Pensions (Increase) Bill, 1956—Second Stage.

Minister for Finance (Mr. Sweetman)

I move that the Bill be now read a Second Time. The purpose of this Bill is to give statutory force and effect to the increases in pensions payable from the Exchequer or other public funds, including the funds of local authorities, which I announced in the Budget last May. Under the authority of a Supplementary Estimate passed by this House on the 25th July last, increases have already been paid to most of the Exchequer pensioners. The detailed legislative provisions governing the increases are contained in the Bill before the House and I shall now summarise the more important of its provisions.

The appropriate percentage increases under the Bill, ranging from 15 per cent. on pensions under £100 a year to 6 per cent. on pensions over £450 a year, are prescribed by Section 2. The pensions to which these increases apply are described in the Schedule to the Bill. Parts I and II of the Schedule contain pensions payable from the Exchequer and from certain statutory funds to retired civil servants, teachers, etc., to members of the judiciary and to the widows and children of former Ministers and holders of parliamentary offices. Parts III and IV of the Schedule specify the pensions payable to former employees of local authorities and harbour authorities.

Generally no increase will be granted under the Bill unless the pensioner's service ended before the effective date of the 1952 pay increases. These pay increases were granted to most classes with effect from 1st November, 1952; where this is not the case, the appropriate date in 1952-53 is prescribed or can be determined under the Bill. This alternative date will in no case be later than the 6th April, 1953. I should like any reference to the 1st November, 1952, that I may make in the course of my remarks to be understood as a reference to the alternative date prescribed or determined under the Bill for a particular class or classes.

This restriction does not apply to pensions payable at fixed rates which were not altered or affected by the 1952 pay increases. The pensions payable to the widows and children of Ministers and other holders of parliamentary offices and to widows of members of the Garda Síochána, which are listed in Part II of the Schedule to the Bill, are almost all of this type. In such cases the appropriate increase under the Bill will be added to all pensions, including pensions to be granted in future, thus operating as a general revision of the existing rates of pension which were fixed prior to 1952. An exception is also required in cases where, although retirement took place after the 1st November, 1952, the pension was calculated on average salary over a three-year period which stretched back before the 1st November, 1952, and was, therefore, derived partly from receipts at the lower salary rates in force prior to that date. Special provision has been made in Section 7 of the Bill to allow a modified increase proportionate to that part of the three years which fell before the 1st November, 1952. Parts III and IV of the Schedule to the Bill cover similar cases among local authority and harbour authority pensioners.

As no pension calculated wholly on the increased rates of salary introduced on 1st November, 1952, may be increased under the Bill, so no pension may be increased under the Bill beyond the amount which would be payable to a colleague of identical rank and service who retired on the 1st November, 1952, and whose pension was calculated wholly by reference to the higher salary rates introduced on that date. Provision for this overriding maximum has accordingly been made in Sections 3, 4 and 7 of the Bill,

During the period between 1921 and 1951, the salaries of the higher posts in the Civil Service, and of some higher posts elsewhere, were subject to a reduction called the supercut. The supercut originated as a reduction in the cost-of-living bonus in the higher salaries. Its effect persisted in the consolidated salary rates which replaced the former system of basic salary and bonus from 1946 onwards until it was removed partially in 1948 and completely in January, 1951.

Officers who retired while the supercut was in force are, however, still in receipt of pensions based on the lower salaries. When this Bill was in course of preparation it was found that a revision of these pensions to remove the effects of the supercut would not cost appreciably more than the grant of the appropriate percentage increases under the Bill. I decided, therefore, in view of the representations which had been made from time to time by these pensioners, to allow them to take their pensions increase either in the form of a remission of the supercut reduction, or the appropriate percentage increase, whichever is more favourable. Provision has been made accordingly in sub-section (4) of Section 3 of the Bill.

Other sections of the Bill provide for the treatment of double pensions and for the application to the pension as increased of any statutory provisions applicable to the original pension. Sub-section (5) of Section 10 provides that any increase under the Bill shall not be assessed as means for the purpose of an old age pension or a widow's non-contributory pension.

Under Sections 5 and 6 local authorities and harbour authorities are empowered to grant increases in the pensions payable by them which are specified in Part III and Part IV of the Schedule. The increases will be subject to the approval of the Minister for Local Government or the Minister for Health in the case of local authority pensions, and to regulations to be made by the Minister for Industry and Commerce in the case of harbour authority pensions. The increases allowed will be similar in amount and will be generally subject to the conditions and limitations governing increases in Exchequer pensions.

The total cost of the Bill to the Exchequer is estimated at £140,000 in a full year. Of this sum £37,000 will go to retired civil servants, £40,000 to national teachers, and £28,000 to former members of the Garda Síochána and the Dublin Metropolitan Police Force, resigned and dismissed members of the Royal Irish Constabulary, and other pensioners under various enactments. The balance will be payable to local authorities in increased grants attracted by increases in local authority pensions. Increases in Army pensions and retired pay, for which separate legislation is being prepared, will bring the total cost to the Exchequer of pensions increases to £180,000 a year, the amount that I mentioned in my Budget statement.

I accordingly commend the Bill to the House.

Mr. MacEntee

This Bill is one of the consequences of the failure to check the rising cost of living. It is a Bill, in fact, to mitigate the hardship to which the continuing upward trend in prices has subjected many hapless people, most of them incapable of serious work, who were retired on pension in days when circumstances were easier and who had been looking forward to comfortable security in their old age. It cannot be denied that the hardship exists and that in the majority of cases it is severe. Accordingly, despite the fact that the burden of taxation presses heavily on all the people, we are not opposing the Bill. This, I believe, is in accord with the general public feeling that something should be done to relieve the distressed conditions in which many retired public servants are now existing.

Indeed, the one criticism I have heard of the reliefs to be granted under the Bill is that, so far as the smaller pensions are concerned, they are meagre indeed; but we have to recognise, as against that, the straits in which the Minister finds himself for cash. If the tax revenue is not coming into the Exchequer, he cannot dole it out unless he borrows and the capacity of any Minister for Finance in this country to raise money by borrowing, even for the most acceptable and justifiable purposes, is exceedingly limited to-day; but even if the Minister for Finance could borrow, he would not be justified in borrowing to pay increased pensions, even to the most deserving persons, and I feel certain that the present Minister would resist any attempt to force him to do so. I do not believe either that he would be justified in imposing extra taxation to raise the additional moneys required in order to give effect to the provisions of the Bill.

I think, indeed, that the limit of our tax-paying capacity has not merely been reached but exceeded. Therefore, despite the fact that I am alive to the needs of those whom the Bill is intended to help, I must recognise that such benefits as it provides can be given only at the expense of the general body of hard-pressed taxpayers and, therefore, I personally will not take responsibility for pressing the Minister to do more for the persons who are covered by the Bill.

This Bill is indeed a wide-ranging measure. No fewer than, I think, 24 different classes of pensioners are covered by it and some of those who are covered by the provisions of paragraph (g) of sub-section (1) of Section 2 may be in receipt of substantial sums. I do not question the equity of that particular provision, particularly in the circumstances to which the Minister referred. I believe that in the matter of superannuation, as in the matter of remuneration, the principle of relative and fair reward should, so far as is just or practicable, be observed; but the fact that it is included in the Bill and the fact that the measure will benefit no fewer than 24 different classes of pensioners spotlights the ineffectiveness of the Minister for Defence. The Minister for Finance has shown that he is a very effective Minister indeed, so far as the Minister for Defence is concerned.

When he was in opposition, ranting up and down the country, Deputy General Seán MacEoin, as he then was, constituted himself as the guardian, protector and special friend of the Old I.R.A. He led them to believe that if he were to be put in office, he would be a sort of fairy godmother— ill-favoured for the rôle, no doubt, but a fairy godmother, nevertheless— to them. Largesse in generous measure would be bestowed upon them. He would also exercise his magic, wit and charm on the Minister for Finance and would not be denied by him. Alas, for Deputy Seán MacEoin's promises! Alas, for the Old I.R.A. men who were taken in by them! Although there is room in this Bill for 24 different classes of pensioners, there is no room in it for the Old I.R.A. men. That will not make any difference to the Minister for Defence. As Minister for Defence and as Deputy General Seán MacEoin, he will go on his humbugging way making promises to his old——

Mr. Sweetman

As Deputy Seán MacEoin.

Mr. MacEntee

——comrades, which may or may not be fulfilled, and which, if they are not fulfilled, will not cost the Deputy, or the Minister as the case may be, an instant's worry. If the Minister for Finance says, as this Bill suggests he says, that everyone in some degree must be taken care of, except the Old I.R.A., that is all right with Deputy General Seán MacEoin, now that he is in the Government as Minister for Defence, or with the Minister for Finance. I shall leave the Minister for Defence to extricate himself from the equivocal position in which his colleague, the Minister for Finance, has placed him and I will content myself by saying what I said at the beginning, that this is a Bill to mitigate in a modest way the hardships which the rising cost of living has imposed on certain classes in the community and, as a Bill to mitigate hardship, we do not oppose it.

The only thing I would hope for is that as the Bill will cost £140,000 in a full year, the Minister will find himself in a position to defray the additional expenses for which the Bill provides out of the economies which we understand he is endeavouring to make. I trust he will be successful and that the net result of the Bill will not be to increase the burden upon the already overburdened taxpayer's back.

Dr. Esmonde

The ex-Minister for Finance paid a very grudging tribute to the present Minister for Finance for introducing this Bill. He states that the purpose of the Bill is to mitigate the hardships caused to pensioners as a result of the rising cost of living. I think it is only fair to remind the ex-Minister that he had some small part in this rising cost of living himself. When this Government came into office, the cost of living was already going up.

Mr. MacEntee

It was not.

Dr. Esmonde

While the last Government was in office, there was no Bill to give anything to the pensioners. Having regard to the limited funds at his disposal and to the difficult economic position with which he is faced, I think the Minister has done very well to introduce this Bill. I also think that he has given increased pensions to the people who most need them. He has not been able to give them a lot, but the sum of £140,000 is distributed among the people who most need it. I think this is a reasonable Bill and Deputy MacEntee would have made a far greater impression had he accepted the Bill on its face value as the best that could be done in the circumstances.

Every Deputy will agree that pensioners who have given the best years of their lives in the service of the State deserve to be looked after as best we can. As I say, I do not think the speech which Deputy MacEntee has just made is a very satisfactory one, from the point of view of pensioners. I think it would clearly indicate that had this Government not been in power pensioners would have waited quite a considerable time before getting what was due to them.

Mr. Traynor

Deputy Esmonde has more or less implied that when the Minister for Finance is in difficulties, or, as he put it himself, embarrassed, it is quite in order to sacrifice the Old I.R.A. men who gave service to this nation. As far as I am concerned, and I am sure I am speaking for most Deputies, when a Bill of this kind comes before the House, it is generally received with sympathetic consideration. We all know that the people who are endeavouring to exist on fixed sums of money find it difficult to make ends meet. There is no means by which they can increase the fixed sums and they have to live within the bounds of those means.

It seems to me to be an extraordinary situation in a national Parliament, whose establishment was due to the activities of the Old I.R.A., that they are the only section of the community excluded from this Bill. It does seem an extraordinary state of affairs and I do not think it reflects any credit on any one of us here that that should be so, especially when we know that the Old I.R.A. pensioner in this State is the only pensioner who has a pension of the very small amount which he receives for the service he gave to the State. The average pension, if we take the awards made under both Acts, the Acts of 1924 and 1934, paid to these men is the very small sum of £47. If we look at it from the point of view of the amount paid to the same type of pensioner under the 1924 Act, the average pension is £73 and that paid under the 1934 Act is £37. I hope the Minister for Finance is listening to these figures.

Mr. Sweetman

The Minister is ascertaining facts which Deputy Traynor ought to know.

Mr. Traynor

I am only——

Mr. Sweetman

Deputy Traynor knows very well, I am quite sure, that the Old I.R.A. pensions were increased post-November 1st, 1952, and that this is to bring other people up.

Mr. Traynor

I am drawing the Minister's attention to the smallness of these pensions paid to men, who, as I said at the beginning, are mainly responsible for the fact that we are debating this Bill. My reference to the Minister was merely to emphasise the fact that these were the amounts being paid to these men and that they were the only section of the community being excluded from this Bill. I am putting it to the Minister that he ought to take that into consideration and bring in this one section that have been excluded and give them the type of justice which they are all seeking.

I do not think the amount, if the Minister went into it, would be very excessive. My own rough estimate would be something in the neighbourhood of £50,000. Surely these men are entitled to that? If the Minister is not prepared to consider all the Old I.R.A., then I suggest that he consider sections of the Old I.R.A.; in other words, sections under, say, Sections E and D of the Pensions Act. These are men who are receiving rather small amounts and anything that could be done in the nature of even the small amount that this Bill would provide would be very acceptable.

There is another section which we surely should not overlook, even if we are prepared to exclude all the sections I have mentioned. There is still the section which is paid disability pensions. These are men who are paid small pensions because of the disability from which they suffer or wounds they incurred in the engagements in which they participated. I know there are quite a number of Deputies on the other side who would be as sympathetically disposed to the case I am making as I and my colleagues are and I do not think that in a matter of this kind we need discuss it from any political angle. We can discuss it from the point of view that these men gave service when service was required and when service was sometimes very difficult to find. From that point of view, I would ask for the very sympathetic consideration of the Minister for that section of the community.

I hope that by the time we have reached the Committee Stage the Minister will have examined the figures I have given him, and that, if satisfied that these figures are correct, he will take into consideration the desirability of amending the Bill to that extent.

Mr. O'Leary

While the number of pensions and the amount involved under this Bill are small, the pensioners affected will welcome it. Deputy MacEntee struck a wrong note when he referred to the Minister for Defence not having sympathy with the Old I.R.A. But for the 1949 Act, which he brought in, a good number of the Old I.R.A. would not be in receipt of pensions to-day, and I think it is no harm to remind Deputy MacEntee of that. There should be sympathy for the members of the Old I.R.A. After all since we entered this House and since the pensions started a great number of the Old I.R.A. have died and there should be a saving for that reason. It would be no harm if that saving was utilised in order to increase the pensions of the small number who still survive. I did not hear the Minister say anything about the Connaught Rangers. I am sure a few of those still survive and there must be some of them still trying to eke out an existence on a very meagre pension. I am sorry they are not included in this. I certainly did not hear them mentioned.

Deputy Traynor says that these increases would cost about £50,000: £50,000 is nothing to a Government. It is only a fleabite as compared with the expenditure in Government Departments at the moment. Money is of very little account in some countries to-day. If we were in the position that we had to declare a state of emergency to-morrow, money would be required. That money would be found, as it was found in the last emergency; millions were found for the Army and for defence. In County Wexford, there are many Old I.R.A. trying to live on very small pensions and the Minister should give them some consideration.

Mr. J. Brennan

I want to add my voice to those of the last two speakers, in support of the case made for a particular section of our people, a section conspicuous by their absence from this Bill. By way of interjection, the Minister said that the 1952 Bill made certain provision for increases to these people. The 1952 Bill only made good the omissions of the 1950 Act, an Act brought in by the Minister's predecessor. Its introduction was regarded by us as merely correcting that rather serious omission.

Everybody knows that the change in money values has left pensioners in the position that they are barely able to meet the calls made on them or purchase for themselves the necessaries of life. There is one section of our pensioners deserving of any increase in the paltry amount they are receiving. Every Deputy knows them. Every Deputy has had the experience of being almost ashamed to admit that these are the people who played even a small part in the establishment of this State because of the conditions under which they are now compelled to live. Their position is a mockery. No one would begrudge them anything by way of increase in the paltry pensions they receive.

I agree with Deputy O'Leary that it may be difficult to come by money now, but I also agree with him that, if it has to be found, it will be found. Every Department is loud on the necessity for economy. If a world war broke out to-morrow and an emergency situation was once more declared here, money would be found to meet that situation. We should declare war on poverty. We should be able to find the money to help these deserving cases. If the view is taken that we cannot go on increasing emoluments indefinitely, then we can leave out the higher income groups from our calculations and concentrate on the more deserving categories. One of the most deserving is the Old I.R.A. pensioners. They are in receipt of very paltry pensions at the moment and they are certainly worthy and deserving of an increase.

I emphatically endorse all that has been said by Deputy Traynor and Deputy O'Leary. I am sure that every Deputy is only too anxious to urge on the Minister the importance of making provision for this section of our community. There is yet time to make that provision. If there is not sufficient money to meet all claims, surely the Minister will agree that those with the lower scales of pension are entitled to consideration. I urge the Minister to consider the lower-paid pensioners of the Old I.R.A. and make some provision for them even at this stage.

Mr. Colley

This Bill is one to which no reasonable man could have objection. Those concerned have been very, very hard hit because of the rising prices in the past few years. Why they are not included, I cannot understand. Very meagre amounts are given to these people to meet increasing costs. In many cases, the increases would not cover the increase in rates which they have been compelled to meet over the last few years. Nothing is cheap. No reasonable man could object to these increases. Indeed, we would all approve of giving more, if that more could be found.

There is one notable omission from this Bill, namely, the Old I.R.A. pensioners. They were omitted, too, from the 1950 Bill. We never got any reasonable explanation of that omission. That Bill was not amended until three years later, in 1953, and then the Old I.R.A. pensioners got only exactly the same amount as all other pensioners had got in 1950. I do not know why that policy should be continued in this Bill. It was an injustice to leave those people out in 1950. That was proved in 1953 when the House unanimously, almost with acclamation, agreed to increase the pensions of the Old I.R.A. It passes my comprehension why they should be once more omitted from the scope of this measure. They suffer in the same way so far as the value of money is concerned. We all know the service they had to render in order to qualify for pensions, in order to lay the foundations of this State. I cannot understand why they should be treated in this fashion. To say the least of it, it does seem ungrateful that men like them should be omitted from the scope of this measure and that we shall have to wait another few years before the position is again rectified. It will then, of course, be rectified unanimously and with acclamation.

Mr. O'Leary

They will all be dead by then.

Mr. Colley

I would appeal to the Minister not to take the same line as his predecessor did about 1950. If the Minister had been in the House in 1953 when the Old I.R.A. pensions were discussed, or if he would look up the records he would know that what I am saying is perfectly true. Representations were made from all sides just as they are made to-day. It would seem that the Old I.R.A. are the only people concerned who have to suffer further and not get even the small amelioration of their lot that is being given under this Bill.

That is the main point I want to make on the Bill. I was very surprised to find that, although I went through the measure very carefully, there was nothing at all in it about the Old I.R.A. I would appeal to the Minister to meet us on that matter. I am sorry I was not here at the beginning of the debate, but I gather that appeals have been made already from different sides of the House and I would like to add my voice to the voices of those who have already spoken in appealing to the Minister to put this matter right at once.

Mr. Sweetman

Deputy MacEntee suggested that it was undesirable that any Minister for Finance should borrow for such things as pension increases. Of course, I could not agree with him more. As far as I am concerned, this is a measure which was visualised by me at the time when I was framing my Budget last April or May and it was included by me on the basis of the estimates then available to me that it would be possible to meet the cost out of current revenue. Although we all wish, whenever we possibly can, to be as considerate as possible to those who are in straitened circumstances, as most pensioners are, so far as I am concerned I want to make it quite clear that unless I was able to estimate that it would be met out of current revenue, I could not possibly have accepted its implications.

The only other point that has been raised is that which was raised in relation to military service pensions. The purpose of this Bill is to bring the pensions of civil servants up, where the civil servants resigned prior to the 1st November, 1952.

In regard to military service pensions, there was, of course, as Deputy O'Leary properly said to Deputy MacEntee, a measure introduced in 1949 by the Minister for Defence which adequately, I think, makes clear his interest in those who were responsible for the foundation of this State, and who, as Deputy Traynor has correctly said, were responsible for the fact that we are discussing the matter here. The Bill of 1953 brings the position in their case up to the 1st January, 1953, whereas this Bill deals with civil servants who were retiring prior to the 1st November, 1952, that is to say a matter of a couple of months before. Quite apart from that, the pattern of the legislation is such that a matter of that sort is dealt with by separate legislation rather than in an over-all pensions increase measure. The classes included in this Bill are those in respect of which an estimate was framed at Budget time and I regret it is not possible for me to provide more funds than were provided at that period.

Question put and agreed to.

Committee Stage ordered for Wednesday, 21st November, 1956.

Mr. Sweetman

Might I mention a matter informally? I understand the Minister for Agriculture, who follows, is likely to take only a few minutes. Both Deputy MacEntee and I have been here and will be both concerned in the business following that. If the business of the Minister for Agriculture does not take sufficient time to enable Deputy MacEntee and myself to have a meal in the Restaurant, would the House adjourn until 6.45 p.m.?

Agreed.

Dáil Éireann debate -
Wednesday, 14 Nov 1956