This is a point to which I will return in a moment. In default of an election of this kind, serving Judges will be entitled to a pension at the new rate of one-half of their last annual salary when they retire after fifteen years' service or for reasons of ill health.
The next important innovation made by the Bill is the introduction of a compulsory retiring age. This was first recommended in 1913 by the St. Aldwyn Commission from whose Report I have already quoted, and was endorsed by the Royal Commission under the chairman 102 ship of the late Lord Peel which reported in 1936. Both the St. Aldwyn Commission and the Peel Commission suggested that the retiring age for Judges of the Queen's Bench Division—they were dealing only with Judges of that Division—should be 72, though the St. Aldwyn Commission recommended that a Committee consisting of the Lord Chancellor and the Lord Chief Justice of the day together with any ex-Lord Chancellor still sitting as a Lord of Appeal, should have power to extend it to 75 if they thought it in the public interest to do so.
The Peel Commission, on the other hand, thought that any power to extend was undesirable since, as they said:a conditional extension of office might conceivably be thought to endanger, in however small a degree, the independence of the Judges.The then Master of the Rolls, Lord Hanworth, who was a member of the Peel Commission, while expressing some doubt about the wisdom of a retiring age, thought that if there were to be one it should be fixed at 75, the age proposed by the Bill. I should also tell your Lordships that the Bar Council have recently taken this matter into consideration and arrived independently at the conclusion that there should be a fixed retiring age of 75 for the Judges.
My Lords, I have considered long and anxiously before making up my mind about this question of a retiring age, for there can be no doubt that if a Judge is called on to retire on reaching a certain age the State may well lose the services of a man at the height of his powers with several years of valuable work still ahead of them. That is true, and it is still true whatever age one takes. But I think it is equally true that it is in the best interests of the State and of the Judges themselves that a Judge should know clearly in advance the age at which he will have to relinquish office. What is important is that the age should be fixed sufficiently high to ensure that we do not lose too early the knowledge, experience and ripe judgment of the older Judges; and it is for this reason that I think that the age of 75 is the right one.
The effect of the new retiring age coupled with the system of graduated pensions introduced by the Bill will be that a Judge appointed in the future will have to retire on reaching 75 years 103 of age; and I would repeat the point I have already explained and would emphasise that this does not apply to existing Judges. A Judge appointed in future will have to retire at that age, taking the graduated pension to which his length of service entitles him. This will mean that a man appointed after the age of 60 will not be able to earn a full pension; but it will nevertheless give me a freer hand than I have at present in choosing a man over 60 for appointment, because he will qualify for some pension even though he has been appointed at a later age than has been customary in recent years.
I have already mentioned the beneficial provisions of Clause 2 (2). This will enable a Judge who has attained the age of 70 to retire if he wishes to do so, taking the proportionate pension to which his length of service entitles him. I hope that a provision of this kind may be found useful by a Judge who may perhaps find the continued burden of work on the Bench something of a strain and who would like to go sooner than is normally contemplated. This provision, as I have said, is something of which a Judge now in office may take advantage if he is prepared to accept the new scheme as a whole, including its provisions for graduated pensions and compulsory retirement at the age of 75; but, of course, it is entirely for him to decide whether he wishes to take advantage of the new scheme. Otherwise the retiring age may not be applied to existing Judges. I am sure your Lordships will agree with that principle. They have taken office on the basis of no retiring age, and unless they want to come into the scheme it should not apply to them.
I can deal with the remaining provisions of the Bill quite shortly. Clause 4, which appears at first sight to be somewhat complicated, is intended simply to ensure that a member of the lower Judiciary, such as a county court judge, who is promoted to high judicial office shall not suffer financially if he is obliged to retire after a short time on the High Court Bench. I could give your Lordships details, but I am sure there will be no objection to that principle. It is obviously fair and just. This clause, therefore, enables a person in this position to elect on retirement between the 104 pension and lump sum to which his office as a High Court Judge entitles him and the pension for which he would have been eligible if he had continued in his former office, together with a lump sum calculated by reference to his former salary.
To Clause 5 I refer with some diffidence, for it proposes, as your Lordships will see, that the pension of the Lord Chancellor should be increased to £5,000 a year—the figure at which it was fixed in 1832. The reduction of one-quarter in judicial pensions which was made in 1950 in return for the retiring benefits and widows' and children's pensions meant, however, that the Lord Chancellor's pension, in the sense of the amount of money which he actually received so long as he was alive, was reduced to £3,750 per annum; and I hope your Lordships will agree that it is not unreasonable that some increase should now be made in that figure. At £5,000 the pension will, of course, be less than one-half of the Lord Chancellor's salary, which is only right in view of the fact that the pension is payable without any qualifying period of service on the Woolsack. Moreover, it has long been the practice, and there is in my view a moral if not a legal duty, for ex-Lord Chancellors to assist by sitting in your Lordships' House and the Judicial Committee of the Privy Council when the Lord Chancellor asks them so to do and they can do it, with due allowance for health and so on.
Clause 6 makes it clear that not more than one pension can be paid for service in two different judicial capacities. As I have told your Lordships, retired High Court Judges have not had the benefit of any increase in their pensions such as has been given to the members of the lower Judiciary and public service pensioners by the various Pensions (Increase) Acts that have been passed in recent years. Clause 7 atones for this neglect by providing that any holder of high judicial office who retired before July 9 of this year, when the last Pensions (Increase) Act was passed, is to receive an increase of 12 per cent. in his pension. Subsection (2) of Clause 7 provides that this increase shall not be taken into account in calculating widows' and children's pensions, but this 105 is only because these pensions can be dealt with under regulations which I propose to make under the Pensions (Increase) Act.
Finally, I ought perhaps to mention the provisions of Clause 8. Subsection (1) repeals the provision in the Judges' Remuneration Act, 1954, which provided that when the Judges' salaries were increased their pensions should remain at their previous figures. The effect of Clause 8 is that in future pensions will be linked to current salaries. Subsection (2) of Clause 8 may at first sight seem to be rather puzzling. It deals with the case of a Judge in office at the passing of the Administration of Justice (Pensions) Act, 1950, who elected not to come into the widows' and children's pensions scheme for which that Act provided. Those benefits, as I have said, were made in return for a reduction of one-quarter in the Judges' pensions, but a Judge who opted out did not have his pension reduced. To calculate the new pension of a Judge in this position on a salary notionally increased by one-third—which is what subsection (2) proposes—is, as the mathematicians among your Lordships will already have worked out, equal to giving the Judge a pension which has not been reduced by one-quarter.
My Lords, I hope I need say no more except to commend this Bill to your Lordships as one which makes fair and reasonable pension provision on modern lines for the Judges, for whom such a provision is beyond question needed. Good pension rights are to-day regarded as a necessary element in considering the attractions of any form of employment, and it is plain that the Judges' pensions should bear a fair relationship to the pension which a man of comparable ability could earn elsewhere. I hope your Lordships will think, as I do, that the new scheme will be of real benefit to the Judges, and that you will now give the Bill a Second Reading so as to ensure its early passage into law. I beg to move that the Bill be now read a Second time.
Moved, That the Bill be now read 2a. (The Lord Chancellor.)