§ 2.59 p.m.
§ Order of the Day for the Second Reading read.
§ LORD SHEPHERD
My Lords, I beg to move that this Bill be read a second time. I must confess to some uncertainty as to the method or approach in making a Second Reading speech on this Bill. As most of the House will appreciate, superannuation matters are always difficult to understand, and they become increasingly more difficult to explain. In spite of the fact that this Bill is of considerable complexity it is, I believe, uncontentious. I am glad to see the noble Viscount the Deputy Leader of the Opposition in his place, so that I may freely admit that while this Bill is non-conten-tious, it was a Bill that we found waiting for us. It is a Bill that had been prepared by the previous Administration.
I should like to suggest that we leave aside for the moment Clauses 1 to 4, dealing with the Diplomatic Service, and consider the remaining part of the Bill. An Act was required in regard to the Diplomatic Service, so the Government thought it right to use this as an opportunity of dealing with a number of minor but important amendments to existing Statutes and the general code governing superannuation of the Civil Service. I should inform the House that these amendments have been discussed with the representative organisations—the staff side of the Civil Service National Whitley Council and the trade unions—and all the provisions have been agreed to.
There are a number of important major matters still outstanding and subject to discussion. I think I should make 690 it clear that the Bill in no way prejudices those discussions or any conclusions that may arise. It in no way affects the general framework of existing schemes; it merely removes or amends in a minor way existing anomalies and adjustments. Perhaps I could give one or two examples. If your Lordships refer to paragraph 23 of Schedule 2 you will see that this validates past and future superannuation awards to certain staff who have always been treated as civil servants but who have now been discovered not to be such. The House will remember that in 1963 we had interesting; debates on the British Museum Bill. For many years it had been assumed that the staff of the British Museum were civil servants, but when the Bill was going through Parliament the Treasury were forced to advise that, in their view, according to law, the staff of the Museum were not in fact civil servants; and the Government of the day thought it necessary to move an Amendment in another place in order to protect the status of the staff.
The House may well ask why this problem arose. It arose because the staff were appointed by the Trustees of the British Museum, and the Trustees are themselves not wholly appointed by or on behalf of the Crown and were not expressly acting on behalf of the Crown. It was felt right that we should in this Bill deal with this situation. But there are a number of other organisations, and they are referred to in paragraph 23 of Schedule 2. There are such organisations as the Imperial War Museum, the National Gallery, the National Maritime Museum, the National Portrait Gallery, the Tate Gallery and many others. The House will also see that the Treasury have power, if it is necessary, to add to this list.
The House may also note a peculiar office called the office of Falkland Macer. I am quite sure that the noble Earl, Lord Dundee, will know this office, but it was a complete surprise to me and therefore I made some inquiries. The holder of the office is, in fact, a fairly junior official in the Scottish courts, called a bailiff, but is appointed by the hereditary proprietor of the lands of Falkland in Scotland. Since he has not been appointed by the Crown but by a Major Crichton-Stewart it is extremely doubtful whether he is a civil servant. As he is 691 unique in this situation he has been added to the Bill to safeguard his pension. That is one example.
Perhaps I might refer to Clauses 6 and 7. These clauses deal with those who have served in two or more public offices—the technical name for certain fringe bodies not forming part of the Civil Service proper. The principle laid down by Parliament as long ago as 1892 is that continuous and successive service in two or more public offices should be treated for superannuation purposes as if it were service in the Civil Service itself. The main existing rules made by the Treasury to give effect to this principle date from 1911. Since those days, as new concessions have been made, superannuation matters have become more and more complicated. For example, in 1892 unestablished service did not generally speaking, count for superannuation at all, and departure from the Civil Service, other than to a public office, led inevitably to total loss of superannuation rights. Now, unestablished service nearly always reckons on subsequent establishment, and there are a variety of procedures under which an officer can leave the Civil Service with reserved or transferred pension rights. The old rules, however, do not cater for all the possible permutations and combinations: for example, the case where an officer has unestablished service in one public office, followed by established service in another public office, followed by transfer to a public board such as a nationalised industry. Opportunity has therefore been taken to sweep away a number of the old provisions and replace them by an up-to-date code of enabling powers under which the Treasury will make rules based on the principle that, so far as possible, an officer with mixed service in a number of public offices shall be no worse off than if he had rendered the corresponding service entirely within the Civil Service. Those are two illustrations giving, I think, the general character of the main part of the Bill.
I would suggest that if there are any other points in this part of the Bill we might discuss them on Committee stage. If I were to cover all the points to-day, I should be speaking at considerable length.
In regard to Clauses 1 to 4 your Lord-ships will recall that on April 7, 1964, 692 in a debate initiated by the noble Lord, Lord Gladwyn, the House gave a warm welcome to the Plowden Report on the Representational Services Overseas. We gave a welcome to the previous Administration's acceptance of the Plowden Report. The Diplomatic Service, which brought together the Foreign Service the Commonwealth Service and the Trade Commissioner Service, did not require legislation. It has now been set up and in fact, came into being on January 1,1965, through an Order in Council. I should like to express the appreciation of this Government to the Plowden Committee and to wish the new Service well.
While legislation was not necessary to set up this new Service, legislation was required in dealing with superannuation and pensions, and Clauses 1 to 4 deal with this matter. Clause 1 allows members of the Diplomatic Service with 20 years' service to resign with preserved pension rights. Like other civil servants, members of the Diplomatic Service who have attained the age of 50 retain the right which they now have to retire or resign at that age, with pension rights reserved for payment at the age of 60, independently of length of service. Moreover, pension rights are preserved automatically on transfer to the Home Civil Service or, with consent, to the various other public services or academic life. These arrangements are now complemented and completed by this further concession which is linked to the particular circumstances of the Diplomatic Service as a career by the provision that eight years out of 20 years' service must be rendered overseas. The provision will, in practice, cover any member of the Diplomatic Service with 20 years' service whose career has followed anything resembling the normal pattern.
Clause 2 deals with a special problem affecting the secretarial staff. The vital importance of their r^ ole I am sure is appreciated by all noble Lords, and I know there will be a recognition of some of the difficulties of secretarial staffs serving in various parts of the world—matters such as climate and amenities—and that the special liabilities of the service may become less attractive to the secretary as the years go by. It should normally be possible to provide for a transfer of the secretary to a fixed post in the Home Civil Service. But this 693 clause provides for a gratuity to be paid if a secretary wishes to leave the Diplomatic Service and cannot be offered a comparable job in the Home Civil Service or refuses such a posting for good compassionate reasons. I hope that this additional element of flexibility will prove of great value in what are often most difficult circumstances.
Clauses 3 and 4 apply to the new Diplomatic Service as a whole the existing provisions for compulsory premature retirement with enhanced pensions which have hitherto applied only to the senior ranks of the old Foreign Service. There is no new principle involved; it is merely a necessary consequence of unification. Special provisions are made which recognise that in the case of junior staff, who though competent are found unsuited for the special conditions of the Diplomatic Service overseas, the best course has often been for them to be transferred to the Home Civil Service and here we do not anticipate any difficulties.
I hope this brief explanation will suffice for giving this Bill a Second Reading. It affects a limited number of people in a limited way, but I think the House will recognise that it is useful and will welcome it none the less. I think that on a previous occasion noble Lords asked what would be the cost of this measure. The cost of the part affecting the Diplomatic Service would rise in a full year from £15,000 to £35,000 a year, and the cost of the other amendments to which I have referred would rise in the course of about ten years from £100,000 to £250,000 a year. These rather small figures perhaps illustrate the modest character of the amendments within the Bill. I hope, with those brief words, that I can commend this Bill to your Lordships and that the House will give it a Second Reading. I beg to move.
§ Moved, That the Bill be now read 2a.—(Lord Shepherd.)
§ The Earl of DUNDEE
My Lords, the noble Lord, Lord Shepherd, began by referring to the British Museum Bill, which I had to look after in your Lord-ships' House, which took up four or five days of our time, but I can assure the noble Lord I do not intend to retaliate. This is a Bill which we support, and I think the explanation which the 694 noble Lord has given upon it is sufficient. I have no further questions to ask. I understand that my noble friend Lord Inchyra will make a few observations about the Diplomatic Service, which I look forward to hearing. But, so far as I am concerned, I am content that we should now give this Bill a Second Reading. The noble Lord, Lord Shepherd, will be glad to hear that I am not going to ask about the Falkland Macer whom I know, and I am glad to hear his pension is safeguarded.
§ 3.14 p.m.
§ LORD INCHYRA
My Lords, my only reason for prolonging the discussion on this technical and rather complicated Bill is, as the noble Lord, Lord Shepherd, said, that to a large extent it is based on the recommendations of the Committee which was presided over by the noble Lord, Lord Plowden, and of which I had the privilege of being a member. The fact that the Government, and indeed the previous Government, have accepted the Committee's recommendations is naturally a source of considerable satisfaction to us, all the more so since we attached quite considerable importance to these particular recommendations about pensions and retirements and indeed regarded them as one of the basic elements which were fundamental to our whole proposal for the constitution of an intergrated Diplomatic Service.
The noble Lord, Lord Shepherd, made particular reference to Clauses 3 and 4—Clause 3 in particular, which applies to the new Diplomatic Service the same rules for premature retirement as have been applied for the last twenty years, with I think considerable advantage, to the Foreign Service. This is a point to which the Plowden Committee attached rather special importance. They felt that in modern conditions, when the pace of everything is accelerating and when the physical conditions under which people have to work in more and more places is increasingly unpleasant and indeed quite frequently dangerous; when the stresses and strains of responsibility bear increasingly heavily not only on the heads of missions but on a wider range of staff; and above all in these days when, if the Diplomatic Service is to meet the increasing demands put on it, it must be maintained at the highest 695 pitch of efficiency, there really must be some proper, fair system for dealing with those occasional cases of individuals who, although they may have done excellent work in the past and have very many admirable qualities, are not really fit to fill the higher posts in the Service under present conditions and whose retention beyond a certain period is not really in the public interest. Such a system ought to enable persons in this position to be retired, on a pension of course, before the normal retirement age without any feeling of stigma or sense of failure and at an age when they still have a reasonable chance of getting alternative employment.
The 1943 Act applied such a system to the Foreign Service, and Clause 3 of this Bill will apply that to the new Diplomatic Service; and I know I can speak for the noble Lord, Lord Plowden, and I believe for the other members of the Committee, in saying that we particularly welcome this decision. Personally, I think it is quite clear that if we are to have an efficient Diplomatic Service and one capable of standing up to modern conditions and dealing with the multifarious problems with which we are now faced, it is quite necessary that some system should be in existence for premature retirement of those who are not fully up to standard for the highest posts. I would hope that the authorities when they implement Clause 3 of this Bill will feel able to do so with reasonable freedom.
As a corollary, I should hope that the authorities will pay some regard to another recommendation of the Plowden Committee in which we suggested that there should be rather less rigidity than heretofore in retiring members of the Service almost the moment they reach the nominal pension age of 60, even though they may then be at the height of their usefulness and in a position to render some more years of valuable service. There will not, of course, be many such cases, and indeed there may not be many individuals who want to go on after the age of 60; equally, it is important not to interfere with the normal flow of promotion. But I should have thought that it would be logical, if, as I hope, the rules for premature retirement are going to be enforced rather more strictly in future, that there should 696 be rather more flexibility about the age at which the really outstanding members of the Service have to retire.
There was another recommendation about superannuation which was made by the Plowden Committee and which is not covered by the Bill, quite naturally I think, because, as I understand it, it deals with a matter not requiring legislative action at all but one capable of being disposed of by administrative action. It is the recommendation where we dealt with the position of non-established locally engaged personnel at our missions abroad. These persons do quite invaluable work, and are of course an integral part of the staffs of our Embassies and High Commissions. They are considerable in number. I think I am right in saying that for the Foreign Office posts alone there are some 4,500, of whom I think about 1,600 are British subjects.
At the moment, except for these persons who are working in North America, there are no arrangements whatever for paying them pensions when they come to retire, quite often after many years' service, sometimes as much as 20 or 30 years. This has always seemed to me unjust and inequitable, and, furthermore, it has the disadvantage of creating rather an unpleasant picture abroad of Her Majesty's Government as a good employer. Furthermore, it tends to inefficiency, because no one is anxious to get rid of someone after many years' service and when he is perhaps rather past his best, if you know that even though he may have served Her Majesty's Government for 40-odd years he is going to get no pension at all at the end of it. And, perhaps worse than that, it is bad for recruitment. It is most discouraging for locally engaged people, local personnel whom one would like to take on to help Embassies and High Commissions, if they are told that at the end of their service they will be turned out merely with a small ex gratia grant.
All this is particularly unfortunate, I think, at the present time, because a large part, perhaps the greater majority, of these locally engaged personnel work in the commercial sections of our Embassies and High Commissions abroad, and are particularly concerned with export promotion work. They are the people on whom we depend for information about 697 local conditions, how markets are developing and whether new British exports are likely to find an outlet; what sort of people should be appointed agents for British firms, and so on. They perform quite essential duties in the day-to-day commercial work of our missions abroad. It seems quite illogical that the authorities at home, at a time when they are urging, and urging quite rightly, our Ambassadors and High Commissioners abroad to step up their activities in the export promotion field, should be making it more difficult—or perhaps it is fairer to say, are doing nothing to make it easier—for our missions abroad to recruit and train the personnel that they require.
The Plowden Committee considered this problem at considerable length, and recommended with as much emphasis as they could that early steps should be taken to introduce a world-wide contributory superannuation scheme to cover all these locally engaged personnel; and also that special steps should be taken to deal with the case of the older, more senior locally engaged personnel for whom any comprehensive scheme might come into effect too late. Of course, we realised when we made that recommendation that the preparation of any such scheme would raise a number of difficulties and take some time. But the matter is really one of quite considerable importance, not only to the individuals concerned, but to the efficient and smooth working of our missions abroad; and also I think to a certain extent it has a bearing on the reputation which Her Majesty's Government have as an employer in the eyes of foreign workers. Therefore, I would greatly hope that, before much longer, some action may be taken along the lines advocated by the Plowden Committee. In that connection I was glad to hear the noble Lord, Lord Shepherd, saying that this Bill was not to be regarded as the final step.
Now if I may just return to the Bill itself, I feel sure that if it is enacted it will be greatly to the advantage of the new Diplomatic Service, not only to the individual members of the Service but to the Service as a whole. I think it will enable the latter to face the future with more confidence; it will be better geared to stand up to modern conditions, and it will I think, also have a consider- 698 able effect on encouraging recruitment. I hope that the Bill may meet with your Lordships' approval.
§ 3.27 p.m.
§ LORD SHEPHERD
My Lords, I am most grateful for the welcome that has been given to this Bill, and in particular for the remarks of the noble Lord, Lord Inchyra, who was a distinguished member of the Plowden Committee. The two points which he raised have naturally been given considerable thought. In regard to the age limit governing retirement particularly of civil servants, the noble Lord will appreciate that this matter has to be treated on its merits, or on the merits of the individual case. One has to take into account the areas in which the individual has served and also the opportunities that may be available for providing him with employment. As I understand it, the view is now taken that each and every case is treated entirely upon its merits. But there is one other difficulty. I am quite sure that the noble Lord appreciates that one must never, by retaining, shall we say, older and senior members, adversely affect the opportunities for promotion within the middle strata of any Service. This applies not only to the Civil Service, but equally in commercial life. I would say to the noble Lord, Lord Inchyra, that we will look at this question with considerable sympathy, but we must take in a number of different aspects and points.
In regard to the locally engaged staff, here I have a considerable sympathy with what has been said. When I lived overseas in the Far East, I saw the yeoman and stalwart service that local people gave, not only to British employers, but also in the High Commissioners' and Trade Commissioners' offices, and I must say that I often felt that they were not being treated as well as we should have treated them. But in view of what was reported by the Plowden Committee, the recommendation has been accepted and arrangements are now in hand to give effect to it wherever possible by instituting contributory pension schemes within the countries and areas concerned. This does not need to be covered in this Bill since statutory power already exists in Section 5 of the Superannuation Act, 1946, to pay the employers' contributions to such 699 schemes. This matter is being considered and is in hand. I would assure the noble Lord that I will convey the views which he has expressed to the proper quarter, and if anything can be done to speed up the matter, I will do my best in that regard. I hope that the House will now give the Bill a Second Reading.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.