§ Order for Second Reading read.
§ 2.50 p.m.
§ The Minister of State for Colonial Affairs (Mr. John Hare)
I beg to move, That the Bill be now read a Second time.
I apologise to the House for taking up so much time today, but I should like to explain one or two things about this Bill, which is somewhat complicated. The main purpose of the Bill, as the Explanatory Memorandum says, is to provide a new method of calculating the amount of a Governor's pension. At present, a Governor's pension is calculated by reference to his length of service as a Governor, together with a unit of pension for every completed month of service—I will say a word or two about that later.
Under the proposed new method, a Governor who before his appointment was serving in the Oversea Civil Service will normally have his pension based on his final salary and on the combined length of his service in the Oversea Civil Service and as a Governor; a Governor not previously in the Oversea Civil Service will have his pension based on his final salary and his length of service as a Governor.
The number of people to be covered by the Bill is not very large. Only 49 Governors retired on pension in the last ten years, and four died while still serving. Apart from these, about a dozen Governors have retired without drawing pensions, the majority being formerly officers in the Armed Services who received pensions and gratuities in respect of that service. Hon. Members will have noticed that in paragraph 12 of the Financial and Explanatory Memorandum the Bill, if enacted, would increase the annual total of the pensions to be awarded to Governors now serving by £20,000.
While, therefore, neither the number of persons directly concerned by the Bill nor the amount of money at stake are large, hon. Members will, I am sure, agree that Governors as a class have deserved well of our country and that an improved pension system for them is overdue. I do not think it can any longer be said, if indeed it ever could, that 934 appointment as Governor is a reward for past labours and a pleasant prelude to retirement. I do not think there is any Governorship now which is not an arduous assignment, and, as we all know, some have proved to be very dangerous.
It is important to point out, too, that it is no longer possible for Governors to make substantial savings from their salaries to provide for their own retirement and for their dependants. Under the Act which we are working at the moment, the 1947 Act, the unit of pension which, as I said at the beginning of my speech, a Governor earns, varies according to the class of Governorship which he has held. There are four classes of Governorship. In a Class I Governorship, each month of service earns a pension of £7; in a Class II Governorship, £6; in a Class III Governorship, £5; and in a Class IV Governorship, £4. Very roughly, these four classes of Governorship reflect the size, population, etc., of the Territories concerned.
These awards bear no relation to the salary earned by the Governor; and this is in direct contrast to the position in both the Home Civil Service and the Oversea Civil Service, where pensions are based, as the House knows, on final salary or, in some cases, on the average salary over the last three years of service. As an illustration of the anomalies of the present system, there is one Governor who retired after 34 years of public service, which included two major Governorships, with a pension of £1,150 a year, which is only half the maximum pension permitted under the present Act.
Hon. Members I hope will understand that since under the present system Governors' pensions are not based on their final salary, it is possible for a Governor's pension for Civil Service and Governor's service combined to add up to less than he would have received had he remained in the Overseas Civil Service and retired from one of the senior posts in it. This is particularly so in the case of Governors who were appointed during the earlier years of the post-war period, when Civil Service salaries were beginning to show a marked upward tendency.
The Bill proposes to remedy these defects by providing that the pension of a Governor who was previously an Over-sea Civil Servant—and a large majority 935 of these Governors are in this category—should be based on his final salary and total period of public service. This, as I have indicated earlier, is the normal basis of Government superannuation awards.
The pension will be calculated at the rate of 1/600th of the average yearly salary of the three years before final retirement. This is then multiplied by the total number of months served. For example, a Governor who had 25 years total service would, on retiring, receive a pension of half the average salary of his last three years of service. This is the pension rate commonly employed in oversea Territories.
The oversea Governments concerned will, as at present, bear the costs of the pensions awarded under their own pension ordinances in respect of Oversea Civil Service, and Her Majesty's Government will pay the balance of the pension calculated on the basis which I have just indicated on total service and final salary.
A Governor who has had no previous Oversea Civil Service will earn a pension—provided he has had no less than ten years' total State service—at the rate of 1/600th of the average salary for each month he has served as Governor. A Governor who has previously been in the Home Civil Service will, in addition to this pension, draw his Home Civil Service pension. All this is provided for in Clause 2.
Clause 3 limits the maximum total pension which a Governor may receive to £3,000 or two-thirds of the highest salary earned, whichever is the less. I think I should explain that this figure of £3,000 has been adopted as being two-thirds of the salary of a Permanent Secretary in the Home Civil Service, and it will be noticed that provision is made for its alteration by Treasury Order. This would be done as and when salaries of Permanent Secretaries are revised in the United Kingdom. In fact, salaries of Permanent Secretaries have been revised with effect from 1st April, and after the passing of the Bill a Treasury Order will be laid which will have the effect of making an appropriate adjustment to the maximum pensions of Governors who retire after that date.
§ Mr. Hare
It is £3,500. The amount specified in the Bill will apply to Governors who retired between 1st September, 1955, and 31st March, 1956.
Clause 5 empowers the Treasury to grant a gratuity to the personal representatives of a Governor who dies in office and who immediately before his appointment as Governor was serving in the home or overseas Civil Service. The amount of the gratuity is equal to the average salary of the last three years service—and this is where I think the hon. and gallant Gentleman the Member for Brixton (Lieut.-Colonel Lipton) was a little muddled—subject to a limit of £4,500. This limit also may be varied by Treasury Order.
The other new major provision in the Bill is set out in Clause 4, by which a Governor may commute a maximum of a quarter of his pension for a capital sum. The calculation of the capital sum will be prescribed by Treasury Order. I think it is important to note that the right to commute will be independent of the Governor's state of health, and a medical examination will not be required.
The other Clauses are, I think, of less importance, and perhaps they could be left to the Committee stage, though I will say one word about Clause 12. This Clause applies the provisions of the Bill to pensions and gratuities after 31st August, 1955, but safeguards the rights of a Governor serving on 1st September, 1955, to the former provisions if these are more advantageous to him. This date was chosen as it marks a convenient gap between a number of Governors who retired before and those who have retired since.
I hope that this modest, but important and desirable Measure affecting a very deserving body of public servants will commend itself to the House.
§ 3.0 p.m.
§ Mr. Arthur Creech Jones (Wakefield)
I shall not detain the House for more than a few minutes. We on this side of the House all welcome that the whole problem of Governors' pensions is to be brought under review by this Bill. I imagine it is all part of the general process going on of looking at the conditions of the Colonial Service and considering whether we can provide for the Colonial Service much better arrangements than have been made hitherto. We have 937 studied quite recently the problem of recruitment, and I take it we have now been obliged to come to the far end of the service and look at the position of those who have achieved supreme rank in the Service.
I should like first of all to ask what was the origin of the Bill. I myself was responsible, in 1947, for certain changes in the pensions of the Service, and also Governors' pensions, trying to secure a little more generous treatment and trying to make it possible, if we could, for Governors, if they so wished, to retire at an earlier age.
This is a very complicated Measure, somewhat difficult for the ordinary lay person to understand. Perhaps I may be permitted to make this aside, that I am sure that some of my own hon. Friends feel that we should like the same solicitude to be shown towards Members of Parliament in regard to the provision which is made for them. I would hope also that, as a result of this discussion this afternoon, the Colonial Office will look at its own internal problems and see whether it cannot make provision for some of its own civil servants or those who, because they are on temporary lists, will find themselves completely unprovided for when they retire. I want to bring to the attention of the Minister of State the fact that some of our own people here in London, in the Colonial Office on temporary lists, are retiring after many years of service without any pension at all.
What is curious is the method by which this basis of 1/600th is arrived at. What is the principle underlying the Bill? I would say also that it is desirable to wipe out the various grades of Governors in the calculation of pensions.
§ Mr. Creech Jones
Yes; I welcome that change. It has always, to my mind been one of the mysteries in respect of the appointment of Governors that there should be this astonishing grading; one would have thought that the Colonial Office and the Secretary of State should enjoy complete freedom in allocating Governors where they were most required. Therefore, in so far as in the 938 calculation of pensions the grading is now abolished, that is all to the good.
The Bill has another valuable aspect, which was not mentioned, namely that persons on short appointments may now be considered for Governorships, people who would normally draw no pension because of the very short period for which their appointment was made. If, therefore, the Bill succeeds in giving the Secretary of State greater freedom of choice in appointments, so that men with wide public service and experience may be considered for some of the appointments, the Bill is all to the good.
If pensions are improved, it will be made possible for the Secretary of State to deal more readily with those Governors who have perhaps lost their zest and who possibly should retire so that more energetic and enlightened men may be brought in to do the work.
There is one query on which I should like enlightenment. During his speech, the Minister referred to retrospective service. I should like to know whether the Bill will apply only to existing Governors or whether the benefits of the Bill can be given to those now in retirement. The right hon. Gentleman gave the number of Governors who are in retirement and I should have thought that from the point of view of good feeling amongst them, there was some claim that they might receive at least equal treatment. Perhaps the right hon. Gentleman can tell us whether it is intended to apply the Bill to Governors who have already concluded their appointments. I should like to know also the age to which the Secretary of State is working in regard to appointments. Is retirement now compulsory or optional, and at what age? These are my only two queries.
The Bill, complicated as it is, is desirable. It will give the Secretary of State greater freedom of action, and I think also that it will treat more fairly and justly Governors whose service often is of tremendous importance to the Commonwealth and which has been given very freely and often with consummate skill.
§ 3.7 p.m.
§ Sir David Gammans (Hornsey)
This is a very useful Bill, but to my mind it has one defect. It is the sort of Bill which could usefully have been laid 939 before the House about 20 years ago. Since then, however, conditions have changed, and the defect in the Bill which I should like to have seen remedied is that the pensions—and, for that matter, the pay—of all Governors should be a charge, not on the local Government, but on the home Government. This would be perhaps the most desirable contribution that this country could make in the developing state of the Commonwealth today.
If a Governor's pension—I can refer only to pensions, but the same argument applies equally to pay—is dependent upon a country which has just adopted a democratic constitution and has achieved self-government, he is placed in an invidious position in relation to those over whom he exercises rule. One of the desirable trends of the last few years is the claim by developing countries to get rid of the expatriates. That is a horrible word. It simply means a fellow British subject from these islands, who has given the best years of his life and has helped to develop a country to the point of self-government and is then called an expatriate. All that arises from a feeling of nationalism and a desire to get rid of him, perhaps merely because he draws higher allowances and was not born in the country.
When dealing with the Governor and his pension, it would have been an imaginative gesture on the part of the Government to have said that they would take the Governor's salary out of the sphere of the local Government and bring it home and make it a colonial development and welfare fund responsibility.
That is desirable for another reason also. I believe that as countries reach the stage of full or semi-self-government, we shall need a different type of Governor. The idea of a man working his way up through the service to become a Governor will tend to disappear and men with political background behind them and knowledge of political experience will be selected as Governors of important Colonies rather than men who have come up through the service. Although this is an admirable Bill as far as it goes, I wish that my right hon. Friend had been able to persuade his colleagues to go one stage further and make a thorough job of it.
§ 3.10 p.m.
§ Mr. Norman Pannell (Liverpool, Kirkdale)
I am very happy to support the Bill as it not only removes many anomalies but tends to put overseas Governors in the same relative pension position as the higher executives of the Civil Service. In view of the many benefits that the Bill confers it would, perhaps, be churlish of me to emphasise the very few defects it contains, but I would draw one of those defects to the attention of my right hon. Friend.
I refer to the political governorship appointments, which, I think, will become increasingly frequent in future as Colonies move towards self-government. Those men are not drawn from either the home Civil Service or the Oversea Civil Service but are men of broad political experience who are considered best able to discharge the functions of Her Majesty's representatives in the changing circumstances. Those Governors are not properly provided for by the Bill. They have to serve for ten years before they qualify for any pension. They have no former service in the home Civil Service or the Oversea Civil Service which would increase their pensions. Many of these men are appointed late in middle life, and they are called upon to undergo the strains and stresses of colonial conditions in countries mostly situated in the tropical or sub-tropical regions.
It is quite conceivable that such a Governor would not be able to endure the whole ten years, and might retire because of ill-health. If he were to do so, having discharged his highly important functions for, perhaps, eight years, he would be left without any provision being made for him by the Bill. Neither, so far as I can see, is he provided for under Clause 5, should he die in office within the ten years. I would draw my right hon. Friend's attention to that, and ask him whether it is possible, in the Committee stage, to introduce some provision for those Governors, if they serve for less than ten years and have to retire through no fault of their own.
Although a number of Governors are of that political type, I think it is true to say that the great majority of the Governors serving at present in our Colonial Territories are drawn from the colonial Civil Service, and are men who have graduated from the humble rank of cadets through the various grades to 941 the exalted rank of Her Majesty's representative. It is probably the ambition of every cadet in the colonial service to rise to the position of Governor, but, of course, in the very nature of things, few of them achieve that ambition, and most of them finish their careers in humbler spheres. At the same time, we must admit that those overseas civil servants still form the cadre from whom Governors are drawn, and it is important, in my view, that they should not suffer under any sense of grievance.
Under the Bill, the Government accept direct responsibility for the pensions of Governors on a reasonably generous scale, but they deny responsibility altogether for the pension of those who do not attain the rank of Governor and who are in service of Colonies which have achieved internal self-government. They deny responsibility entirely for those officers and throw that responsibility on to the colonial Governments themselves.
The Colonies deal with this matter in different ways. There are wide disparities in their treatment of it. I refer to those Colonies with which I am particularly familiar, the Colonies of West Africa. In those Colonies—the Gambia, Sierra Leone, the Gold Coast, Nigeria—provisions for increased pensions have been introduced following an increase in the cost of living, but the model is different in each case. Whereas Nigeria has, by virtue of recent legislation, no ceiling, the Gambia, Sierra Leone and the Gold Coast have a ceiling of £600 for an unmarried man and of £900 per annum for a married man with dependants.
Furthermore, the Gambia applies a means test, so that any person who is in receipt of an income of £900 or more from all sources does not qualify for the increase of pension. There are similar disparities with regard to widows' and orphans' pension schemes in those Colonies, although all those who benefit from them have subscribed equally to the funds. In Nigeria and Sierra Leone there is a ceiling on widows' and orphans' pensions of £350 to £450, according to the number of dependants, yet no such limitation exists in the Gold Coast and Gambia.
I ask the Minister of State for Colonial Affairs to consider this point very seriously. It is essential that we should give reasonable treatment not only to 942 Governors but also to those who aspire to be Governors, and who form the cadre from which Governors are chosen. If the Government cannot accept direct responsibility for the pensions of these servants who do not reach the rank of governor, I ask my right hon. Friend to use his utmost influence to induce the Colonies in question to introduce a uniform and generous scheme for them and for their widows and orphans.
§ 3.17 p.m.
§ Mr. E. G. Willis (Edinburgh, East)
I agree with all that has been said about Governors deserving well of the House, and I agree with the remarks made on the nature of their work and its importance. I also agree that there is a good case for wiping out injustices and anomalies, but I cannot help wondering whether it is really necessary at this juncture to increase the maximum pension from £2,300 to £3,000. That is a very substantial sum of money.
I have often been struck by the ease with which certain groups of persons can have their pensions increased by hundreds of pounds with very little debate and with the unanimous approval of the House, whilst when we come to discuss pensions for ordinary folk we have to carry on a very bitter battle for many years to get as many extra shillings for them. The dependants of a man who has lost his life fighting in war also deserve well of us, for he also has done an important job for the country, but to secure a few extra shillings for his widow or for a disabled man is very difficult. There is something wrong with our sense of values when, on one hand, we can talk so easily in terms of hundreds of pounds whilst in the other case we find it difficult to talk in terms of shillings.
I should have thought that at present, when everyone is being told that we must not ask for any more, it is inappropriate to increase the maximum pension from £2,300 to £3,000. Surely this could have waited for a little while. The Chancellor of the Exchequer is going round frantically trying to have pounds, and to do so at the expense of school children and all sorts of other people, yet the Government bring forward a Bill to make this increase in Governors' pensions. I should have thought that £2,300 was fairly generous and should have enabled 943 a man to enjoy quite a decent standard of living during his retirement.
We should be told more about why at this moment, above all others, when we hear so much about the difficulties facing the country, it is necessary to increase this pension by £700, which in itself is a substantial sum. I hope that the Minister of State for Colonial Affairs will be able to say something about that when he replies to the debate.
§ 3.20 p.m.
§ Mr. Emrys Hughes (South Ayrshire)
I have no objection to the principle of the Bill, but it is unfortunate that it should be presented to the House at the end of a week during which the Chancellor of the Exchequer has brought forward a series of proposals for economies. Earlier in the week, the Chancellor announced considerable economies which are supposed to amount to £100 million a year, and one can hardly read a newspaper these days without seeing appeals for economy and for reducing Government expenditure.
Why, then, is there any need for haste in this matter? I suggest that this Measure should be delayed for at least 12 months, until we are sure that the plateau of stability has become permanent. I fail to see the consistency of the Chancellor of the Exchequer and of the Prime Minister going to the wage earners and to the big trade unions and saying that we must stabilise prices and must not encourage demands for higher incomes, if this House sets the example of introducing, even though only in a very small way, increases in emoluments which are not among the most urgent.
For example, if we were to propose an increase in old-age pensions——
§ Mr. Hughes
Yes, or Members' pay; I was coming to that, but I am starting with the old-age pensions. If we were to say that the old-age pensioners——
§ Mr. Speaker
The hon. Member may be starting with the old-age pensioners, but the Bill starts with Governors' pensions, and we cannot go too far astray from that even on Second Reading.
§ Mr. Hughes
I was only suggesting that this proposal for increasing the pensions of people who receive comparatively good emoluments and pensions should be postponed until we have some indication that the policy of the Government has changed. The question of economy at this time is important, as I am sure the Lord Privy Seal would agree——
§ Mr. Hughes
The right hon. Gentleman nods his head in acquiescence, but he can hardly be aware of the Bill before the House. I am suggesting that the Government are not setting a good example in restraint to the old-age pensioners and the other unmentionables by coming forward, even at this late hour on a Friday afternoon when they thought all the vigilant Scottish Members had gone home, with a Bill which, to say the least of it, does not sound the high note of economy which we are accustomed to read about in the newspapers. It also makes it exceedingly difficult for us to understand the consistency of the Prime Minister, because in a recent controversy with the Leader of the Opposition the right hon. Gentleman said, "Yes, this is perfectly just, this is perfectly reasonable, but this is not the time." All I am suggesting, Mr. Speaker, is that this is not the time to set an example in increasing Government expenditure.
After all, it is these small increases which add up to the big increases and justify increased wage demands. Certainly when lower paid people in the Civil Service see this, they will ask, "Where do we come in?" I can imagine that this debate will be read by all kinds of people who in these days are looking for the slightest justification for increasing their salaries. I do not know what the Parliamentary Secretaries are going to say when they learn that the Government, who have been so niggardly towards them, are ready to meet the Colonial Governors.
I understand that if I go into the question of Members' pay, I shall be out of order, and I do not wish to raise a question involving such acute controversy during the late part of the week, but I suggest that there is a very reasonable case for the withdrawal of this Bill for at least 12 months.
§ 3.26 p.m.
§ Lieut.-Colonel Marcus Lipton (Brixton)
I do not want it to be thought that doubts about this Bill are felt only by two hon. Members from north of the Border. There is at least one Member representing a constituency south of the Border who, to a considerable extent, shares the views that have been expressed by my two hon. Friends the Members for South Ayrshire (Mr. Emrys Hughes) and Edinburgh, East (Mr. Willis).
It seems odd that the Government, in assessing the order of priorities, should, no doubt, after very careful consideration, have come to the conclusion that the situation with regard to Governors is now so urgent and pressing that the matter must be dealt with here and now. Reference has been made, and very properly made, to the appeals that have been addressed to the House and to the country by the Prime Minister and others asking for restraint. By reason of those appeals many requests for sympathetic consideration on behalf of various categories of people—I will not specify those categories—have had to be turned down, or at least postponed, for some indefinite period. Nevertheless, we are now asked on a Friday afternoon, when I believe the Government thought that this matter would slip through more or less on the nod, to agree to this increase.
I am not opposed—neither, indeed, are my hon. Friends—to pensions. We want better pensions for everybody at the earliest possible moment. There is no reason why, in the framework of that general attitude, Colonial Governors should be prejudiced. All that we suggest is that it strikes some of us as rather curious that at this moment, when all kinds of justifiable claims for consideration have got to be turned down, the Governors' Pensions Bill comes before the House.
The Minister of State for Colonial Affairs said that this is a complicated Measure, and I must confess that I was not able to follow him in all the figures and calculations that he gave us. He said that the yearly maximum is to be increased from £2,300 to £3,000, subject to a limit of two-thirds of the final salary. But this question of two-thirds of the final salary is, if I understand him aright, conditioned by the salaries paid in the whole Civil Service. In those circumstances, if the highest rate of salary in 946 the whole Civil Service goes up to £6,000, as has been proposed in the last few days, then two-thirds of that will be £4,000.
§ Lieut.-Colonel Lipton
I understood the Minister of State to say that the maximum of £3,000, for which the Bill provides, may, on the application of the two-thirds limit to take account of the rise in Civil Service salaries in this country, be increased to £4,000. It will be noticed that the maximum can be varied by Treasury Order and that it is not necessary to bring in another Bill.
The hon. Member for Kirkdale (Mr. N. Pannell) intervened to ask why I did not object to the pensions being increased. If it is thought necessary, and if the times are propitious, I do not object to the pension being increased from £3,000 to £4,000, but the House is entitled to know whether my interpretation is correct Perhaps the Minister of State did not correctly understand the interruption which I tried to make during his speech. I was merely trying to indicate that it may well be that under Clause 3 a maximum of £3,000 a year pension may be increased by a Treasury Order up to £4,000 in the light of the £6,000 a year which is soon to be paid to the Permanent Under-Secretary in one of the major Departments.
This is an inappropriate time to introduce the Bill. As my hon. Friends have pointed out, we are not objecting to better provisions being made for Colonial Governors, but we are entitled to say that the order of priorities which the Government seem to have established for themselves will not be very easily understood by old-age pensioners, disabled ex-Service men particularly disabled ex-Service men of the 1914–18 War, limbless men and a number of other deserving categories which it is hardly necessary for me to mention in detail.
§ 3.33 p.m.
§ Mr. Hare
By leave of the House; I did not quite understand the intervention of the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton), and I am sorry if I was discourteous. He is quite right in saying that the basis of this provision can be altered by Treasury Order. I am glad that in principle the hon. and gallant Member and his hon. Friends the 947 Member for Edinburgh, East (Mr. Willis) and the hon. Member for South Ayrshire (Mr. Emrys Hughes) do not oppose the Bill in its objects and confined their remarks to asking why we should not have bigger and better pensions elsewhere.
Possibly they do not understand that the Bill is to try to reform a system which is long out of date, and which merely puts these public servants on the same basis as the Oversea Civil Service. It is not a Measure which will cost large sums of money. In fact, it will cost £20,000 a year, as I indicated in my speech. Perhaps the opportunity has been taken to build up this matter rather more than it deserves.
The right hon. Member for Wakefield (Mr. Creech Jones) asked me one or two specific questions. He asked why 1/600th is the measurement taken. I understand that that follows general colonial precedent and, therefore, permits the new Governors' pension system to be combined with the present overseas Civil Service system. He also asks what the origin of the Bill was. It was begun to be thought about at least a year ago, when it was found that there was a great disparity between what was happening in the Oversea Civil Service and what was happening with Governors' pensions.
I think that he also wanted to know whether Governors can be retired at an earlier age under the Bill.
§ Mr. Hare
I am afraid that we cannot make the Bill retrospective.
My hon. Friend the Member for Hornsey (Sir D. Gammans) regretted that we had not made provision to pay governors from United Kingdom sources. I note what he says, but I am afraid that it does not come within the scope of the Bill. My hon. Friend the Member for Kirkdale (Mr. N. Pannell) made an eloquent plea, requesting my right hon. Friend the Secretary of State to consider the pensions of others serving in the Colonial Service, and that plea was reinforced by the right hon. Member for Wakefield. I can assure both my hon. Friend and the right hon. Member that everything that they have said will be considered carefully by the Colonial 948 Office. Meanwhile, I should like to say that I am grateful to the right hon. Gentleman for saying that his party gives support to the Bill. I hope, therefore, that it will be given a Second Reading.
§ Question put and agreed to.
§ Bill accordingly read a Second time.
§ Bill committed to a Committee of the whole House.—[Mr. R. Thompson.]
§ Committee upon Monday next.