§ 2.56 p.m.
§ Lord CLIFFORD of CHUDLEIGHMy 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 whether the retirement remuneration of Admirals of the Fleet, Field Marshals and Marshals of the Royal Air Force is less than the pensions for officers of the immediately inferior rank, and if so whether they were warned of the fact before accepting promotion.
§ The MINISTER of STATE, MINISTRY of DEFENCE (Lord Strathcona and Mount Royal)My Lords, at the time when they cease active duty, the retirement remuneration received by five-star officers (calculated and known as half-pay) exceeds that of any officer junior to them retiring during the same year. Half-pay is increased in line with full pay and full pay has not in recent years kept pace with inflation. On the other hand, service pensions in general have been increased in line with price inflation and thus 28 four-star officers out of some 120 who retired in the years 1971–77 at present receive retired pay greater than the five-star half-pay. A similar phenomenon of "overtaking" has occurred throughout the public service and at all levels. Since it is impossible to foresee at any given moment what will be the relative movement of salaries and prices in the future, no specific warning can be given.
§ Lord CLIFFORD of CHUDLEIGHMy Lords, if the noble Lord will allow me to say so, that is not an entirely satisfactory Answer. Is he aware that, as an impoverished farmer, I have no sympathy for these highly-paid index-linked pensioners of the State? However, is there not some moral or even trade union principle being broken in a case like this, where a five-star officer is getting up to £ 6, 000 a year less "pension" than a four-star officer? Can my noble friend also say whether this differential— or perhaps I should say, differential in reverse— also applies to those officers' widows?
§ Lord STRATHCONA and MOUNT ROYALMy Lords, I cannot answer the last part of the noble Lord's question, but I shall write to him on the matter. As regards the general principle, it is, of course, true that the system of linking the retirement remuneration of five-star officers to half-pay rather than a pension arrangement is an added complication, 1259 but it must be pointed out that it has at times worked to their advantage as well as to their disadvantage. However, we have decided that in future five-star officers ceasing active duty will receive retired pay linked to prices on the same basis as the rest of the armed forces, and all five-star officers have been given the opportunity to change if they so wish.
§ Lord HILL-NORTONMy Lords, I should declare a personal interest in this matter, and I think that I am the only one of your Lordships here today who has this personal interest. It is, if I may say so— and I am not making a speech— a monstrous injustice which the noble Lord the Minister has tried to slough over by quoting a phenomenon called the "overtaking" phenomenon which applies to permanent civil servants, but not to the officers who were previously the professional heads of their armed forces.
I wish to ask the Minister two questions. How much would it cost annually to bring the half-pay of the only 20 people in the United Kingdom so concerned, up to the same as the best of their erstwhile subordinates? Secondly, how much more would it cost to restore the 20 per cent. advantage— which the Government of the day, when five-star half-pay was first established in 1949, deemed to be right, proper and just— to the most senior officers in the land?
§ Lord STRATHCONA and MOUNT ROYALMy Lords, I do not think I should add very much to the letter the noble Lord received from the Prime Minister back in May. That was a private exchange. But perhaps I can do my best. First, it would be anomalous to single out a small group, even of the most senior officers and (dare I say it?) the most highly respected officers. Anomalies, if indeed they are anomalies— and I accept that many people perceive that they are— are regrettably exceedingly widespread. It is estimated that it would cost something of the order of £ 100 million a year to rectify them all.
§ Lord HILL-NORTONMy Lords, will the noble Lord be kind enough to answer one or other of my questions?
§ Lord STRATHCONA and MOUNT ROYALMy Lords, I shall have to write 1260 to the noble Lord about the detailed questions that he has asked me because at the moment I do not have the answers.
§ Lord HILL-NORTONMy Lords, I would much rather their Lordships were informed, as well as myself.
§ Viscount AMORYMy Lords, will my noble friend accept that I am a little perplexed at the answer he gave, in view of the importance which the present Government, rightly, attach to incentive for effort and initiative? But I was slightly comforted by the last part of his first answer. Will my noble friend also accept that this confirms my own prescience, when I was temporarily in the Army during the war, in not having made a greater effort to become a Field Marshal? That is the reason— because of the application of what my noble friend called the "overtaking" phenomenon.
§ Lord STRATHCONA and MOUNT ROYALMy Lords, the country would, perhaps, have been deprived of the services of a very distinguished ex-Minister had this particular development taken place. I think that I should make the point that Field Marshals and five-star officers are, to some extent, in the forecasting business, and part of the original Question was whether they needed to be warned of the consequences of their promotion, and I should not have thought that they did.