TEACHERS' SUPERANNUATION BILL (Hansard, 8 December 1965)

§ LORD SNOW

My Lords, fortunately this is a fairly cheerful measure and I shall not detain your Lordships very long. It aims to make a significant improvement in the conditions of service of school teachers in England and Wales.

Last week, when we discussed higher education, I pointed out that the standard of entry to the universities in this country was the highest in the world. This would not be possible without the devoted work of school teachers at all levels of the educational system, and it is these people with whom we are concerned to-day. Your Lordships may like to be aware that the Bill applies to a widely representative range of teachers, not only in schools maintained by local education authorities, but also those in direct grant schools and in over 1,000 independent schools which have elected to join the Government superannuation scheme; and these include many famous public schools, with well-known names.

Most of your Lordships would not claim a profound knowledge of teachers' superannuation; it is a subject on which I am myself shamefully ignorant. Superannuation is indeed a notoriously complex and specialised subject. I should like to think it could be done more easily by a computer, but we can note with satisfaction that one of the principal objects of this Bill is to reform the legislation on teachers' superannuation which, unfortunately, is now contained in some ten Statutes and nearly 100 Statutory Instruments. Under Clauses 1 and 2 of this 379 Bill most of these will be replaced by a comprehensive set of superannuation regulations. This will make it much easier to ascertain and administer the law. It will also make it easier in future to make minor adjustments that may be necessary as a result of developments in the education service.

Your Lordships will be aware that there are some dangers in this process. A wide power to legislate by Statutory Instrument can put too much authority into the hands of the Executive. That is obvious. The proposals in the Bill try to strike a balance between rigidity and flexibility. In the first place, the superannuation regulations can be made only after consultation with representatives of local education authorities and teachers likely to be affected, and they will be subject to annulment by Parliament. Secondly℄and this is probably a more valuable safeguard℄the basic financial provisions of the scheme, such as the rates of contributions and of benefits, continue to be entrenched in the Statutes. The financial basis of teachers' superannuation, as some of your Lordships will probably remember, was the subject of controversy before the Act of 1956, and it is entirely right that it should not be altered without an Act of Parliament.

The second and probably more important object of this Bill is to enable regulations to be made to provide pensions for widows and other dependants of teachers in England and Wales. This closes a chapter in the history of public service superannuation, because, for reasons which I will indicate in a moment, teachers are the last body of public servants to gain a widow's pension scheme. I am sure your Lordships will be glad that it has now proved possible to make good this grave deficiency in their conditions of service.

Why does a widow's pension scheme for teachers come so late in the day? The reason, I am afraid, is a prolonged and not entirely pretty disagreement about how the cost should be met. The teachers thought that the cost should be shared between themselves and the Government and the local education authorities, but the local education authorities and successive Governments were not willing to contribute. This was mainly because they had agreed with similar groups of em- 380 ployees, particularly persons subject to the Local Government Superannuation Acts, that the cost might be met from other superannuation benefits. There was therefore a prolonged impasse.

In the end the Scots, who have proved to be pioneers in this matter, as they often do, suggested that benefits for widows and dependants might be provided from a fund financed by additional contributions from the teachers themselves. This has gone far to meet the objectives of both sides. Neither the Government nor the local education authorities will actually contribute to the fund, though they will make a significant contribution by bearing the costs of administration of a rather complex scheme. The teachers will gain a valuable benefit in tax relief on their annual contributions, and can avoid reductions in their main scheme superannuation benefits.

The arrangements of the Bill, I have to tell your Lordships, do not entirely satisfy the teachers, but a clear majority of them have asked the Secretary of State to introduce a scheme on these lines, and he felt it was right, and in fact his duty, to go ahead. The teachers still feel that the Government, or their employers —that is, local education authorities in most cases—or both, ought to make a direct contribution to the widows' pension fund. If they were not prepared to do so on a permanent basis, the teachers felt that they ought to make some kind of once-for-all payment to help older teachers for whom the scheme cannot provide very good terms.

It is quite true that older teachers cannot in the nature of things pay annual contributions for many years and so cannot get much tax relief. If they wish to participate fully in the scheme, they will have to surrender part of their lump sum benefits under the main scheme. But my right honourable friend and his predecessor who had to consider the matter in the first place, did not see how either of them could justify making a substantial payment for the benefit of particular age groups. This is one of the agonising decisions that Secretaries of State have to make. Moreover, my right honourable friend felt that the older teachers were, on the whole, reasonably placed. Most of them would be approaching the time 381 when their family commitments would begin to diminish and their earning power would be at its maximum. And the Working Party which prepared a detailed scheme was able to devise for them a wide range of options concerning the extent to which they might participate and the means of meeting their liabilities for past service. These options have not been offered to any other body of public servants, and they will make the scheme much more difficult and expensive to administer. We are aware, and we are sorry, that there is some discontent about the scheme among older teachers, but we hope that when the particulars are circulated they will study them as dispassionately as they can to see whether or not it would be an advantage for them to join.

A scheme on a similar basis to what is proposed in this Bill has been in force in Scotland since last April. Teachers in England and Wales are anxious not to be left too far behind. The Bill has passed quickly through another place, and if, as we hope, we in this House can give it a speedy passage, it is likely, in spite of the administrative complexities I have mentioned, that we can bring the scheme into force from April 1 next. As soon as the Bill is passed we shall cover provisionally, on a minimum basis, all married men teachers at present in service who have satisfied the not very onerous qualifying conditions, so that if they should unfortunately die between the date of the Royal Assent and the date by which options must be exercised, their widows can receive a small pension. On the average, I am told, more than one teacher dies in service every day, a particularly bleak statistical thought. I am sure your Lordships will agree that to help their widows in this way will be a significant step forward.

Finally, I should say a few words about Clause 4, as it deals with a most important group of people—teachers who serve for a period overseas, usually these days in developing countries, where their services are so much needed. The clause makes a change in the arrangements under which they can continue to participate in the home superannuation scheme. At present their superannuation contributions are based on their old salaries in the posts they left, but these 382 naturally become out of date. This may save them a little in contributions, but it means that if they are not, for one reason or another, able to return to a teaching post in this country, their benefits become out of date also. This can have serious consequences for teachers nearing retirement, and in fact inhibits the recruitment of experienced older teachers. For this reason my right honourable friend the Minister of Overseas Development has urged this Amendment, and it is included in the Bill, rather than the regulations, just because it is so urgent. What it means is that most teachers serving overseas will pay a little more in contributions in return for better insurance cover, while a few teachers nearing retirement will gain much larger pensions—or rather it is better to say they will not have their pensions unfairly reduced.

My Lords, we have before us this modest but useful Bill which will be of benefit to a most valuable section of the community. Clauses 1 and 2 provide for a reform of legislation which is fully in line with the Government's policy of law reform and modernisation. Clause 3 completes a chapter in the history of the social welfare of public servants, and Clause 4 will remove an obstacle to a valuable form of overseas aid. I commend the Bill to your Lordships and I beg to move that it be now read for a second time.