HL Deb 28 September 1976 vol 374 cc170-2

2.45 p.m.

Lord ORR-EWING

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what is the total cost of providing fully indexed increases to public service pensioners as a result of the increase of 26.1 per cent. last year and 13.8 per cent. increase in 1976 and how these percentages compare with increases given in the private sector.

The LORD PRIVY SEAL (Lord Peart)

My Lords, may I preface my reply by saying how delighted is the whole House to congratulate the Chairman of Committees, the noble Earl, Lord Listowel, on his seventieth birthday?

My Lords, the cost of last year's 26.1 per cent. increase for the million or so public service pensioners was estimated at £180 million over a full year; this year's 13.8 per cent. increase is expected to cost about £114 million. No comprehensive information is publicly available about increases given in the private sector, but such information as I have suggests that a very high degree of protection is by no means uncommon among major employers in the private sector.

Lord ORR-EWING

My Lords, is the noble Lord aware that at the moment I am not challenging some need for some form of indexation, but that the comparability between private and public sector pensioners is made by the Pay Research Unit, which is entirely made up of civil servants? Would it not be a good idea to broaden the base of this unit to include some knowledgeable members from the private sector, so that justice is seen to be done more obviously? Also, should not the various factors to be taken into consideration in drawing up comparability be better known by all concerned, because the judgment in the private sector is that no pensioner does half as well in the degree of indexation which he receives as does the public sector civil servant?

Lord PEART

My Lords, I am grateful for the first part of the noble Lord's remarks. On the question of the Pay Research Unit, I am well aware that the noble Lord has raised this matter before. I carefully read his speech in December and I know that he pursued this matter with my noble friend, my predecessor. I believe that the noble Lord has a fair point here and I am prepared to look at it.

Lord PAGET of NORTHAMPTON

My Lords, why is it that comparability arises here? Surely people who enter the public service in a sense prefer security over the long run to higher immediate earnings, and are they not at this point receiving the advantage of their bargain?

Lord PEART

My Lords, I have nothing to add to my reply to that question.

Lord ORR-EWING

My Lords, when looking at this matter, would the noble Lord really try to examine what the private sector is able to do? I have been into it very carefully and it is not true that private sector pensions are indexed at anything like 26.1 per cent. or 13.8 per cent. as compared with public sector pensions.

Lord PEART

My Lords, I should not like to get into an argument about the merits of private sector treatment of pensioners or that in the public sector. I said, however, that I had noted what the noble Lord has said about the Pay Research Unit and that I should look at this carefully. No doubt I shall be able to deal with the matter at a later period.