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.