HC Deb 12 December 1949 vol 470 cc227-8W
Mr. Yates

asked the Chancellor of the Exchequer if he has any further statement to make on the deferment of the increases of salary for the higher posts of the Civil Service which had been recommended by the Chorley Committee; and on the effect of the decision on the pensions of the holders of such posts retiring in the near future.

Sir S. Cripps

In reply to my hon. Friend the Member for Chesterfield (Mr. Benson) on 17th February I said that I hoped to give effect in the course of the present year to the recommendations of the Chorley Committee, subject to the salary increases concerned being introduced by stages. I later directed that the introduction of the increased salaries by stages should start on 1st October last and that the full increases should be effective by 1st October, 1951.

I have, however, already had to announce that in view of the devaluation of the pound and the consequent need to avoid increases in personal incomes, I have felt it necessary to postpone the introduction of the increases which had been authorised to take place on 1st October last, though I have reaffirmed the intention of the Government that my direction that the full increases are to become operative by October, 1951, is not to be affected by this further postponement.

I have also stated already that I have not thought it right to allow this decision to prejudice the pensions of those officers retiring after 1st October, 1949, whose pensions and allowances are, under the Superannuation Acts, based on the salary earned at or shortly before their retirement (in. most cases on the salary in the three years preceding retirement), Where pensions are based on retiring salary the permanent loss of pension entailed by basing it on the existing instead of on the increased salary would be considerable and in my view unjustifiable in the circumstances of the case.

In order, therefore, to ensure that the pensions and death gratuities of those concerned are not prejudiced by this postponement, I have given the following instructions.

Salaries are being fixed as from 1st October, 1949, at the rates which would have been payable, but for the postponement, under the arrangement for introducing the recommended increases by stages. These salaries are, however, being abated in accordance with a general direction, which will remain in force until further notice, by amounts sufficient to ensure that for the time being no increases in salaries are, in fact, paid. The result will be that under Section 13 of the Superannuation Act, 1935, the pensions and death gratuities under the Superannuation Acts of those retiring or dying in or shortly after the period during which the abatement is in force will be calculated on the salary that would have been payable had the abatement not been made.

I have also considered the effect of this deferment on the non-effective benefits of staff pensionable under F.S.S.U and on temporary staff. Although the effect of deferment in these cases will be far less and the number of individuals concerned is very small, I have not thought it fair that staff in these categories should be treated differently and I propose, therefore, that the necessary adjustments should be made to ensure that their noneffective benefits also are not prejudiced. Legislation may be required to authorise these payments but its extent cannot be determined until further inquiries have been made and I propose that the introduction of any necessary Measure to authorise the payments made after October, 1949, should be deferred until a suitable opportunity presents itself.