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Railway Pensions

Volume 464: debated on Tuesday 10 May 1949

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Motion made, and Question proposed, "—That this House do now adjourn."—[ Mr. Popplewell.]

10.48 p.m.

I wish to refer to the position of those rail- way pensioners who draw their pensions upon the pre-war scale and in consequence suffer substantial hardship owing to the rise in the cost of living. They were the salaried staffs, those employed as stationmasters, goods agents, special class clerks and other senior clerks. I am asking the Minister if he will agree to an inquiry into their position. I recognise that the question is a rather complicated one, but for the purposes of this Debate, in order to simplify the matter as far as possible, I propose to limit what I have to say to the age group that retired before July, 1941. There are about 10,000 men in that age group who are now all 68 years of age or older. Those who retired later are also affected in more or less the same way, but those who retired before that date are the worst sufferers upon whom it is best to focus attention at the moment.

If the right hon. Gentleman is prepared to agree to an inquiry into their case. I see no reason why the inquiry should not deal with the categories which retired later in the course of the same proceedings. The trouble with these people is that they get no cost-of-living bonus, except those whose pensions are less than £135 a year. In 1944 a very slight alleviation was made in the position of those whose pensions were less than £135 a year, otherwise the 10,000 men who retired before July, 1941, got no cost-of-living bonus. The first time that attention was drawn to this matter was in December, 1943, when the hon. Member for the Park Division of Sheffield (Mr. Burden), in the course of the Debate on the Address, said:
"The Government control of the railways is a pretty good thing for the Treasury. It is making a handsome profit out of it, and I do not think it is asking too much to ask the Chancellor that his proposals should be wide enough to cover the case of retired railway salaried staffs."
The hon. Gentleman concluded:
"I assure the Chancellor that there is very real hardship."—[OFFICIAL REPORT; 3rd December, 1943; Vol. 395, c. 682.]
If there was real hardship then there is much greater hardship now. In other cases this hardship has been recognised by the Government. Supplementary cost-of-living pensions were granted to retired Army officers with a ceiling of £600, as against a ceiling of £135 for the class we are now discussing. The position of retired civil servants was dealt with by the Pensions Increase Acts of 1944 and 1947, and the Superannuation (Miscellaneous Provisions) Act, 1948, and in various consequential Statutory Rules and Orders. The position of teachers was also dealt with, as was that of local government officers and other categories of Government employees. Therefore, I feel that there is a prima facie case for dealing with these former railway employees. On 14th February, my hon. Friend the Member for Moseley (Sir P. Hannon) asked the Minister of Transport whether he would
"make regulations under Section 98 of the Transport Act, 1947, to provide for the revision of pensions granted under superannuation schemes having regard to the increased cost of living since the retirement took place."
The Parliamentary Secretary replied as follows:
"No. The question of granting supplementary allowances to existing pensioners has been raised by the trades unions and by other parties with the Railway Executive, who have had to decline such applications on the grounds of cost. My right hon. Friend would not feel justified on making regulations on this subject."—[OFFICIAL REPORT, 14th February, 1949; Vol. 461, c. 119.]
I would say, in passing—and I want to be objective about it and am not making any complaint—that when the Parliamentary Secretary says the question is raised by the trade unions, I do not think that the trade unions have any standing when the question of the pensions of retired persons is at issue. I recognise that they are indeed concerned with the future pensions of persons now employed, but I am informed that actually they have no standing to negotiate with regard to the pensions of persons who have already retired. I may be wrong, and if so, no doubt the Minister will correct me on that point.

I sought to raise this matter and did so on the Second Reading of a Private Bill, the British Transport Commission Bill, on 22nd February. I briefly raised the case and was hoping for a reply from the Minister; but unfortunately his speech was closured by his own. Chief Whip and we never got the answer to which we had been looking forward. I hope we shall be more fortunate tonight. I wrote to him immediately after the Debate and he referred my letter to the Chairman of the British Transport Commission, Sir Cyril Hurcomb. Sir Cyril replied to me in a very full letter, of which I will read the last paragraph:
"Existing pension arrangements apply only to retired salaried staff and not to retired wages staff, the great majority of whom are not covered by pensions schemes. Were anything further to be done for retired railway salaried staff who already receive pensions, there would therefore be immediate difficulties with the retired wages grade staff, quite apart from the cost which would be involved in providing from the Commission's revenues supplements for the very large number of persons concerned."
I gather from that paragraph that the real obstacle is not financial but diplomatic—the fear that if some alleviation is granted in these cases, it will open the way to other demands.

One thing which I think should be stressed is that the railway companies during the war could have done nothing to help in this matter because the railways had been taken over by the Government for a fixed rental. They were virtually requisitioned for a rent of £43 million a year, which, in fact, was insufficient to pay any dividend on certain classes of railway capital. On the other hand, in the course of the war, the Government made a profit of £200 million and they were therefore in a fairly strong position to deal with cases of this kind.

I want to put to the Minister one or two propositions of principle which arise out of consideration of the position of these 10,000 railway pensioners because these men, of course, all retired before the railways were nationalised. I should like the Minister to give us an assurance that, in his view, other things being equal, those who retired before the nationalisation of an industry should be in no worse position than those who retired after the nationalisation of an industry. I would urge that proposition because—at any rate, in the case of the railways—the Government not only took over the assets but also the liabilities of the companies; and in my submission they should assume not only the financial liabilities, but also the moral liabilities involved.

I should further like to ask him to agree that the employees of a nationalised industry should not be regarded as in any way inferior to civil servants; and that their claim to fair treatment in respect of pensions should be regarded as equally strong. Because the Government have converted men engaged in free enterprise into servants of a State monopoly, I do not think the Government should proceed to try to hive them off so that they are in a position inferior to that of other servants of the State. That conception of equality is contemplated in Section 98 of the Transport Act, 1947, and if I may occupy a few seconds further of the time of the House, I would read the material words:
"The Minister may make Regulations for providing pensions for persons employed in any undertaking transferred to the Commission but who have not been taken into the service of the Commission."
That, I suggest, implied that the intention of Parliament was that these railwaymen, who had retired before nationalisation came to the railways, but whose industry has become a State monopoly, should be regarded by the Minister as entitled to receive as much consideration from him as railwaymen who have retired since or who may retire in the future. That is the implication; that the same consideration should be given to these men as to any civil servant in his Ministry.

I feel that there is a strong case for an inquiry. I recognise that the matter is somewhat complicated but I hope the Minister will realise that here is a real hardship and that he will say that he is prepared to grant an inquiry.

11.3 p.m.

I am in the dubious position of agreeing with the case which the hon. Baronet has made, but I must inform him that his presentation is entirely misinformed. I speak on behalf of part of the organisation catering for these men, and I can say that there is in some cases real hardship. It is true that these men are superannuated on pre-war scales; but a great mistake of the hon. Baronet is that these matters could have been put right before nationalisation and ought to have been put right then. Far from it being the case, as submitted by him on 22nd February, that if it had not been for the nationalisation of railways it would have been an obligation on the former railway owners to see that these men were well treated, this matter was taken up in 1943 and the trade unions approached the railway companies as long ago as 1940. The railway companies then stated that the concession would place railway superannuitants in a better position than civil servants and others. That was the reply at that time. In 1944 a new Pensions Increase Act was presented; at the time it was presented we argued that a new set of circumstances had arisen and that the old argument did not apply.

The hon. Member said that representations were made to the railway companies, and infers that the railway companies were then privately owned. But the railways were under Government control.

If the hon. Baronet will allow me to make my speech in my own way, I shall try to convince him that if the railway companies had come forward and made representations to the Government, they would have received sympathetic treatment. That was the statement made in this House by the right hon. Member for the City of London (Mr. Assheton). He told us that all representations would be sympathetically treated. That statement was communicated to the chairmen of the railway companies, but no action was taken in this matter. It was then raised again on 18th April, 1944, when the Chancellor of the Exchequer repeated the assurance that any representations would be considered sympathetically. The railway companies refused to make those representations, and therefore I submit that it is quite unfair to suggest that the railway companies could not do it before nationalisation because of Government control. They could have done so, but decided not to make those representations.

Then we come to December, 1944, when a very meagre and limited concession was made. Again, we stated that this concession was really of no great use to the vast majority. Then on 29th May, 1945, this matter was again raised, this time by a Member of the Opposition, the hon. Member for Monmouth (Mr. P. Thorneycroft) who asked a Question. The Minister's reply was that supplementary allowances were already given to certain annuitants, but that the question of supplementary pensions was a matter for the railway companies. The Minister stated, however, that any representations they might desire to make to the Government regarding the position during this period of control would be given the most careful consideration. This statement was again drawn to the attention of the companies, but they declined to take any action. They declined to make any move at all to come forward to the Government, which had virtually promised sympathetic consideration. Therefore, I submit that it is entirely wrong to suggest that if it had not been for nationalisation this matter would have been dealt with. In accordance with the regime we knew so well before the war, they declined to take any steps at all.

These negotiations proceeded after 1945. The trade union has thrown all its resources into trying to better the position of these persons, who are undoubtedly suffering great hardship. The last reply from the Transport Executive was that they were unable to consider granting supplementary allowances to retired salaried staff until consideration had been given to the general question of the pensions scheme for those grades for whom no pensions scheme had been made yet. There is a very real case to which the Minister, I hope, will address himself, and draw the attention of the Transport Commission and the Railway Executive to the conditions under which many worthy servants of the railways are living, not covered by the new insurance scheme at all.

But it is entirely wrong to create an impression that nationalisation has been a bar to the progress we desire in this matter. It could have been settled, and settled satisfactorily, during the years of the war, on the statements of Ministers. The companies chose not to do it, and I hope those annuitants already feeling frustration will bear in mind that nationalisation has nothing at all to do with it.

Before the Minister replies, may I ask him what steps have been taken or are intended under the powers vested in him under Section 98 of the Transport Act, 1947? If any negotiations have been begun, at what stage are those negotiations?

11.9 p.m.

The hon. Gentleman who raised this matter put the simple and direct issue to me whether I will institute an inquiry into the position of retired salaried railwaymen's pensions. I regret that I see no useful purpose in acceding to that request. All the facts are known, and have been fully considered, and I want to repeat some of the facts tonight. I regret, however, that on a previous occasion we could not deal with this issue. The only proposal that was made or consideration given by the late railway companies, as my hon. Friend has stated, was in 1945, when those who were below the minimum of £135 a year were brought up to that level. I should like to deal with the question of the moral obligation which the Transport Commission, the hon. Baronet alleges, should have taken over from the railway companies. As the railway companies had never accepted the moral obligation of his case, beyond the one concession which they gave, I do not see any case for his allegation that the British Transport Commission are shirking any moral obligation.

Surely during the material time the railway companies had no say in the matter, because they were under control. All the railways received was a fixed rental, which they had to distribute to their shareholders in so far as it could cover dividends. That was all.

I do not think that can stand examination. It was the Railway Executive of that period, which consisted of the four general managers of the old main line companies, who went to the Minister of War Transport, Lord Leathers, and submitted this proposal to him. It is true that under the arrangements between the Government and the railways at that time any fresh commitment had to be provided by the Minister, but the Minister did approve the only recommendation they submitted to him, and if the railway companies had any desire to go further in the matter there was nothing to prevent them from submitting it to the then Minister.

Therefore, the British Transport Commission, in January, 1948, inherited these superannuation schemes, and today there are approximately 99,000 persons covered by them, and there are 32,000 drawing superannuation annuities. What I think my hon. Friend and everyone else must recognise is that these superannuation schemes are not solvent. They were not solvent in the year before the railway companies ceased to be responsible. If one takes the year 1947, the payments made by the railway companies amounted to £4,187,000. Of that sum, the deficiency payment that came from current revenues of the railways amounted to £2,452,000. It is true that we have not the figures yet for 1948. It is almost certain that the deficiency which the British Transport Commission will have to pay to maintain existing payments will amount at least to a sum equal to that of 1947, and possibly more. We have reached the position that the railway revenue is already meeting approximately 75 per cent. of the cost of these schemes, and the general finance of the railways under the British Transport Commission's administration as I know it today does not permit them to impose additional burdens of that character.

The hon. Member for South-East Essex (Mr. Gunter) referred to the reply which the trade unions received from the Railway Executive in regard to recent negotiations that have taken place. I should place a different interpretation upon the last sentence of Sir Cyril Hurcomb's letter. He must have in mind not only financial considerations. It is a question of equity rather than diplomacy. One cannot dispute the fact that the great majority of wages staffs are not covered by any pensions scheme at all. From the standpoint of equity, while no one disputes that any person existing on fixed pensions, or any kind of fixed income, is suffering direct hardship when there is a general rise in commodity prices, nevertheless the Commission carry obligations to all of their staff, and in so far as there is a deficit of £2,400,000 on current revenue of the Commission in consequence of meeting those commitments, one can quite see the impossibility at the present time of imposing this additional burden.

The Question having been proposed after Ten o'clock and the Debate having continued for half an hour, Mr. DEPUTY-SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned accordingly at Eighteen Minutes past Eleven o'Clock.