HL Deb 17 July 1978 vol 395 cc2-6

2.38 p.m.

Lord BOYD-CARPENTER

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

The Question was as follows:

To ask Her Majesty's Government whether they are aware that, whereas senior civil servants received not only some part of the salaries recommended in Report No. 6 of the Top Salaries Review Body but have been treated for pension purposes as being entitled to the full amounts recommended in that report from 1st January 1975, members of the boards of public sector bodies have received neither of these advantages; and whether they will now take steps to terminate this discrimination and treat these board members for pension and pay purposes during the period 1st January 1975 to 1st April 1978 on the same basis as civil servants were treated.

The LORD PRIVY SEAL (Lord Peart)

My Lords, I am aware of the position the noble Lord describes. The Government do not believe that it would be appropriate to base pensions retrospectively on recommended salary levels that have never been accepted. However, the noble Lord will have noted from the Statement made by my right honourable friend the Prime Minister in another place on 4th July 1978, that the Government propose to treat all the groups covered by TSRB 10 in a similar manner.

Lord BOYD-CARPENTER

My Lords, perhaps the noble Lord would clarify the somewhat mysterious concluding sentence of that Answer. Does it mean that the grievance of those members of the boards of nationalised industries, who were not promised, as were the civil servants, that their pension entitlement would be built up on the basis that they were receiving the full increases recommended by Report No. 6, has been taken away, or does it remain?

Lord PEART

My Lords, I am afraid that I cannot go beyond what I have said. However, I believe that the acceptance of the Top Salaries Review Body Report No. 10, which no doubt noble Lords will have read, means that there will be considerable improvements which will be beneficial to all.

Lord BOYD-CARPENTER

My Lords, while accepting what the noble Lord said about the most recent and much more courageous decision of the Government compared with that of December 1974, may I ask him whether he is aware that he has left, certainly in my mind, the impression that members of nationalised industry boards who retired during the period between 1st January 1975 and 1st April 1978 will have retired on a much lower pension than if they had been civil servants in the same salary bracket and on the same recommendation under that report?

Lord PEART

My Lords, I note carefully what the noble Lord has said. The difference between board members and other groups is that, in the case of the latter, the Government had accepted the salaries recommended by TSRB Report No. 6. For board members, it is obviously not now possible to make a forward commitment to those salaries, and it is contrary to pensions policy to calculate pensions on notional salaries which have not been drawn and to which there was no commitment at the time of retirement. I am sorry if that answer is not satisfactory.

Lord BOYD-CARPENTER

My Lords, with respect, surely the disposition of entitlement to pensions, which are in respect of salaries not being drawn, has already been conceded in respect of Members of the House of Commons?

Lord PEART

My Lords, that is another matter.

Several noble Lords

Oh!

Lord ORR-EWING

My Lords, is the noble Lord aware that there is a strange anomaly here? In the private sector, pensions have never been indexed to the extent that they are in the public sector. Now there is a division between two different kinds of public sector employees: those who are in the Civil Service and those who were—for example, in the case of the Atomic Energy Board and the Civil Aviation Authority—civil servants and who have now been transferred to Government authorities. It is this second group of employees who are now being handicapped by the idea that they cannot have their pensions related to notional salaries, as civil servants do. May I ask the noble Lord whether or not this is a strange and unfair anomaly between two sets of public servants, and ought not this matter to be put right at the earliest moment?

Lord PEART

My Lords, as I have said, the Boyle Report has led to the fulfilment of a promise to certain sections, particularly to those who work for public bodies. I believe that what has happened has been accepted by the country. Even though the amounts are considerable, I think that the Government were right to do so, despite criticisms from certain quarters.

Lord DERWENT

My Lords, could the noble Lord the Leader of the House explain what he means by "accepted by the country"? Most of the people in this country know nothing about it.

Lord PEART

My Lords, I am surprised to hear the noble Lord say that, because I believe that the average person reads the daily Press and this matter has been considerably ventilated. There have been great arguments about it, and I believe that the Government have acted with courage.

Lord GLENKINGLAS

My Lords, will the noble Lord be kind enough to bear in mind and think carefully about the problem? I happened to be at the Board of Trade when the Civil Aviation Authority was hived off. It was a very considerable problem for a great many extremely good and useful civil servants as to whether they should stay with the Civil Service or move to the Civil Aviation Authority, which was what the Government at the time wanted. I should be sorry if they were penalised for having taken a decision which was in the country's interest, if it was not also in their interest.

Lord PEART

My Lords, I have noted carefully what the noble Lord has said. Perhaps he could have a word with me about some of the details. I know that the noble Lord, Lord Boyd-Carpenter, is genuine and sincere about this, because not only was he once a distinguished Member of Parliament and Minister but he was also a public servant with the Civil Aviation Authority. I take note of what he says, but he knows full well all the arguments that there have been on this. Nevertheless, I still believe that the acceptance of TSRB Report No. 10 is a step forward, despite all criticism.

Lord DRUMALBYN

My Lords, is the noble Lord aware that, if he looks up the records of the past, he will find undertakings that those who opted out of, or who were compulsorily hived of from, the Civil Service would not be disadvantaged in any way whatever? Will the noble Lord look into this and make certain that if there are such undertakings they will be implemented?

Lord PEART

My Lords, it has been asked whether the board members who have recently retired will in fact catch up or whether they have been differentiated against. My reply is that any of those who are still serving will benefit from the Government's latest decision in TSRB 10. I believe generally that it is a step forward.

Lord LEATHERLAND

My Lords, as various classes of public officials have received improvements in their emoluments, and as Members of the House of Commons are also to receive an increase in their pay, do the Government intend to improve the pay of certain other very hard-working and earnest public servants?

Lord PEART

My Lords, I assume that the noble Lord means noble Lords in this House—at least I hope that is what he means. I am prepared to accept that, but this is a matter which I still think has to be considered very quickly.

Lord HAWKE

My Lords, will the noble Lord not agree that the real anomaly is that the Civil Service has index-linked pensions and, like the vast majority of people in this country, I believe that this is the road to bankruptcy in an era of inflation?

Lord PEART

My Lords, I think the noble Lord is exaggerating; he usually does.