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It appears to be widely supposed that Ministers of the Crown receive pensions on retirement. The position is that a Minister of the Crown may obtain a pension if he has held office for four or five years. But he is not entitled to it as a right on account of his service. He must apply for it to the First Lord of the Treasury, and make a declaration that his private income or resources are inadequate to the maintenance of the social position proper to one who has been a Minister of the Crown. Only two Members of the Government receive pensions automatically on retiring from office, the Lord Chancellor of England, whose pension is £5,000, and the Lord Chancellor of Ireland, whose pension is £4,000 a year. These two pensions are payable as a matter of course, however brief may have been the period of service. Nor is there any limitation to the number of such pensions that may be paid at the same time. At the close of the World War in 1918 there were living four ex-Lord Chancellors of England—Lord Halsbury, Lord Loreburn, Lord Haldane, and Lord Buckmaster—all of whom are paid the £5,000 a year, and a fifth, Lord Finlay, who, it was understood, waived his right to the retiring allowance.
The other political pensions are, as I have said, conditional. Johnson felt it necessary to define the English use of the word “pension” as: “Pay given to a State hireling for treason to his country.” Johnson, however, afterwards did something to make this form of royal bounty respectable by himself accepting £300 a year from George III. Undoubtedly in the corrupt stage of political life during the eighteenth century there were numerous pensions and sinecure offices for Ministers who were needy, or simply greedy. A Committee of the House of Commons reported in 1802 that for twenty years previous a sum of £115,000 had been annually spent on pensions. But as political morality developed with the progress of the nineteenth century, or as the tax-payer grew impatient of his increasing burdens, this system of growing rich or repairing broken fortunes at the public expense gradually came to an end. The granting of political pensions was for the first time regulated by an Act passed by the Reform Government of Earl Grey in 1834—the “4 and 5 William V, c. 24,” which is described as an Act, “to alter, amend, and consolidate the laws for regulating pensions, compensations, and allowances to be made to persons in respect of their having held civil offices of his Majesty’s service.”
The statute which now governs the granting of pensions to ex-Ministers is the Political Offices Pension Act, 1869. It was Gladstone, then in the first year of office as Prime Minister, who brought in the measure. The only serious opposition to it came from Henry Fawcett (afterwards Postmaster-General in Gladstone’s second Administration), who thought that no Minister should be entitled to a political pension unless he had been obliged to give up his profession or business on taking office, and found it impossible to resume it on retirement. Gladstone explained that his scheme was no more than a necessary amendment of the Act of 1834, which authorized pensions varying from £800 to £2,000, according to length of service and the emoluments received, and after a short discussion, with one division—94 to 15—the Bill was passed.
Three classes of pensions for ex-Ministers were thus created:
First-class pensions of £2,000 for four years’ service in an office of not less than £5,000 a year.
Second-class pensions of £1,200 for five years’ service in an office of less than £5,000 a year and not less than £2,000 a year.
Third-class pensions of £800 for five years’ service in an office of less than £2,000 and more than £1,000 a year.
The period of service may be continuous, or at different times, and in different offices of the same class. “No new pension shall be granted in any class while four pensions in that class are subsisting,” says that Act; “nor shall more than one pension be granted in the same year.”
The Political Offices Pensions Act, 1869, embodies the following section of the Act of 1834:
And whereas the principle of the regulations for granting allowances of this nature is and ought to be founded on a consideration not only of the services performed by the individual to the State, but of the inadequacy of his private fortune to maintain his station in life; be it therefore enacted that from and after the passing of this Act, whenever any person shall seek to obtain one of the pensions before mentioned his application for that purpose shall be made in writing to the Commissioners of his Majesty’s Treasury, to which he shall subscribe his name, and which shall contain not only a statement of the services performed by him and the grounds on which such pension is claimed, but a specific declaration that the amount of his income from other sources is so limited as to bring him within the intent and meaning of this Act and the principle hereinabove declared, and without such declaration no pension as hereinbefore provided or authorized shall be granted.