Clause 3. — (Pensions for Widows, Widowers, Children and Dependants.)

Orders of the Day — Teachers' Superannuation Bill – in the House of Commons at 12:00 am on 26th November 1965.

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1.30 p.m.

Photo of Mr Arthur Newens Mr Arthur Newens , Epping

I beg to move Amendment No. 4, in page 4, line 28, after "prescribed", to insert: after the advice of the Board of Management".

The Deputy Chairman:

It may be for the convenience of the Committee to consider at the same time the next two Amendments, which are in the name of the Secretary of State. Amendment No. 5, in line 28, leave out "including functions" and insert: in relation to the valuation of the assets and liabilities of the fund established in accordance with subsection (2)(d) of this section and".

Amendment No. 6, in line 30, leave out from "teacher" to end of line.

Photo of Mr Arthur Newens Mr Arthur Newens , Epping

This is not a matter that requires a great deal of explanation. The Report of the Working Party set up by the right hon. Member for Birmingham, Handsworth (Sir E. Boyle) during the last Parliament provided for the administration of the Act to be carried out by a Board of Management, which was to consist of representatives of the teachers and the employers. The Clause would seem to some extent to contradict the intentions of the Working Party.

The question is whether or not the Government Actuary could ignore the Board of Management on matters specified in the Clause. In relation to the determination of contributions or pensions payable, could the Government Actuary ignore the opinions expressed by the Board? This question could be of some importance if a surplus or a deficit arose. If a surplus arose, how would it be dealt with? The Board might consider it desirable to reduce contributions, or it might come to the opinion that it was desirable to raise the benefits. In these circumstances, would the Government Actuary be able to ignore the wishes of the Board?

I recognise that to some extent other Amendments that we shall consider cover some of the points about which I am concerned. However, it still seems to me that the matter is not entirely satisfactory. I consider that the Board should have its rights safeguarded. Too much power tends to be concentrated today in various centres immune from popular control. I am very concerned—so are the teachers' organisations—that power over matters which I have referred should not be placed in the hands of the Government Actuary and remote from the control of the Board. I appeal to my hon. Friend to make the Government's view clear on this aspect of the problem. I hope that he will accept my Amendment, but if he is unable to accept it but is willing to give assurances to cover my point, I shall at a later stage ask permission to withdraw my Amendment.

Photo of Mr Edward Redhead Mr Edward Redhead , Walthamstow West

I appreciate the purpose and intention of my hon. Friend in proposing his Amendment. The two Amendments tabled by the Government apply to the same aspect of the matter, and I think that to some extent they go some way, as my hon. Friend indicated, to meet his point of view.

Perhaps I should first explain that the reason why Clause 3(4,a) is needed is simply that the conduct of a scheme of this; kind requires the professional services of an actuary, and that, if these services are to be provided by the Gov- ernment Actuary's Department, as all are agreed they should be, and if this Department is thereby to incur expenditure for this purpose, it is necessary for the Bill to authorise the Secretary of State, by Regulation, to confer these functions on that Department.

My hon. Friend expressed some concern about the Clause. It arises because he, and the teachers' interests which lie very properly represents, fear that the functions which the Clause will enable the Secretary of State to confer on the Government Actuary's Department will be similar to those they already exercise in relation to the main scheme for teachers' superannuation. I hope that I can completely allay these fears by the assurances which I shall seek to give.

The statutory functions of the Government Actuary's Department in relation to the main scheme of teachers' superannuation include, besides the normal actuarial job of valuing the assets and liabilities of the fund, that of specifying what should be done to bring the fund into the necessary financial balance. Where this valuation reveals a deficit, the Government Actuary must specify increases in contributions. Even though under the 1956 Teachers' Superannuation Act increased contributions are possible only in respect of employers—the teacher's contribution remaining always at 6 per cent.—it is entirely understandable that in the case of the widows' pension scheme, to which the Clause refers, where the fund is made up entirely by teachers' contributions, the teachers would not wish the Government Actuary to have a similar statutory power to specify changes in contributions or benefits.

So I give the first assurance, that under the powers of this Clause the Secretary of State intends to confer upon the Government Actuary's Department the function only of recommending and not of specifying or determining changes in the rates of contribution for benefits in relation to the widows' pension scheme.

As for what is done about any such recommendations, I can give a second assurance. Under Clause 3(2,e) the Secretary of State is required to provide for the establishment of a Board of Management to undertake the management of the fund and to exercise such other powers and functions in relation to the pensions … as may be determined in accordance with the regulations. It is the Secretary of State's clear intention in making these Regulations to lay down that the recommendations of the Government Actuary for the making-good of any deficiency or the disposal of any surplus should be made not only to the Secretary of State but to the Board of Management itself. It will then be for the Board of Management—upon which, I would remind my hon. Friend, teachers are to have a majority—to make proposals for any amendment of the Regulations concerning these matters which it thinks appropriate, and it will be for the Secretary of State, after that, under his obligations under the Bill, to consult representatives of the authorities and the teachers before making any amendment thereto.

In giving these assurances, I must make it clear that a somewhat different situation applies in respect of the scheme in regard to dependants as distinct from that for widows. Since the circumstances of the teacher wishing to secure cover for a dependant and the amount of cover which he or she may seek will vary from person to person, it will be necessary to determine the rate of contributions to be paid in each case. The Working Party, to which my hon. Friend referred, in paragraph 16 of Appendix II of its Report, recommended that these individual rates should be determined by the Government Actuary.

Basically, therefore, there are two, and only two, functions to be conferred upon the Government Actuary. The first is to make a quinquennial valuation of the assets and liabilities of the common fund of both the widows and dependants schemes. The two assurances which I have given relate to this function. The second function is the one which I have just mentioned, that of determining the right of contributions to be paid by each teacher nominating a dependant under the dependants' scheme.

After further study of Clause 3(4,a), my right hon. Friend concluded that the wording is wider than necessary and he proposes, in the two Amendments we are considering with this one, to narrow it so as to particularise as far as is practicable the two functions I have mentioned. In the light of the assurances which I have given and of the narrowing of the scope of Clause 3(4,a) I hope that my hon. Friend will not feel it necessary to press the Amendment.

He may feel that his fears have been laid at rest. We will see that it would be inadvisable to assign to the Board of Management—as the Amendment, in effect, would do—any rôle in the professional actuarial functions which the Government Actuary has and which only he can properly undertake. My hon. Friend will have noted that the Board will be given the fullest opportunities to express any views at the appropriate stage.

Lastly, I am sure that he will not claim that his Amendment could possibly be accepted as it stands. It is defective in form, in that it requires the Secretary of State to obtain the advice of the board of management before making the Regulations prescribing the functions to be conferred on the Government Actuary or his deputy. This could not be done in the important initial stages of establishing the new scheme, since the Regulations which will prescribe the functions conferred on the Actuary are the same Regulations which will create the Board of Management. In short, when the Secretary of State makes the Regulations, no Board of Management will exist to advise him as to what to put in them. In the circumstances, I hope that my hon. Friend will feel able to withdraw his Amendment and that the Committee will agree to the two Government Amendments.

Photo of Sir Edward Boyle Sir Edward Boyle , Birmingham Handsworth

The Minister of State has given us a very reasonable reply to the Amendment moved by the hon. Member for Epping (Mr. Newens). As I understand the essence of the Minister of State's point, I agree with him that it could not be right for the Board of Management to try to perform the functions of the Government Actuary, but I also agree that it is important that the Board should have the fullest opportunity to comment on and to criticise the findings of the Government's Actuary and their implications. In other words, it is important that there should not be a direct line from the Actuary to the Secretary of State but that the Board of Management—that is to say, the Board which is not a part of the Government—shoud have the chance of commenting en route.

This is very important because when the Secretary of State makes Regulations after full discussions with the other educational partners, it should be in the full knowledge of all the views of the Board of Management, on which teachers will he very fully represented. We should be grateful to the hon. Member for Epping for having given us the opportunity to have a short debate on this important point. I have had a number of letters on this subject in the past week, from which it is clear that a number of older teachers feel, when we pass Bills of this kind after relatively short debate, that we do not all fully realise what this may mean in human terms and how important are the details of the Regulations.

1.45 p.m.

One cannot deny—I do not want to get out of order by making a Second Reading speech again—that there is much anxiety and concern on the part of older teachers. It is therefore very important that a clear message go out from the House that we want the Board of Management to have the fullest opportunity of commenting. I think we can all be grateful, therefore, to the Minister of State for his assurances.

Photo of Mr William Hamling Mr William Hamling , Woolwich West

I am sure that the House is indebted to the Minister of State for his clear exposition in reply to my hon. Friend's Amendment. The point which the right hon. Member for Birmingham, Handsworth (Sir E. Boyle) made about the fear of older teachers was very much in our minds in putting down the Amendment. He and, I am sure, my hon. Friends know that we have discussed this Amendment with the teachers' representatives. We were very concerned that the views of teachers in particular should be considered when Regulations are made under the Bill and that, as my hon. Friend said, rules should not be laid down nor Regulations prescribed from the centre without full consideration of the teachers' interests.

Photo of Mr Arthur Newens Mr Arthur Newens , Epping

In view of the assurances which my hon. Friend has given and with which I am very satisfied—as, I am sure, will be the organisations I represent—I beg leave to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Amendments made: Amendment No. 5, in page 4, line 28, leave out "including functions" and insert: in relation to the valuation of the assets and liabilities of the fund established in accordance with subsection (2,d) of this section and".

Amendment No. 6, in line 30, leave out from "teacher" to end of line.—[Mr. Redhead.]

Clause, as, amended, ordered to stand part of the Bill.

Clauses 4 to 6 ordered to stand part of the Bill.