HC Deb 16 June 1920 vol 130 cc1243-4

asked the Prime Minister whether he is aware of the distress existing amongst ex-service pensioners and their dependants owing to the continually increasing cost of living; that since the present pension scale became operative the cost of living, as shown by official figures, has largely increased; and that the Royal Warrant of 6th December, 1919, stipulates that no readjustment of pensions in consequence of the rise or fall in the cost of living shall take effect before 1st April, 1923; and whether, under the exceptional circumstances, he will recommend the Government to increase pensions to ex-service men and their dependants on the same basis that increase of wages is paid to railwaymen and others, namely, that where the cost of living increases by 5 per cent., a corresponding increase shall be made in pensions, such increase to be retrospective to 1st January, 1920?

Mr. BONAR LAW (Leader of the House)

The pensions of ex-service men and their dependants were revised last September at a cost of £22,000,000 per annum, when, apart from an increase in the flat rate of pension ample to cover any increase in the cost of living to that date, many other benefits were given such as the wife's allowance of 10s. a week. After very careful consideration it was decided to deal with future fluctuations in the cost of living as follows. The continuance of rates of pension based on the cost of living in 1919 was guaranteed to 31st March, 1923, at which date (and thereafter annually) the rate of pension will, subject to a minimum flat rate of 33s. a week in any case, be varied up or down according as the cost of living in the previous year is above or below the figure in 1919.

I am aware that the cost of living in the first five months of 1920 somewhat exceeds the cost of living in 1919, but it is obviously impossible that the State should increase rates of pension all round to meet increases in the cost of living while not reducing them in the event of a fall. I see no reason for supposing that the pensioners would benefit on the whole from a continually fluctuating rate of pension as compared with the guarantee they now enjoy that there will be no reduction for three years. The immense number of pensions now paid and the fact that it is necessary to issue the appropriate documents (pay books, etc.) three months in advance would in any case render impracticable alterations in the rates at frequent intervals.

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