I move:
That Dáil Éireann is of the opinion that, in view of the steep rise in the cost of living, and the difficulties created thereby for all pensioners, the whole question of pensions should be reviewed as a matter of urgency.
The purpose of this motion is to secure a review of all pensions and a revision upwards of pensions to meet the changes arising from the rising cost of living. This motion has been framed in order to ensure that all categories of pensioners are included in it—or rather it has been framed so as to ensure that no category of pensioner, either State or other classes, will be excluded from consideration.
In recent months there has been both in the House and generally throughout the country quite an amount of discussion on the rise in the cost of living and many references have been made to the increases in salaries and wages, particularly to the recent rise in wages and salaries known as the eighth round. With few exceptions, all wage and salary earners have received adjustments. I say with few exceptions because there are a few sections, either those who are self-employed, or possibly some of those employed in particular types of work, who have received no increases comparable to the eighth round.
But in general, State personnel, employees of private concerns, employees of State companies and, generally, all categories of wage and salary earners in the community have received or are in the process of receiving the benefits of the eighth round of wage increases. Since the end of the war, salaries and wages of various categories have been adjusted on eight occasions, with, as I say, possibly some few exceptions, so that since the end of the war, either to meet the rise in the cost of living or, on one or two occasions, to improve the general standards of the wage and salary structure, increases in salaries and wages have been granted on eight occasions.
As I say, there are certain exceptions. With the exclusion of self-employed people and certain other categories who may not have been included, by and large the vast majority of wage and salary earners have received eight increases over that period. During the same period there have been only four increases in respect of pensioners. Here again there are exceptions because some of the pensioners have received no increases. However, as far as State pensioners are concerned, with possible exceptions where apparently only three increases have been made operative, pensions have been increased on four occasions only, so that compared with wage and salary earners, pensioners have not received the same attention or the same consideration.
I think it is generally agreed that one of the severe effects of economic conditions since the end of the war has been the adverse effect on persons living on fixed incomes and they include pensioners of all categories whether they are retired State personnel or people retired from private employment. Their pensions have been fixed on the basis of pay at retirement and once that system is in operation and that criterion accepted as the standard on which pensions are based, then because of the drop in the value of money and the rise in the cost of living over a number of years, the position of pensioners has been seriously affected.
It is, therefore, desirable that this motion should be considered in the light of the economic conditions which affect the various categories of pensioners in the community. Pensions, as I say, are based on pay at retirement and are generally regarded as being percentages of the active pay earned at the date of retirement. That has been the standard on which pensions have been based. They have been the statutory conditions governing all State pensioners since the early 19th century.
The House will agree that that basis is no longer valid. The idea of fixing a pension on the basis of salary at retirement was all right when the value of money was constant. The parent Superannuation Act is an old Act passed in the 19th century. There was an amending Act subsequently passed and there were various amending Acts since which varied or increased the rate but the basis on which pensions are fixed is still that of a percentage of pay at retirement. That worked reasonably satisfactorily when the value of money was constant and when economic fluctuations such as those we have witnessed since the last war did not operate. In actual fact, the parent Superannuation Act was passed before the Franco-Prussian war which is generally regarded as the start in modern times of a change in the value of money. Subsequently there was a settled period up to the first world war when an inflationary period followed and in the twenties and thirties, the value of money was reasonably constant.
During the last war and during all the years that have passed since the beginning of the last war, whether the tempo of the changes varied or not, there has been a continuous decrease in the value of money and a continuous rise in the cost of living. I want the House to consider and review the whole pensions code here and the basis on which pensions are paid to retired personnel. In addition to that, if we examine what has happened, we will see that there have been changes in comparatively recent times which have affected adversely the position of pensioners compared with their former colleagues who have been in a position to serve on for longer periods.
Over the past few years, there have been substantial wage and salary increases to serving State personnel, whether civil servants, Garda, Army, teachers or whatever categories are paid directly or indirectly by the State. When these wage and salary adjustments were granted, whether they were made directly by the Government or through arbitration or conciliation machinery, the increases were decided upon and the State paid them. There was no suggestion that the State should not pay. Only a couple of weeks ago the Taoiseach, in the course of the discussion on the Vote on Account, expressed the view that he did not think there would be any opposition either in the House or outside it to the Government's decision to pay the wage and salary adjustments concerned in the eighth round; that the State had the same responsibility to pay these increases as had private employers.
No one would suggest that the State should not fulfil its obligations in that regard. Why, therefore, should they differentiate between State pensioners and State personnel still serving? The reason why these differences obtain is because of the outdated method of calculating pensions based on pay on retirement. That was reasonable and satisfactory enough when pay remained constant over a relatively long period. The pay for a particular category was awarded according to rank and the pensions were based on the appropriate basis of pay on retirement.
In the past few months, and I do not propose to go back any further than that at the moment, there have been very substantial pay adjustments in respect of the Army and the Garda and I understand that the Minister for Finance is at present engaged in negotiations in respect of pay adjustments for civil servants. That development means that quite a large number of pensioners who retired last July or August now find that a person serving in the same rank who had the same number of years of service with the exception of a few months and who retired after the 1st November last is substantially better off than the man who retired in July or August.
That change has come about because, in the meantime, due to the rise in the cost of living or the wage and salary adjustments of the eighth round of wage increases, the emoluments of the particular office have been increased and the pensioner who retired on 1st November last retired on a higher pension than his colleague who retired in July or August. One of the difficulties of discussing a motion on pensions is that each category tends to consider the particular scale appropriate to his or her rank and the appropriate pensions to be paid to persons serving in a particular rank may seem smaller when compared with others. Compared with a person in a higher rank the person on the lower rank may consider that the person on the higher rank has a reasonably good pension.
I do not want to discuss the individual rates or pension grades except to emphasis that a very substantial change has occurred in recent months because of the increase known as the eighth round which has affected serving personnel to their advantage compared with their fellow civil servants who retired a few months ago and who retired at the same age limit, not because there was a change in their grading or rank, but because the increases in the wage or salary operated to increase the pension of a person who retired later.
It is reasonable that when a person serves in a particular grade or rank, he should expect to retire on the pension appropriate to that rank, provided that the cost of living had been stable and conditions had been stable; but we have here the position in which over a number of years, there has been a continuous rise in the cost of living and, in consequence, a decline in the purchasing power of money. I want to ask the House is it just or equitable or reasonable that because of the timing of a pay increase, the arbitrary fixing of a date—not any change in rank or age of retirement—one group of pensioners should retire with a lower pension than others or vice versa? No such difference can be justified or defended.
During the past few months and particularly during the past few weeks, Supplementary Estimates have been introduced for the purpose of giving the appropriate pay and salary increases that have been awarded. It seems, if that treatment is being granted, as it should be granted to serving personnel, similar treatment should be granted to those who have retired.
It is important for us to consider in this connection what happens in other countries. Quite recently, the British Home Secretary, Mr. Butler, said that with the advent of the Common Market, he believed there would be a levelling up of social benefits, not a levelling down. Up to very recently, he was, and at present he is, the Minister in charge of the Committee in the British Government dealing with the negotiations on Britain's entry into the Common Market and that is the view he expressed. It is important to realise that, so far as the attitude adopted here and in Britain is concerned, we appear to be out of step with a number of European countries in regard to pensions of retired State servants. I am using that decription in the broadest sense to include the Civil Service, Army, Garda, teachers and, indeed, local authority workers, employees of State concerns and so on, because they are all paid directly or indirectly by the State.
In quite a number of other countries, the position is different—in Denmark, France, Norway and Sweden. In these countries, pensions vary with the cost of living. There are certain differences in each case, but, in the main, the pensions are based on, or pegged to, the existing salary of serving personnel, and when adjustments are made in respect of wages and salaries of personnel still serving, the pensioners are included in these adjustments. In most of these countries, the changes have taken place since the war. That seems to be reasonable and proper because the substantial variations in the value of money have all occurred either during, or since, the last war.
In France, since 1948, civil and military pensions are automatically adjusted in relation to changes in the case of serving state personnel In Denmark, pensions are adjusted in step with fluctuations in the cost of living on the same basis as granted to serving personnel. The same is true in Norway and Sweden. When we go further afield, we find that increases have been granted in the case of New Zealand and in respect of the Services, what are regarded in other countries as the fighting services—here they are confined to the Army and probably the Naval Service—increases in pensions are automatic with those granted to serving personnel.
With those changes coming, with the E.E.C., it is significant that at the moment this country and Britain are out of line with pension arrangements which exist in a number of European countries and which have been changed in order to meet the changed conditions resulting from the increase in the cost of living and the drop in the purchasing power of money. It may be argued that any increase in pensions is a novelty. That argument was valid so long as the cost of living and the purchasing power of money remained constant, but when the superannuation code which is at present in operation was originally framed, the question of pay increases was hardly ever considered. The only changes that occurred were those with advancement in rank and unless a person were promoted to a higher rank, his pay or salary remained constant for very long periods.
That situation is no longer true and whatever validity existed for it when the cost of living was stable in the 'twenties and 'thirties, with the continuous rise in the cost of living and the consequent drop in the value of money which has been a feature in all economies—this country is not peculiar in that respect; the drop in money values and the rise in the cost of living may vary between one country and another but the pattern is pretty much the same—it does not exist now.
Since the end of the war, there has been pretty general price inflation and the various economies I have mentioned in Europe and outside it have changed their superannuation arrangements and altered their payment of pensions on the basis of whatever the appropriate increase is, either the cost of living index figure or alternatively, on the basis of the comparable rises granted to State personnel still serving.
The increase in the cost of living here in the past few years has been quite considerable. In February, 1957, the consumer price index stood at 135; in February of this year it had risen to 154. That is the consumer price index—all items.
While that is true in respect of the figure, as we know it, it may help to get an indication of how that affects commodities that are purchased by the humblest pensioners. The figures I have here involve commodities which everybody who has to exist must purchase. They show that the price of butter has increased from 3/8¾d. in February, 1957, to 4/6¾d. in February, of 1961, an increase of 10d. The 2-lb. loaf has increased from 9d. to 1/3½d., an increase of 6½d. The stone of flour has increased from 4/2½d. to 8/1d., an increase of 3/10½d. Potatoes have gone from 2/0¼d. to 2/8d. Sugar has increased from 7d. to 8½d. If we take the consumer price index, we find that clothing has increased by 4 per cent. from 102.7 to 107.3. Housing has increased from 115 to 131.3 or 10 per cent. Drink and tobacco have increased from 112.7 to 130 or 16 per cent. Between 1957 and 1962, the consumer price index has increased by 19 points. That is equivalent to 14 per cent. or 2/9½d. in the £. That is a substantial increase. As I say, I have picked out only the items which the humblest pensioner must have. I have not included meat or other articles that are included in the consumer price index. Deputies will agree there has been a very substantial increase in the cost of living, particularly the cost of essentials.
I want to urge the House and in this regard to impress on the representatives in this House of workers and workers' organisations that one of the interests which they have and in which they have shown an interest over the years has been the conditions, pay and emoluments of those at work whether they are employed by the State or by private concerns. In this matter, one of the important things for trade unions and other organisations representing employees is to look after the welfare of those they have represented not merely while they are at work but when they retire. Unless they exert their influence while these people are serving as civil servants, Army or Garda personnel, and so on, the contribution they can make to the welfare of the persons they represent after they have retired is not so great.
One of the facts about the superannuation arrangements and the pension arrangements in operation here has been that with a few exceptions there have been no increases comparable with the increases that have been granted to those in present-day employment. The increases that have been granted in respect of pensions have been referred to here on a number of occasions and these increases were granted under various Pension (Increase) Acts. The 1950 Act granted an increase on a pension not exceeding £100 a year of 50 per cent. There was a grading then, varying with the amount of pension: on a pension exceeding £100 but not exceeding £125 a year, an increase of £50 a year; exceeding £125 but not exceeding £150, an increase of 40 per cent., and so on, up to a maximum of £450. Subsequently the 1956 Act granted an increase on a pension not exceeding £100 a year of 15 per cent.; exceeding £100 but not exceeding £125, an increase of 15 per cent., and again up to £450 where the increase was 6 per cent.
When the 1959 Act was passed a 6 per cent. increase was granted in respect of retirals before the 1st January, 1948, a 4 per cent. increase in respect of retirals between 1st November, 1948, and 1st November, 1952. The 1960 Act granted a 7½ per cent. increase in respect of retirals before the 1st November, 1948, and a 5 per cent. increase in respect of retirals between 1st November, 1948, and 1st November, 1955. It is a fact that those who retired after 1st November, 1955 have received no increase. During the same period serving Civil Service personnel got 49 per cent. on the portion of salary not exceeding £250 and on the portion of salary exceeding £250 a year, 29 per cent.
It is obvious from these figures that the treatment afforded to pensioners has been entirely inadequate. The pension at present payable in respect of old age pensioners, widows and orphans, is beneath that which is necessary in order to exist in frugal comfort. I have figures which show that a widow of a Garda who died during service, that widow having two children, had a pension of less than £60 a year. The present old age non-contributory pension of 30/-, the widow's non-contributory pension of 28/6—47/6 for a widow with two children, plus 5/- for each additional child—indicates the level of pensions prevailing.
I want to urge the House to give an affirmative decision in favour of this motion. It will be argued, I know, that the amount of money which will be necessary to meet this will be considerable. During the course of some replies given here earlier this year, I ascertained from the Minister for Finance that at 31st December, 1961, there were 3,255 Civil Service pensioners and that the amount paid by way of pension for the year ended on the same day was £1,108,475. That is reported at column 50, Volume 193 of the Official Reports.
The Minister for Defence in reply to a question gave a total of 2,427 in respect of ex-Army personnel, officers, N.C.O.s and men and the total cost to the end of the year 30th September, 1961, was £418,661. The Minister for Local Government in reply to a question said that the total number of retired local authority employees at the 31st March, 1961, was 5,860 and the total cost of superannuation payments in respect of the year ended 31st March, 1961, was £1,355,908. That payment included pensions, marriage, death and short service gratuities.
These figures indicate the numbers involved and if we compare them with the cost of implementing the award which was mentioned by the Taoiseach in referring to the eighth round, it is obvious that the cost and numbers are far less than those involved in paying the wage and salary adjustments in respect of serving personnel. I believe the Dáil and the country would support an increase in pensions not merely to State pensioners but to all categories. Indeed, if we look at some of the State bodies, C.I.E. pensioners exist on a pension that is below any reasonable standard. It is one of the lowest paid pensions that it is possible to imagine. Most of the other State companies have more satisfactory pension schemes. The fact that the C.I.E. pension scheme is so unsatisfactory is, of course, due to the legacy they inherited from the principal railway company which was taken over, but I do not think there is any justification for advancing that as a reason for not increasing the pensions paid to retired C.I.E. personnel.
In any event, no matter what category we examine, the overall position compares very unfavourably with the increases that have been granted and the costs that have been borne by the community. The Supplementary Estimates introduced here in recent weeks for the payment of serving personnel, whether civil servants, Garda, teachers or others, have either been passed or are on the Order Paper for discussion in the near future. It has been agreed by all sides of the House that the increases which have been awarded should be paid and the necessary money will be voted by this House.
The same should apply in even greater measure in respect of retired pensioners because, with the exception of the four increases mentioned, pensioners have got no increase, or no increase comparable with the increases in salaries and wages granted to serving personnel. It is only an accident of age or, indeed, in some cases, an accident of timing of the pay award, that certain pensioners have had the good fortune to retire at a higher pension, although a person serving in the same rank, doing the same work, with the same number of years' service, except for a month or a couple of months, as the case may be, retires and finds himself on a lower pension because of the arbitrary date fixed for the granting of the eighth round increase.
I believe the House and the country are prepared to support a general review, to grant a reasonable increase. No one expects that any approach other than a reasonable one should be made to this matter but the reasonable demands, the just demands, the fair demands which these people have on the community for an increase in pension are beyond argument. Not merely do we ask the House to support this motion, but we ask the House, in addition, to support whatever necessary taxation is involved to meet the cost of the appropriate pension increases in respect of retired State servants and retired personnel, no matter whether they were employed directly or indirectly by the State.
One of the categories of pensioners whose lot has been even more severe than others are those living on the products of investments from money saved when at work, who invested their savings in order to give them some income on retirement. There are undoubtedly nowadays fewer of these in the community because most organisations have pension schemes in operation but, nevertheless, there is quite a substantial section who have to exist on the income from the accumulated savings of past exertions. I want to urge the Minister to consider their position. It may not be possible to include them in the present superannuation framework but it ought to be possible to consider some relief for them in conjunction with the Budget.
The amendment in the Minister's name urges that "proposals concerning pensions charged on the Public Revenue should be considered only in conjunction with the Budget when they can be related to the taxation required to implement them". Why do we adopt a different standard for pensioners from the standard adopted for serving personnel? The Taoiseach said in the course of the discussion on the Vote on Account that nobody should suggest that the State should not pay the wage and salary awards which have been granted. If that is true for State personnel still serving, it ought to be true for pensioners and the appropriate increase based on the cost of living index or based on a percentage of the increase that has been granted in respect of those still serving should be granted to those who have retired.
One of the facts about the various Supplementary Estimates introduced recently is that they have been introduced irrespective of the Budget and, indeed, in advance of the Budget. Some of them were introduced quite some weeks ago. Possibly some of them were introduced before Christmas. At present on the Order Paper, there are a number of Supplementary Estimates down for consideration dealing with some of these increases that have been granted. The same treatment as has been afforded to serving personnel, whether Civil Service, Army or Garda, and so on, should be afforded to those who have retired and I urge the House to give sympathetic consideration to this motion.
When the election was over, the Taoiseach said the Government would leave political considerations to look after themselves. It is significant that since the last election, two motions have been brought forward here, one dealing with the health services, and the reaction of the Government was to put down an amendment and to set up a committee to inquire into the matter. Even that was an advance. If that health motion had been down before the last election, there would have been no committee and no investigation. On this occasion, the Minister for Finance on behalf of the Government puts down an amendment requesting that it be deferred until the general budgetary proposals are under consideration.
That, in normal circumstances, would be reasonable enough, but, as I say, in recent weeks and months, we have had a whole series of Supplementary Estimates in order to implement the eighth round which has been applied by private employers to their employees and which in the case of State employees has been granted through either arbitration or conciliation or whatever the appropriate machinery is. What is sauce for the goose should be sauce for the gander, and we should treat those who have retired on the same basis.
In addition, one of the features of the various pay and salary awards that have been made is that they are retrospective to a date in November in most cases. If that is the standard adopted in respect of serving personnel, a similar standard should be adopted in respect of those who have retired and any increase should be made retrospective to a comparable date in order to compensate to some extent and give those who are on pension some small consolation in respect of the substantial rise in the cost of living and the drop in purchasing power of money.
In the main, the average life of a pensioner after retirement is something short of ten years. One of the claims adumbrated in relation to this country is that we have a Christian philosophy and a Christian approach to these matters. I do not believe any one Party or any particular side of this House has a different view on this matter from any other Party or side. I believe the Minister and the Government are just as anxious as we are to be reasonable and considerate.
Reference has often been made here to the directive social principles laid down in the Constitution. If we really believe in these principles, and if we want to live up to the verbal advices laid down, then we have now an opportunity of putting that advice into practice. It is not sufficient just to lay down standards and then refuse to implement them. One of the arguments we have advanced in support of our application to join the European Economic Community is that we are prepared to provide the same standards here as obtain in other countries. The British Home Secretary, Mr. Butler, referred recently to a levelling up rather than a levelling down.
I believe there will be universal approval of any proposal to review upwards speedily to a reasonable level the pensions for all categories of retired personnel, not merely State pensioners but all categories of pensioners, living on pensions or on accumulated savings. Irrespective of what positions they occupied, these people have served the community well. Many of them have rendered distinguished service. Some have rendered humble service. Whether service was distinguished or humble may have been an accident, but they all rendered the best possible service they could. They are now entitled to reasonable and fair consideration from the community.
That is the proposal we put before this House. It is a proposal we believe that not only the House will be prepared to support but also the country at large, so that, whatever may be necessary to implement the proposal to give these people reasonable standards which will enable them to live out their remaining years in proper Christian conditions, will be forthcoming. These are the conditions which should properly be regarded as appropriate to their circumstances and appropriate equally in relation to the obligations the State has to cherish equally all sections of the community.