§ 11.18 a.m.
My Lords, I beg to move the Second Reading of this Bill. It has four main purposes. The first is to modernise the pension scheme for Members of Parliament. Second, it introduces a voluntary supplementary scheme for Ministers and office holders in both Houses of Parliament, including any who may be in neither House of Parliament. Third, it updates and realigns the pensions of the three great Offices of State—those of the Prime Minister, the Lord Chancellor and the Speaker of the House of Commons—and arranges that they, too, should automatically be adjusted when salaries are increased. I shall be saying something on this aspect of the matter later. Finally, it applies the Pensions (Increase) Act, which already covers the pensions attaching to the three high offices, to Members' pensions and to the new Ministerial supplementary scheme.
1100 It will be seen that while this is a matter that intimately affects every Member of the House of Commons, it does not affect your Lordships' House as a whole or indeed even most of us. In view of this, I do not intend to speak at great length, and some of the things that I say, treating as they do a matter which is essentially House of Commons business, I shall say, I hope, with due and proper diffidence.
This Bill has, I believe, an unimpeachable pedigree in that it is founded on the recommendations relating to pensions of the first Report of the Top Salaries Review Body published last December. The Chairman of this body is the noble Lord, Lord Boyle of Handsworth, and it is usually known as the Boyle Committee. Also on the Committee are two other Members of your Lordships' House, the noble Lord, Lord Beeching, and the noble Baroness, Lady Seear, though I understand that she was in fact appointed too late to the Review Body to take an active part in this particular review. I should like again to pay a very real and sincere tribute to the noble Lord, Lord Boyle, and his colleagues for a difficult remit promptly and very capably discharged. I know something of how arduous and thorough their labours were and speaking from a certain personal knowledge of this I should like, as it were, to reaffirm the sincerity of my tribute to the Review Body.
I do not intend to delay your Lordships with a long description of the terms of the Members' pension scheme or of the supplemental scheme which Ministers and office holders may opt to join. These follow the recommendations of the Boyle Committee precisely except in one minor technical feature on which I understand the Committee were insufficiently advised and on which it has been possible to find a simpler solution to one of their difficulties. There has been plenty of opportunity for those who are interested to digest this Report of the Boyle Committee, in particular where it touches pensions, and therefore I would single out only four particular points and deal with a fifth in introducing this Bill on Second Reading.
In the first place, the new Members' scheme is brought into line with much of modern pension practice by being 1101 made what is called a terminal salary scheme. This means that the pension earned is related not only to the length of service but also to final salary. Like its predecessor it is a contributory scheme.
Next, the scheme for Ministerial pensions. The task of devising a suitable scheme for Ministers was a taxing one. Most pension schemes are based on the very broad assumptions that remuneration will be earned throughout the career, and at least at a constant, but preferably at an increasing, rate. Unhappily, these normally common assumptions do not invariably hold good for Ministers. The Boyle Committee therefore hit upon the ingenious idea of making the Ministerial scheme an adjunct to the basic Members' scheme. Members of Parliament who opt to join the Ministers' scheme will earn an additional pension on that part of their salary which exceeds the Member of Parliament's salary, and when they retire their Ministerial pension will be related to whatever was the Member of Parliament's salary during the final year in which they were contributing to the Minister's scheme.
Much the same holds good for those Ministers and office holders in the House of Lords, who, like myself, have never been Members of Parliament. In their case, of course, they will only earn one pension; this will build up at exactly the same rate of 1/60th of salary per year of service for each £4,500 worth of their official salary. The beauty, if I may so term it, of this arrangement is that it enables account fairly to be taken of the stops and starts, the rises and falls of Ministerial earnings without giving a disproportionate advantage to, say, the member of the scheme who happens to be at maximum earnings as a Cabinet Minister at the point of retirement compared, say, with his colleague who after a most distinguished career, including a period as a Minister, spent his final years earning only the M.P.'s salary. If noble Lords would like, I should be delighted to explain—or rather I should say try to explain—this complex but ingenious system further at the end of this discussion. But I am conscious that my right honourable friend the Lord President of the Council has spelled it out in a note which he has made available to 1102 everyone who might at present be entitled to join the scheme.
The third feature on which I should like to lay some stress is that this Bill ensures that the Pensions (Increase) Act which your Lordships approved last year will bite on the pensions of Members of Parliament and on the new Ministerial pensions. I know this was a matter of considerable concern to a number of Members of your Lordship's House who wrote to me about it. This will mean, as noble Lords will probably remember, annual reviews and inflation-proofing. This will, I think, be particularly welcome to those drawing pensions under the existing Members' scheme. Their first increases of pension under the Pensions (Increase) Act are likely to bring them up to something like the level that they would have earned under the Boyle scheme had it been in operation when they retired, and that level will, of course, act as a ceiling on any increase awarded under the Act.
The fourth point on which I wish to lay some stress relates to the provisions for the three great offices of State, those of Prime Minister, Lord Chancellor and Speaker of the House of Commons. The Boyle Committee proposed increases in the new pension rates appropriate to salaries now current, taking account in the case of the Lord Chancellor, as is traditional, of judicial pension arrangements, and they looked here also for some automatic link between pension and salary for the future. The Government have accepted these very reasonable suggestions, as they have the other suggestions of the Boyle Committee. Noble Lords may, however, have noticed some attempts in another place to direct critical public attention to the overall percentage increase involved in the pension changes, and to the other traditionally special features of these pensions which the Boyle Committee implicity endorsed. All these points were very thoroughly dealt with by my honourable friend the Parliamentary Secretary in another place, and I would not wish to go over the whole ground again: but since it particularly affects your Lordships' House, your Lordships may wish me to dwell for a moment on the proposals in the Bill in so far as they relate to the pension of the Lord Chancellor.
§ LORD PARGITER
My Lords, before the noble Earl proceeds to that matter there is one question I would ask. I must declare an interest here. Would the noble Earl make it clear that the operation of the Pensions (Increase) Act will bring ex-Members' pensions up to what they would have been had the whole of their service been within the Boyle scheme? I understood that is what he said.
No. my Lords; I think I said that the operation of the Pensions (Increase) Act will in almost all cases bring the pensions of those who were within the 1964 scheme very close to the level of the Boyle scheme. In fact there is a provision that they should not exceed it. It would be possible for them to exceed it, and this would obviously be wrong. It brings them very close, and in some cases up to, but not exceeding, the Boyle limits. That is the position.
May I now dwell on the question of the Lord Chancellor's pension, which I think is a matter which affects your Lordships' House? Here one is thinking of the future. The Lord Chancellor's pension owes its origin to the fact that, unlike other holders of high judicial office, Lord Chancellors hold office during pleasure and have not the security of tenure attached to other judges. Indeed, it was for this reason that during the 18th century the first Lord Mansfield refused the chance of becoming Lord Chancellor in favour of the Lord Chief Justiceship of the King's Bench when it became vacant. On the other hand, unlike other Ministers, the Lord Chancellor of the day is not free to return to the practice of his profession when he vacates office. In this respect the Lord Chancellor's position differs from that of the Attorney General and Solicitor General, who normally return to the Bar, with, of course, enhanced earning capacity.
It has now been generally accepted that a Lord Chancellor who obtains other remunerative employment does not draw his pension. But in the main your Lordships will recognise that the majority of Lord Chancellors—there is no invariable rule, but the majority—have preferred not to take part in business after holding this high and ancient office. It has indeed always been understood that they have held themselves available to take part in 1104 the Judicial Business of the House and of the Judicial Committee of the Privy Council if invited to do so. Indeed, before the creation of the Lords of Appeal in Ordinary in the latter part of the 19th century this Business was largely conducted by the Lord Chancellor of the day and his predecessors in office. In this connection my noble and learned friend on the Woolsack has asked me to say that he has been deeply grateful to the noble and learned Lord, Lord Gardiner, for the services which he has rendered to the House in this respect.
It is sometimes suggested, or at least I have known it suggested, that the Lord Chancellor, like some other Cabinet Ministers, should employ the evening or the late afternoon of his days in composing memoirs for publication. While these precedents undoubtedly exist, they are not, I think, uniformly encouraging, and my noble and learned friend has asked me to say that while he is himself flattered at current estimates of the value of his memoirs he does not at present intend to avail himself of them. In the main the House will probably wish to cater for a race of Lord Chancellors (if that is not too racy an expression) some of whom do not wish to indulge in recollections at the expense of erstwhile colleagues and opponents. The Boyle Committee no doubt carefully considered these somewhat delicate matters, and I hope I have not broken through any thin ice in commenting on them. They said—and I quote their words:The office of the Lord Chancellor is unique in that it combines by long tradition the function of Head of the Judiciary with the Ministerial duties of a Cabinet Minister. In addition to these functions the Lord Chancellor is also Speaker of the House of Lords.In any event, in my view it would be wholly unbecoming if anyone, regardless of his length of tenure of office, could leave any of these three great Offices—I have been touching on one since it affects us the more intimately—without a pension which was beyond any doubt or peradventure fully adequate. We must be grateful to the Boyle Committee for having endorsed the traditional arrangements and for having helped us to bring them up to date. I would ask the House to accept the Committee's conclusions as embodied in this Bill as regards all three Offices to which they relate.
1105 I should like now to touch on one other particular area where I think there has been some disquiet, and disquiet evinced in your Lordships' House by a number of noble Lords. A good deal of concern has been expressed on behalf of those Members of the House of Commons with substantial service before the introduction of the present scheme in October, 1964. They were only allowed to count a maximum of 10 years of their back service towards pension, and if they were no longer Members of Parliament on the operative date, and did not become so again, they had no entitlement under the scheme at all.
Some noble Lords who are particularly qualified to speak on this point have been good enough to represent their views on it to me. I have had the opportunity, as has my right honourable friend the Lord President of the Council and his predecessor, of talking to some of them and writing to others, and I should like to assure them that I have listened to what has been said with a very great degree of personal sympathy in this regard. These representations have been of help to the Government in assessing what is, by all accounts, a difficult situation. I do not want to labour this matter any more than noble Lords may wish it, and I am particularly anxious not to embarrass anybody. So may I at this stage simply say that the conditions to which I have referred in the existing scheme derive from careful consideration by the Lawrence Committee in 1964? Normally this is the sort of matter which, of its nature, is settled once and for all when a scheme is set up. But in fact the review by the Boyle Committee gave an opportunity for second thoughts. As the Committee explain in paragraph 69 of their Report, they looked at these matters again with great care, but were forced reluctantly to the conclusion that they would not feel justified in modifying the recommendations of the Lawrence Committee. However, if asked I will go into this in greater detail when I wind up.
May I, in conclusion, just say in general and in principle that I submit that we should resist the temptation to adjust the scheme recommended by the Boyle Committee. It will be within the recollection of many noble Lords that until some ten years ago Parliament, or at 1106 any rate the House of Commons, found the task of considering its own remuneration so embarrassing and distasteful that salaries of Ministers and Members of Parliament were seldom adjusted. Moreover, until quite recently there was no pension provision at all except the traditional pensions granted by Statute to the holders of the three great Offices to which I have referred.
In 1963, however, the Government broke out of this near-impasse and referred the whole problem to an outside body, the Lawrence Committee. The present Government have followed exactly the same procedure in giving a similar remit to the Boyle Committee last year. The Boyle recommendations relating to salaries were enacted earlier this year in the Ministerial and other Salaries Act. The present Bill will finish the job by picking up the recommendations relating to pensions. Once again my strong advice to your Lordships is to take the package as a whole unchanged and unadulterated. A pension scheme, for example, is built up from many interlocking components. My honourable friend in another place, the Parliamentary Secretary, well described it as being like a jigsaw puzzle. One must in any event hesitate before altering the shape of individual pieces. But that is not the Government's main argument for accepting Boyle's advice as it stands. The reason here, if I may sum it up rather indelicately and in the special hope that noble Lords will forgive me, is that it is often unwise both to keep a dog and to attempt to bark oneself, and we keep Boyle in this respect.
I have looked back with great interest over the debates that took place on the Act of 1965 which implemented the Lawrence scheme, and I find that this argument was put by several Government spokesmen with the clarity and conviction which I am sure were a testimony to the vividness of their recollections of the pre-1964 difficulties from which they had so recently escaped. I do not want to detain your Lordships now with lengthy quotations, but I would commend particularly what two speakers said at that time. The noble Lord, Lord Diamond, who was then Chief Secretary to the Treasury in another place, spoke movingly on December 18, 1964, of how a way out of this difficulty had at last been found 1107 through the medium of an outside committee, and of the thoroughness of the Committee's work.
I think the same applies to the Boyle Committee. Lord Diamond pointed out that if Parliament departed from the Committee's recommendations in any broad way it would be back in the same boat, in the same difficulty it had previously been in. As he put it at column 810:This would be an intolerable situation, and the odium which we have endeavoured so hard to remove from our shoulders would be restored to us.When that Bill moved into this House, the noble Lord, Lord Champion, had an equally vivid way of putting it. He said:The Committee was set up to relieve those Members of the embarrassment of deciding their remuneration, and its recommendations are to be regarded as in some sense analogous to an arbitration award."—[OFFICIAL REPORT, 2nd March, 1965, col. 1036.]I recognise, as I explained at the outset of these remarks, that this is a measure not primarily the concern of this House. Nevertheless, this House is concerned with the welfare of Parliament as a whole. The Bill incorporates the recommendations of the Boyle Report, which set out what is believed to be right for Members of Parliament in order to enable them to carry out their duties properly in a modern and effective Parliament. I commend those recommendations as embodied in this Bill both on their merits and because there are strong reasons, which I have sought to advance, for accepting them as they stand. I beg to move.
§ Moved, That the Bill be now read 2a.—(Earl Jellicoe.)
§ 11.38 a.m.
§ LORD SHACKLETON
My Lords, we are grateful to the noble Earl for the very clear and brief explanation he has given on what in fact is a fairly complicated matter. In welcoming this Bill I should like to express appreciation of the promptness with which the Government have acted on Boyle, and the skill which the officials—and I particularly have in mind the noble Earl's officials and the draftsmen—have used in producing a Bill which, although it has arguable points, is none the less a clear and I believe progressive measure.
1108 It has always struck me as quite extraordinary, as one who was in the House of Commons for many years, that Parliament was so slow to look after the proper interests of its own Members. I am one—as I think most of your Lordships here are—who takes the view that Parliament is the greatest and most important institution for the preservation of democracy in our country, and it seemed to me to be ludicrous that we were not, in the past, prepared to provide either adequate means of living or adequate means of retiring before death. I remember when I was first in the House of Commons there was an old Member—I do not know whether the noble Lord, Lord Hale, who I think shared a constituency, will remember him—for Oldham who lost his seat at an election, was very ill and then was, like other Members of Parliament, forced straight on to National Assistance. This has always struck me as intolerable and undignified, if we are to have the sort of people we wish to have in Parliament.
There has always been difficulty in discussing this question. There has been a fear, which is still prevalent, that Members of Parliament were trying to feather their own nests, and there is always unpleasant publicity from certain newspapers on the subject, which has had unfortunate consequences. We live in an unjust society and there are many people, both in and out of Parliament, for whom no proper provision is made. Therefore, it is all the more difficult when one seeks to make proper provision and certain people are left out.
The scheme which is now before us is one which ought to have been in force many years ago; in fact, pension schemes ought long ago to have been introduced into the community at large. Therefore, in recognising that there are limitations in what is contained in this Bill, and that there are a number of people for whom provision should have been made who will not benefit at all under it, one must also recognise that large sections of the community are also not covered. I am bound to say that I think we ought to have some feeling of shame, both for ourselves and for our predecessors, for failing to make such provision for the community at large. It was of course a fact—and I am not seeking to make a Party political point here, because it is 1109 a historical fact—that there was a section in the House of Commons, particularly in the Conservative Party, who thought that Members of Parliament ought not to be properly paid, that it was desirable to have men of means, and that there should therefore be no pay or pension. I remember that when the noble and learned Lord the Lord Chancellor was in the House of Commons, he always took the view that Members of Parliament ought to be properly rewarded. Therefore, I, for one, will not criticise the salaries that will relate to the race of Lord Chancellors. But I will express deep regret that there is no prospect of any reminiscences or memoirs from him, which would certainly be extremely entertaining. I would ask him to reconsider his decision, even if he chooses to donate the royalties to the Members' pension fund for those who are not properly provided for.
Having made those few general remarks, I should like to deal with certain of the technical points. First of all, I am quite sure that the Government are right—and this has been the unanimous view of the leadership of the Opposition in another place—in their view that we have to accept Boyle or do nothing. It is because Parliament has been inhibited in dealing with this matter that, whether we like it or not, whether we criticise certain aspects and even wonder whether we should have such a scheme at all, we have put the matter into commission and the only way to deal with it, though Parliament retains its full rights, is to accept the Boyle proposals. None the less, I think it is possible that with further experience the Boyle Committee might have made certain further improvements.
I do not believe that it was necessary to standardise on a one-sixtieth rate, which is the Boyle recommendation. Provision is made for other kinds of pensions. Quite rightly, judges can accumulate a pension at a very much faster rate; I think after 18 or 20 years. I cannot remember the exact figures, but I think they can accumulate a pension that will give them up to 50 per cent. of their salary. Therefore, there is provision for people who are, so to speak, entrants into careers which naturally tend to develop rather later in life. Furthermore there are provisions in the Inland Revenue rules for occupational schemes, by which 1110 it is possible to accrue at a very much faster rate—even at one-thirtieth. Indeed, under recent changes in the Inland Revenue rules—and, again, I have not been able to check these figures—I think it is possible to have a rapidly mounting rate of accrual, provided that an individual is under contract to stay on until he has reached the age of 65.
Quite clearly, Members of Parliament and Ministers cannot be guaranteed their employment. That is one aspect of Parliamentary life. But I should not have thought it impossible to provide a different form of accrual rate, according to the age of entry into Parliament. We do not want to complicate the scheme, but pension facilities and the Inland Revenue rules are already complicated, and I should hope that this aspect of the matter which was discussed only in very broad terms in another place—not taking into account the technical variations that are at present allowed for late entry into occupational schemes—could be further looked at.
That brings me to a particular point which I wish to make, and that is the frequency with which the Committee will examine these matters. It would be very undesirable to pull up by the roots the basis of payment and, particularly, the basis of the pension scheme, but developments come about. For example, there has been one development which has taken place in the Civil Service itself since Boyle reported; that is, for people to have the right to "buy in" for years which they have lost. That is the sort of variation which might be considered by Boyle, and I would ask the noble Earl, even if he cannot give an undertaking to-day, whether he will be sympathetic to the suggestion made by Boyle that the Committee should be free between the four-year reviews, or whatever they are, to have an interim look. That would be very desirable, because here is a new scheme being introduced and at the end of, say, two years it may be possible to see where certain obvious improvements can be made.
That brings me to the most difficult issue of all, which is those who benefit in no way from this scheme. This is an extremely difficult matter and it is one which we really ought to consider in the House of Lords, because, whereas all 1111 those who are now Members of another place are potential beneficiaries under the scheme, only in this House is there representation of those ex-Members of Parliament who have no voice at all in the country and who are apt to be forgotten. Representations were made to the Government—my noble friend Lord Beswick was particularly active on this matter—and, as a result, certain improvements have been made in the Members' fund. I realise that it is not possible to go further, but we ought to recognise that in this House there are the post-1964 Members of Parliament who are benefiting—though they are not benefiting by the full entitlement from their service in Parliament—and there are others who may have served many years in Parliament but who have no benefit at all.
It is no use suggesting that they had the opportunity to participate in other pension schemes, because the pattern of pension schemes in the country—which, to-day, is improving only slowly—has been grossly unsatisfactory and many people have lost pension rights by going into Parliament. I do not wish to be personal, but I have missed out on every pension scheme in every employment that I have had. I am otherwise fortunate, but I know that some of my colleagues are not so fortunate.
We shall need to look further at the position of pre-1964 Members of Parliament. I realise it would be difficult, but I am wondering if it would not be possible because, after all, the Government will have to pay into the pension scheme credits for the previous 10 years in which no contributions were made. I see no reasons why some additional contribution should not be made possible through the Members' Pension Fund. As I say, I realise that this is a difficult subject, but we in this House are in a better position to put the case forward because we can speak for those ex-Members of Parliament who do not benefit under the scheme. I do not wish to press this subject any further at the moment, but none the less it is a matter on which there is a feeling of real injustice. I do not blame the Government for it. All of us—Opposition and Government—are to blame.
There are one or two small points that I should like to make, including one about the very curious discrimination 1112 with regard to widowers. This is a point which my noble friend Lady Summerskill will no doubt have noted. Just when we are beginning to make progress in this matter Clause 14 of the Bill introduces a measure of thoroughly unjust sex discrimination. I doubt whether an Amendment on this point could be carried, but I draw attention to it and suggest that it is one of the things that might be corrected in any interim look which the Boyle Committee take at the matter.
In conclusion, I would say that there may be those who would think that at a time when there are still many people for whom inadequate provision is being made we ought not to introduce such a pension scheme—that the time is not ripe. But the time to introduce an arrangement of this sort has never been ripe. I believe it is essential to make provision for Members of Parliament. Members of Parliament take on a very arduous life. It is only those of us who have been Members of Parliament and who have been unfortunate or fortunate enough to cease to be, who know just how arduous is the life of such a person. Therefore, it is very much in the national interest that we should introduce this scheme, notwithstanding the fact that we are deeply conscious of the injustices that still exist elsewhere in our society. I hope that we shall pass this Bill speedily. I am sure that discussion on particular points will be helpful to the future examination of this problem that I hope the Boyle Committee may in due course be prepared to make. Meanwhile, our thanks go to the members of the Boyle Committee for the work which they have done in this area.
§ 11.54 a.m.
§ LORD BOOTHBY
My Lords, I want to make only two very brief points. First, I want to strike a note of apprehension. At the moment the public are watching very carefully what is happening. We are at death grips with the problem of inflation, which is probably the worst problem that has ever affected our country. The Government, the Opposition and everybody else admit this. The public will see that we are bringing in legislation to increase the pensions and salaries of Members of Parliament at a time when there have been astronomical increases in the salaries of the chairmen of the nationalised industries. The workers are bound to say "To hell with 1113 this! If they can get away with murder, why should not we? Let us get on the bandwagon."
The timing of this legislation is wrong. It is true, as the noble Lord, Lord Shackleton, said, that it is always easy to say that the timing is wrong. But when we are engaged in a fearsome battle again inflation I cannot believe that this is the moment to bring in this Bill. I would not have accepted Boyle at this moment. I would not have accepted anything. I would not have raised the salaries of the chairmen of the nationalised industries. The workers are saying that if we can do it, they can do it. If everybody does it then we are sunk. That is the first matter to which I should like to draw attention. It is not the right time to take this step.
In raising my second point I have to declare a personal interest. This matter was raised by the noble Lord, Lord Shackleton, and concerns pensions for Members of Parliament who retire or who were elevated to your Lordships' House before 1964. I served in another place without a break for 34 years. What is my pension? Nil. I know of no other country in the western World or even in the Communist world which treats Members of Parliament in that way. I know that the noble Earl, Lord Jellicoe, has made strenuous efforts in this matter. I thank him for that; he has done a noble job.
I can see the difficulties with retrospective legislation; nevertheless, I know of a considerable number of people who were Members of another place for more than 10 years before 1964 and who are now living in penurious circumstances. But they would rather die, as I would, before they would accept the humiliation of going before a means test committee, which is what they would have to do to get a pension of any kind. This is not right. I am not asking for much. I would suggest a figure of about £500 a year, granted as a right to any Member of Parliament with more than 10 years' service. I am thinking of people who have given the service to which the noble Lord, Lord Shackleton, referred. A moderate pension, as of right, without the recipient's having to go through the humiliation of going before a means test 1114 committee, would be a wise and sensible thing to give. In view of the numbers involved the expense would be negligible.
Those are the only two points I want to make. First of all, I am frightened of these astronomical increases in the salaries of people in the highest quarters and of the effect that they may have on the working class and the trade union movement at a time when we are all struggling to avoid inflation. Secondly, I feel that it is not right that Members of Parliament with more than 10 years' service before 1964 should be deprived of a pension as of right.
§ 11.59 a.m.
§ BARONESS LEE OF ASHERIDGE
My Lords, the noble Lord, Lord Boothby, has expressed sentiments which reflect the views of some Members of your Lordships' House but of a great many members of the public outside. I submit that the logic is absolutely unanswerable. If we have an industrial worker taking home anything between £20 and £35 a week in a period of rising prices we cannot possibly convince him that there is any logic in a standstill on his claim for higher wages when he finds, as the noble Lord, Lord Boothby, said, not only this present pension scheme but large increases in salaries in the nationalised industries and elsewhere.
I want to make it quite clear that I do not believe in cheap labour. I believe in everyone having proper remuneration for what he does. I am a passionate Parliamentarian, concerned about the dignity of the representative Chamber and of your Lordships' House, too. So the last thing I am advocating is that we should not look at salaries and pensions; but I just do not see how we can possibly go ahead with this measure now unless everything that is being told to those of us who do not profess to be expert economists is wrong. I agree that my friends who do profess to be expert economists keep on disagreeing with one another, but that is another matter. I feel that we must take the present inflationary threats in this country seriously; and in dealing with them we must consider not only the sums of money involved—that can be the more trivial side of it—but the psychological implications.
I submit to your Lordships that there is a strong case for bringing in a short, 1115 quick measure to give a pension, at last, to the pre-1964 Members of the House of Commons, because they really need it. Again I agree with the noble Lord, Lord Boothby. Their circumstances vary, and you cannot expect them to make representations. Indeed, the more embarrassed their circumstances the less likely they are to say anything in public. It seems to me to be most ungentlemanly behaviour (I must not say "unladylike" in these days of "women's lib.") and most unfair and unreasonable, financially and psychologically, to go ahead with this measure at the present time; but I do see every case—and I am sure there is not a single industrial worker in the country who would object—for saying, "There are a number of people who have given public service for a great many years, and they have now reached a time in their lives when they need a pension". I am sure people would not begrudge that kind of expenditure.
§ 12.2 p.m.
§ BARONESS BACON
My Lords, I had not intended to speak during this debate, although with my noble friend Lord Beswick and my noble friend Lord Hoy I have been doing a little behind the scenes to try to put Members' pensions on the right lines. Let me say straight away that I do not agree with the two previous speakers who have said that now is not the time. My Lords, we have always been told throughout the years that it was not the time to improve the lot of Members of Parliament and ex-Members of Parliament, and if we had waited until people thought it was the right time nothing would ever have been done at all. I should like to thank the noble Earl for the representations which I know he has made, not only about the pre-1964 people but about those who, like some of us, will benefit from the 1964 Pension Scheme and who were a little afraid about what was going to happen to that scheme.
However, I should like to say one word about the pre-1964 people which has not yet been said. There are some who say that the pre-1964 people ought not to have a pension because they never paid anything, they never contributed towards any pension fund. I would put it to your Lordships that the pre-1964 people paid much more in the work 1116 which they did than any of the Members of Parliament after 1964. These were the Members of Parliament who were existing on £600 a year and, a little later, on £1,000 a year. They had no secretarial expenses, they had no free postage, no free telephones and nothing allowed for living in London. Therefore I think it is an insult to those people to say that they never contributed. They contributed a great deal to Parliament and to this country in the work they did and through the pittance of a salary which they were given. So I support this Bill and its being put into operation at the present time. I must end with an apology. As I said, I did not intend to speak; but I am afraid I shall have to leave before the noble Earl makes his reply, and I apologise to him for that.
§ 12.5 p.m.
§ LORD ROBBINS
My Lords, before the noble Earl replies, may I make a modest request apropos the question of the position of the pre-1964 people? There seems to be something esoteric about the official attitude on this matter. Allusion is made to difficulties, which apparently are insurmountable, in doing the simple and just thing here. Could the noble Earl elucidate this matter a little further? I, in my simplicity, have always thought that the greater argument against retrospective and, as it were, discriminatory legislation was that it might tend to the spontaneous multiplication of the class concerned, but that cannot possibly apply in this case. There can be no conceivable incentive for more people to become ex-M.P.s of the period before 1964.
§ 12.6 p.m.
§ LORD AVEBURY
My Lords, I had not intended to speak but I should like to back up what the noble Lord, Lord Boothby, said and put one further argument in support of it. As your Lordships know, prior to the coming into office of this Government the over-80s had no National Insurance pension as of right, and that amendment of the law was retrospective. Those people had been too old to come into the 1948 scheme, and the Government decided that they should have something without going through a means test—a very small pension, admittedly, but it was better than nothing. I believe that of the take-up of all the benefits available, the take-up on that one 1117 has been the most gratifying to this Government. So it not the same argument applicable to those Members who retired pre-1964? They had no opportunity to come into a contributory scheme such as was enjoyed by their more fortunate colleagues who were in the other place later on, and, as the noble Baroness mentioned, they had a very much more difficult time when they were Members in that they enjoyed none of the benefits of free postage, free secretarial assistance and so on, which are available nowadays. I think that in another place they have probably now got these benefits about right.
For a large proportion of the time when I was there, none of these things was available; but, of course, the post-1964 Members who have retired with less than ten years' service have been taken care of—and I declare an interest here. I always thought it was monstrous that if you served nine-and-a-half years in another place and you then came here or retired or lost your seat, not only did you get no pension but you could not even get your contributions back for five years, and they gave you a miserable 3 per cent. interest during the five years that they were keeping your money. That was grossly unfair, and I am glad to see that that is being swept away in this Bill. We can now have our contributions back again, though somewhat diminished by the roaring inflation which has occurred since this Government came into office; but I suppose we should be thankful for small mercies in getting it back at all.
The pre-1964 people are in an even worse situation, and, just as in the case of the public service and Armed Forces pensions, which we discussed regularly in another place, the people who retired longest ago find it most difficult to make ends meet now. For example, the Permanent Secretary—no, let me take another example; that is probably not a good one, because the Permanent Secretaries have not done too badly over the years, but take people lower down—the clerical officers and, in the Armed Forces, lieutenants or sergeants who retired some years ago and who do not have their pensions brought up to parity with those of equivalent ranks retiring today. Those people were always the subject of concern, but nothing was done about them until the last few years, when we had the 1118 Government approach to parity in the Civil Service and the Armed Forces by bringing up the pensions of those who retired many years ago to the levels which would have obtained if they had retired yesterday. Why should we not do the same thing for the former Members of another place? Is it not only logical that what we have done for public servants should also be applied to servants of the people? Those servants of the people who retired prior to 1964 are entitled to that same consideration, and I think the Bill should be amended to see that they get it.
§ 12.10 p.m.
§ LORD FRASER OF LONSDALE
My Lords, I sat in the House of Commons for 33 or 34 years. I get no pension and I do not happen to want one. Members who were with me in the House of Commons, especially members of the Labour Party, may remember that ever since this matter fell to be discussed since the days of the £400-a-year Parliament I was one of the small number of Conservatives who backed the proposal that the pay should be more realistic. I did so with conviction because I felt not only that there was very real hardship in some cases but that for a variety of reasons that I shall not recite now, it was not in the nation's interest to underpay its Members of Parliament. I want to take a different view from that of my noble friend Lord Boothby, and I would commend this view as a more realistic one. In regard to his first point about the highly-paid chairman of this or that board, there is a rate for the job; and in a country where we have two systems running parallel with each other, a nationalised element and a free enterprise element, there is a rate for the job. It is in my view essential that the rate for the job shall be maintained, not only for the engine drivers but also for the chairmen of great corporations.
My Lords, there is never a right time to do his kind of thing. We ought therefore to take advantage of the fact that this has been done in the middle of a Parliament and that this Government are simply following the precedent of previous Governments in bringing forward this Bill. So I support the high rises for the men in these very important and very responsible positions. I would point out in passing that the rise in terms of 1119 percentage over the years does not leave the skilled artisan or engine driver behindhand; on the contrary, the percentage rise in many of these instances is less than that which has been received by miners, railwaymen and others.
On the latter point, I want to dissent from my noble friend Lord Boothby, again with respect and most cautiously. I did not prepare this speech; I am speaking really off the cuff. I have never taken the view that it is a disgraceful or demeaning thing to go to the State for help if you are in need of help. I received a war pension for 50 years or more. I am not ashamed of that. If there were elements in it which required me to disclose my income in order to get more, I should willingly disclose it. In any event, I have been in the habit of disclosing it to the Inland Revenue for 50 years or so. A great deal of nonsense and false sentiment is spoken and thought in relation to the so-called means test. The means test is a fact of life. I suggest that every grandfather and father either knows the means of his children or, if he does not, asks what they are; and the grandson or son are never (or, in my experience, not often) loth to tell. The father or the grandfather bases the provision that he makes in his will on the means of those dependent on him and on his own means. Every trade union used to have, and for all I know still has, certain funds of a beneficial or charitable nature which they dispense—and which they dispense with the knowledge of the situation of the individual. They apply a means test in their minds. I do not see anything demeaning about taking the allowances which are available. I would recommend anyone who is hard up, be he an ex-M.P. or not, to get what he can and to get it quickly. It is possible to give and to take with grace.
§ 12.15 p.m.
§ LORD CHORLEY
My Lords, I am a supporter of the Bill and I find myself in somewhat the same position as the noble Lord, Lord Boothby—although not exactly so because I was never in another place. I have worked in your Lordships' House for 25 years; but that fact is neither here nor there. I rose to scold the noble Earl, the Leader of the House; and as time went on I found I had to include 1120 in the scolding my own Leader and the noble Lord, Lord Boothby: because none of them can distinguish between "Parliament" and "the House of Commons". The noble Earl the Leader of the House said that he was never a Member of Parliament. What nonsense! He is now and has been ever since I first knew him. By the time one reaches the position and stature of—
§ LORD SHACKLETON
My Lords, I rise not so much to apologise to the noble Lord because I understand that he is a Lord of Parliament as opposed to being a Member of Parliament. But I do not think it matters very much.
§ LORD CHORLEY
My Lords, I think it is all wrong. I reprove my friends when they ask me, "Where you ever a Member of Parliament?" I tell them that I have been working hard as a Member of Parliament for a quarter of a century. However, I have made my point.
§ 12.18 p.m.
§ LORD BALFOUR OF INCHRYE
My Lords, I should be lacking in moral courage if I did not say one word in support of the pre-1964 Members of Parliament. Like Lord Boothby, I am one of the few survivors of the "£400-a-year Parliament" of the 'twenties. Those of my colleagues on both sides of that House who are still alive are in some cases living very close to distress. I sincerely hope that Her Majesty's Government will take into account the words spoken today on all sides of your Lordships' House.
I want to add a word to the last point raised by the noble Lord, Lord Boothby. The noble Lord, Lord Shackleton, the Leader of the Opposition said that it was never the right time. That may be true; but sometimes it is the wrong time—not for the Members of Parliament but for those in the very high surtax bracket who are going to obtain increases—most of which we know will go in tax, but that does not matter. What matters is the psychological effect on railwaymen who have recently been on strike for a 1121 wage of £20 or £21 a week of seeing a leader of a nationalised industry having his salary raised from £18,000 a year to £20,000 or £22,000.
The noble Lord, Lord Fraser of Lonsdale, said that we must have a rate for the job. Certainly, I am all against not paying those in the public sector salaries comparable to those paid in the private sector; but the Government are responsible for the public sector, and in view of the psychological effects to which I have referred and in the interests of their efforts to check inflation, I believe that these increases if granted, should be postponed. With the co-operation of those who are offered them and of the Minister, they should be postponed; because, I repeat, while Lord Shackleton has said that there is never a right time, I believe that this moment is the wrong time. I think that this is a good Government and I support them in every way; but every Government have their failings and with this Government the public relations aspect is sometimes deplorable. The psychological effect on the public of what they are doing will do the Government harm in the country. I do not want to stray into the realm of public relations, but I greatly regret that in this crisis in which we find ourselves, the danger of inflation, our Prime Minister has not gone on radio and television and explained the facts to the country. That is another direction where I think we have failed in public relations. I do not want to enlarge upon this matter, but I feel that we should separate the two categories—Members of Parliament, many of whom are in penury and deserve pensions, and the higher officers of the State and in the public sector.
§ BARONESS GAITSKELL
My Lords, I only wish to add one sentence in support of what the noble Lord, Lord Balfour of Inchrye, has said. He left out one category. I agree with him absolutely on retirement pensions for Members of Parliament, but he omitted the increase in judges' salary. I think they should be mentioned, too.
§ 12.22 p.m.
My Lords, perhaps it would be appropriate for me to say something in reply to the debate, which has sometimes ranged fairly widely, but in this case I think we have trespassed on the ground which we will no doubt 1122 be covering next Wednesday when debating the general economic issue. I was not aware when my noble friend Lord Balfour of Inchrye spoke that we were going to debate the public relations policy of Her Majesty's Government on this particular Bill.
§ LORD BALFOUR OF INCHRYE
My Lords, may I say that I have no intention of debating it. I mentioned it incidentally and if the noble Earl wishes to take me to task he can do so.
My Lords, if I may say so I was gently taking my noble friend to task. I was very grateful for the tribute which the noble Lord the Leader of the Opposition paid to the officials who have done a great deal of work in this particular matter. I do not wish to single any out because it would be wrong for me to do so—and I forebore to mention this, and this tribute, as it were, is torn from me by what the noble Lord the Leader of the Opposition has said—since they happen to be officials who work in my own Department.
This Bill does represent, whatever strictures it may have been exposed to in the last hour or so, a very considerable, noteworthy and desirable advance. I should like to pay my tribute to the deep, sustained and personal and very helpful interest which my right honourable friend the Secretary of State for Northern Ireland paid to this whole question when he was Lord President of the Council. It would not be right for me to let this moment go without saying that, and I think it is within the knowledge of many Members of your Lordships' House.
I do not wish to widen the debate on to the broad economic field into which we have been drawn, except to say this. With all-Party agreement the Government referred the question of Ministerial and Parliamentary remuneration to the Boyle Committee, an impartial and expert Committee with very wide representation. The Committee gave its views and added—with reference particularly, but not I think exclusively, to salaries—that its Report should be implemented at once and in full. The Government accepted this in order, as my right honourable friend the Lord President of the Council put it in another place, to ensure a modern and effective Parliament and thus in the interests of the nation as a whole. 1123 I submit that to give reasonable remuneration, backed and supported by reasonable, modern and up-to-date pension arrangements is in the interests of the nation as a whole. We have already implemented the salary recommendations in the Ministerial and Other Salaries Act, 1972. That, in any event, is water under the bridge. We now have to relate pensions to those salaries, and that is what is being done in this Bill.
I do not accept the argument that the timing in that respect is wrong. Noble Lords opposite hold views—and hold them strongly—to which I have listened with interest on other salary increases elsewhere which the Government have decided to implement following the Boyle Committee recommendation. I would submit that that is a matter for debate next Wednesday when we are debating inflation and not a matter for debate on this particular Bill. I have listened with interest, although not always in entire agreement, with what has been said in that respect, but I will hold my fire on that question until next Wednesday, which I think is a more appropriate occasion.
A number of points were raised by the noble Lord, Lord Shackleton. I should like to thank him for his broad endorsement of this Bill. He asked whether it was right necessarily to standardise on the one-sixtieth rate. I think there has been some misunderstanding here. It is perfectly clear from the Boyle Committee's Report that the Committee worked on the assumption of a pension-earning career of 40 years. But there is no reason for believing, as has been suggested in some quarters (though not by the noble Lord the Leader of the Opposition), that they mistakenly thought that this 40 years would necessarily or frequently be spent in another place. They were well aware of the average length of a Parliamentary career. People like the noble Lord, Lord Boyle, know their Parliament pretty well and their recommendations have to be seen in the context of their time. Strategy for Pensions, the White Paper of my right honourable friend the Secretary of State for Social Services, holds out the prospect that before long all employees will be in either an occupational pension scheme or in the State Reserve Scheme, that all schemes will be required to preserve the pensions of those 1124 who leave prematurely or to give and receive transfer values. The realistic assumption for the future, therefore, is that those of the 40 pension-earning years which are not spent in Parliament will be spent in other pension-earning employment. And I believe it would be invidious to provide a special preferential rate of accrual for Parliamentarians on a different assumption.
§ LORD SHACKLETON
My Lords, may I interrupt the noble Earl? I feel that in this respect Boyle is falling into an error of time, as indeed is the noble Earl, Lord Jellicoe. I absolutely accept the argument for the future, but for many people it will be many years before they have accumulated a pension either in an occupational scheme or in the Reserve Scheme. I am not pressing the noble Earl further, but it may be desirable to have some interim variation in the accrual rates for those who are beginning to come up to the point of retirement.
My Lords, I see the noble Lord's point. What I was going to say is, that as and when the Boyle Committee consider these matters again, this is no doubt a point, since emphasis has been placed on it, which they will wish again to consider. But it brings me by fairly close analogy to the noble Lord, Lord Shackleton's second question, which was the possibility of buying in extra pension rights. I am sure the Boyle Committee took full account of the situation in the public service schemes at the time they were deliberating. But it is a fact that this possibility of purchasing added years was introduced into the negotiations on the Civil Service scheme after the Boyle Report was published. I am very glad that this now figures in the new and greatly improved Civil Service scheme.
I am not saying that the Boyle Committee would necessarily have taken a different line from that which they did take if they had been aware of these later improvements which have now been made in the Civil Service scheme. Be that as it may, I am quite certain that this is just the kind of change of which account could be taken when the Boyle Committee next looks at these matters, because pension practice and policy is evolving all the time, and this is one incidence of it. It is not a static picture. 1125 This is one reason why I think it would be a good thing if the Boyle Committee could look at this, as they will be looking at other possibilities as and when they have their next review. By the same token, no doubt they will be able to look at the strictures which Clause 14 attracted for its element of discrimination in matters of sex. I was rather surprised that the noble Baroness, Lady Summerskill, did not rise to her feet at Clause 14.
§ BARONESS SUMMERSKILL
My Lords, I took it for granted that the noble Earl had read the debate in another place. He expressed such ignorance of it. It was well threshed out in another place, and I was shocked to find that the noble Earl had to refresh his memory.
My Lords, I did not mention it, but this does not mean that I do not know all about it. I am well aware of what the honourable Member Mr. Houghton said in another place, and the particular epithet that he applied to this clause.
"Scandalous", I think, was the word he used. I hope that the noble Baroness will give me the credit for having read what was said in another place: I did in fact do my homework.
I come now to what I think is the main matter, apart from extraneous points, which has attracted most comment in our debate on Second Reading; that is, the question of the pre-1964 exclusions. I explained earlier in my introductory remarks that this was a matter which had been carefully considered by the Lawrence Committee in 1964, and was deliberately—I wish to stress the word "deliberately"—reconsidered by the Boyle Committee in their recent review. This matter is so important and, understandably, has attracted so much comment in your Lordship's House, that I think I ought to read to your Lordships part of paragraph 69 of the Boyle Report. It reads as follows:We have also been asked to consider the possibilities of extending the payment of pensions to M.P.s who retired prior to the commencement of the pension scheme in October, 1964, of providing for full credit for all service 1126 prior to that date in place of the present limit of 10 years. We do not feel able, however, to modify the recommendations on these points of the Lawrence Committee".They then go on to give their reasons. I am certain that anyone who goes into this matter is bound to sympathise with those who served for many years in another place without commensurate pensions and, indeed, in conditions which are not applicable to-day.
Parliament is of course unfettered in this and other matters, but I would suggest to your Lordships that in this respect we are the prisoners of two tightly constricting factors. The first is the length of time that it took our predecessors to decide to break out of the difficulties which so beset them whenever they approached this subject—their natural, but I think disastrous coyness. This meant that there simply was no Parliamentary pension scheme before 1964, though schemes had long been established in all branches of the public service. Secondly, if we were now to say, as I think some noble Lords are inclined to suggest: "Never mind; we will make good the procrastination and delays of the past and give much more retrospective credit to those who never had the opportunity to contribute to the scheme", we should then be in grave trouble on two counts. Not only should we be overriding the most careful conclusions of two distinguished and expert committees, but we should also be laying ourselves wide open to the accusation that the legislators were prepared to treat themselves better than the generality of good employers.
This is an argument which I hope noble Lords will weigh carefully. I have considered this matter carefully; I feel the position myself; and I have had a great many representations—I am glad to have had them—from noble Lords opposite. It would be wrong of me to pretend that there is any easy way out of this difficulty. Certainly we can be sure that when the Review Body next considers pensions it will be well aware of the views that once more have been expressed in Parliament on this feature of the scheme. It would be wrong for me to build up any expectation of a different recommendation. However, I am certain that, given the views of the experts and the weight of feeling that lies behind that expression of views, this is a matter 1127 which undoubtedly the Review Body will look at, and will look at in the light of what has been said.
§ LORD ROBBINS
My Lords, I apologise for interrupting, but can the noble Earl develop his analogy between employment in private enterprise and the position of the servants of the people who have been Members of Parliament? It seems to me that they are in pari materia.
My Lords, I do not wish in any way to put down a smoke screen, but if this is a matter which noble Lords wish to pursue—and this may be the case, if only to have a further chance to look at the balance and the weight of argument—it might be better done at the Committee stage. Meanwhile, may I point out that the cupboard is by no means bare for those who find themselves in this situation. For those already retired on pension under the existing scheme there is now, as I said in my opening remarks, the immediate prospect of increases under the Pensions (Increase) Act of last year. Next, for those who lost under the ten-year limit, but are still in service, the new accrual rate, which for service over 15 years more than doubles the old one, will help, as again of course will the Pensions (Increase) Act later on. Finally, for some, at least, of those who have not qualified under the present scheme there is the possibility of assistance from the Members' Fund, which the Boyle Committee thought, rightly or wrongly, the correct source of help.
As my right honourable friend the Lord President was able to announce in another place we understand that the trustees of the Fund intend, once this Bill becomes law, to move a resolution which would raise the maximum grants by 10 per cent. and the income limits—and these are most important—which we are bound by law to observe, by more. This would obviously greatly ease the restrictions on the discretion of the trustees which is absolute and would make possible in some cases increases in grants of a great deal more than 10 per cent. I do not want to go into actual cases here—I do not think I should ever want to do that—but when I say "a great deal more than 10 per cent.", I mean that: it is a very great deal more than 10 per cent. in certain cases.
1128 Having said that, I should like to say two things. First, I recognise the depth of feeling expressed on this by noble Lords on all sides of your Lordships' House. They are sentiments with which to a large extent I am in agreement. But, secondly, I should like to refer to what I said at the outset in my introductory remarks: that I believe we should be most unwise at this stage to depart from the main principle of accepting the package as a whole. If we once get driven off that, then I believe we are in great difficulty and may well get back on the precise difficulties which plagued Parliament before the Lawrence Committee and the Boyle Committee were established. In this instance, I believe there is a great deal to be said for Boyle, the whole Boyle, and nothing but Boyle.
My Lords, may I just say this in conclusion?—because some of the things I have been saying imply that these are matters which will be ripe for looking at when the Review Body next looks at these issues. That raises the question of when the next review will be. I touched on this in answer to a point raised by the noble Lord, Lord Byers, as a supplementary question to the Government's Statement on the Boyle Report on December 6 last. The answer is that the Government are committed to a major review of Members' and Ministers' remuneration once in every Parliament of normal length. The Boyle Committee thought this would probably mean about once every four years. The noble Lord the Leader of the Opposition reminded me that the Boyle Committee have added that they would not wish to exclude the possibility of an intermediate revision between major reviews. I have not overlooked this point, although it was not exactly a recommendation. However, the Government would not wish to exclude anything in this regard, and I am now just reminding the House of the limit of the Government's commitment: that is, to accept Boyle—and Boyle said a review in the lifetime of each Parliament, but did not preclude intermediate reviews.
That said, I would strongly suspect that on the question of pre-1964 Members I shall not have given full satisfaction to all your Lordships who feel deeply on this point. I am not suggesting that we should necessarily have a Committee 1129 stage—far be it from me to do so—but if your Lordships wish to pursue this or other matters, I think that would be the right time to do so. With those words, I hope that noble Lords will be glad to give the Bill a Second Reading.
§ On Question, Bill read 2a; and committed to a Committee of the Whole House.