HC Deb 06 November 1974 vol 880 cc1089-103

Order for Second Reading read.

4.25 p.m.

The Secretary of State for Social Services (Mrs. Barbara Castle)

I beg to move, That the Bill be now read a Second time.

In doing so I believe that I shall succeed in restoring harmony to the House. This is a short Bill but an extremely important one in humanitarian terms to many of our citizens to whom the £10 bonus, which the Bill enables us to pay this Christmas, will come as such a pleasure and such a relief.

The purpose of the Bill is to pay the bonus to more than 9 million people. I am sure that it will receive the general support of the House. I am grateful to the House for affording it a swift passage, which will enable the payments generally to be made before Christmas.

The beauty of the Bill lies in its brevity. Gone is the requirement, as distinct from earlier Bills, that the recipients of qualifying benefits must have reached pensionable age. Over and above the 8 million pensioners who have retired, the Bill adds another 1 million beneficiaries. They will now qualify for the bonus even though they are under retirement age. The scope of the Bill includes widows, invalidity pensioners, those on an attendance allowance and those recipients of industrial injury benefit or war pensions who are permanently unfit to work. I want to make it clear that that is what is meant by the unemployability supplement, which is a qualifying benefit for the bonus. It is not the same as unemployment benefit. There has been considerable misunderstanding on that point. I wish to make it clear that those on unemployment benefit will not qualify. Only those receiving industrial injury benefits and war pensions who are permanently unfit to work and those in the other categories to which I have referred will qualify.

The Bill provides for an additional million beneficiaries. It discharges the commitment that we made in our manifesto. This is just one more example of the Government hurrying to carry out a commitment which was made during the election campaign. The Bill is in accordance with the arguments which we advanced when in Opposition when the Christmas bonus Bill was first introduced. I have no doubt that Opposition hon. Members will accept those arguments on this occasion.

The great bulk of payments to persons over pension age who are qualified will again be dealt with by the post offices. I must express my gratitude to the post office staff and to sub-postmasters who are prepared to perform this task when their period of greatest work pressure is approaching. I am sure that the House will wish to join me in that tribute. I include in this expression of gratitude the staff of my own Department who will arrange for speedy payment to most of the new categories of beneficiaries. The majority of those entitled will receive the £10 payment during the week beginning 18th November. All but a handful of payments should be made by Christmas.

It may help the House if I briefly describe the details of the Bill. These details will also apply in Northern Ireland. Clause 1 deals with conditions for the receipt of the bonus payment. A person must be present or ordinarily resident in the United Kingdom or any member State of the EEC at some time during the week beginning 18th November, and be entitled or treated as entitled in respect of at least one day of that week to payment of a qualifying benefit. There is provision for a further payment of £10 in respect of a spouse when both the beneficiary and his spouse are over pensionable age. For most married couples over pensionable age the wife will be entitled to a separate payment on her own book. Only one bonus will be payable in respect of any one person.

Rev. Ian Paisley (Antrim, North)

As this Bill applies to Northern Ireland, naturally those of us from Northern Ireland are interested in it and welcome it. Can the right hon. Lady assure us that all post offices in Northern Ireland will be able to pay out the bonus, since we have discovered that in the case of some of the social service payments some post offices are not able to pay out the benefits?

Mrs. Castle

I have no information to the contrary but I will look into the point raised by the hon. Gentleman. If we get information before the debate ends, I will convey it to him, but it is a point new to me.

The bonus will be tax-free and will not in any way affect entitlement to other benefits, such as supplementary benefit, rate rebates or rent allowances, and will be disregarded in calculating charges for Part III accommodation. Qualified people in such accommodation, or in hospital, will get the bonus in full.

Clause 2 lays down that the week in which the conditions must be satisfied is the week beginning 18th November. It also sets out the qualifying benefits. These are retirement pension—which includes the over-eighties' pension; invalidity pension; all widows' benefits under the national insurance scheme—that is to say, widow's allowance, widowed mother's allowance, widow's pension or widow's basic pension; attendance allowance; constant attendance allowance or unemployability supplement under the industrial injuries or war pension schemes, payable to people who are permanently unfit to work; war widow's pension; industrial injuries widow's or widower's pension; supplementary pension. War pension will be a qualifying benefit where the person concerned is over pensionable age and retired—or over the age of 70 for a man and 65 for a woman if not retired.

Persons will be treated as entitled to a qualifying benefit if they would have been so entitled but for the receipt of some other overlapping benefit from public funds, or if the operation of an earnings rule has extinguished right to payment in respect of the qualifying week. This was a point that I raised on an earlier Bill introduced by the Conservative Government, and we have incorporated it into this Bill. Clause 2 also ensures that United Kingdom beneficiaries living in the Channel Islands, the Isle of Man and Gibraltar will get the bonus payment.

Clause 3 deals with the making of payments. Nearly 8 million of the beneficiaries are retirement or supplementary pensioners, the vast majority of whom will get payment at the post office when they cash their pension for the week beginning 18th November. Other payments will be sent by post. For those getting their payment at post offices, action, in the form of sticking receipt slips in their books, will start in the week beginning 11th November.

Clause 4 deals with financial provisions. In the case of persons whose qualifying benefit is payable from national insurance funds, the payment will come from these funds, but national insurance contributions are not to be increased specially on this account, as they were last year under the Conservative Government. We have another Bill before us today which deals with national insurance contributions. Where the qualifying benefit is payable by the Exchequer the bonus will come from the Exchequer.

The bonus payment will cost £92 million and will, as I have said, be tax-free. So this Bill is a considerable contribution to the happiness of 9 million people this Christmas, and I confidently commend it to the House.

4.35 p.m.

Mrs. Elaine Kellett-Bowman (Lancaster)

I can think of no task that could be allotted to me in this House that would please me more than to welcome the right hon. Lady's conversion to the value of the Christmas bonus, pioneered by her predecessor, my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph), and about which, I regret to say, she was so scathing when he introduced it two Christmases ago. On 20th November 1972 the right hon. Lady described the bonus as a "cheap substitute", and went on to add: … it reflects the inadequacy of the Government's own recent uprating. She went on to say—digging her own grave even deeper— … it is only six weeks ago that the Government carried into effect what was supposed to be their proper and fundamental answer to the old people's needs."—[OFFICIAL REPORT, 20th November 1972; Vol. 846, c. 989.] The hon. Member for Rotherham (Mr. O'Malley) now Minister of State, on the same occasion described the bonus as a stop-gap emergency measure". If that was so in 1972, it is certainly even more the case in 1974. Inflation has already taken a very large bite out of the pension uprating which the right hon. Lady set as her target two years ago, announced in March and paid in July. Pensioners will have to wait a whole year before they get any further increase instead of receiving a six-monthly up-rating in January, as they would have done under the Conservatives.

Yes, our pensioners and disabled certainly do need a Christmas bonus under Labour. But one thing puzzles me. This year the relevant date for entitlement to the bonus is 18th November, eight days earlier than last year and a fortnight earlier than in 1972. Yet I vividly recall how, last year, Member after Member on the Labour benches, led by the hon. Member for Goole (Dr. Marshall) with the right hon. Member for Deptford (Mr. Silkin) lending his not inconsiderable weight to the charge, demanded that everyone who reached pensionable age before Christmas should be entitled to the bonus. I confess that I had considerable sympathy with that view, as had my hon. Friend the Member for Somerset, North (Mr. Dean), who was then Under-Secretary of State.

The date fixed by the Conservative Government, which aroused such fury in the Labour Party, was the week ending 1st December. The date this year is the week ending 23rd November, which means that many more people who will become pensioners between 23rd November and Christmas will be deprived of the bonus. Clearly, the right hon. Lady is not interested, because she is chatting instead of listening to what is being said.

Why should the administrative process be so much longer in this matter under Labour, to the detriment of so many? I find it a little strange, too, that while the Secretary of State has promised to uprate other benefits, albeit only once a year, she has left the rate of the Christmas bonus exactly as it stood when my right hon. Friend introduced it two years ago. I find it all the stranger since, when discussing our Bill last year, the right hon. Member for Deptford said: …why is the bonus this year only £10, because that figure has inflated considerably during the last 12 months? I am astonished that the Government are so unrealistic about this. If they really think that £10 today has the value of £10 a year ago they should go and see some old-age pensioners who may be able to tell them what has happened."—[OFFICIAL REPORT, 19th November 1973; Vol. 861, c. 576.]

Mr. F. A. Burden (Gillingham)

Is it not the case that the Government have to introduce the Christmas bonus because if they failed to do so there would be uproar among pensioners and others? This is not a voluntary act but one forced upon them by the fact that the Conservative Government introduced it.

Mrs. Kellett-Bowman

My hon. Friend the Member for Gillingham (Mr. Burden) is undoubtedly right. That is why I referred to the right hon. Lady's conversion. As I was saying, the criticism about the level of the bonus was made last year. How much more serious are the ravages of inflation on the £10 bonus now under the very harsh eye of "Mr. 8.4 per cent." for the pension is now only worth £7.42. Why has it not been uprated to £12.57, which would keep it in line with inflation.

Nevertheless, despite my disappointment that the bonus has not been uprated to take account of inflation, I am delighted that, after her disparaging remarks of two years ago, the Secretary of State has decided to follow our example and continue the Christmas bonus. I am delighted because I have found in my constituency, and I am sure that other hon. Members have found the same, that this Christmas bonus means a great deal to the recipient. It often makes an otherwise drab Christmas more cheerful by enabling those receiving it to buy a few little extras. In addition, many have told me that they value it even more highly because it gives them a chance to buy a few presents, particularly for grandchildren and the friends who visit them at Christmas time.

However, the Opposition firmly say that it is essential for the long-term wellbeing of our older citizens to bring in wider measures, such as the tax credit system and the occupational pension scheme, which were passed by the House before the February election but abolished by the right hon. Lady, who thus destroyed at a stroke the chance that people would have had from next April to build up a second pension. Those two measures taken together would render a Christmas bonus unnecessary.

But until such measures are carried out the need for a Christmas bonus will remain. I am glad that a larger number of widows and disabled will get the bonus, but the problem is to decide whom to leave out of its scope, for the wider the cover extends, the more anomalies and unhappiness are created. My hon. Friend the Member for Somerset, North will deal with these matter later. However, I am very glad indeed that the Secretary of State has followed our example in making the bonus tax-free and is continuing our practice of not having it taken into account for other purposes such as rent and rate rebates and the calculation of supplementary benefit.

In short, the Opposition are glad that in this Bill at least the Government are following a good Conservative example. We shall give the Bill a fair passage, devoutly hoping that the Government will refrain from spending the taxpayers' money so lavishly on doctrinaire measures, such as nationalisation, so that money will still be available for essential welfare purposes such as this.

4.43 p.m.

Dr. Edmund Marshall (Goole)

I propose to ignore the cantankerous parts of the contribution by the hon. Lady the Member for Lancaster (Mrs. Kellett-Bowman) and to turn immediately to welcome the fact that the scope of the bonus payment has been considerably extended. A very large number of people in receipt of benefits will enjoy this bonus this year under the present Government.

As has just been intimated, there is one further extension of the bonus which I would have welcomed, and I hope that Ministers will keep it in mind if similar occasions arise in future. Last year I pointed out that the Bill then being passed by the House would not permit the payment of the bonus to pensioners who reached pensionable age before Christmas Day but after the end of the relevant week in which the payment was made. Last year that was a period of three weeks.

As has been pointed out, this year more people will be affected by this problem. As the Bill stands, any elderly people reaching pensionable age after 24th November will not qualify for the bonus. My estimate, which is based on figures from the Registrar-General, is that about 50,000 people will be affected in this way. They will be pensioners before Christmas, but they will not receive the bonus payments authorised in the Bill.

This is an anomaly. There is no question of any party points to be scored here, for it is an administrative anomaly. I hope that during the debate Ministers will say that consideration is being given to how the anomaly may be ironed out for future occasions. While it is good that the payments to pensioners in general are all to be made in a relevant week in November, there ought to be some method by which those who reach pensionable age afterwards receive the bonus with the first payment of their pensions. I made the same point last year, and I hope that, if we have the same kind of bonus payments in future years, we shall be able to extend these provisions as I have suggested.

However, we have made good progress this year in extending the scope of the payments to whole new categories of pensioner, and on that Ministers are to be congratulated.

4.46 p.m.

Mr. Cyril Smith (Rochdale)

I, too, add my congratulations to those offered to the Government on the introduction of the Bill. I have long taken the view in politics that the art of campaigning does not disbar the art of charitable understanding. If I may say so to the hon. Lady the Member for Lancaster (Mrs. Kellett-Bowman), I do not believe that it does the art of politics any good to fail to recognise the good in the policies of one's opponents.

Frankly, I compliment the Government on introducing the Bill. I shall not carp about the Bill. I think that we should say that it is an excellent Bill and that we welcome it. I compliment the Secretary of State on it, and I do so not only on my own behalf but on behalf of all my colleagues on the Liberal benches.

Mr. R. J. Maxwell-Hyslop (Tiverton)

Where are they?

Mr. Smith

The percentage of Liberals present is greater than the percentage of Conservatives present. Certainly if the matter is to be judged by weight rather than by numbers, the Liberals are more strongly represented.

Secondly, I wish to compliment the Secretary of State on having included in this Bill the many deserving cases that have been left out of past Bills. I have taken the trouble to look up the record of debates in 1972 and 1973 to see what criticisms the right hon. Lady and her hon. Friends had to make of earlier Bills, and I see that they have all been covered in this Bill. Ministers are to be complimented on that.

I am glad too—and I hope that I am correct in this assumption—that there is to be no scaling down of the £10 bonus according to the level of a person's stamp contributions. Such scaling down always creates problems and anomalies. I hope that at some time when later Bills are being considered Ministers will try to get over this anomaly and that pension increases introduced because of increases in the cost of living will not be scaled down because a person has not contributed the full number of stamps. Such a person may already not be getting the full basic pension and should not also suffer having the increase scaled down in relation to the basic pension. I am delighted that it is not to be done on this occasion, and I hope that the matter will be covered in future pension increases.

I have always argued that economic problems are not the only problems of age. A major problem of age is that of loneliness, not just economic deprivation. I take the opportunity to urge the right hon. Lady, whom I know to be a very charitably-minded lady, if I may say so in sincerity, a person with a depth of compassion, to consider the possibility of remitting television licence fees for pensioners, who find the cost of such a licence a desperate problem. That would go a long way to combating the problem of loneliness.

There is also the problem of mobility for the aged. If we could introduce some statutory means of having a uniform system of concessionary fares for pensioners, that, too, would help a great deal. I say that intending in no way to criticise this Bill. I say it simply because I see this as an opportunity to make the point whilst I have the floor.

I am delighted that the Government have introduced the Bill. One of my problems during the General Election campaign was that a number of old-age pensioners in my constituency were canvassed by perhaps over-enthusiastic Labour supporters and told that if they did not return a Labour Member for Rochdale this time they might lose their £10 Christmas bonus. I am glad to say that, in spite of not taking that advice, old-age pensioners are to have the bonus, albeit that it may be due to the fact that none the less the electorate returned a Labour Government. At any rate, the Bill gives the lie to that myth.

By the time that it becomes necessary to introduce a future Bill for a Christmas bonus, I hope that the Secretary of State will have been able to look favourably upon the Finer Report and be able to include one-parent families in any future £10 bonus.

I agree with the hon. Member for Lancaster and others who could, and no doubts will, make the point that pensions should be tied to average earnings and that the sooner that is done the better. But any Government, whatever their complexion, are faced with the economic problems of the nation, the amount of money available, and so on. Until these basic changes in the pension scheme can be introduced, we must continue to ensure that our pensioners are allowed to live and not merely exist.

I am delighted that the right hon. Lady has introduced the Bill. I assure her that she can rely on the support of the Liberal bench in this matter.

4.52 p.m.

Mr. James Kilfedder (Down, North)

I welcome the Bill and congratulate the right hon. Lady on introducing it. This is the third occasion on which old-age pensioners will receive the bonus.

I cast my mind back to my maiden speech 10 years ago which contained an appeal for the payment of a £10 Christmas bonus to retired people. The Minister in the Labour administration at the time was Miss Margaret Herbison, a woman of great compassion. My appeal was turned down. Miss Herbison said that she had been advised that it was impossible late in October to make any payment in time for Christmas or even, as I recall, until about March. I am not certain of the exact timetable, but certainly the House was told that it could not be paid in time for Christmas. Clearly, we have made great advances since then if such a payment can be made at this short notice.

Even 10 years ago when I made my special plea for a Christmas bonus for pensioners I felt that £10 was barely adequate. I found no sympathy among my Conservative colleagues at the time, but I am glad that it has been found possible since then to make such payment, which has been greatly welcomed by the elderly. As I say, even in 1964 I thought that £10 was barely adequate. Even then it seemed a relatively small amount compared with the large sums spent at Christmas by the average family and by young adults generally.

Average wages today are about £35 or £40. In view of present day costs of food and clothing, a payment of £10 to the old at Christmas is hardly an overgenerous donation. In these days of inflation in prices and wages, £20 would seem to be a better sum with which to buy shoes, clothes and fuel. We could debate at length what could be or should be paid to the elderly, but I know how much the payments were appreciated on past occasions by pensioners in my constituency and throughout Northern Ireland. I am sure that the experience of other hon. Members is the same.

I want to echo the remarks of the hon. Member for Rochdale (Mr. Smith) about television licences and concessionary fares. These are matters which I have been urging for some time, and I hope that the Government will give them further study. This is a payment of £10 for Christmas, but we must combat loneliness throughout the year. For that reason, I feel that some help should be given to the aged with television licence fees, and especially with bus fares in order that they may keep in touch with their families and go shopping.

I should like to think of these payments by the nation as a Christmas bonus from the young to our senior citizens, as a token of good will and understanding of Christian charity in its fullest meaning from children to their parents or grandparents. There has been a decline throughout the nation in filial duty, just as there has been in family life. The nation is the poorer for it. Payments like this help to jog people's memories and make young people aware of the needs of the old. For that reason, the Government are acting rightly in putting this Bill before the House. However, I should like to think that on the next occasion, with inflation, the sum will be greater and that in the meantime the elderly will be helped in other ways as well. In any event, there is no doubt that if this Christmas bonus was not paid and we did not urge it upon the nation, the country would be the poorer spiritually and morally.

4.56 p.m.

Rev. Ian Paisley (Antrim, North)

I want to identify myself with hon. Members who have given a great welcome to this Bill. Those of us who are engaged in constituency work know how much past bonuses of this kind have been appreciated by those who have received them. But we have also known how badly put out others felt because they were not included in the original scheme. For that reason, I welcome the widening of the scheme. I know that it will be generally welcomed by the nation as a whole, especially Northern Ireland.

Sometimes hon. Members from Northern Ireland constituencies are accused of not taking an interest in social welfare matters. I ask the House to note the good turnout of hon. Members from Northern Ireland today and the interest that they are taking in the social affairs of the nation. With due respect to the hon. and weighty Member for Rochdale (Mr. Smith), I think that the presence of the United Unionist side today is a good deal stronger than that of the Liberals. However, we are glad to have the hon. Gentleman with us and to have his weight on our side on this occasion.

I have been wondering about the difference in value between the original £10 and the £10 proposed to be paid this year. There has been a considerable deterioration in the spending power of £10 in the past two years.

Then I return to the query which I raised with the Secretary of State a little earlier. There are certain sub-post offices scattered over Northern Ireland which have not been able to pay out this benefit. The result has been that some of our constituents have had to travel considerable distances before finding a post office which was doing this paying out. Is it possible for sub-post offices throughout Northern Ireland to pay out these sums? That would be of great assistance to the aged, the infirm and the needy, who otherwise will have to make fairly long journeys in today's dangerous security conditions.

I welcome the Bill. I trust that when we next discuss such a proposal this House will be able to enlarge the amount and possibly even double it.

5.0 p.m.

The Minister of State, Department of Health and Social Security (Mr. Brian O'Malley)

I am grateful to all parties in the House for the generally warm welcome that has been given to the Bill.

It is my pleasure to congratulate the hon. Member for Lancaster (Mrs. Kellett-Bowman) on the first occasion that she has spoken from the Front Bench, and certainly the first occasion when we have spoken across the Floor of the House from the Front Benches in the same debate. May I, with great good humour, say that on a Bill of this kind I thought that she was remarkably cantankerous, as my hon. Friend the Member for Goole (Dr. Marshall) said. I agree that she was perhaps somewhat strident. It is always a difficult lesson in politics to know when to take a highly party political line and when to be gracious about legislation brought in by the Government. I suggest that on this occasion the hon. Lady misjudged the mood of the House and what was needed from an Opposition Front Bench speaker.

The hon. Lady said that she welcomed our conversion to the principle of paying a Christmas bonus to pensioners. The Christmas bonus was part of the Labour Party's election manifesto. It is interesting to notice that it was not part of the Conservative Party's manifesto. We can only assume that, on the basis of the periodicity of the upratings to which the right hon. and learned Member for Surrey, East (Sir G. Howe) referred in earlier debates in the House of Commons, it was not their intention, had a Conservative Government been returned, to implement a Christmas bonus this year. Therefore, to the extent that the hon. Member for Rochdale (Mr. Smith) remarked on the observations made by Labour Party canvassers in his constituency, had a Conservative Government been returned it certainly was not part of their election manifesto.

Mrs. Kellett-Bowman

My right hon. and learned Friend made it clear throughout the election, as did the rest of my right hon. and hon. Friends, that we took it for granted that, having originally done this, we would automatically go on doing so. Indeed, we said so loudly and clearly. Right hon. Gentlemen opposite had never included it before. We were the pacesetters, and the whole country knows it.

Mr. O'Malley

If I may help, the hon. Lady appears to be saying that it is a bit like the 9½ per cent. mortgage which was talked about during the election. On previous occasions I think that, looking at the low level of the pension which we had to jack up by 29 per cent. to £10 and £16 when we came into office, we were justified in saying that the £10 bonus that the Conservative Government paid was a substitute for a better and higher level of pension. When we used to ask for a higher level of pension the then Under-Secretary told us how extravagant it was and that the contributors and our national resources could not afford the increase that we put into effect at the first possible date after the return of a Labour Government, albeit a minority Government, in February this year.

We have tried to improve the proposals that we inherited. We have brought in a further 1 million people. The hon. Member for Lancaster will be aware that her leader, amongst others, has said that we are in the middle of a severe economic crisis. Yet we have brought in these extra 1 million people. This brings the total cost to £92 million. I think that the hon. Members for Down, North (Mr. Kilfedder) and Antrim, North (Rev. Ian Paisley) in their observations and questions recognised that we are in a time of economic difficulty. If the question is asked, "Is it right to do more for the pensioners in this or in any other direction?", of course it is always right bearing in mind the level of provision on which 8 million retirement pensioners have to depend at present.

The hon. Member for Antrim, North asked what the equivalent figure would have been had there been an uprating of the £10 level. Compared with last year it would be £11.40. We included these extra 1 million recipients—widows and invalidity pensioners—because we thought that was the right priority in the circumstances.

The hon. Member for Lancaster referred to the date of the payment—the week beginning 18th November. The hon. Lady will recognise that we are in the hands of the Post Office, which has a very busy Christmas period. The House is already aware that beef tokens will be issued in due course, That is another load that will have to be taken by the Post Office. We are paying the £10 bonus as near as possible to the Christmas period.

The hon. Member for Antrim, North asked whether all post offices in Northern Ireland would be able to pay out these benefits. My right hon. Friend could not give the answer immediately. I had to ask for a note on the subject, which I have just received. I understand that the Department of Health and Social Services for Northern Ireland has no knowledge of any general difficulty. Officials are aware of some post offices experiencing difficulties with coinage, and they point out that other post offices have been damaged by bombs. If the hon. Gentleman or any Northern Ireland Member knows of any specific problems and will let me have the details I will ensure that everything possible is done to minimise the difficulties which may arise.

My hon. Friend the Member for Goole generously recognised that the Government have made significant improvements in the proposals that we are now considering. I understand, and have a great deal of sympathy with, the point made by my hon. Friend. The difficulty is that the payment of the bonus is linked to the payment of a qualifying benefit in a particular week. I assure my hon. Friend that I have noted his observations on this subject. I think that it is right that any observations or comments on the defects inherent in or arising from the scheme should be placed on record so that they can be suitably and accordingly considered by the Government when examining this kind of problem.

I conclude by again thanking the House for the generally warm welcome that it has given to the Bill.

Question put and agreed to.

Bill accordingly read a Second nine.

Committed to a Committee of the whole House.—[Mr. Coleman.]

Further proceedings stood postponed, pursuant to the order of the House this day.