OLD AGE PENSIONS. (Hansard, 6 July 1937)

§ Mr. Ellis Smith
I desire to raise the position of old age pensioners in this country, and in doing so I shall try to avoid any controversy as far as possible. I want to confine myself to the facts and realities of the position in which old age pensioners find themselves to-day, and to 310 give evidence in order to appeal to the Financial Secretary to recommend the Chancellor of the Exchequer to consider the position of old age pensioners. In 1911 they were receiving 5s. per week, but towards the end of the War period, as a result of a deputation from the Trades Union Congress and the Miners' Federation in particular, led by Mr. Smillie, the Government reluctantly agreed to increase these pensions to 7s. 6d. per week. From 1919 until the present time old age pensioners have received 10s. per week. There is great uneasiness throughout the country, especially in the North of England, as to the position in which old age pensioners find themselves, and I want to give facts and figures to induce the Government to consider this matter.
It is often said that our expenditure on social services is already too high. Let me deal with that point first. In 1934–35 the total expenditure on pensions was £80,500,000. Of that the workers and the employers contributed £21,600,000, and the Treasury found only £13,000,000 of the cost. The balance was met from the accumulated funds of the Contributory Pensions Fund. If the Treasury would find in a financial year a total of £46,000,000 towards old age pensions, it would be possible to increase the old age pensions to 15s. a week for every man and woman in receipt of them. I ask the Financial Secretary whether that is not a reasonable proposition to make in these times. In these times of growing expenditure in many directions, and of talk about the return of prosperity, is it too much to ask the Financial Secretary to recommend to his right hon. Friend that the expenditure on old age pensions by the Treasury should be increased to £46,000,000 a year?
I wish to deal very briefly with the question from the point of view of the increased cost of living. The cost of living is increasing month by month. In 1933, even taking the official figures, it was at 36 points, and in 1937 it has risen to 52 points. But in the case of old age pensioners, my contention is that the cost of living has risen considerably more than the official figures show. In the first place, the things that they consume are restricted, owing to their small income, to such commodities as bread, tea, milk and a few things of that description. The official figures include a great variation 311 of commodities which are consumed by the general population, but the people who have these restricted incomes are able to purchase only the bare necessities of life. I find on analysis that the cost of these foods which the old age pensioners purchase has increased considerably more than is shown by the official figures of the Ministry of Labour.
At the same time, there is a growing uneasiness because old age pensioners and their friends see that profits are rising. Taking the figures of the "Economist," in 1933 profits were 69.7; in 1935 they had increased to 84.1, and in 1937 the same companies' profits had increased to 106.7. Moreover, we find that bonuses are again being paid by a large number of companies. All this is a sure sign of the high profits that are being made by companies at the present time. Consequently, this is the time when the Opposition should be asking the Government to give serious consideration to the question of an increase in old age pensions. We also find that the increased productivity per person employed in industry is greater in this country than it is in any other country. This is very largely due to scientific methods of production, increased mechanisation and electrification, which is also reflecting itself in other directions which one has known to one's cost within the last few days. This increased production also affects the old people who cannot hold their own in industry. They say that, having regard to the enormous increase in production, it is not asking too much that they, having served industry for 30 or 40 years, should receive more than 10s. a week.

§ Mr. Baxter
I have great sympathy with the hon. Member's case, but would he mind explaining exactly what he means by 85 per cent. in regard to profits?

§ Mr. Smith
The hon. Member must realise that I have only a few minutes, and that I wish to leave the Financial Secretary time to reply. I was quoting figures from the "Economist," and I shall be only too glad to show them to the hon. Member afterwards. I find, from an answer given by the Financial Secretary to my hon. Friend the Member for Leigh (Mr. Tinker) that there are 214,901 old-age pensioners on Poor Law relief. This is unfair to the old people themselves, and to the localities 312 in which they live. The larger percentage of old age pensioners live in the North of England and in Scotland; the percentage in the South is relatively small, because the people who have to depend on Old Age Pensions are mainly those who have been engaged in industry. In the South, generally speaking, people have been engaged in business, or are better off in other respects. This is an increased cost upon public assistance which ought to be borne by the nation and not by any locality.
I hope I have given sufficient evidence to the Financial Secretary to enable him to recommend the Chancellor of the Exchequer to give serious attention to this matter, and I hope that he will come before the House soon with a proposal based on the facts. I am convinced that if the Government investigated this position as they investigated the position of hon. Members of this House a short time ago they would come forward with a recommendation that old age pensions should be increased to at least 15s. a week.

§ The Financial Secretary to the Treasury (Lieut.-Colonel Colville)
I think my hon. Friend and I are agreed that it is unfortunate we should have such a short time to discuss this important subject, but I shall do my best in the few minutes available to answer his points. Since I have been Financial Secretary, I have answered many questions on this matter, showing the keen interest which is taken in it. I think an hon. Member opposite once said that I was in danger of being thought hard-hearted because of my answers. I hope to show that it is not a question of being hard-hearted, but when one has to answer for large public funds, it is necessary to do so with a full sense of responsibility.
I shall try to deal with three points. First there is the question of old-age pensioners on the Poor Law. The figure which the hon. Member quoted was correct, at January last, namely, 214,901. I would remind the House, however, that that is 9.7 per cent. only of the total number of pensioners, and that the remaining 90 per cent. are not receiving Poor Law assistance. Further, a certain number of the 214,901 are receiving assistance because of their infirmities. In 313 addition to the question of monetary assistance, they are receiving assistance because of illness or infirmity, Therefore the proposal—the hon. Member did not specifically make it to-night, but it was made earlier in a question—that there should be an increase of 5s. a week in these pensions, would not necessarily remove all the 214,901 from Poor Law assistance, because a great many of them, I think, are being assisted for other reasons as well. It would, of course, if such an increase were made, be a constant care from the Treasury point of view. I am bound to say that, because it is an important part of my argument. To increase the old age pension from 10s. to 15s. a week for those over 65 would cost £33,000,000 a year, and to that would have to be added a sum of £2,500,000 more in respect of pensions to widows aged 65 to 70, who clearly could not be treated differently. That would be an increase of £35,500,000.
The hon. Member dealt with the cost of living, and I feel bound again to repeat the figures which have been mentioned once before in relation to the cost of living. In 1920, when old age pensions were fixed at 10s. by the Act of 1919, the cost of living figure percentage increase on July, 1914, was 150; in 1925 is was 72, and that was the year of the Contributory Pensions Act; in 1930, it was 54; in 1933 it was 36; and in 1937 it was 52. I am taking June of each year to get comparable figures. The hon. Member will, therefore, see that while taking full account of the fact that there has been a rise in recent years, we must also have regard to the history of pensions during that long period. When one sees that in June of this year the figure was 52 as against 150 in 1920 and 72 in 1925. I think the House will agree with me that it would be difficult to justify on that argument alone an increase in the pension at the present time.
I should like to give a few facts in relation to the expense of social services 314 and pensions. The total provision in the Estimates for 1937 for old age and widows' pensions, housing, health insurance, unemployment insurance and assistance, and education, that is, the social services generally, was £215,000,000; and if you compare that with 1925,. the comparable figure was just over £100,000,000, so that we have greatly increased our expenditure on these very desirable services. Taking pensions alone, the total cost of old age and widows' pensions to those over 65, in 1937, is, for old age pensioners over 70, £45,000,000; for those between 65 and 70, £21,000,000; and for widows between 65 and 70, £5,000,000. £45,000,000 is paid entirely by Votes by Parliament. The remainder of the pensions expenditure is met out of a fund to which the Exchequer, however, contributes £16,000,000; so that you have there a figure of £61,000,000 of Exchequer money.
This year, as the House knows, is a very anxious year from the defence point of view. Very great calls have been put upon us for defence. I do not intend to say more than that I believe that is a vital necessity. If we did not see that our defences were sound, our whole social structure might be affected. We are able at the same time to pay a greatly increased amount on the social services due to our industrial recovery, but this new demand for a large additional sum is one which in the present circumstances cannot be agreed to and which, on the argument of the cost of living, I cannot agree has been substantiated. I appreciate the spirit in which the hon. Member has made this point—it is one on which many people are greatly interested—but I am bound to say that I cannot agree with his contention to-night.